q Éüà¤@ @~ 5y' GÏoØ

UsetheselinkstorapidlyreviewthedocumentTABLEOFCONTENTSINDEXTOFINANCIALSTATEMENTS

TableofContents

As filed with the Securities and Exchange Commission on May 17, 2019

Registration No. 333-

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-4 REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

Elanco Animal Health Incorporated (Exactnameofregistrantasspecifiedinitscharter)

2500 Innovation Way Greenfield, Indiana 46140

(877) 352-6261 (Address,IncludingZipCode,andTelephoneNumber,IncludingAreaCode,ofRegistrant'sPrincipalExecutiveOffices)

Michael-Bryant Hicks, Esq. 2500 Innovation Way

Greenfield, Indiana 46140 (877) 352-6261

(Name,Address,IncludingZipCode,andTelephoneNumber,IncludingAreaCode,ofAgentForService)

Copies to:

Taavi Annus, Esq. Bryan Cave Leighton Paisner LLP

One Metropolitan Square 211 N. Broadway, Suite 3600

St. Louis, Missouri 63102 Tel: (314) 259-2000 Fax: (314) 259-2020

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after the effectiveness of this registration statement.

IfthesecuritiesbeingregisteredonthisFormarebeingofferedinconnectionwiththeformationofaholdingcompanyandthereiscompliancewithGeneralInstructionG,checkthefollowingbox.o

IfthisFormisfiledtoregisteradditionalsecuritiesforanofferingpursuanttoRule462(b)undertheSecuritiesAct,checkthefollowingboxandlisttheSecuritiesActregistrationstatementnumberoftheearliereffectiveregistrationstatementforthesameoffering.o

IfthisFormisapost-effectiveamendmentfiledpursuanttoRule462(d)undertheSecuritiesAct,checkthefollowingboxandlisttheSecuritiesActregistrationstatementnumberoftheearliereffectiveregistrationstatementforthesameoffering.o

Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,asmallerreportingcompanyoranemerginggrowthcompany.Seethedefinitionsof"largeacceleratedfiler,""acceleratedfiler,""smallerreportingcompany"and"emerginggrowthcompany"inRule12b-2oftheExchangeAct.

Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection7(a)(2)(B)oftheSecuritiesAct.o

Ifapplicable,placeanXintheboxtodesignatetheappropriateruleprovisionrelieduponinconductingthistransaction:

ExchangeActRule13e-4(i)(Cross-BorderIssuerTenderOffer)o

ExchangeActRule14d-1(d)(Cross-BorderThird-PartyTenderOffer)o

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered

Amount to be Registered(1)

Proposed maximum offering price per

Proposed maximum aggregate offering

price Amount of

registration fees(3)

3.912%SeniorNotesdue2021 $500,000,000 100% $500,000,000 $60,600.00

4.272%SeniorNotesdue2023 $750,000,000 100% $750,000,000 $90,900.00

4.900%SeniorNotesdue2028 $750,000,000 100% $750,000,000 $90,900.00

Total $2,000,000,000(2) $242,400.00

(1) Representstheaggregateprincipalamountofeachseriesofnotestobeofferedintheexchangeofferstowhichtheregistrationstatementrelates.

(2) Representsthemaximumaggregateofferingpriceofallnotestobeofferedintheexchangeofferstowhichtheregistrationstatementrelates.

(3) ComputedinaccordancewithRule457(f)undertheSecuritiesAct.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter becomeeffective in accordance with Section 8(a) of the Securities Act or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

Indiana (StateorOtherJurisdictionofIncorporationorOrganization)

2834 (PrimaryStandardIndustrialClassificationCodeNumber)

82-5497352 (I.R.S.Employer

IdentificationNumber)

Largeacceleratedfilero Acceleratedfilero Non-acceleratedfilerý SmallerreportingcompanyoEmerginggrowthcompanyo

TableofContents

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. Thisprospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MAY 17, 2019

Elanco Animal Health Incorporated

Offer to Exchange

up to $500,000,000 principal amount of our 3.912% Senior Notes due 2021 registered under the Securities Act, for any and all of its outstanding 3.912% Senior Notes due 2021;

up to $750,000,000 principal amount of our 4.272% Senior Notes due 2023 registered under the Securities Act, for any and all of its outstanding 4.272% Senior Notes due 2023; and

up to $750,000,000 principal amount of our 4.900% Senior Notes due 2028 registered under the Securities Act, for any and all outstanding unregistered 4.900% Senior Notes due 2028

Weareoffering,uponthetermsandsubjecttotheconditionssetforthinthisprospectusandtheaccompanyinglettersoftransmittal,toexchangeupto$500,000,000aggregateprincipalamountofournew3.912%SeniorNotesdue2021(the"2021ExchangeNotes")foralikeamountofouroutstandingunregistered3.912%SeniorNotesdue2021(the"2021OriginalNotes"),upto$750,000,000aggregateprincipalamountofournew4.272%SeniorNotesdue2023(the"2023ExchangeNotes")foralikeamountofouroutstandingunregistered4.272%SeniorNotesdue2023(the"2023OriginalNotes"),andupto$750,000,000aggregateprincipalamountofournew4.900%SeniorNotesdue2028(the"2028ExchangeNotes"and,collectivelywiththe2021ExchangeNotesandthe2023ExchangeNotes,the"ExchangeNotes")foralikeamountofouroutstandingunregistered4.900%SeniorNotesdue2028(the"2028OriginalNotes"and,collectivelywiththe2021OriginalNotesandthe2023OriginalNotes,the"OriginalNotes").WerefertotheExchangeNotesandtheOriginalNotestogetherasthe"notes"inthisprospectus.Werefertotheofferstoexchange,collectively,asthe"ExchangeOffers."

Terms of the Exchange Offers:

• TheExchangeOffersexpireat5:00 p.m., New York City time, on , 2019 ,unlessextended.

• AlloutstandingOriginalNotesthatarevalidlytenderedandnotvalidlywithdrawnpriortotheexpirationoftheExchangeOfferswillbeexchanged.

• YoumaywithdrawtendersofOriginalNotesatanytimepriortotheexpirationoftheExchangeOffers.

• WeissuedtheOriginalNotesinatransactionnotrequiringregistrationundertheSecuritiesActof1933,asamended(the"SecuritiesAct").WearemakingtheExchangeOffersinordertosatisfycertainofourobligationsundertheexchangeandregistrationrightsagreemententeredintoinconnectionwiththattransaction.

• TheexchangeofOriginalNotesforExchangeNoteswillnotbeataxableeventforU.S.federalincometaxpurposes.

• WewillnotreceiveanyproceedsfromtheExchangeOffers.

• ThetermsofeachseriesofExchangeNotesaresubstantiallyidenticaltothetermsoftheapplicableseriesofOriginalNotes,except(i)theExchangeNotesareregisteredundertheSecuritiesAct,(ii)thetransferrestrictionsandregistrationrightsapplicabletotheOriginalNotesdonotapplytotheExchangeNotes,and(iii)theExchangeNoteswillnotcontainprovisionsrelatingtoadditionalinterestrelatingtoourregistrationobligations.

ThereisnoestablishedtradingmarketfortheExchangeNotesortheOriginalNotes.WedonotintendtoapplyforlistingoftheExchangeNotesonanynationalsecuritiesexchangeorforquotationthroughanyquotationsystem.

AnyOriginalNotesnottenderedintheExchangeOfferswillremainoutstandingandcontinuetobesubjecttoallthetermsandconditionsspecifiedintheindenture,includingtransferrestrictions,butwillnotretainanyrightsundertheexchangeandregistrationrightsagreement(includingtherighttoearnadditionalinterestrelatingtoourregistrationobligations)aftertheconsummationoftheExchangeOffers.ExceptinlimitedcircumstanceswithrespecttospecifictypesofholdersofOriginalNotes,wewillhavenofurtherobligationtoprovidefortheregistrationundertheSecuritiesActofsuchOriginalNotes.Ingeneral,theOriginalNotesmaynotbeofferedorsold,unlessregisteredundertheSecuritiesAct,exceptpursuanttoanexemptionfrom,orinatransactionnotsubjectto,theSecuritiesActandapplicablestatesecuritieslaws.

Eachbroker-dealerthatreceivesExchangeNotesforitsownaccountpursuanttotheExchangeOffersmustacknowledgethatitwilldeliveraprospectusinconnectionwithanyresaleofsuchExchangeNotes.Theletteroftransmittalstatesthatbysoacknowledgingandbydeliveringaprospectus,abroker-dealerwillnotbedeemedtoadmitthatitisan"underwriter"withinthemeaningoftheSecuritiesAct.Thisprospectus,asitmaybeamendedorsupplementedfromtimetotime,maybeusedbyabroker-dealerinconnectionwithresalesofExchangeNotesreceivedinexchangeforOriginalNoteswheresuchOriginalNoteswereacquiredbysuchbroker-dealerasaresultofmarket-makingactivitiesorothertradingactivities.Wehaveagreedthat,foraperiodof180daysaftertheexpirationoftheExchangeOffers,wewillmakethisprospectusavailabletoanybroker-dealerforuseinconnectionwithanysuchresale.See"PlanofDistribution."

For a discussion of factors you should consider in determining whether to tender your Original Notes, see the information under "Risk Factors" beginning on page 15 of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is , 2019

TableofContents

TABLE OF CONTENTS

ABOUT THIS PROSPECTUS

WehavenotauthorizedanyonetogiveanyinformationortomakeanyrepresentationsconcerningtheseExchangeOffersexceptthatwhichisinthisprospectus,orwhichisreferredtounder"WhereYouCanFindMoreInformation."Ifanyonegivesormakesanyotherinformationorrepresentation,youshouldnotrelyonit.Thisprospectusisnotanoffertosellorasolicitationofanoffertobuysecuritiesinanycircumstancesinwhichtheofferorsolicitationisunlawful.Youshouldnotinterpretthedeliveryofthisprospectus,oranysaleofsecurities,asanindicationthattherehasbeennochangeinouraffairssincethedateofthisprospectus.Youshouldalsobeawarethatinformationinthisprospectusmaychangeafterthisdate.

WehavefiledwiththeSecuritiesandExchangeCommission,ortheSEC,aregistrationstatementonFormS-4withrespecttotheExchangeNotes.Thisprospectus,whichformspartofthisregistrationstatement,doesnotcontainalltheinformationincludedintheregistrationstatement,includingitsexhibitsandschedules.Forfurtherinformationaboutusandthenotesdescribedinthisprospectus,youshouldrefertotheregistrationstatementanditsexhibitsandschedules.Statementswemakeinthisprospectusaboutcertaincontractsorotherdocumentsarenotnecessarilycomplete.Whenwemakesuchstatements,wereferyoutothecopiesofthecontractsordocumentsthatarefiledasexhibitstotheregistrationstatement,becausethosestatementsarequalifiedinallrespectsbyreferencetothoseexhibits.Theregistrationstatement,includingtheexhibitsandschedules,isavailableattheSEC'swebsiteatwww.sec.gov .

AboutthisProspectus iCautionaryStatementConcerningForward-LookingStatements 1WhereYouCanFindMoreInformation 2ProspectusSummary 3RiskFactors 15UseofProceeds 42UnauditedProFormaCondensedConsolidatedandCombinedStatementofOperations 43Management'sDiscussionandAnalysisofFinancialConditionandResultsofOperations 47Industry 71Business 75Management 95ExecutiveCompensation 100CertainRelationshipsandRelatedPartyTransactions 134SecurityOwnershipofCertainBeneficialOwnersandManagement 144TheExchangeOffers 146DescriptionoftheExchangeNotes 157Book-EntrySettlementandClearance 171DescriptionofCertainOtherIndebtedness 174MaterialU.S.FederalIncomeTaxConsequences 175PlanofDistribution 176LegalMatters 178Experts 178SECPositiononIndemnificationforSecuritiesActLiabilities 178IndextoFinancialStatements F-1

TableofContents

Youmayalsoobtainthisinformationwithoutchargebywritingortelephoningusatthefollowingaddressandtelephonenumber:

ElancoAnimalHealthIncorporated2500InnovationWay

Greenfield,Indiana46140(877)352-6261

Attn:GeneralCounselandCorporateSecretary

If you would like to request copies of these documents, please do so by , 2019 (which is five business days before the scheduled expiration of the exchange offers) in order to receive thembefore the expiration of the Exchange Offers.

Asusedinthisprospectus,unlessthecontextrequiresotherwise,(i)referencesto"Elanco,"the"Company,""we,""us"or"our"refertoElancoAnimalHealthIncorporated,anIndianacorporationanditssubsidiariesand(ii)referencesto"Lilly"refertoEliLillyandCompany,anIndianacorporation,anditssubsidiaries,exceptElancoandElanco'ssubsidiariesshallnotbedeemedpartofLillyduringtheperiodsbeforeMarch11,2019,whenthemajorityofElanco'sshareswerecontrolledbyLilly.

Unlessotherwiseindicated,informationcontainedinthisprospectusconcerningElanco'sindustryandthemarketsinwhichElancooperates,includinggeneralexpectationsandmarketpositions,marketopportunityandmarketshare,isbasedoninformationfromthird-partysourcesandestimatesofElanco'smanagement.Certainstatements,whereindicated,arebasedoninformationpublishedbyVetnosisLimited("Vetnosis"),aresearchandconsultingfirmspecializinginglobalanimalhealthandveterinarymedicine,andestimatesofElanco'smanagement.Managementestimatesarederivedfrompubliclyavailableinformation,knowledgeofElanco'sindustryandassumptionsbasedonsuchinformationandknowledge,whichElancobelievestobereasonable.Managementestimateshavenotbeenverifiedbyanyindependentsource.Inaddition,assumptionsandestimatesofElanco'sanditsindustry'sfutureperformancesarenecessarilysubjecttoahighdegreeofuncertaintyandriskduetoavarietyoffactors,includingthosedescribedin"RiskFactors."TheseandotherfactorscouldcausefutureperformancetodiffermateriallyfromElanco'sassumptionsandestimates.See"CautionaryStatementConcerningForward-LookingStatements."

TableofContents

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

Thisprospectuscontainsforward-lookingstatements,including,withoutlimitation,statementsconcerningtheExchangeOffers,ourindebtedness,ourabilitytomakeinterestandprincipalpaymentsonourindebtedness,ourabilitytosatisfythecovenantscontainedinourindebtedness,theredemptionofthenotes,ourindustryandouroperations,performanceandfinancialcondition,includinginparticular,statementsrelatingtoourbusiness,growthstrategies,productdevelopmentefforts,andfutureexpenses.Forward-lookingstatementscanbeidentifiedbywordssuchas"anticipates,""intends,""plans,""seeks,""believes,""estimates,""expects,"andsimilarreferencestofutureperiods,orbytheinclusionofforecastsorprojections.Examplesofforward-lookingstatementsinclude,butarenotlimitedto,statementswemakeregardingtheoutlookforourfuturebusinessandfinancialperformance,suchasthosecontainedin"Management'sDiscussionandAnalysisofFinancialConditionandResultsofOperations."

Forward-lookingstatementsarebasedonourcurrentexpectationsandassumptionsregardingourbusiness,theeconomy,andotherfutureconditions.Becauseforward-lookingstatementsrelatetothefuture,bytheirnature,theyaresubjecttoinherentuncertainties,risks,andchangesincircumstancesthataredifficulttopredict.Asaresult,ouractualresultsmaydiffermateriallyfromthosecontemplatedbytheforward-lookingstatements.Importantfactorsthatcouldcauseactualresultstodiffermateriallyfromthoseintheforward-lookingstatementsincluderegional,nationalorglobalpolitical,economic,business,competitive,marketandregulatoryconditionsandthefollowing:

• heightenedcompetition,includingfrominnovationorgenerics;

• theimpactofdisruptiveinnovationsandadvancesinveterinarymedicalpractices,animalhealthtechnologiesandalternativestoanimal-derivedprotein;

• changesinregulatoryrestrictionsontheuseofantibioticsinfoodanimals;

• impactofgenericproducts;

• ourabilitytoimplementourbusinessstrategiesorachievetargetedcostefficienciesandgrossmarginimprovements;

• consolidationofourcustomersanddistributors;

• anoutbreakofinfectiousdiseasecarriedbyfoodanimals;

• thesuccessofourR&Dandlicensingefforts;

• ourabilitytocompleteacquisitionsandsuccessfullyintegratethebusinessesweacquire;

• misuseoroff-labeluseofourproducts;

• unanticipatedsafety,qualityorefficacyconcernsassociatedwithourproducts;

• theimpactofweatherconditionsandtheavailabilityofnaturalresources;

• risksrelatedtoourpresenceinemergingmarkets;

• changesinU.S.foreigntradepolicy,impositionoftariffsortradedisputes;

• theimpactofglobalmacroeconomicconditions;and

• theeffectonourbusinessofthetransactionsinvolvingtheseparationofourbusinessfromthatofLillyandthedistributionofLilly'sinterestinustoitsshareholdersthroughanexchangeofferconsummatedonMarch11,2019.

See"RiskFactors"forafurtherdescriptionoftheseandotherfactors.Althoughwehaveattemptedtoidentifyimportantriskfactors,theremaybeotherriskfactorsnotpresentlyknowntous

TableofContents

orthatwepresentlybelievearenotmaterialthatcouldcauseactualresultsanddevelopmentstodiffermateriallyfromthosemadeinorsuggestedbytheforward-lookingstatementscontainedinthisprospectus.Ifanyoftheserisksmaterialize,orifanyoftheaboveassumptionsunderlyingforward-lookingstatementsproveincorrect,actualresultsanddevelopmentsmaydiffermateriallyfromthosemadeinorsuggestedbytheforward-lookingstatementscontainedinthisprospectus.Forthereasonsdescribedabove,wecautionyouagainstrelyingonanyforward-lookingstatements,whichshouldalsobereadinconjunctionwiththeothercautionarystatementsthatareincludedelsewhereinthisprospectus.Anyforward-lookingstatementmadebyusinthisprospectusspeaksonlyasofthedatethereof.Factorsoreventsthatcouldcauseouractualresultstodiffermayemergefromtimetotime,anditisnotpossibleforustopredictallofthem.Weundertakenoobligationtopubliclyupdateortoreviseanyforward-lookingstatement,whetherasaresultofnewinformation,futuredevelopments,orotherwise,exceptasmayberequiredbylaw.Comparisonsofresultsforcurrentandanypriorperiodsarenotintendedtoexpressanyfuturetrendsorindicationsoffutureperformance,unlessspecificallyexpressedassuch,andshouldbeviewedashistoricaldata.

WHERE YOU CAN FIND MORE INFORMATION

Wefileannual,quarterlyandcurrentreports,proxystatementsandotherinformationwiththeSEC.YoumayaccessthisinformationontheSEC'swebsite,whichcontainsreports,proxystatementsandotherinformationthatwefileelectronicallywiththeSEC.Theaddressofthatwebsiteiswww.sec.gov .YoumayalsoconsultourwebsiteformoreinformationaboutElanco.Ourwebsiteiswww.elanco.com .Informationincludedonthiswebsiteisnotincorporatedbyreferenceintothisprospectus.

TableofContents

PROSPECTUS SUMMARY

This summary highlights selected information appearing elsewhere in this prospectus and is, therefore, qualified in its entirety by the more detailed information appearing elsewhere in this prospectus. It may notcontain all the information that is important to you. We urge you to read carefully this entire prospectus and the other documents to which it refers to understand fully the terms of the Exchange Notes and theExchange Offers. You should pay special attention to "Risk Factors" and "Cautionary Statement Concerning Forward-Looking Statements."

Our Company

Elancoisapremieranimalhealthcompanythatinnovates,develops,manufacturesandmarketsproductsforcompanionandfoodanimals.HeadquarteredinGreenfield,Indiana,Elancoisthefourthlargestanimalhealthcompanyintheworld,withrevenueof$3.1billionfortheyearendedDecember31,2018.Globally,Elancois#1inmedicinalfeedadditives,#2inpoultryand#3incattle,measuredby2017revenue,accordingtoVetnosis.Elancoalsohasoneofthebroadestportfoliosofpetparasiticidesinthecompanionanimalsector.Elancooffersadiverseportfolioofmorethan125brandsthatmakeitatrustedpartnertoveterinariansandfoodanimalproducersinmorethan90countries.

OnSeptember24,2018,Elanco'sinitialpublicoffering(the"IPO")wascompleted,pursuanttowhichElancoissuedandsold19.8%ofElanco'stotaloutstandingshares.OnSeptember20,2018,ElancocommonstockbegantradingontheNYSEunderthesymbol"ELAN."OnSeptember24,2018,immediatelyprecedingthecompletionoftheIPO,LillytransferredtoElancosubstantiallyallofitsanimalhealthbusinessesinexchangefor(i)allofthenetproceeds($1,659.7million)ElancoreceivedfromthesaleofElancocommonstockintheIPO,includingthenetproceedsitreceivedasaresultoftheexerciseinfulloftheunderwriters'optiontopurchaseadditionalshares,(ii)allofthenetproceeds(approximately$2,000million)ElancoreceivedintheSeniorNotesOffering(asdefinedbelow)and(iii)allofthenetproceeds($498.6million)ElancoreceivedfromtheentryintotheTermFacility(asdefinedbelow).

OnMarch11,2019,Lillycompletedthedispositionofitsremaininginterestinusthroughatax-freeexchangeofferpursuanttowhichittransferreditsremainingholdingsinustoitsshareholdersinexchangeforsharesofLillycommonstock.Werefertothistransactioninthisprospectusasthe"Split-Off."FollowingtheSplit-Off,Lillynolongerownsanysharesinus,andweareanindependentpubliclytradingcompany.

Inaddition,immediatelypriortothecompletionoftheIPO,ElancoandLillyenteredintocertainagreementsthatprovideaframeworkforElanco'songoingrelationshipwithLilly,whichagreementsremainineffectfollowingthecompletionoftheSplit-Off.Formoreinformation,see"CertainRelationshipsandRelatedPartyTransactions—RelationshipbetweenElancoandLilly."

Elanco'svisionistoenrichthelivesofpeoplethroughfood—makingproteinmoreaccessibleandaffordable—andthroughpetcompanionship—helpingpetslivelonger,healthierlives.Elancoadvancesitsvisionbyofferingproductsinfourprimarycategories:

• Companion Animal Disease Prevention ("CA Disease Prevention"). Elancohasoneofthebroadestparasiticideportfoliosinthecompanionanimalsectorbasedonindications,speciesandformulations,withproductsthatprotectpetsfromworms,fleasandticks.Combiningitsparasiticideportfoliowithitsvaccinespresence,ElancoisaleaderintheU.S.inthediseasepreventioncategorybasedonshareofrevenue.

• Companion Animal Therapeutics ("CA Therapeutics"). Elancohasabroadpainandosteoarthritisportfolioacrossspecies,modesofaction,indicationsanddiseasestages.Petownersareincreasinglytreatingosteoarthritisintheirpets,andElanco'sGalliprant productisoneofthe

TableofContents

fastestgrowingosteoarthritistreatmentsintheU.S.Elancoalsohastreatmentsforotitis(earinfections),aswellascardiovascularanddermatologyindications.

• Food Animal Future Protein & Health ("FA Future Protein & Health"). Elanco'sportfoliointhiscategory,whichincludesvaccines,nutritionalenzymesandanimal-onlyantibiotics,servesthegrowingdemandforproteinandincludesinnovativeproductsinpoultryandaquacultureproduction,wheredemandforanimalhealthproductsisoutpacingoverallindustrygrowth.Elancoisfocusedondevelopingfunctionalnutritionalhealthproductsthatpromotefoodanimalhealth,includingenzymes,probioticsandprebiotics.Elancoisaleaderinprovidingvaccinesasalternativestoantibioticstopromoteanimalhealthbasedonshareofrevenue.

• Food Animal Ruminants& Swine ("FA Ruminants & Swine"). Elancohasdevelopedarangeoffoodanimalproductsusedextensivelyinruminant(e.g.,cattle,sheepandgoats)andswineproduction.

Corporate Information

ElancoAnimalHealthIncorporatedwasincorporatedinIndianaonMay3,2018.Elanco'sprincipalexecutiveofficesarelocatedat2500InnovationWay,Greenfield,Indiana46140,andthetelephonenumberis(877)352-6261.Thecorporatewebsiteaddressiswww.elanco.com .Elanco'swebsiteandtheinformationcontainedon,orthatcanbeaccessedthrough,thewebsiteisnotdeemedtobeincorporatedbyreferencein,andisnotconsideredpartof,thisprospectus.YoushouldnotrelyonanysuchinformationinmakingyourdecisionwhethertoparticipateintheExchangeOffers.

TableofContents

The Exchange Offers

The following summary contains basic information about the Exchange Offers. It does not contain all of the information that may be important to you. For a more complete description of the terms of theExchange Offers, see "The Exchange Offers."

TheExchangeOffers Weareoffering,uponthetermsandsubjecttotheconditionssetforthinthisprospectusandtheaccompanyinglettersoftransmittal,toexchange:

• upto$500,000,000aggregateprincipalamountofthe2021ExchangeNoteswhichhavebeenregisteredundertheSecuritiesActforalikeamountoftheunregistered2021OriginalNotes,

• upto$750,000,000aggregateprincipalamountofthe2023ExchangeNoteswhichhavebeenregisteredundertheSecuritiesActforalikeamountoftheunregistered2023OriginalNotes,and

• upto$750,000,000aggregateprincipalamountofthe2028ExchangeNoteswhichhavebeenregisteredundertheSecuritiesActforalikeamountoftheunregistered2028OriginalNotes.

ToexchangeyourOriginalNotes,youmustproperlytenderthem,andwemustacceptthem.WewillacceptandexchangeallOriginalNotesthatyouvalidlytenderanddonotvalidlywithdrawpriortotheexpirationoftheExchangeOffers.WewillissueregisteredExchangeNotespromptlyaftertheexpirationoftheExchangeOffer.

ResaleofExchangeNotes BasedoninterpretationsbythestaffoftheSECasdetailedinaseriesofno-actionlettersissuedtothirdparties,webelievethat,aslongasyouarenotabroker-dealer,theExchangeNotesofferedintheExchangeOffersmaybeofferedforresale,resoldorotherwisetransferredbyyouwithoutcompliancewiththeregistrationandprospectusdeliveryrequirementsoftheSecuritiesActaslongas:

• youareacquiringtheExchangeNotesintheordinarycourseofyourbusiness;

• youarenotparticipating,donotintendtoparticipateinandhavenoarrangementorunderstandingwithanypersontoparticipateina"distribution"oftheExchangeNotes;and

• youarenotan"affiliate"ofourswithinthemeaningofRule405oftheSecuritiesAct.

TableofContents

IfanyoftheseconditionsisnotsatisfiedandyoutransferanyExchangeNotesissuedtoyouintheExchangeOfferswithoutdeliveringaproperprospectusorwithoutqualifyingforaregistrationexemption,youmayincurliabilityundertheSecuritiesAct.Moreover,ourbeliefthattransfersofExchangeNoteswouldbepermittedwithoutregistrationorprospectusdeliveryundertheconditionsdescribedaboveisbasedonSECinterpretationsgiventoother,unrelatedissuersinsimilarExchangeOffers.WecannotassureyouthattheSECwouldmakeasimilarinterpretationwithrespecttoourExchangeOffers.WewillnotberesponsiblefororindemnifyyouagainstanyliabilityyoumayincurundertheSecuritiesAct.

Anybroker-dealerthatacquiresExchangeNotesforitsownaccountinexchangeforOriginalNotesmustrepresentthattheOriginalNotestobeexchangedfortheExchangeNoteswereacquiredbyitasaresultofmarket-makingactivitiesorothertradingactivitiesandacknowledgethatitwilldeliveraprospectusmeetingtherequirementsoftheSecuritiesActinconnectionwithanyoffertoresell,resaleorotherretransferoftheExchangeNotes.However,bysoacknowledgingandbydeliveringaprospectus,suchparticipatingbroker-dealerwillnotbedeemedtoadmitthatitisan"underwriter"withinthemeaningoftheSecuritiesAct.Duringtheperiodending180daysaftertheconsummationoftheExchangeOffers,subjecttoextensioninlimitedcircumstances,aparticipatingbroker-dealermayusethisprospectusforanoffertosell,aresaleorotherretransferofExchangeNotesreceivedinexchangeforOriginalNoteswhichitacquiredthroughmarket-makingactivitiesorothertradingactivities.

ExpirationDate TheExchangeOfferswillexpireat5:00p.m.,NewYorkCitytime,on,2019,unlessweextendtheexpirationdate.

AccruedInterestontheExchangeNotesandtheOriginalNotes TheExchangeNoteswillbearinterestfromthemostrecentdatetowhichinteresthasbeenpaidontheOriginalNotes.IfyourOriginalNotesareacceptedforexchange,thenyouwillreceiveinterestontheExchangeNotesandnotontheOriginalNotes.AnyOriginalNotesnottenderedwillremainoutstandingandcontinuetoaccrueinterestaccordingtotheirterms.

TableofContents

Conditions OurobligationtoconsummatetheExchangeOffersisnotsubjecttoanyconditions,otherthanthattheapplicableExchangeOfferdoesnotviolateanyapplicablelaworSECstaffinterpretation.See"TheExchangeOffers—Conditions."Wereservetherighttoterminateoramendtheexchangeoffersatanytimepriortotheexpirationdateif,amongotherthings,thereshallhavebeenproposed,adoptedorenactedanylaw,statute,rule,regulationorSECstaffinterpretationwhich,inourjudgment,couldreasonablybeexpectedtomateriallyimpairourabilitytoproceedwiththeExchangeOffers.

ProceduresforTenderingOriginalNotes EachholderofOriginalNotesthatwishestotendertheirOriginalNotesmusteither:

• properlycomplete,signanddatetheletteroftransmittal,includingallotherdocumentsrequiredbytheletteroftransmittal;havethesignatureontheletteroftransmittalguaranteediftheletteroftransmittalsorequires;anddeliverthatletteroftransmittalandotherrequireddocumentstotheexchangeagentonorbeforetheexpirationdate;

• iftheOriginalNotesaretenderedunderthebook-entrytransferprocedures,transmittotheexchangeagent,onorbeforetheexpirationdate,an"agent'smessage;"or

• complywiththeproceduressetforthbelowunder"—GuaranteedDeliveryProcedures."

EachholderofOriginalNotesthattenderstheirOriginalNotesintheExchangeOffersmustrepresenttousthatthefollowingaretrue:

• anyExchangeNotesthattheholderreceiveswillbeacquiredintheordinarycourseofitsbusiness;

• theholderhasnoarrangementorunderstandingwithanypersonorentitytoparticipateinthedistribution(withinthemeaningoftheSecuritiesAct)oftheExchangeNotes;

• theholderisnotan"affiliate"ofuswithinthemeaningofRule405oftheSecuritiesAct;and

• iftheholderisabroker-dealerthatwillreceiveExchangeNotesforitsownaccountinexchangeforOriginalNotesthatwereacquiredasaresultofmarket-makingorothertradingactivities,thensuchholderwilldeliveraprospectusinconnectionwithanyresaleoftheExchangeNotes.

TableofContents

SpecialProceduresforBeneficialOwners Ifyoubeneficiallyownoriginalnotesregisteredinthenameofabroker,dealer,commercialbank,trustcompanyorothernomineeandwishtotenderyourbeneficiallyownedoriginalnotesintheExchangeOffers,youshouldcontacttheregisteredholderpromptlyandinstructittotendertheoriginalnotesonyourbehalfandcomplywiththeinstructionssetforthinthisprospectusandtheletteroftransmittal.

GuaranteedDeliveryProcedures IfyoudesiretotenderyourOriginalNotes,but:

• ourOriginalNotesarenotimmediatelyavailable;

• youcannotdeliveryourOriginalNotes,theletteroftransmittaloranyotherdocumentsrequiredbytheletteroftransmittaltotheexchangeagentpriortotheexpirationdate;or

• theproceduresforbook-entrytransferofyourOriginalNotescannotbecompletedpriortotheexpirationdate,

youmaytenderyourOriginalNotespursuanttotheproceduresdescribedin"TheExchangeOffers—ProceduresforTenderingOriginalNotes—GuaranteedDelivery."

WithdrawalRights YoumaywithdrawyourtenderofOriginalNotesundertheExchangeOffersatanytimebeforetheapplicableExchangeOfferexpires.Anywithdrawalmustbeinaccordancewiththeproceduresdescribedin"TheExchangeOffers—WithdrawalRights."

ConsequencesofFailuretoExchangeOriginalNotes AnyOriginalNotesnottenderedintheExchangeOfferswillremainoutstandingandcontinuetobesubjecttoallthetermsandconditionsspecifiedintheindenture,includingtransferrestrictions,butwillnotretainanyrightsundertheexchangeandregistrationrightsagreement(includingtherighttoearnadditionalinterestrelatingtoourregistrationobligations)aftertheconsummationoftheExchangeOffers.ExceptinlimitedcircumstanceswithrespecttospecifictypesofholdersofOriginalNotes,wewillhavenofurtherobligationtoprovidefortheregistrationundertheSecuritiesActofsuchOriginalNotes.Ingeneral,theOriginalNotesmaynotbeofferedorsold,unlessregisteredundertheSecuritiesAct,exceptpursuanttoanexemptionfrom,orinatransactionnotsubjectto,theSecuritiesActandapplicablestatesecuritieslaws.

AnytradingmarketfortheOriginalNotescouldbeadverselyaffectedifsomebutnotalloftheOriginalNotesaretenderedandacceptedintheExchangeOffers.

TableofContents

AccountingTreatment TheExchangeNoteswillberecordedatthesamecarryingvalueastheOriginalNotes,asreflectedinouraccountingrecordsonthedateofexchange.Accordingly,wewillrecognizenogainorlossforaccountingpurposesupontheclosingoftheExchangeOffers.TheexpensesoftheExchangeOfferswillbeexpensedasincurred.

MaterialU.S.FederalIncomeTaxConsequences YourexchangeofOriginalNotesforExchangeNoteswillnotbetreatedasataxableeventforU.S.federalincometaxpurposes.See"MaterialU.S.FederalIncomeTaxConsequences."

UseofProceeds WewillnotreceiveanyproceedsfromtheExchangeOffersortheissuanceoftheExchangeNotes.BecausetheExchangeNoteshavesubstantiallyidenticaltermsastheOriginalNotes,theissuanceoftheExchangeNoteswillnotresultinanyincreaseinourindebtedness.TheExchangeOffersareintendedtosatisfyourobligationsundertheexchangeandregistrationrightsagreement.

ExchangeAgent DeutscheBankTrustCompanyAmericasisservingastheexchangeagentinconnectionwiththeExchangeOffers.Theaddress,telephonenumberandfacsimilenumberoftheexchangeagentissetforthunder"TheExchangeOffers—ExchangeAgent."

TableofContents

The Exchange Notes

ThetermsofeachseriesofExchangeNotesaresubstantiallyidenticaltothetermsoftheapplicableseriesofOriginalNotes,except(i)theExchangeNotesareregisteredundertheSecuritiesAct,(ii)thetransferrestrictionsandregistrationrightsapplicabletotheOriginalNotesdonotapplytotheExchangeNotes,and(iii)theExchangeNoteswillnotcontainprovisionsrelatingtoadditionalinterestrelatingtoourregistrationobligations.EachseriesofExchangeNoteswillevidencethesamedebtasthecorrespondingseriesofOriginalNotesandwillbeissuedunderthesameindentureasthecorrespondingseriesofOriginalNotes.

ThefollowingsummarycontainsbasicinformationabouttheExchangeNotesandisnotintendedtobecomplete.Itdoesnotcontainalltheinformationthatisimportanttoyou.ForamorecompleteunderstandingoftheExchangeNotes,pleaseread"DescriptionoftheExchangeNotes."

Issuer ElancoAnimalHealthIncorporated

ExchangeNotesOffered $500,000,000aggregateprincipalamountof3.912%SeniorNotesdue2021

$750,000,000aggregateprincipalamountof4.272%SeniorNotesdue2023

$750,000,000aggregateprincipalamountof4.900%SeniorNotesdue2028

InterestRates;InterestPaymentDates;Maturities The2021ExchangeNoteswillbearinterestatarateof3.912%perannumandwillmatureonAugust27,2021.Wewillpayinterestonthe2021ExchangeNotesonFebruary27andAugust27ofeachyearuntilmaturity.

The2023ExchangeNoteswillbearinterestatarateof4.272%perannumandwillmatureonAugust28,2023.Wewillpayinterestonthe2023ExchangeNotesonFebruary28andAugust28ofeachyearuntilmaturity.

The2028ExchangeNoteswillbearinterestatarateof4.900%perannumandwillmatureonAugust28,2028.Wewillpayinterestonthe2028ExchangeNotesonFebruary28andAugust28ofeachyearuntilmaturity.

InterestontheExchangeNoteswillaccruefromthemostrecentdatetowhichinterestontheOriginalNoteshasbeenpaid.

InterestRateAdjustment TheinterestratepayableoneachseriesofnoteswillbesubjecttoadjustmentfromtimetotimeifS&PorMoody's(or,ifapplicable,asubstituteratingagency)downgrades(orsubsequentlyupgrades)itsratingassignedtotherespectiveseriesofnotes.See"DescriptionoftheExchangeNotes—InterestRateAdjustment."

TableofContents

RepurchaseUponChangeofControl Upontheoccurrenceofachangeofcontroltriggeringevent,wewill,incertaincircumstances,berequiredtomakeanoffertopurchaseeachofthenotesatapriceequalto101%oftheaggregateprincipalamountofthenotestogetherwithaccruedandunpaidinterestto,butexcluding,thedateofrepurchase.See"DescriptionoftheExchangeNotes—ChangeofControl."

OptionalRedemption Wemayredeemthenotesofanyseries,inwholeorinpart,atanytimeattheredemptionpricesdescribedin"DescriptionoftheExchangeNotes—OptionalRedemption."

Ranking Thenotesareourseniorunsecuredobligationsandrankequallywithallofourexistingandfutureseniorunsecuredindebtedness.FollowingtheSeparation,substantiallyallofourassetsarethecapitalstockofoursubsidiariesandthenotesarenotguaranteedbyoursubsidiaries.Asaresult,thenotesarestructurallysubordinatedtoalldebtandotherliabilities,includingtradeandotherpayables,ofoursubsidiaries.

NoPriorMarket ThereiscurrentlynoestablishedmarketfortheExchangeNotes.Accordingly,wecannotassureyouastothedevelopmentorliquidityofanymarketfortheExchangeNotes.WedonotintendtoapplyforlistingoftheExchangeNotesonanysecuritiesexchange.

FormandDenomination WewillissuetheExchangeNotesintheformofoneormoreglobalnotesindefinitive,fullyregisteredbook-entryform.TheglobalnoteswillbedepositedwithoronbehalfofDTCandregisteredinthenameofCede&Co.,asnomineeofDTC.TheExchangeNoteswillbeissuedinminimumdenominationsof$2,000and$1,000integralmultiplesinexcessthereof.

RiskFactors YoushouldconsidercarefullyalloftheinformationsetforthinthisprospectuspriortoexchangingyourOriginalNotes.Inparticular,weurgeyoutoconsidercarefullythefactorssetforthundertheheading"RiskFactors."

TableofContents

Selected Historical and Pro Forma Financial Data

ElancoreportsitsfinancialresultsinaccordancewithU.S.generallyacceptedaccountingprinciples("U.S.GAAP").ThesummaryhistoricalconsolidatedandcombinedstatementsofoperationsdataforthethreemonthsendedMarch31,2019and2018andthesummaryhistoricalcombinedbalancesheetdataasofMarch31,2019presentedbelowhavebeenderivedfromourunauditedcombinedfinancialstatementsincludedelsewhereinthisprospectus.ThesummaryhistoricalconsolidatedandcombinedstatementsofoperationsdatafortheyearsendedDecember31,2018,2017and2016andtheconsolidatedandcombinedbalancesheetdataasofDecember31,2018and2017presentedbelowhavebeenderivedfromElanco'sauditedconsolidatedandcombinedfinancialstatementsincludedelsewhereinthisprospectus.TheselectedhistoricalcombinedstatementofoperationsdatafortheyearendedDecember31,2015andthecombinedbalancesheetdataasofDecember31,2016presentedbelowhavebeenderivedfromElanco'sauditedcombinedfinancialinformationnotincludedelsewhereinthisprospectus.TheselectedhistoricalcombinedstatementofoperationsdatafortheyearendedDecember31,2014andthecombinedbalancesheetdataasofDecember31,2015and2014presentedbelowhavebeenderivedfromElanco'sunauditedcombinedfinancialinformationnotincludedelsewhereinthisprospectus.

Elanco'scombinedfinancialstatementsfortheperiodspriortotheIPOincludetheattributionofcertainassetsandliabilitiesthathavehistoricallybeenheldattheLillycorporatelevelbutwhicharespecificallyidentifiableorattributabletoElanco.Elanco'scombinedfinancialstatementsfortheperiodpriortotheIPOalsoincludeexpenseallocationsrelatedtocertainLillycorporatefunctions,includingexecutiveoversight,treasury,legal,finance,humanresources,tax,internalaudit,financialreporting,informationtechnologyandinvestorrelations.TheseexpenseshavebeenallocatedtoElancobasedondirectusageorbenefitwherespecificallyidentifiable,withtheremainderallocatedprimarilyonaproratabasisofrevenue,headcountorothermeasures.Elancobelievesthatthisexpensemethodology,andtheresultsthereof,isreasonableforallperiodspresented.However,theallocationsmaynotbeindicativeoftheactualexpensethatwouldhavebeenincurredifElancohadoperatedasanindependent,publiclytradedcompanyfortheperiodspresented.ItisimpracticaltoestimatewhatElanco'sstandalonecostswouldhavebeenforthehistoricalperiodspresented.

TheselectedunauditedproformacondensedconsolidatedandcombinedstatementofoperationsdatafortheyearendedDecember31,2018presentedbelowhavebeenderivedfromElanco'sunauditedproformacondensedconsolidatedandcombinedstatementofoperationsincludedelsewhereinthisprospectus.TheunauditedproformainformationsetforthbelowreflectsElanco'shistoricalconsolidatedandcombinedstatementofoperations,asadjustedtogiveeffecttotheTransactions(asdefinedbelow)asiftheyhadoccurredasofJanuary1,2018.TheunauditedproformainformationisillustrativeandnotintendedtorepresentwhatElanco'sresultsofoperationsorfinancialpositionwouldhavebeenhadtheTransactionsoccurredonthedateindicatedortoprojectElanco'sresultsofoperationsorfinancialpositionforanyfutureperiod.ForanunderstandingoftheproformastatementofoperationsthatgiveproformaeffecttotheTransactions,see"UnauditedProFormaCondensedConsolidatedandCombinedStatementofOperations"includedelsewhereinthisprospectus.

ThefinancialstatementsincludedinthisprospectusmaynotbeindicativeofElanco'sfutureperformanceanddonotnecessarilyreflectwhatElanco'sfinancialpositionandresultsofoperationswouldhavebeenhadElancooperatedasanindependent,publiclytradedcompanyfortheentiretyoftheperiodspresented,includingchangesthatoccurredandwilloccurinElanco'soperationsandcapitalstructureasaresultoftheIPOandtheseparation.

TableofContents

Theunauditedproformacondensedconsolidatedandcombinedstatementofoperationsgiveseffecttothefollowingtransactions,whicharereferredto,collectively,asthe"Transactions,"asiftheyeachhadoccurredonJanuary1,2018:

• theimpactoftheentryintotheCreditFacilitiesandtheSeniorNotesOffering(the"DebtTransactions")andtheuseoftheproceedstherefrom.

Duetolocalregulatoryandoperationalrequirements,incertainnon-U.S.jurisdictions,thetransferofcertainassetsandliabilitiesofLilly'sanimalhealthbusinesseswilloccurfollowingthedateofthisprospectus.Elancohasnotadjustedtheaccompanyingunauditedproformacondensedconsolidatedandcombinedstatementofoperationsforthepotentialimpactofsuchdelayedtransfersbecauseanyimpactofthesetransfersisnotmaterialtoitsunauditedproformacondensedconsolidatedandcombinedstatementofoperations,individuallyorintheaggregate.

Youshouldreadtheinformationsetforthbelowtogetherwith"UnauditedProFormaCondensedConsolidatedandCombinedStatementofOperations,""Management'sDiscussionandAnalysisofFinancialConditionandResultsofOperation"andElanco'sconsolidatedandcombinedfinancialstatementsandtherelatednotestheretoincludedelsewhereinthisprospectus.

Three Months Ended

March 31, Year Ended December 31,

Historical

Pro Forma

2019 2018 2018 2017 2016 2015 2014 (In millions, except per share data) Statement of Operations Data: Revenue $ 731.1 $ 736.2 $ 3,066.8 $ 3,066.8 $ 2,889.0 $ 2,913.5 $ 2,909.1 $ 2,066.0Costs,expensesandother: Costofsales 343.8 360.0 1,573.8 1,573.8 1,493.9 1,409.0 1,533.7 932.6Researchanddevelopment 64.1 65.2 246.6 246.6 251.7 265.8 291.0 208.5Marketing,sellingandadministrative 181.1 180.0 735.2 735.2 779.8 784.8 916.0 561.2Amortizationofintangibleassets 49.0 49.2 197.4 197.4 221.2 170.7 163.0 57.6Assetimpairment,restructuringandotherspecialcharges 24.9 2.4 128.8 128.8 375.1 308.4 263.3 38.8Interestexpense,netofcapitalizedinterest 20.8 — 110.7 29.6 — — — —Other(income)expense,net 2.6 1.9 41.3 41.3 (0.1) (2.8) 1.6 1.4Income(loss)beforeincometaxes 44.8 77.5 33.0 114.1 (232.6) (22.4) (259.5) 265.9Incometaxexpense(benefit) 13.3 4.8 8.1 27.6 78.1 25.5 (48.7) 101.0Netincome(loss) $ 31.5 $ 72.7 $ 24.9 $ 86.5 $ (310.7) $ (47.9) $ (210.8) $ 164.9Netincome(loss)asapercentofrevenue 4% 10% 1% 3% (11)% (2)% (7)% 8%Netincome(loss)pershare—basicanddiluted $ 0.09 $ 0.25 $ 0.08 $ 0.28 $ (1.06) $ (0.16) $ (0.72) $ 0.56Weightedaveragesharesoutstanding—basic(1) 365.7 293.3 313.7 313.7 293.3 293.3 293.3 293.3Weightedaveragesharesoutstanding—diluted(1) 366.0 293.3 313.7 313.7 293.3 293.3 293.3 293.3

(1) TheweightedaveragesharesfortheperiodspriortotheIPOrepresentssharesofElancocommonstockheldbyLillyasifsuchshareshadbeenoutstandingfortheentireperiod.

TableofContents

As of December 31,

March 31,

Historical 2019 2018 2017 2016 2015 2014 (In millions, except per share data) Balance Sheet Data: Totalassets $ 8,747.4 $ 8,956.7 $ 8,940.3 $ 8,099.7 $ 8,433.6 $ 2,980.6Totalliabilities 708.2 3,759.2 1,160.0 1,082.3 1,004.1 551.5Long-termdebt 2,436.6 2,443.3 — — — —Totalequity 5,196.2 5,197.5 7,780.3 7,017.4 $ 7,429.5 $ 2,429.1Cash dividends declared per common share — — — — — —Book value per common share (2) 14.20 $ 14.22 — — — —

(2) RepresentsElancoshareholders'equitydividedbytheactualnumberofoutstandingshares.

TableofContents

RISK FACTORS

You should carefully consider the risks described below and all of the information contained in this prospectus before making a decision on whether or not to participate in the Exchange Offers. The occurrence of theevents described below could have a material adverse effect on Elanco's businesses, prospects, financial condition, results of operations and/or cash flows. In addition, other unknown or unpredictable economic, business,competitive, regulatory, geopolitical or other factors could have material adverse effects on our businesses, prospects, financial condition, results of operations and/or cash flows. Please read "Cautionary StatementRegarding Forward-Looking Statements" in this prospectus.

Risks Related to Elanco's Business and Industry

The animal health industry is highly competitive.

Theanimalhealthindustryishighlycompetitive.Elanco'scompetitorsincludestandaloneanimalhealthbusinesses,theanimalhealthbusinessesoflargepharmaceuticalcompanies,specialtyanimalhealthbusinessesandcompaniesthatmainlyproducegenericproducts.ElancobelievesmanyofitscompetitorsareconductingR&DactivitiesinareasservedbyElanco'sproductsandinareasinwhichitisdevelopingproducts.Severalnewstart-upcompaniesalsocompeteintheanimalhealthindustry.Elancoalsofacescompetitionfrommanufacturersofdrugsglobally,aswellasproducersofnutritionalhealthproducts.Thesecompetitorsmayhaveaccesstogreaterfinancial,marketing,technicalandotherresources.Asaresult,theymaybeabletodevotemoreresourcestodeveloping,manufacturing,marketingandsellingtheirproducts,initiatingorwithstandingsubstantialpricecompetitionormorereadilytakingadvantageofacquisitionsorotheropportunities.Further,consolidationintheanimalhealthindustrycouldresultinexistingcompetitorsrealizingadditionalefficienciesorimprovingportfoliobundlingopportunities,therebypotentiallyincreasingtheirmarketshareandpricingpower,whichcouldleadtoadecreaseinElanco'srevenueandprofitabilityandanincreaseincompetition.Forexample,manyofElanco'scompetitorshaverelationshipswithkeydistributorsand,becauseoftheirsize,theabilitytoofferattractivepricingincentives,whichmaynegativelyimpactorhinderElanco'srelationshipswiththesedistributors.Inadditiontocompetitionfromestablishedmarketparticipants,newentrantstotheanimalhealthmedicinesandvaccinesindustrycouldsubstantiallyreduceElanco'smarketshare,renderElanco'sproductsobsoleteordisruptElanco'sbusinessmodel.

TotheextentthatanyofElanco'scompetitorsaremoresuccessfulwithrespecttoanykeycompetitivefactor,orElancoisforcedtoreduce,orisunabletoraise,thepriceofanyofitsproductsinordertoremaincompetitive,itsbusiness,financialconditionandresultsofoperationscouldbemateriallyadverselyaffected.Competitivepressurecouldarisefrom,amongotherthings,morefavorablesafetyandefficacyproductprofiles,limiteddemandgrowthorasignificantnumberofadditionalcompetitiveproductsbeingintroducedintoaparticularmarket,pricereductionsbycompetitors,theabilityofcompetitorstocapitalizeontheireconomiesofscale,theabilityofcompetitorstoproduceorotherwiseprocureanimalhealthproductsatlowercoststhanElancoandtheabilityofcompetitorstoaccessmoreornewertechnologythanElanco.

Disruptive innovation and advances in veterinary medical practices, animal health technologies and alternatives to animal-derived protein could negatively affect the market for Elanco's products.

ThemarketsforElanco'sproductsareregularlyimpactedbytheintroductionand/orbroadmarketacceptanceofnewly-developedoralternativeproductsthataddressthediseasesandconditionsforwhichElancosellsproducts,including"green"or"holistic"healthproducts,speciallybreddisease-resistantanimalsorreplacementsformeat,milk,eggsorfishfromalternativenaturalorsyntheticsources.Forexample,themarketforElanco'scompanionanimaltherapeuticshasbeenparticularlyaffectedbyinnovationinnewmoleculesanddeliveryformulationsinrecentyears.TechnologicalbreakthroughsbyothersmayrenderobsoleteElanco'sproductsandreduceoreliminate

TableofContents

themarketforitsproducts.IntroductionoracceptanceofcompetinganimalhealthproductsandinnovationordisruptiveproteinalternativescouldmateriallyadverselyaffectElanco'sbusiness,financialconditionandresultsofoperations.

Regulatory restrictions and bans on the use of antibiotics and productivity products in food animals, as well as changing market demand, may continue to negatively affect demand for certain of Elanco's food animalproducts.

Overthepastfewyears,Elanco'soperationalresultshavebeen,andwillcontinuetobe,affectedbyregulationsandchangingmarketdemand.Incertainmarkets,includingtheU.S.,salesofcertainofElanco'sfoodanimalproductshavebeennegativelyaffectedbyanincreaseinconsumersentimentforproteinsanddairyproductsproducedwithouttheuseofantibioticsorotherproductsintendedtoincreaseanimalproduction.

Therearetwoclassesofantibioticsusedinanimalhealth:shared-class,ormedicallyimportant,antibiotics,whichareusedtotreatinfectiousdiseasecausedbypathogensthatoccurinbothhumansandanimals;andanimal-onlyantibiotics,whichareusedtotreatinfectiousdiseasecausedbypathogensthatoccurinanimalsonly.See"BusinessofElanco—Products—Antibiotics."Concernsthattheuseofantibioticsinfoodanimalproductionmayleadtoincreasedantibioticresistanceofhumanpathogenshaveresultedinincreasedregulationandchangingmarketdemand.InDecember2013,theU.S.Food&DrugAdministration(the"FDA")announcedfinalguidanceestablishingproceduresforthevoluntaryphase-outintheU.S.overathree-yearperiodoftheuseofshared-classantibioticsinanimalfeedorwaterforgrowthpromotioninfoodanimalproduction.Theguidanceallowsforcontinueduseofshared-classantibioticsinfood-producinganimalsunderthesupervisionofaveterinarianfortreatment,controland,undercertaincircumstances,forpreventionofdisease.TheFDAindicatedthatittookthisactiontohelppreservetheefficacyofshared-classantibioticstotreatinfectionsinhumans.Aspartofthoseefforts,stricterguidelinesgoverningtheadministrationofshared-classantibioticshaverecentlycomeintoeffect.AsofJanuary1,2017,undertheFDA'sguidanceandtherelatedruleknownastheVeterinaryFeedDirective,theuseofshared-classantibioticsinthewaterorfeedoffood-producinganimalsrequireswrittenauthorizationbyalicensedveterinarian.Inaddition,othercountriesinwhichElancosellsorplanstosellitsproducts,suchasFranceandVietnam,havepassedrestrictionsorbansonantibioticuse.Othercountrieshaveplacedrestrictionsorbansontheuseofspecificantibioticsincertainfood-producinganimals,regardlessoftherouteofadministration(infeedorinjectable).

From2015to2018,Elanco'srevenuefromshared-classantibioticsdeclinedataCAGRof6%,excludingtheimpactofforeignexchange.Thiswasdrivenprimarilybychangingregulationsinmanymarkets,includingtheVeterinaryFeedDirective,aswellaschangingmarketdemandandElanco'stiered-approachtoantibioticstewardship,whichincludedremovinggrowthpromotionfromlabelsandrequiringveterinaryoversightintheU.S.andothermarkets.Globally,during2018,Elanco'srevenuefromshared-classantibioticsdeclined2%,excludingtheimpactofforeignexchange,andrepresented12%(4%fromsalesintheU.S.and8%fromsalesoutsidetheU.S.)oftotalrevenue,downfrom16%in2015.From2015to2018,Elanco'srevenuefromanimal-onlyantibioticsgrewataCAGRof5%,excludingtheimpactofforeignexchange,drivenbysalesoutsidetheU.S.,whichoffsetaslightdeclineintheU.S.Globally,during2018,Elanco'srevenuefromanimal-onlyantibioticsgrew8%,excludingtheimpactofforeignexchange,andrepresented25%oftotalrevenue,upfrom23%in2015.In2018,87%ofElanco'srevenuefromanimal-onlyantibioticsresultedfromthesaleofionophores.Ionophoresareaspecialclassofanimal-onlyantimicrobials,andbecauseoftheiranimal-onlydesignation,modeofactionandspectrumofactivity,theirusehasnottodatebeenimpactedbyregulationsorchangingmarketdemandinmanymarketsoutsideoftheU.S.

TheimpactofchangesinregulationsandmarketpreferencesregardingtheuseofantibioticsinfoodanimalscouldhaveamaterialadverseeffectonElanco'sbusiness,financialconditionandresults

TableofContents

ofoperations.IfthereisanincreasedpublicperceptionthatconsumptionoffoodderivedfromanimalsthatutilizeElanco'sproductsposesarisktohumanhealth,theremaybeafurtherdeclineintheproductionofthosefoodproductsand,inturn,demandforElanco'sproducts.Inaddition,antibioticresistanceconcernswilllikelyresultinadditionalrestrictionsorbans,expandedregulationsorpublicpressuretofurtherreducetheuseofantibioticsinfoodanimals,increaseddemandforantibiotic-freeprotein,orchangesinthemarketacceptanceorregulatorytreatmentofionophores,anyofwhichcouldmateriallyadverselyaffectElanco'sbusiness,financialconditionandresultsofoperations.

Inaddition,Elanco'srevenuehasbeenimpactedbyregulatorychangesinChinaandothermarketsrestrictingtheuseofproductivityproducts,suchasthosecontainingractopamineinfoodanimals.ThishasresultedinmanyU.S.foodproducerswhoaccesssuchmarketseliminatingtheiruseofractopamine.Elanco'sFARuminants&SwineproductsOptaflexx andPaylean containractopamine.Ifmoreproducersdecidetoaccesssuchmarketsoradditionalmarketsrestricttheuseofractopamineorotherproductivityproducts,Elanco'sbusiness,financialconditionandresultsofoperationscouldbemateriallyadverselyaffected.

Generic products may be viewed as more cost-effective than Elanco's products.

Elancofacescompetitionfromproductsproducedbyothercompanies,includinggenericalternativestoElanco'sproducts.Elancodependsonpatentsandregulatorydataexclusivityperiodstoprovideitwithexclusivemarketingrightsforsomeofitsproducts.Patentsforindividualproductsexpireatdifferenttimesbasedonthedateofthepatentfiling(orsometimesthedateofpatentgrant)andthelegaltermofpatentsinthejurisdictionswheresuchpatentsareobtained.TheextentofprotectionaffordedbyElanco'spatentsvariesfromjurisdictiontojurisdictionandislimitedbythescopeoftheclaimedsubjectmatterofitspatents,thetermofthepatentandtheavailabilityandenforcementoflegalremediesintheapplicablejurisdiction.In2018,approximately72%ofElanco'srevenuewasfromproductsthatdidnothavepatentprotection,includingrevenuefromsomeofitstopproductssuchasRumensin ,Maxiban ,Denagard andTylan Premix .Otherproductsareprotectedbypatentsthatexpireoverthenextseveralyears.Forexample,certainpatentsrelatedtoTrifexis expireasearlyas2020intheU.S.,2021inJapanand2025inEuropeanterritories.Asthepatentsforabrandnameproductexpire,competitorsmaybegintointroducegenericorotheralternatives,andasaresult,Elancomayfacecompetitionfromlower-pricedalternativestomanyofitsproducts.Forexample,ElancohasexperiencedsignificantcompetitiveheadwindsfromgenericractopamineintheU.S.Inthethirdquarterof2013,alargeestablishedanimalhealthcompanyreceivedU.S.approvalforgenericractopamine.U.S.revenuefromOptaflexx ,Elanco'sractopaminebeefproduct,hasdeclinedataCAGRof24%from2015to2018asaresultofgenericcompetitionandinternationalregulatoryrestrictions.Elancomayfacesimilarcompetitioninthefutureforexistingproductsthatdonotbenefitfromexclusivity,includingRumensin ,whichhasnotbenefittedfrompatentprotectionintheU.S.forover20years,orforexistingproductswithmaterialpatentsexpiringinthefuture.See"BusinessofElanco—IntellectualProperty."

Genericcompetitorsarebecomingmoreaggressiveintermsoflaunchingproductsbeforepatentrightsexpire,and,becauseofattractivepricing,salesofgenericproductsareanincreasingpercentageofoverallanimalhealthsalesincertainregions.Althoughtheimpactofgenericcompetitionintheanimalhealthindustrytodatehasnottypicallymirroredthatseeninhumanhealth,productpricingandtheimpactofgenericcompetitioninthefuturemaymorecloselymirrorhumanhealthasaresultofchangesinindustrydynamics,suchaschannelexpansion,consolidation,anincreaseintheavailabilityanduseofpetinsuranceandthepotentialforgenericcompetitionbyestablishedanimalhealthbusinesses.Ifanimalhealthcustomersincreasetheiruseofneworexistinggenericproducts,Elanco'sbusiness,financialconditionandresultsofoperationscouldbemateriallyadverselyaffected.

TableofContents

Elanco may not successfully implement its business strategies or achieve targeted cost efficiencies and gross margin improvements.

Elancoispursuingstrategicinitiativesthatmanagementconsiderscriticaltoitslong-termsuccess,including,butnotlimitedto:improvingmanufacturingprocesses,reducingitsmanufacturingfootprint,achievingleaninitiatives,consolidatingitsCMOnetwork,strategicallyinsourcingprojects,pursuingcostsavingsopportunitieswithrespecttorawmaterialsthroughanewprocurementprocessandimprovingtheproductivityofitssalesforce.Elancomaypursueadditionalstrategicinitiativesinthefuturetoimprovegrossmarginsandachieveitstargetedcostefficiencies.Elancoalsohasacquiredorpartneredwithanumberofsmalleranimalhealthbusinesses,anditintendstocontinuetodosointhefuture.Therearesignificantrisksinvolvedwiththeexecutionoftheseinitiatives,includingsignificantbusiness,economicandcompetitiveuncertainties,manyofwhichareoutsideofElanco'scontrol.Accordingly,Elancomaynotsucceedinimplementingthesestrategicinitiatives.Realizingtheanticipatedbenefitsfromtheseinitiatives,ifanybenefitsareachievedatall,maytakeseveralyears.Elancomaybeunabletoachieveitstargetedcostefficienciesandgrossmarginimprovements.Additionally,Elancomayhaveinsufficientaccesstocapitaltofundinvestmentsinstrategicinitiatives,oritsbusinessstrategymaychangefromtimetotime,whichcoulddelayitsabilitytoimplementinitiativesthatitbelievesareimportanttoitsbusiness.

Consolidation of Elanco's customers and distributors could negatively affect the pricing of its products.

Third-partydistributors,veterinariansandfoodanimalproducersareElanco'sprimarycustomers.Inrecentyears,therehasbeenatrendtowardstheconcentrationofveterinariansinlargeclinicsandhospitals.Inaddition,foodanimalproducers,particularlyswineandpoultryproducers,andElanco'sdistributorshaveseenrecentconsolidationintheirindustries.Furthermore,Elancohasseentheexpansionoflargercross-bordercorporatecustomersandanincreaseintheconsolidationofbuyinggroups(cooperativesofveterinarypracticesthatleveragevolumetopursuediscountsfrommanufacturers).Thepaceofconsolidationandstructureofmarketsvariesgreatlyacrossgeographies.Ifthesetrendstowardsconsolidationcontinue,Elanco'scustomerscouldattempttoimprovetheirprofitabilitybyleveragingtheirbuyingpowertoobtainfavorablepricing.TheresultingdecreaseinElanco'spricescouldhaveamaterialadverseeffectonitsbusiness,financialconditionandresultsofoperations.

An outbreak of infectious disease carried by food animals could negatively affect the demand for, and sale and production of, Elanco's food animal products.

SalesofElanco'sfoodanimalproductscouldbemateriallyadverselyaffectedbytheoutbreakofdiseasecarriedbyfoodanimals,whichcouldleadtothewidespreaddeathorprecautionarydestructionoffoodanimalsaswellasthereducedconsumptionanddemandforanimalprotein.Inaddition,outbreaksofdiseasecarriedbyfoodanimalsmayreduceregionalorglobalsalesofparticularanimal-derivedfoodproductsorresultinreducedexportsofsuchproducts,eitherduetoheightenedexportrestrictionsorimportprohibitions,whichmayreducedemandforElanco'sfoodanimalproductsduetoreducedherdorflocksizes.

Inrecentyears,outbreaksofvariousdiseases,includingavianinfluenza,foot-and-mouthdisease,bovinespongiformencephalopathy(otherwiseknownasBSEor"madcow"disease)andporcineepidemicdiarrheavirus(otherwiseknownasPEDV),havenegativelyimpactedsalesofElanco'sanimalhealthproducts.Thediscoveryofadditionalcasesofanyofthese,ornew,diseasesmayresultinadditionalrestrictionsonanimalprotein,reducedherdorflocksizes,orreduceddemandforanimalprotein,anyofwhichmayhaveamaterialadverseeffectonElanco'sbusiness,financialconditionandresultsofoperations.Inaddition,theoutbreakofanyhighlycontagiousdiseasenearElanco'smainproductionsitescouldrequireElancotoimmediatelyhaltproductionofitsproductsatsuchsitesorforceittoincursubstantialexpensesinprocuringrawmaterialsorproductselsewhere.

TableofContents

Elanco's R&D, acquisition and licensing efforts may fail to generate new products or expand the use of its existing products.

Elanco'sfuturesuccessdependsonbothitsexistingproductportfolioanditspipelineofnewproducts,includingnewproductsthatitmaydevelopthroughjointventuresandproductsthatitisabletoobtainthroughlicenseoracquisition.Elancocommitssubstantialeffort,fundsandotherresourcestoR&D,boththroughitsowndedicatedresourcesandthroughcollaborationswiththirdparties.

Elancomaybeunabletodeterminewithaccuracywhenorwhetheranyofitsproductsnowunderdevelopmentwillbeapprovedorlaunched,oritmaybeunabletodevelop,licenseorotherwiseacquireproductcandidatesorproducts.Inaddition,Elancocannotpredictwhetheranyproducts,oncelaunched,willbecommerciallysuccessfulorwillachievesalesandrevenuethatareconsistentwithitsexpectations.Theanimalhealthindustryissubjecttoregionalandlocaltrendsandregulationsand,asaresult,productsthataresuccessfulinsomemarketsmaynotachievesimilarsuccesswhenintroducedintoothermarkets.Furthermore,thetimingandcostofElanco'sR&Dmayincrease,andElanco'sR&Dmaybecomelesspredictableas,amongotherthings,regulationsapplicabletoitsindustrymaymakeitmoretime-consumingand/orcostlytoresearch,developandregisterproducts.IfElancoisunabletogeneratenewproductsorexpandtheuseofitsexistingproducts,itsbusiness,financialconditionandresultsofoperationswillbemateriallyadverselyaffected.Forexample,between2015and2017,priortoElanco'sFebruary2018launchofCredelio intheU.S.,itexperiencedaninnovationlaginthecompanionanimalparasiticidespace.Intheabsenceofacompetitivecombinedoralfleaandtickproduct,Elanco'sU.S.companionanimalparasiticideportfoliorevenuedeclined15%in2017,excludingtheimpactonrevenueresultingfromareductionininventorylevelswithinElanco'sdistributionchannel.

Inaddition,someofElanco'sgrowthhasoccurredthroughLilly'sacquisitions,includingNovartisAnimalHealth,LohmannAnimalHealth,JanssenAnimalHealthandtheBIVetmedicaU.S.vaccinesportfolio.However,followingtheseparation,ElanconolongerbenefitsfromLilly'sscale,capitalbaseandfinancialstrength.

Elanco may not be able to successfully complete favorable transactions or successfully integrate acquired businesses when it pursues acquisitions, divestitures, joint ventures or other significant transactions, such as theacquisition of Aratana Therapeutics, Inc.

Fromtimetotime,Elancoevaluatespotentialacquisitions,divestituresorjointventures,suchastheacquisitionofAratanaTherapeutics,Inc.,thatwouldfurtheritsstrategicobjectives.ThecompletionofsuchtransactionsisoftensubjecttoconditionsthatmaybeoutsideElanco'scontrol,includingobtainingtherequisiteapprovalofthestockholdersofthetargetcompanyand/orgovernmentapprovalpursuanttotheHart-Scott-RodinoAntitrustImprovementsActof1976,asamended.Accordingly,Elancomaynotbeabletocompleteannouncedandsignedtransactionsandthereforenotrealizetheanticipatedbenefitstherefrom.

Aftertheclosingofanacquisition,includingthetransactionwithAratanaTherapeutics,Inc.,Elancowillberequiredtodevotesignificantmanagementattentionandresourcestointegratingtheportfolioandoperationsofthetargetcompany.PotentialdifficultiesthatElancomayencounterintheintegrationprocess,includingasaresultofdistractionofitsmanagement,includethefollowing:

• theinabilitytocombinebusinessesoftheacquiredcompanywithElanco'sinamannerthatpermitsustoachievethecostsavingsorothersynergiesanticipatedasaresultofthetransactionortoachievesuchcostsavingsorotheranticipatedsynergiesinatimelymanner,whichcouldresultinElanconotrealizingsomeanticipatedbenefitsofthetransactioninthetimeframeanticipated,oratall;

• theinabilitytorealizetheanticipatedvaluefromvariousassetsoftargetcompanies;

TableofContents

• lossofkeyemployees;

• potentialunknownliabilitiesandunforeseenincreasedexpenses,delaysorunfavorableconditionsinconnectionwiththeclosingofthetransactionandthesubsequentintegration;and

• performanceshortfallsatElancoorthetargetcompanyasaresultofthediversionofmanagement'sattentionfromongoingbusinessactivitiesasaresultofcompletingthetransactionandintegratingthecompanies'operations.

Futureacquisitionscouldalsoresultinpotentiallydilutiveissuancesofequitysecurities,theincurrenceofdebt,contingentliabilitiesoramortizationexpensesrelatedtointangibleassets,andincreasedoperatingexpenses,whichcouldadverselyaffectElanco'sresultsofoperationsandfinancialcondition.Furthermore,ifElancoissuesequityordebtsecuritiestoraiseadditionalfunds,Elanco'sexistingshareholdersmayexperiencesignificantdilution,andthenewequityordebtsecuritiesmayhaverights,preferencesandprivilegesseniortothoseofElanco'sexistingstockholders.Furthermore,ifElancosellsasubstantialnumberofsharesofcommonstockinthepublicmarkets,theavailabilityofthosesharesforsalecouldadverselyaffectthemarketpriceofitscommonstock.Suchsales,ortheperceptioninthemarketthatholdersofalargenumberofsharesintendtosellshares,coulddepressthemarketpriceofElanco'scommonstockandimpairitsabilitytoraisecapitalthroughthesaleofadditionalequitysecurities.

Elanco had losses in recent periods.

Inrecentperiods,Elancohasincurrednetlosses,asreportedonacombinedbasis,includinganetincome(loss)foreachoftheyearsendedDecember31,2017and2016of$(310.7)millionand$(47.9)million,respectively.See"Management'sDiscussionandAnalysisofFinancialConditionandResultsofOperationsofElanco."Elancocouldcontinuetoincurassetimpairment,restructuringandotherspecialchargesandcouldreportlossesinthefuture.Elancoalsoexpectstocontinuetoincursubstantialexpenditurestodevelop,manufactureandmarketitsproductsandimplementitsbusinessstrategies.Elancomayencounterunforeseenexpenses,difficulties,complications,delays,adverseeventsandotherunknownfactorsthatmaymateriallyadverselyaffectitsbusiness.

The misuse or off-label use of Elanco's products may harm its reputation or result in financial or other damages.

Elanco'sproductshavebeenapprovedforuseunderspecificcircumstancesforthetreatmentofcertaindiseasesandconditionsinspecificspecies.Theremaybeincreasedriskofproductliabilityclaimsifveterinarians,foodanimalproducers,petownersorothersattempttouseElanco'sproductsoff-label,includingtheuseofitsproductsinspecies(includinghumans)forwhichtheyhavenotbeenapproved.Furthermore,theuseofElanco'sproductsforindicationsotherthanthoseforwhichitsproductshavebeenapprovedmaynotbeeffective,whichcouldharmitsreputationandleadtoanincreasedriskoflitigation.IfElancoisdeemedbyagovernmentalorregulatoryagencytohaveengagedinthepromotionofanyofitsproductsforoff-labeluse,suchagencycouldrequestthatElancomodifyitstrainingorpromotionalmaterialsandpractices,andElancocouldbesubjecttosignificantfinesandpenalties,andtheimpositionofthesesanctionscouldalsoaffectitsreputationandpositionwithintheindustry.AnyoftheseeventscouldmateriallyadverselyaffectElanco'sbusiness,financialconditionandresultsofoperations.

Animal health products are subject to unanticipated safety, quality or efficacy concerns, which may harm Elanco's reputation.

Unanticipatedsafety,qualityorefficacyconcernsarisefromtimetotimewithrespecttoanimalhealthproducts,whetherornotscientificallyorclinicallysupported,leadingtoproductrecalls,withdrawalsorsuspendedordecliningsales,aswellasproductliabilityandotherclaims.

TableofContents

Regulatoryactionsbasedonthesetypesofsafety,qualityorefficacyconcernscouldimpactall,orasignificantportion,ofaproduct'ssalesandcould,dependingonthecircumstances,materiallyadverselyaffectElanco'sresultsofoperations.

Inaddition,sinceElancodependsonpositiveperceptionsofthesafety,qualityandefficacyofitsproducts,andanimalhealthproductsgenerally,byfoodproducers,veterinariansandpetowners,anyconcernastothesafety,qualityorefficacyofElanco'sproducts,whetheractualorperceived,mayharmitsreputation.TheseconcernsandtherelatedharmtoElanco'sreputationcouldmateriallyadverselyaffectitsbusiness,financialconditionandresultsofoperations,regardlessofwhethersuchreportsareaccurate.

Elanco's business may be negatively affected by weather conditions and the availability of natural resources.

TheanimalhealthindustryanddemandformanyofElanco'sproductsinaparticularregionareaffectedbyweatherconditions,varyingweatherpatternsandweather-relatedpressuresfrompests,suchasticks.Asaresult,Elancomayexperienceregionalandseasonalfluctuationsinitsresultsofoperations.

Foodanimalproducersdependontheavailabilityofnaturalresources,includinglargesuppliesoffreshwater.Theiranimals'healthandtheirabilitytooperatecouldbeadverselyaffectediftheyexperienceashortageoffreshwaterduetohumanpopulationgrowthorfloods,droughtsorotherweatherconditions.Intheeventofadverseweatherconditionsorashortageoffreshwater,veterinariansorfoodanimalproducersmaypurchaselessofElanco'sproducts.

Further,heatwavesmaycausestressinanimalsandleadtoincreasedvulnerabilitytodisease,reducedfertilityratesandreducedmilkproduction.Droughtsmaythreatenpastureandfeedsuppliesbyreducingthequalityandamountofforageavailabletograzinglivestock,whileclimatechangemayincreasetheprevalenceofparasitesanddiseasesthataffectfoodanimals.Adverseweatherconditionsmayalsohaveamaterialimpactontheaquaculturebusiness.Changesinwatertemperaturescouldaffectthetimingofreproductionandgrowthofvariousfishspecies,aswellastriggertheoutbreakofcertainwaterbornediseases.

Inaddition,veterinaryhospitalsandpractitionersdependonvisitsfrom,andaccessto,theanimalsundertheircare.Veterinarians'patientvolumeandabilitytooperatecouldbeadverselyaffectediftheyexperienceprolongedsnow,iceorothersevereweatherconditions,particularlyinregionsnotaccustomedtosustainedinclementweather.

Elanco may not be able to realize the expected benefits of its investments in emerging markets and is subject to certain risks due to its presence in emerging markets, including political or economic instability andfailure to adequately comply with legal and regulatory requirements.

Elancohastakenstepstoincreaseitspresenceinselectemergingmarkets,includingbyexpandingitssalesorganizationandproductofferingsinthesemarkets.FailuretocontinuetomaintainandexpandElanco'sbusinessinemergingmarketscouldmateriallyadverselyaffectitsbusiness,financialconditionandresultsofoperations.

Inaddition,certainemergingmarketshavelegalsystemsthatarelessdeveloped.OtherjurisdictionsinwhichElancoconductsbusinessmayhavelegalandregulatoryregimesthatdiffermateriallyfromU.S.lawsandregulations,arecontinuouslyevolvingordonotincludesufficientjudicialoradministrativeguidancetointerpretsuchlawsandregulations.Compliancewithdiverselegalrequirementsiscostlyandtime-consumingandrequiressignificantresources.ViolationsorpossibleviolationsofapplicablelawsorregulationsbyElanco'semployeesmayresultininvestigationcosts,potentialpenaltiesandotherrelatedcostswhichinturncouldnegativelyaffectitsreputationanditsresultsofoperations.

TableofContents

Somecountrieswithinemergingmarketsmaybeespeciallyvulnerabletoperiodsoflocal,regionalorglobaleconomic,politicalorsocialinstabilityorcrisis.Forexample,Elanco'ssalesincertainemergingmarketshavesufferedfromextendedperiodsofdisruptionduetonaturaldisasters.Furthermore,Elancohasalsoexperiencedlowerthanexpectedsalesincertainemergingmarketsduetolocal,regionalandglobalrestrictionsonbankingandcommercialactivitiesinthosecountries.Inaddition,certainemergingmarketshavecurrenciesthatfluctuatesubstantially,whichmayimpactElanco'sfinancialperformance.Forthesereasons,amongothers,doingbusinesswithinemergingmarketscarriessignificantrisks.

Modification of foreign trade policy may harm Elanco's food animal product customers.

Changesinlaws,agreementsandpoliciesgoverningforeigntradeintheterritoriesandcountrieswhereElanco'scustomersdobusinesscouldnegativelyimpactsuchcustomers'businessesandadverselyaffectitsresultsofoperations.AnumberofElanco'scustomers,particularlyU.S.-basedfoodanimalproducers,benefitfromfreetradeagreements,suchastheNorthAmericanFreeTradeAgreement("NAFTA").InNovember2018,theU.S.negotiatedanewtradedealwithCanadaandMexicoknownastheUnitedStates-Mexico-Canada-Agreement("USMCA"),aimedatre-negotiatingandupdatingthetermsofNAFTA.TheUSMCAstillrequiresratificationbylegislativebodiesinallthreecountriesbeforeitcantakeeffect.IftheUSMCAisnotratifiedandtheU.S.weretowithdrawfromormateriallymodifyNAFTAorotherinternationaltradeagreementstowhichitisapartyoriftheU.S.weretoengageintradedisputesortheimpositionoftariffs,Elanco'scustomerscouldbeharmed,andasaresult,Elanco'sbusiness,financialconditionandresultsofoperationscouldbemateriallyadverselyaffected.

Elanco's business is subject to risk based on global economic conditions.

MacroeconomicbusinessandfinancialdisruptionscouldhaveamaterialadverseeffectonElanco'sbusiness,financialconditionandresultsofoperations.CertainofElanco'scustomersandsupplierscouldbeaffecteddirectlybyaneconomicdownturnandcouldfaceconstraintsontheavailabilityofcreditordecreasedcashflowthatcouldgiverisetopaymentdelays,increasedcreditrisk,bankruptciesandotherfinancialhardshipsthatcoulddecreasethedemandforElanco'sproductsorhinderitsabilitytocollectamountsduefromitscustomers.IfoneormoreofElanco'slargecustomers,includingdistributors,discontinuesormodifiestheirrelationshipwithitasaresultofeconomicconditionsorotherwise,itsbusiness,financialconditionandresultsofoperationsmaybemateriallyadverselyaffected.Inaddition,economicconcernsmaycausesomepetownerstoforgoordefervisitstoveterinarypracticesorcouldreducetheirwillingnesstotreatpethealthconditionsortocontinuetoownapet.Furthermore,Elanco'sexposuretocreditandcollectabilityriskishigherincertaininternationalmarketsanditsabilitytomitigatesuchrisksmaybelimited.Elanco'sproceduresintendedtomonitorandlimititsexposuretocreditandcollectabilityriskmaynoteffectivelylimitsuchriskandavoidlosses.

Elanco's results of operations are dependent upon the success of its top products.

IfanyofElanco'stopproductsexperienceissues,suchasdisruptiveinnovationsortheintroductionofmoreeffectivecompetitiveproducts,negativepublicity,changestoveterinarianorcustomerpreferences,lossofpatentprotection,materialproductliabilitylitigation,neworunexpectedsideeffects,manufacturingdisruptionsand/orregulatoryproceedings,itsrevenuecouldbenegativelyimpacted,perhapssignificantly.Elanco'stopfiveproducts,Rumensin ,Trifexis ,Maxiban ,Denagard andInterceptor Plus ,contributedapproximately31%ofitsrevenuein2018.Anyissueswiththesetopproducts,particularlyRumensin ,whichcontributedapproximately11%ofElanco'srevenuein2018,couldhaveamaterialadverseeffectonitsbusiness,financialconditionandresultsofoperations.

TableofContents

Elanco's business is subject to risk based on customer exposure to rising costs and reduced customer income.

Feed,fuel,transportationandotherkeycostsforfoodanimalproducersmayincreaseoranimalproteinpricesorsalesmaydecrease.EitherofthesetrendscouldcausedeteriorationinthefinancialconditionofElanco'sfoodanimalproductcustomers,potentiallyinhibitingtheirabilitytopurchaseitsproductsorpayitforproductsdelivered.Elanco'sfoodanimalproductcustomersmayoffsetrisingcostsbyreducingspendingonitsfoodanimalproducts,includingbyswitchingtolower-costalternativestoitsproducts.Inaddition,concernsaboutthefinancialresourcesofpetownerscouldcauseveterinarianstoaltertheirtreatmentrecommendationsinfavoroflower-costalternativestoElanco'sproducts,whichcouldresultinadecreaseinsalesofElanco'scompanionanimalproducts,especiallyindevelopedcountrieswherethereisahigherrateofpetownership.RisingcostsorreducedincomeforElanco'scustomerscouldhaveamaterialadverseeffectonitsbusiness,financialconditionandresultsofoperations.

For Elanco's companion animal products, increased use of alternative distribution channels, or changes within existing distribution channels, could negatively impact its market share, margins and distribution of itsproducts.

Inmostmarkets,petownerstypicallypurchasetheiranimalhealthproductsdirectlyfromveterinarians.However,petownersincreasinglyhavetheoptiontopurchaseanimalhealthproductsfromsourcesotherthanveterinarians,suchasonlineretailers,"big-box"retailstoresorotherover-the-counterdistributionchannels.Thistrendhasbeendemonstratedbythesignificantshiftawayfromtheveterinariandistributionchannelinthesaleoffleaandtickproductsinrecentyears.Petownersalsocoulddecreasetheirrelianceon,andvisitsto,veterinariansastheyrelymoreoninternet-basedanimalhealthinformation.BecauseElancomarketsitscompanionanimalprescriptionproductsprimarilythroughtheveterinariandistributionchannel,anydecreaseinvisitstoveterinariansbypetownerscouldreduceitsmarketshareforsuchproductsandmateriallyadverselyaffectitsbusiness,financialconditionandresultsofoperations.Inaddition,petownersmaysubstitutehumanhealthproductsforanimalhealthproductsifhumanhealthproductsaredeemedtobelower-costalternatives.

LegislationhasalsobeenproposedintheU.S.,andmaybeproposedintheU.S.orabroadinthefuture,thatcouldimpactthedistributionchannelsforElanco'scompanionanimalproducts.Forexample,suchlegislationmayrequireveterinarianstoprovidepetownerswithwrittenprescriptionsanddisclosurethatthepetownermayfillprescriptionsthroughathirdparty,whichmayfurtherreducethenumberofpetownerswhopurchasetheiranimalhealthproductsdirectlyfromveterinarians.SuchrequirementsmayleadtoincreaseduseofgenericalternativestoElanco'sproductsortheincreasedsubstitutionofitscompanionanimalproductswithotheranimalhealthproductsorhumanhealthproductsifsuchotherproductsaredeemedtobelower-costalternatives.ManystatesalreadyhaveregulationsrequiringveterinarianstoprovideprescriptionstopetownersuponrequestandtheAmericanVeterinaryMedicalAssociationhaslong-standingpoliciesinplacetoencouragethispractice.

Overtime,theseandothercompetitiveconditionsmayincreaseElanco'suseofonlineretailers,"big-box"retailstoresorotherover-the-counterdistributionchannelstosellitscompanionanimalproducts.Elancomaynotbeadequatelypreparedorabletodistributeitscompanionanimalproductsifanincreasedportionofitssalesoccursthroughthesechannels.Also,Elancomayrealizelowermarginsonsalesthroughthesedistributionchannelsthanitdoesonsalesthroughveterinarians.AnyoftheseeventscouldmateriallyadverselyaffectElanco'sbusiness,financialconditionandresultsofoperations.

Inaddition,ifoneormoreofElanco'scompanionanimaldistributorsdiscontinuesormodifiestheirrelationshipwithit,Elanco'sbusiness,financialconditionandresultsofoperationsmaybemateriallyadverselyaffected.Forexample,in2017,achangeinElanco'sU.S.inventorymanagementpracticesresultedinarevenuelagasexistinginventorywassolddown,whichmanagementestimatesdecreaseditsrevenuebyapproximately$35million.

TableofContents

Loss of Elanco's executive officers or other key personnel could disrupt its operations.

Elancodependsontheeffortsofitsexecutiveofficersandotherkeypersonnel.Elanco'sexecutiveofficersandotherkeypersonnelarenotcurrently,andarenotexpectedtobe,subjecttonon-competeprovisions.Inaddition,Elancohasnotenteredintoemploymentagreementswithitsexecutiveofficersorotherkeypersonnel.Anyunplannedturnoveroritsfailuretodevelopanadequatesuccessionplanforoneormoreofitsexecutiveofficerorotherkeypersonnelpositionscoulddepleteitsinstitutionalknowledgebaseanderodeitscompetitiveadvantage.ThelossorlimitedavailabilityoftheservicesofoneormoreofElanco'sexecutiveofficersorotherkeypersonnel,oritsinabilitytorecruitandretainqualifiedexecutiveofficersorotherkeypersonnelinthefuture,could,atleasttemporarily,haveamaterialadverseeffectonitsbusiness,financialconditionandresultsofoperations.

Elanco may be required to write down goodwill or identifiable intangible assets.

UnderU.S.GAAP,ifElancodeterminesgoodwilloridentifiableintangibleassetsareimpaired,itwillberequiredtowritedowntheseassetsandrecordanon-cashimpairmentcharge.AsofDecember31,2018,Elancohadrecordedonitsbalancesheetgoodwillof$3.0billionandidentifiableintangibleassetsof$2.5billion.Identifiableintangibleassetsconsistprimarilyofmarketedproductsacquiredorlicensedfromthirdparties,licensedplatformtechnologiesthathavealternativefutureusesinR&D,manufacturingtechnologies,andcustomerrelationshipsfrombusinesscombinations.Elancoalsohasindefinite-livedintangibleassets,whichconsistofacquiredin-processR&Dprojectsfrombusinesscombinationsthataresubjecttoimpairmentandnon-cashimpairmentcharges.

Determiningwhetheranimpairmentexistsandtheamountofthepotentialimpairmentinvolvesquantitativedataandqualitativecriteriathatarebasedonestimatesandassumptionsrequiringsignificantmanagementjudgment.Futureeventsornewinformationmaychangemanagement'svaluationofanintangibleassetinashortamountoftime.ThetimingandamountofimpairmentchargesrecordedinElanco'sconsolidatedandcombinedstatementsofoperationsandwrite-downsrecordedinitsconsolidatedandcombinedbalancesheetscouldvaryifitsmanagement'sconclusionschange.AnyimpairmentofgoodwilloridentifiableintangibleassetscouldhaveamaterialadverseeffectonElanco'sbusiness,financialconditionandresultsofoperations.

As a standalone public company, Elanco may expend additional time and resources to comply with rules and regulations that did not previously apply to it, and failure to comply with such rules may lead investors tolose confidence in Elanco's financial data.

Asastandalonepubliccompany,ElancoissubjecttothereportingrequirementsoftheExchangeAct,theSarbanes-OxleyAct,theDodd-FrankWallStreetReformandConsumerProtectionActandregulationsoftheNYSE.ElancohasestablishedalloftheproceduresandpracticesrequiredasasubsidiaryofLilly,butitmustcontinuetoimplementothersasaseparate,standalonepubliccompany.ContinuingtoestablishandexpandsuchproceduresandpracticeswillincreaseElanco'slegal,accountingandfinancialcompliancecosts,willmakesomeactivitiesmoredifficult,time-consumingandcostlyandcouldbeburdensomeonElanco'spersonnel,systemsandresources.Elancoisdevotingandwillcontinuetodevotesignificantresourcestoaddressthesepubliccompanyrequirements,includingcomplianceprogramsandinvestorrelations,aswellasElanco'sfinancialreportingobligations.Asaresult,Elancohasandwillcontinuetoincursignificantlegal,accountingandotherexpensesthatitdidnotpreviouslyincurtocomplywiththeserulesandregulations.Furthermore,theneedtoestablishthecorporateinfrastructurenecessaryforastandalonepubliccompanymaydivertsomeofElancomanagement'sattentionfromoperatingElanco'sbusinessandimplementingitsstrategy.However,themeasuresElancotakesmaynotbesufficienttosatisfyitsobligationsasapubliccompany.Inaddition,Elancocannotpredictorestimatetheamountofadditionalcostsitmayincurinordertocomplywiththeserequirements.

TableofContents

Elancohasmade,andwillcontinuetomake,changestoitsinternalcontrolsandproceduresforfinancialreportingandaccountingsystemstomeetitsreportingobligations.Inparticular,asapubliccompany,ElancomanagementisrequiredtoconductanannualevaluationofElanco'sinternalcontrolsoverfinancialreportingandincludeareportofmanagementonElanco'sinternalcontrolsinitsannualreportsonForm10-K.Undercurrentrules,ElancowillbesubjecttotheserequirementsbeginningwithitsannualreportonForm10-KfortheyearendingDecember31,2019.Inaddition,ElancowillberequiredtohaveitsindependentregisteredpublicaccountingfirmattesttotheeffectivenessofElanco'sinternalcontrolsoverfinancialreportingpursuanttoAuditingStandardNo.5beginningwithElanco'sannualreportonForm10-KfortheyearendingDecember31,2019.IfElancoisunabletoconcludethatithaseffectiveinternalcontrolsoverfinancialreporting,orifElanco'sregisteredpublicaccountingfirmisunabletoprovideElancowithanattestationandanunqualifiedreportastotheeffectivenessofElanco'sinternalcontrolsoverfinancialreporting,investorscouldloseconfidenceinthereliabilityofElanco'sfinancialstatements,whichcouldresultinadecreaseinthevalueofitscommonstock.

Elanco's R&D relies on evaluations of animals, which may become subject to bans, additional restrictive regulations or increased attention from activism movements.

Asananimalhealthmedicinesandvaccinesbusiness,Elancoisrequiredtoevaluatetheeffectofitsexistingandnewproductsinanimalsinordertoregistersuchproducts.Animaltestingincertainindustrieshasbeenthesubjectofcontroversyandadversepublicity.Someorganizationsandindividualshaveattemptedtobananimaltestingorencouragetheadoptionofnewregulationsapplicabletoanimaltesting.Totheextentthattheactivitiesofsuchorganizationsandindividualsaresuccessful,Elanco'sR&D,andbyextensionitsbusiness,financialconditionandresultsofoperations,couldbemateriallyadverselyaffected.Inaddition,negativepublicityaboutElancooritsindustrycouldharmitsreputation.

Manufacturing problems and capacity imbalances may cause product launch delays, inventory shortages, recalls or unanticipated costs.

Inordertosellitsproducts,Elancomustbeabletoproduceandshipsufficientquantitiestoitscustomers.Elancoownsandoperates12internalmanufacturingsiteslocatedinninecountries.Elancoalsoemploysanetworkofapproximately100third-partyCMOs.ManyofElanco'sproductsinvolvecomplexmanufacturingprocessesandaresole-sourcedfromcertainmanufacturingsites.

MinordeviationsinElanco'smanufacturingorlogisticalprocesses,suchastemperatureexcursionsorimproperpackagesealing,couldresult,andhaveinthepastresultedin,delays,inventoryshortages,unanticipatedcosts,productrecalls,productliabilityand/orregulatoryaction.Inaddition,anumberoffactorscouldcauseproductioninterruptions,including:

• thefailureofElancooranyofitsvendorsorsuppliers,includinglogisticalserviceproviders,tocomplywithapplicableregulationsandqualityassuranceguidelines;

• mislabeling;

• constructiondelays;

• equipmentmalfunctions;

• shortagesofmaterials;

• laborproblems;

• naturaldisasters;

• poweroutages;

TableofContents

• criminalandterroristactivities;

• changesinmanufacturingproductionsitesandlimitstomanufacturingcapacityduetoregulatoryrequirements,changesintypesofproductsproduced,shippingdistributionsorphysicallimitations;and

• theoutbreakofanyhighlycontagiousdiseasesnearElanco'sproductionsites.

Theseinterruptionscouldresultinlaunchdelays,inventoryshortages,recalls,unanticipatedcostsorissueswithElanco'sagreementsunderwhichitsuppliesthirdparties,whichmaymateriallyadverselyaffectitsbusiness,financialconditionandresultsofoperations.

Elanco'smanufacturingnetworkmaybeunabletomeetthedemandforitsproductsoritmayhaveexcesscapacityifdemandforitsproductschanges.Theunpredictabilityofaproduct'sregulatoryorcommercialsuccessorfailure,theleadtimenecessarytoconstructhighlytechnicalandcomplexmanufacturingsitesandshiftingcustomerdemand(includingasaresultofmarketconditionsorentryofbrandedorgenericcompetition)increasethepotentialforcapacityimbalances.Inaddition,constructionofsitesisexpensive,andElanco'sabilitytorecovercostswilldependonthemarketacceptanceandsuccessoftheproductsproducedatthenewsites,whichisuncertain.

Elanco relies on third parties to provide it with materials and services and are subject to increased labor and material costs and potential disruptions in supply.

ThematerialsusedtomanufactureElanco'sproductsmaybesubjecttoavailabilityconstraintsandpricevolatilitycausedbychangesindemand,weatherconditions,supplyconditions,governmentregulations,economicclimateandotherfactors.Inaddition,laborcostsmaybesubjecttovolatilitycausedbythesupplyoflabor,governmentalregulations,economicclimateandotherfactors.Increasesinthedemandfor,availabilityorthepriceof,materialsusedtomanufactureElanco'sproductsandincreasesinlaborcostscouldincreasethecoststomanufactureitsproducts,resultinproductdeliverydelaysorshortages,andimpactitsabilitytolaunchnewproductsonatimelybasisoratall.Elancomaynotbeabletopassalloramaterialportionofanyhighermaterialorlaborcostsontoitscustomers,whichcouldmateriallyadverselyaffectitsbusiness,financialconditionandresultsofoperations.

Elancomaybeunabletomeetdemandforcertainofitsproductsifanyofitsthird-partysuppliersceaseorinterruptoperations,failtorenewcontractswithitorotherwisefailtomeettheirobligationstoit.

Elanco may incur substantial costs and receive adverse outcomes in litigation and other legal matters.

Elanco'sbusiness,financialconditionandresultsofoperationscouldbemateriallyadverselyaffectedbyunfavorableresultsinpendingorfuturelitigationmatters.Thesemattersmayinclude,amongotherthings,allegationsofviolationofU.S.andforeigncompetitionlaw,laborlaws,consumerprotectionlawsandenvironmentallawsandregulations,aswellasclaimsorlitigationrelatingtoproductliability,intellectualproperty,securities,breachofcontractandtort.Inaddition,changesintheinterpretationsoflawsandregulationstowhichElancoissubject,orinlegalstandardsinoneormoreofthejurisdictionsinwhichElancooperates,couldincreaseitsexposuretoliability.Forexample,intheU.S.,attemptshavebeenmadetoallowdamagesforemotionaldistressandpainandsufferinginconnectionwiththelossof,orinjuryto,acompanionanimal.Ifsuchattemptsweresuccessful,Elanco'sexposurewithrespecttoproductliabilityclaimscouldincreasematerially.

Litigationmatters,regardlessoftheirmeritsortheirultimateoutcomes,arecostly,divertmanagement'sattentionandmaymateriallyadverselyaffectElanco'sreputationanddemandforitsproducts.Elancocannotpredictwithcertaintytheeventualoutcomeofpendingorfuturelitigationmatters.AnadverseoutcomeoflitigationorlegalmatterscouldresultinElancobeingresponsiblefor

TableofContents

significantdamages.AnyofthesenegativeeffectsresultingfromlitigationmatterscouldmateriallyadverselyaffectElanco'sbusiness,financialconditionandresultsofoperations.

Elanco's business is subject to substantial regulation.

Asaglobalcompany,Elancoissubjecttovariousstate,federalandinternationallawsandregulations,includingregulationsrelatingtothedevelopment,qualityassurance,manufacturing,importation,distribution,marketingandsaleofitsproducts.Changesinapplicablefederal,state,localandforeignlawsandregulationscouldhaveamaterialadverseeffectonElanco'sbusiness,financialconditionandresultsofoperations.Inaddition,Elanco'smanufacturingfacilities,includingthemanufacturingfacilitiesoperatedbyitsCMOs,aresubjecttoperiodicinspectionsbyregulatoryagencies.Aninspectionmayreportconditionsorpracticesthatindicatepossibleviolationsofregulatoryrequirements.Elanco'sfailure,orthefailureofthirdpartiesitrelieson,includingCMOs,tocomplywiththeseregulatoryrequirements,allegationsofsuchnon-complianceorthediscoveryofpreviouslyunknownproblemswithaproductormanufacturercouldresultin,amongotherthings,inspectionobservationnotices,warninglettersorsimilarregulatorycorrespondence,fines,apartialortotalshutdownofproductioninoneormoreofElanco'sfacilitieswhileanallegedviolationisremediated,withdrawalsorsuspensionsofcurrentproductsfromthemarket,andcivilorcriminalprosecution,aswellasdecreasedsalesasaresultofnegativepublicityandproductliabilityclaims.AnyoneoftheseconsequencescouldmateriallyadverselyaffectElanco'sbusiness,financialconditionandresultsofoperations.

Inaddition,Elancowillnotbeabletomarketnewproductsunlessanduntilithasobtainedallrequiredregulatoryapprovalsineachjurisdictionwhereitproposestomarketthoseproducts.Evenafteraproductreachesmarket,itmaybesubjecttore-reviewandmayloseitsapprovals.Elanco'sfailuretoobtainapprovals,delaysintheapprovalprocess,oritsfailuretomaintainapprovalsinanyjurisdiction,maypreventitfromsellingproductsinthatjurisdictionuntilapprovalorre-approvalisobtained,ifever.

The illegal distribution and sale by third parties of counterfeit or illegally compounded versions of Elanco's products or of stolen, diverted or relabeled products could have a negative impact on Elanco's reputation andbusiness.

ThirdpartiesmayillegallydistributeandsellcounterfeitorillegallycompoundedversionsofElanco'sproductsthatdonotmeettheexactingstandardsofElanco'sdevelopment,manufacturinganddistributionprocesses.Counterfeitorillegallycompoundedmedicinesposeasignificantrisktoanimalhealthandsafetybecauseoftheconditionsunderwhichtheymaybemanufacturedandthelackofregulationoftheircontents.Counterfeitorillegallycompoundedproductsarefrequentlyunsafeorineffectiveandcanbepotentiallylife-threateningtoanimals.Elanco'sreputationandbusinesscouldsufferharmasaresultofcounterfeitorillegallycompoundedproductswhichareallegedtobeequivalentand/orwhicharesoldunderElanco'sbrandname.Inaddition,productsstolenorunlawfullydivertedfrominventory,warehouses,plantsorwhileintransit,whicharenotproperlystoredorwhichhaveanexpiredshelflifeandwhichhavebeenrepackagedorrelabeledandwhicharesoldthroughunauthorizedchannels,couldadverselyimpactanimalhealthandsafety,Elanco'sreputationanditsbusiness.Publiclossofconfidenceintheintegrityofvaccinesand/orpharmaceuticalproductsasaresultofcounterfeiting,illegalcompoundingortheftcouldhaveamaterialadverseeffectonElanco'sbusiness,financialconditionandresultsofoperations.

Elanco is subject to complex environmental, health and safety laws and regulations.

Elancoissubjecttovariousfederal,state,localandforeignenvironmental,healthandsafetylawsandregulations.Theselawsandregulationsgovernmatterssuchastheemissionanddischargeofhazardousmaterialsintotheground,airorwater;thegeneration,use,storage,handling,treatment,

TableofContents

packaging,transportation,exposuretoanddisposalofhazardousandbiologicalmaterials,includingrecordkeeping,reportingandregistrationrequirements;andthehealthandsafetyofElanco'semployees.DuetoElanco'soperations,theselawsandregulationsalsorequireittoobtain,andcomplywith,permits,registrationsorotherauthorizationsissuedbygovernmentalauthorities.TheseauthoritiescanmodifyorrevokeElanco'spermits,registrationsorotherauthorizationsandcanenforcecompliancethroughfinesandinjunctions.

GiventhenatureofElanco'sbusiness,ithasincurred,iscurrentlyincurringandmayinthefutureincurliabilitiesfortheinvestigationandremediationofcontaminatedlandundertheU.S.ComprehensiveEnvironmentalResponse,CompensationandLiabilityActof1980,asamended,orunderotherfederal,state,localandforeignenvironmentalcleanuplaws,withrespecttoElanco'scurrentorformersites,adjacentornearbythird-partysites,oroffsitedisposallocations.Elancocouldbesubjecttoliabilityfortheinvestigationandremediationoflegacyenvironmentalcontaminationcausedbyhistoricalindustrialactivityonsitesthatitownsoronwhichitoperates.ThecostsassociatedwithfuturecleanupactivitiesthatElancomayberequiredtoconductorfinancecouldbematerial.Additionally,Elancomaybecomeliabletothirdpartiesfordamages,includingpersonalinjury,propertydamageandnaturalresourcedamages,resultingfromthedisposalorreleaseofhazardousmaterialsintotheenvironment.SuchliabilitycouldmateriallyadverselyaffectElanco'sbusiness,financialconditionandresultsofoperations.

Furthermore,regulatoryagenciesareshowingincreasingconcernovertheimpactofanimalhealthproductsandfoodanimaloperationsontheenvironment.Thisincreasedregulatoryscrutinyhasinthepastandmayinthefuturenecessitatethatadditionaltimeandresourcesbespenttoaddresstheseconcernsinbothnewandexistingproducts.

Elanco'sfailuretocomplywiththeenvironmental,healthandsafetylawsandregulationstowhichitissubject,includinganypermitsissuedthereunder,mayresultinenvironmentalremediationcosts,lossofpermits,fines,penaltiesorotheradversegovernmentalorprivateactions,includingregulatoryorjudicialordersenjoiningorcurtailingoperationsorrequiringcorrectivemeasures,installationofpollutioncontrolequipmentorremedialmeasures.Elancocouldalsobeheldliableforanyandallconsequencesarisingoutofhumanexposuretohazardousmaterials,environmentaldamageorsignificantenvironmental,healthandsafetyissuesthatmightariseatamanufacturingorR&Dfacility.Environmentallawsandregulationsarecomplex,changefrequently,havetendedtobecomemorestringentandstringentlyenforcedovertimeandmaybesubjecttonewinterpretation.ItispossiblethatElanco'scostsofcomplyingwithcurrentandfutureenvironmental,healthandsafetylaws,anditsliabilitiesarisingfrompastorfuturereleasesof,orexposureto,hazardousmaterialscouldmateriallyadverselyaffectitsbusiness,financialconditionandresultsofoperations.

The actual or purported intellectual property rights of third parties may negatively affect Elanco's business.

AthirdpartymaysueElanco,oritsdistributorsorlicensors,includingLilly,orotherwisemakeaclaim,alleginginfringementorotherviolationofsuchthird-party'spatents,trademarks,tradedress,copyrights,tradesecrets,domainnamesorotherintellectualpropertyrights.IfElanco,itsdistributorsorlicensorsdonotprevailinthistypeoflitigation,Elancomayberequiredto:

• paymonetarydamages;

• obtainalicenseinordertocontinuemanufacturingormarketingtheaffectedproducts,whichmaynotbeavailableoncommerciallyreasonableterms,oratall;or

• stopactivities,includinganycommercialactivities,relatingtotheaffectedproducts,whichcouldincludearecalloftheaffectedproductsand/oracessationofsalesinthefuture.

ThecostsofdefendinganintellectualpropertyclaimcouldbesubstantialandcouldmateriallyadverselyaffectElanco'sbusiness,financialconditionandresultsofoperations,evenifElanco

TableofContents

successfullydefendssuchclaim.Moreover,evenifElancobelievesthatitdoesnotinfringeavalidlyexistingthird-partypatent,Elancomaychoosetolicensesuchpatent,whichwouldresultinassociatedcostsandobligations.Elancomayalsoincurcostsinconnectionwithanobligationtoindemnifyadistributor,licensororotherthirdparty.

Theintellectualpropertypositionsofanimalhealthmedicinesandvaccinesbusinessesfrequentlyinvolvecomplexlegalandfactualquestions,andanissuedpatentdoesnotguaranteeElancotherighttopracticethepatentedtechnologyordevelop,manufactureorcommercializethepatentedproduct.Forexample,whileElancogenerallyentersintoproprietaryinformationagreementswithitsemployeesandthirdpartieswhichassignintellectualpropertyrightstoElanco,theseagreementsmaynotbehonoredormaynoteffectivelyassignintellectualpropertyrightstoElancounderthelocallawsofsomecountriesorjurisdictions.ElancocannotbecertainthatacompetitororotherthirdpartydoesnothaveorwillnotobtainrightstointellectualpropertythatmaypreventElancofrommanufacturing,developingormarketingcertainofitsproducts,regardlessofwhetherElancobelievessuchintellectualpropertyrightsarevalidandenforceableoritbelievesitwouldotherwisebeabletodevelopamorecommerciallysuccessfulproduct,whichmaymateriallyadverselyaffectitsbusiness,financialconditionandresultsofoperations.

If Elanco's intellectual property rights are challenged or circumvented, competitors may be able to take advantage of Elanco's research and development efforts or harm the value of Elanco's brands.

Elanco'slong-termsuccessdependsonitsabilitytomarketinnovative,competitiveproducts.Elancoreliesandexpectstocontinuetorelyonacombinationofintellectualproperty,includingpatent,trademark,tradedress,copyright,tradesecretanddomainnameprotection,aswellasconfidentialityandlicenseagreementswithElanco'semployeesandothers,toprotectitsintellectualpropertyandproprietaryrights.IfElancofailstoobtainandmaintainadequateintellectualpropertyprotection,itmaynotbeabletopreventthirdpartiesfromusingitsproprietarytechnologiesorfrommarketingproductsthatareverysimilaroridenticaltoElanco's.

Elanco'scurrentlypendingorfuturepatentapplicationsmaynotresultinissuedpatents,orbeapprovedonatimelybasis,ifatall.Similarly,anytermextensionsthatElancoseeksmaynotbeapprovedonatimelybasis,ifatall.Inaddition,Elanco'sissuedpatents,oranypatentsthatmayissueinthefuture,maynotcontainclaimssufficientlybroadtoprotectitagainstthirdpartieswithsimilartechnologiesorproductsorprovideitwithanycompetitiveadvantage,includingexclusivityinaparticularproductarea.

ThevalidityandscopeofElanco'spatentclaimsalsomayvarybetweencountries,asindividualcountrieshavetheirownpatentlaws.Forexample,somecountriesonlypermittheissuanceofpatentscoveringanovelchemicalcompounditself,anditsfirstuse,andthusfurthermethodsofuseforthesamecompoundmaynotbepatentable.Thevalidity,enforceability,scopeandeffectivetermofpatentscanbehighlyuncertainandofteninvolvecomplexlegalandfactualquestionsandproceedingsthatvarybasedonthelocallawoftherelevantjurisdiction.Elanco'sabilitytoenforceitspatentsalsodependsonthelawsofindividualcountriesandeachcountry'spracticewithrespecttoenforcementofintellectualpropertyrights.Patentprotectionmustbeobtainedonajurisdiction-by-jurisdictionbasis,andElancoonlypursuespatentprotectionincountrieswhereitthinksitmakescommercialsenseforthegivenproduct.Inaddition,ifElancoisunabletomaintainitsexistinglicenseagreementsorotheragreementspursuanttowhichthirdpartiesgrantitrightstointellectualproperty,includingbecausesuchagreementsterminate,Elanco'sfinancialconditionandresultsofoperationscouldbemateriallyadverselyaffected.

PatentlawreformintheU.S.andothercountriesmayalsoweakenElanco'sabilitytoenforceitspatentrights,ormakesuchenforcementfinanciallyunattractive.Forinstance,inSeptember2011,theU.S.enactedtheAmericaInventsAct,whichpermitsenhancedthird-partyactionsforchallenging

TableofContents

patentsandimplementsafirst-to-inventsystem.ThesereformscouldresultinincreasedcoststoprotectElanco'sintellectualpropertyorlimititsabilitytoobtainandmaintainpatentprotectionforitsproductsinthesejurisdictions.Additionally,certainforeigngovernmentshaveindicatedthatcompulsorylicensestopatentsmaybegrantedinthecaseofnationalemergencies,whichcoulddiminishoreliminatesalesandprofitsfromthoseregionsandmateriallyadverselyaffectElanco'sfinancialconditionandresultsofoperations.

Elanco'strademarksandbrandsmayprovideitwithacompetitiveadvantageinthemarketastheymaybeknownortrustedbyconsumers.Inordertomaintainthevalueofsuchbrands,Elancomustbeabletoenforceanddefenditstrademarks.ElancohaspursuedandwillpursuetheregistrationoftrademarksandservicemarksintheU.S.andinternationally;however,enforcingrightsagainstthosewhoknowinglyorunknowinglydiluteorinfringeElanco'sbrandscanbedifficult.Effectivetrademark,servicemark,tradedressorrelatedprotectionsmaynotbeavailableineverycountryinwhichElanco'sproductsandservicesareavailable.Enforcementisespeciallydifficultinfirst-to-filecountrieswhere"trademarksquatters"canpreventElancofromobtainingadequateprotectionsforitsbrands.TherecanbenoassurancethatthestepsElancohastakenandwilltaketoprotectitsproprietaryrightsinitsbrandsandtrademarkswillbeadequateorthatthirdpartieswillnotinfringe,diluteormisappropriateElanco'sbrands,trademarks,tradedressorothersimilarproprietaryrights.

ManyofElanco'sproductsarebasedonorincorporateproprietaryinformation.Elancoactivelyseekstoprotectitsproprietaryinformation,includingitstradesecretsandproprietaryknow-how,bygenerallyrequiringitsemployees,consultants,otheradvisorsandotherthirdpartiestoexecuteproprietaryinformationandconfidentialityagreementsuponthecommencementoftheiremployment,engagementorotherrelationship.Despitetheseeffortsandprecautions,Elancomaybeunabletopreventathirdpartyfromcopyingorotherwiseobtainingandusingitstradesecretsoritsotherintellectualpropertywithoutauthorizationandlegalremediesmaynotadequatelycompensateitforthedamagescausedbysuchunauthorizeduse.Further,othersmayindependentlyandlawfullydevelopsubstantiallysimilaroridenticalproductsthatcircumventElanco'sintellectualpropertybymeansofalternativedesignsorprocessesorotherwise.

Elanco could be subject to changes in its tax rates, the adoption of new U.S. or foreign tax legislation or exposure to additional tax liabilities.

ElancoissubjecttoincometaxesintheU.S.andnumerousforeignjurisdictions.Changesintherelevanttaxlaws,regulations,administrativepractices,principlesandinterpretationscouldadverselyaffectElanco'sfutureeffectivetaxrates.Asdiscussedfurtherbelow,theU.S.recentlyenactedtaxreformlegislationsignificantlyrevisingU.S.taxlaw,andanumberofothercountriesareactivelyconsideringorenactingtaxchanges.Otherorganizations,suchastheOrganisationforEconomicCooperationandDevelopmentandtheEuropeanCommission,arealsoactiveconcerningtax-relatedmatters,whichcouldinfluenceinternationaltaxpolicyincountriesinwhichElancooperates.Whileoutcomesoftheseinitiativescontinuetodevelopandremainuncertain,modificationstokeyelementsoftheU.S.orinternationaltaxframeworkcouldhaveamaterialadverseeffectonElanco'sconsolidatedresultsofoperationsandcashflows.

InDecember2017,thePresidentoftheUnitedStatessignedintolawtheTaxCutsandJobsAct(the"2017TaxAct").The2017TaxActincludedsignificantchangestotheU.S.corporateincometaxsystem,suchasthereductioninthecorporateincometaxrate,transitiontoamodifiedterritorialtaxsystem,changestobusinessrelatedexclusions,deductionsandcredits,andmodificationstointernationaltaxprovisions.TheU.S.TreasuryDepartmentandtheIRSbegantoissuemajorproposedregulationsrelatedtothe2017TaxActduringthesecondhalfof2018andareexpectedtocontinueissuingsuchregulations.Theproposedregulationsaregenerallysubjecttocommentbeforebeingfinalized;however,oncefinalized,theseregulationsmayrequireElancotomakeadjustments,inparticular,asaresultofcertaincomplexinternationalprovisionscontainedinthe2017TaxAct.Such

TableofContents

adjustmentscouldmateriallyimpactElanco'sprovisionforincometaxesandeffectivetaxrateintheperiodinwhichtheadjustmentsaremadeandcouldalsoimpactElanco'snetincome,earningspershare,consolidatedcashflowsandliquidity.

Inaddition,Elanco'seffectivetaxrateissubjecttopotentialrisksthatvarioustaxingauthoritiesmaychallengethepricingofElanco'scross-borderarrangementsandsubjectElancotoadditionaltax,adverselyimpactingElanco'seffectivetaxrateanditstaxliability.ElancoisalsosubjecttotheexaminationofitstaxreturnsandothertaxmattersbytheInternalRevenueService(the"IRS")andothertaxauthoritiesandgovernmentalbodies.Elancoregularlyassessesthelikelihoodofanadverseoutcomeresultingfromtheseexaminationstodeterminetheadequacyofitsprovisionfortaxes.Therecanbenoassuranceastotheoutcomeoftheseexaminations.IfElanco'seffectivetaxratesweretoincrease,particularlyintheU.S.orothermaterialforeignjurisdictions,oriftheultimatedeterminationofElanco'staxesowedisforanamountinexcessofamountspreviouslyaccrued,Elanco'sbusiness,financialconditionandresultsofoperationscouldbemateriallyadverselyaffected.

Significant portions of Elanco's operations are conducted in foreign jurisdictions, including jurisdictions presenting a high risk of bribery and corruption, and are subject to the economic, political, legal and businessenvironments of the countries in which Elanco does business.

Elanco'sinternationaloperationscouldbelimitedordisruptedbyanyofthefollowing:

• volatilityintheinternationalfinancialmarkets;

• compliancewithgovernmentalcontrols;

• difficultiesenforcingcontractualandintellectualpropertyrights;

• paralleltradeinElanco'sproducts(importationofElanco'sproductsfromEuropeanUnion("EU")countrieswhereElanco'sproductsaresoldatlowerpricesintoEUcountrieswheretheproductsaresoldathigherprices);

• compliancewithawidevarietyoflawsandregulations,suchastheU.S.ForeignCorruptPracticesAct(the"FCPA")andsimilarnon-U.S.lawsandregulations;

• compliancewithforeignlaborlaws;

• burdenstocomplywithmultipleandpotentiallyconflictingforeignlawsandregulations,includingthoserelatingtoenvironmental,healthandsafetyrequirements;

• changesinlaws,regulations,governmentcontrolsorenforcementpracticeswithrespecttoElanco'sbusinessandthebusinessesofitscustomers,includingtheimpositionoflimitsonitsprofitability;

• politicalandsocialinstability,includingcrime,civildisturbance,terroristactivitiesandarmedconflicts;

• traderestrictionsandrestrictionsondirectinvestmentsbyforeignentities,includingrestrictionsadministeredbytheOfficeofForeignAssetsControloftheU.S.DepartmentoftheTreasuryandtheEU,inrelationtoElanco'sproductsortheproductsoffarmersandothercustomers;

• governmentlimitationsonforeignownership;

• governmenttakeoverornationalizationofbusiness;

• changesintaxlawsandtariffs;

• impositionofanti-dumpingandcountervailingdutiesorothertrade-relatedsanctions;

TableofContents

• costsanddifficultiesandcompliancerisksinstaffing,managingandmonitoringinternationaloperations,includingintheuseofoverseasthird-partygoodsandserviceproviders;

• corruptionriskinherentinbusinessarrangementsandregulatorycontactswithforeigngovernmententities;

• longerpaymentcyclesandincreasedexposuretocounterpartyrisk;and

• additionallimitationsontransferringpersonalinformationbetweencountriesorotherrestrictionsontheprocessingofpersonalinformation.

Inaddition,internationaltransactionsmayinvolveincreasedfinancialandlegalrisksduetodifferinglegalsystemsandcustoms.CompliancewiththeserequirementsmayprohibittheimportorexportofcertainproductsandtechnologiesormayrequireElancotoobtainalicensebeforeimportingorexportingcertainproductsortechnologies.Afailuretocomplywithanyoftheselaws,regulationsorrequirementscouldresultincivilorcriminallegalproceedings,monetaryornon-monetarypenalties,orboth,disruptionstoElanco'sbusiness,limitationsonElanco'sabilitytoimportandexportproducts,anddamagetoElanco'sreputation.Inaddition,variationsinthepricingofElanco'sproductsbetweenjurisdictionsmayresultintheunauthorizedimportationorunauthorizedre-importationofitsproductsbetweenjurisdictionsandmayalsoresultintheimpositionofanti-dumpingandcountervailingdutiesorothertrade-relatedsanctions.Whiletheimpactofthesefactorsisdifficulttopredict,anyofthemcouldmateriallyadverselyaffectElanco'sbusiness,financialconditionandresultsofoperations.

Further,changesinanyoftheselaws,regulationsorrequirements,orthepoliticalenvironmentinaparticularcountry,mayaffectElanco'sabilitytoengageinbusinesstransactionsincertainmarkets,includinginvestment,procurementandrepatriationofearnings.

Significant portions of Elanco's operations are conducted in Europe and could be impacted by the withdrawal of the United Kingdom ("UK") from the EU, commonly referred to as "Brexit."

InJune2016,votersintheUKapprovedanadvisoryreferendumtowithdrawfromtheEU,commonlyreferredtoasBrexit.OnMarch29,2017,theUKPrimeMinisterformallynotifiedtheEuropeanCounciloftheUK'sintentiontowithdrawfromtheEUunderArticle50oftheTreatyofLisbon.Thenoticebeganatwo-yearnegotiationperiodtoestablishthewithdrawalterms.InApril2019,theEUextendedtheenddateofthenegotiationperiodtoOctober31,2019,althoughtheUKcouldleavetheEUsooner,dependingonpoliticaldevelopments.Thereferendumandnoticecreatedpolitical,regulatoryandeconomicuncertainty,particularlyintheUKandtheEU,andthisuncertaintymaypersistforyearsifthewithdrawalbecomeseffectivewithoutclarificationastowhethertheUKwillcontinuetobepartytotheEUFreeTradeAgreements("FTA")attheendofthenegotiationperiod.

Elanco'sbusinessissubjecttosubstantialregulation.IftheUKwithdrawsfromtheEUwithoutanagreementandmutualrecognitionoftheFTAs,ElancomaynotbeabletomarketcertainproductsthatenteredtheEUmarketfollowingmarketingauthorizationbyUKauthoritiesinallthenationsthatarepartiestoFTAswiththeEUunlessanduntilElancohasobtainedallrequiredregulatoryapprovalsineachjurisdictionwhereitproposestomarketthoseproducts.

Inaddition,theuncertaintyrelatedtoBrexithascausedforeignexchangeratefluctuationsinthepast,includingthestrengtheningoftheU.S.dollarrelativetotheeuroandBritishpoundimmediatelyfollowingtheannouncementofBrexit.Theimplementationof,orfurtherdevelopmentswithrespectto,Brexitcouldfurtherimpactforeignexchangerates,whichcouldmateriallyadverselyaffectElanco'sbusiness,financialconditionandresultsofoperations.

Awithdrawalwithnoagreementinplacecouldsignificantlydisruptthefreemovementofgoods,services,andpeoplebetweentheUKandtheEU,andresultinincreasedlegalandregulatorycomplexities,aswellaspotentialhighercostsofconductingbusinessinEuropeanddeclininggross

TableofContents

domesticproductinmanyEuropeanmarkets.TheUK'svotetoexittheEUcouldalsoresultinsimilarreferendumsorvotesinotherEuropeancountriesinwhichElancodoesbusiness.

IfnoagreementisreachedattheendoftheextendednegotiationperiodonOctober31,2019andtheUK'sseparationbecomeseffective,unlesstheremainingEUmembersunanimouslyagreetoanextension,theuncertaintysurroundingthetermsoftheUK'swithdrawalanditsconsequencescouldadverselyimpactconsumerandinvestorconfidence,andcouldaffectsalesorregulationofElanco'sproducts.Anyoftheseeffects,amongothers,couldmateriallyadverselyaffectElanco'sbusiness,financialconditionandresultsofoperations.

Foreign exchange rate fluctuations and potential currency controls affect Elanco's results of operations, as reported in its financial statements.

Elancoconductsoperationsinmanyareasoftheworld,involvingtransactionsdenominatedinavarietyofcurrencies.In2018,Elancogeneratedapproximately52%ofitsrevenueincurrenciesotherthantheU.S.dollar,principallytheeuro,Britishpound,Brazilianreal,Australiandollar,Japaneseyen,CanadiandollarandChineseyuan.Elancoissubjecttocurrencyexchangeraterisktotheextentthatitscostsaredenominatedincurrenciesotherthanthoseinwhichitearnsrevenue.Inaddition,becauseElanco'sfinancialstatementsarereportedinU.S.dollars,changesincurrencyexchangeratesbetweentheU.S.dollarandothercurrencieshavehad,andwillcontinuetohave,animpactonElanco'sresultsofoperations.

Elancoalsofacesrisksarisingfromcurrencydevaluationsandtheimpositionofcashrepatriationrestrictionsandexchangecontrols.Currencydevaluationsresultinadiminishedvalueoffundsdenominatedinthecurrencyofthecountryinstitutingthedevaluation.CashrepatriationrestrictionsandexchangecontrolsmaylimitElanco'sabilitytoconvertforeigncurrenciesintoU.S.dollarsortoremitdividendsandotherpaymentsbyElanco'sforeignsubsidiariesorbusinesseslocatedinorconductedwithinacountryimposingrestrictionsorcontrols.WhileElancocurrentlyhasnoneed,anddoesnotintend,torepatriateorconvertcashheldincountriesthathavesignificantrestrictionsorcontrolsinplace,shouldElanconeedtodosotofunditsoperations,itmaybeunabletorepatriateorconvertsuchcash,ormaybeunabletodosowithoutincurringsubstantialcosts.

Elancoalsobearsforeignexchangeriskassociatedwiththefuturecashsettlementofanexistingnetinvestmenthedge("NIH").InOctober2018,Elancoenteredintoafixedinterestrate,5-year,750millionSwissfrancNIHagainstSwissfrancassets.TheNIHisexpectedtogenerateapproximately$25millionincashandcontrainterestexpenseperyear;however,thereispotentialforsignificant2023settlementexposureonthe750millionSwissfrancnotionaliftheU.S.dollardevaluesversustheSwissfranc.

Elanco depends on sophisticated information technology and infrastructure.

Elancoreliesonvariousinformationsystemstomanageitsoperations,anditincreasinglydependsonthirdpartiestooperateandsupportitsinformationtechnologysystems,includingbywayofvirtualandcloud-basedoperations.Thesethirdpartiesincludelargeestablishedvendorsaswellassmall,privatelyownedcompanies.FailurebyanyprovidertoadequatelyserviceElanco'soperations,orachangeincontrolorinsolvencyofoneormoreproviders,maymateriallyadverselyaffectElanco'sbusiness,financialconditionandresultsofoperations.Priortotheseparation,ElancoreliedonLillytonegotiateandmanagemanyofElanco'srelationshipsandcontractswiththesethirdparties.

InconnectionwiththeIPOandtheseparation,Elancosubstantiallychanged,andwillcontinuetodevelop,anumberofitsbusinessprocesses,includingitsfinancialreportingandsupplychainprocessesandwithrespecttowhereandfromwhomitobtainsinformationtechnologysystems.InordertosupportthenewbusinessprocessesunderthetermsofElanco'stransitionalservicesagreementwithLilly,Elancowillmakesignificantconfiguration,processanddatachangeswithinmanyofthe

TableofContents

informationtechnologysystemsituses.IfElanco'sinformationtechnologysystemsandprocessesarenotsufficienttosupportElanco'sbusinessandfinancialreportingfunctions,orifElancofailstoproperlyimplementitsnewbusinessprocesses,Elanco'sfinancialreportingmaybedelayedorinaccurateand,asaresult,Elanco'sbusiness,financialconditionandresultsofoperationsmaybemateriallyadverselyaffected.EvenifElancoisabletosuccessfullyconfigureandchangeitssystems,alltechnologysystems,evenwithimplementationofsecuritymeasures,arevulnerabletodisability,failuresorunauthorizedaccess.IfElanco'sinformationtechnologysystemsweretofailorbebreached,thiscouldmateriallyadverselyaffectElanco'sreputationanditsabilitytoperformcriticalbusinessfunctions,andsensitiveandconfidentialdatacouldbecompromised.

Breaches of Elanco's information technology systems or improper disclosure of confidential company or personal data could have a material adverse effect on Elanco's reputation and operations, or Elanco may fail tocomply with privacy laws, regulations and its contractual obligations.

Elancoreliesoninformationtechnologysystemstoprocess,transmitandstoreelectronicinformationinitsday-to-dayoperations,includingcustomer,employeeandcompanydata.Thesecureprocessing,maintenanceandtransmissionofthisinformationiscriticaltoElanco'soperationsandthelegalenvironmentsurroundinginformationsecurity,storage,use,processing,disclosureandprivacyisdemanding,withthefrequentimpositionofnewandchangingrequirements.Elancoalsostorescertaininformationwiththirdparties.Elanco'sinformationsystemsandthoseofElanco'sthird-partyvendorsaresubjectedtocomputervirusesorothermaliciouscodes,unauthorizedaccessattempts,andcyber-orphishing-attacksandalsoarevulnerabletoanincreasingthreatofcontinuallyevolvingcybersecurityrisksandexternalhazards,aswellasimproperorinadvertentstaffbehavior,allofwhichcouldexposeconfidentialcompanyandpersonaldatasystemsandinformationtosecuritybreaches.AnysuchbreachcouldcompromiseElanco'snetworks,andtheinformationstoredthereincouldbeaccessed,publiclydisclosed,lostorstolen.SuchattackscouldresultinElanco'sintellectualpropertyandotherconfidentialinformationbeinglostorstolen,disruptionofElanco'soperations,andothernegativeconsequences,suchasincreasedcostsforsecuritymeasuresorremediationcosts,anddiversionofmanagementattention.Anyactualorperceivedaccess,disclosureorotherlossofinformationoranysignificantbreakdown,intrusion,interruption,cyber-attackorcorruptionofcustomer,employeeorcompanydataorElanco'sfailuretocomplywithfederal,state,localandforeignprivacylawsorcontractualobligationswithcustomers,vendors,paymentprocessorsandotherthirdparties,couldresultinlegalclaimsorproceedings,liabilityunderlawsorcontractsthatprotecttheprivacyofpersonalinformation,regulatorypenalties,disruptionofElanco'soperations,anddamagetoElanco'sreputation,allofwhichcouldmateriallyadverselyaffectElanco'sbusiness,revenueandcompetitiveposition.WhileElancowillcontinuetoimplementadditionalprotectivemeasurestoreducetheriskofanddetectcyber-incidents,cyber-attacksarebecomingmoresophisticatedandfrequent,andthetechniquesusedinsuchattackschangerapidly.Elanco'sprotectivemeasuresmaynotprotectitagainstattacksandsuchattackscouldhaveasignificantimpactonElanco'sbusinessandreputation.Inaddition,priortotheseparation,ElancoreliedonLillyforcertainprivacyandcompliancefunctionsandpersonnelandmayexperiencedifficultiesmaintainingandimplementingallpoliciesandpracticesfollowingcompletionoftheseparation.

Increased regulation or decreased governmental financial support relating to the raising, processing or consumption of food animals could reduce demand for Elanco's food animal products.

Companiesinthefoodanimalsectoraresubjecttoextensiveandincreasinglystringentregulations.See"BusinessofElanco—Regulatory."Iffoodanimalproducersareadverselyaffectedbynewregulationsorchangestoexistingregulations,theymayreduceherdorflocksizesorbecomelessprofitableand,asaresult,theymayreducetheiruseofElanco'sproducts,whichmaymateriallyadverselyaffectElanco'sbusiness,financialconditionandresultsofoperations.Also,manyfoodanimalproducersbenefitfromgovernmentalsubsidies,andifsuchsubsidiesweretobereducedoreliminated,

TableofContents

thesecompaniesmaybecomelessprofitableand,asaresult,mayreducetheiruseofElanco'sfoodanimalproducts.Morestringentregulationofthefoodanimalsector,includingregardingtheuseoffoodanimalproducts,couldhaveamaterialadverseeffectonElanco'sbusiness,financialconditionandresultsofoperations.

Elanco's business could be materially adversely affected by labor disputes, strikes or work stoppages.

SomeofElanco'semployeesaremembersofunions,workscouncils,tradeassociationsorareotherwisesubjecttocollectivebargainingagreementsincertainjurisdictions,includingtheU.S.Asaresult,Elancoissubjecttotheriskoflabordisputes,strikes,workstoppagesandotherlabor-relationsmatters.Elancomaybeunabletonegotiatenewcollectivebargainingagreementsonsimilarormorefavorabletermsandmayexperienceworkstoppages,higherongoinglaborcostsorotherlaborproblemsinthefutureatitssites.Elancomayalsoexperiencedifficultyordelaysinimplementingchangestoitsworkforceincertainmarkets.TheserisksmaybeincreasedbytheseparationbecauseElancowillnolongerbeabletobenefitfromLilly'spriorrelationshipsandnegotiationsrelatingtosuchagreements.

Further,labor-relatedissues,includingatElanco'ssuppliersorCMOs,couldcauseadisruptionofElanco'soperations,whichcouldhaveamaterialadverseeffectonitsbusiness,financialconditionandresultsofoperations,potentiallyresultingincancelledordersbycustomers,unanticipatedinventoryaccumulationorshortagesandreducedrevenueandnetincome.

The anticipated benefits of the separation may not be achieved.

Elancomaynotbeabletoachievethefullstrategicandfinancialbenefitsexpectedtoresultfromtheseparation.Further,suchbenefits,ifultimatelyachieved,maybedelayed.Thesebenefitsincludethefollowing:

• improvingstrategicandoperationalflexibilityandstreamliningdecision-makingbyprovidingtheflexibilitytoimplementElanco'sstrategicplanandtorespondmoreeffectivelytodifferentcustomerneedsandthechangingeconomicandindustryenvironment;

• allowingElancotoadopttheinvestmentpolicyanddividendpolicybestsuitedtoitsfinancialprofileandbusinessneeds,andallowingittoraisecapitalasanindependentbusiness;

• creatinganindependentequitystructurethatmakespossiblefutureacquisitionsutilizingElanco'scommonstockaswellascompensationarrangements;and

• facilitatingincentivecompensationarrangementsforemployeesmoredirectlytiedtotheperformanceofElanco'sbusiness,andenhancingemployeehiringandretentionby,amongotherthings,improvingthealignmentofmanagementandemployeeincentiveswithperformanceandgrowthobjectivesofElanco'sbusiness.

Elancomaynotachievetheanticipatedbenefitsoftheseparationforavarietyofreasons,whichcouldmateriallyadverselyaffectElanco'sbusiness,financialconditionandresultsofoperations.

Elanco has underfunded pension plan liabilities. Elanco will require current and future operating cash flow to fund these shortfalls reducing the cash available for other uses.

Elancohascertaindefinedbenefitpensionplans,predominantlyoutsideoftheU.S.,thatElanco'semployeesparticipateinthatareeitherdedicatedtoElanco'semployeesorwheretheplanassetsandliabilitiesthatrelatetoElanco'semployeeswerelegallyrequiredtotransfertoElancoatthetimeoftheseparation.Thefundedstatusandnetperiodicpensioncostfortheseplansismateriallyaffectedbythediscountrateusedtomeasurepensionobligations,thelongevityandactuarialprofileofElanco'sworkforce,thelevelofplanassetsavailabletofundthoseobligationsandtheactualandexpected

TableofContents

long-termrateofreturnonplanassets.Significantchangesininvestmentperformanceorachangeintheportfoliomixofinvestedassetscanresultincorrespondingincreasesanddecreasesinthevaluationofplanassetsorinachangeintheexpectedrateofreturnonplanassets.AsofDecember31,2018,forpensionplanswithprojectedbenefitobligationsinexcessofplanassets,theprojectedbenefitobligationwas$229.2millionwithplanassetsof$124.1million.Anychangesinthediscountratecouldresultinasignificantincreaseordecreaseinthevaluationofpensionobligations,affectingthereportedfundedstatusofElanco'spensionplansaswellasthenetperiodicpensioncostinthefollowingyears.Similarly,changesintheexpectedreturnonplanassetscanresultinsignificantchangesinthenetperiodicpensioncostinthefollowingyears.TheneedtomakeadditionalcashcontributionswilldivertresourcesfromElanco'soperationsandmayhaveamaterialadverseeffectonElanco'sbusiness,financialconditionandresultsofoperations.

Risks Related to Elanco's Relationship with Lilly

As a result of the separation, Elanco will lose Lilly's brand, reputation, capital base and other resources.

ElancobelievesitsassociationwithLillyhascontributedtoElanco'sbuildingrelationshipswithElanco'scustomersduetoLilly'sgloballyrecognizedbrandandperceivedhigh-qualityproducts.TheseparationcouldadverselyaffectElanco'sabilitytoattractandretaincustomers,whichcouldresultinreducedsalesofitsproducts.

ThelossofLilly'sscale,capitalbaseandfinancialstrengthmayalsopromptsupplierstoreprice,modifyorterminatetheirrelationshipswithElanco.Inaddition,Lilly'sdispositionofitsownershipofElancocouldpotentiallycausesomeofElanco'sexistingagreementsandlicensestobeterminated.ElancocannotpredictwithcertaintytheeffectthattheseparationwillhaveonElanco'sbusiness,Elanco'sclients,vendorsorotherpersons,orwhethertheElancobrandwillbeacceptedinthemarketplace.

Further,becauseElancohasnotoperatedasastandalonecompanyinthepast,itmayhavedifficultydoingso.ElancomayneedtoacquireassetsandresourcesinadditiontothoseprovidedbyLilly,andinconnectionwiththeseparation,mayalsofacedifficultyinseparatingElanco'sassetsfromLilly'sassetsandintegratingnewlyacquiredassetsintoElanco'sbusiness.Elanco'sbusiness,financialconditionandresultsofoperationscouldbemateriallyadverselyaffectedifithasdifficultyoperatingasastandalonecompany,failstoacquireassetsthatprovetobeimportanttoElanco'soperationsorincursunexpectedcostsinseparatingitsassetsfromLilly'sassetsorintegratingnewly-acquiredassets.

Lilly may compete with Elanco.

LillyisnotrestrictedfromcompetingwithElancointheanimalhealthbusiness.AlthoughLillyhasinformedElancoithasnocurrentintentiontocompetewithitintheanimalhealthbusiness,ifLillyinthefuturedecidestoengageinthetypeofbusinessElancoconducts,itmayhaveacompetitiveadvantageoverElanco,whichmaycauseElanco'sbusiness,financialconditionandresultsofoperationstobemateriallyadverselyaffected.

To preserve the tax-free treatment to Lilly and its shareholders of the Split-Off and certain related transactions, Elanco may not be able to engage in certain transactions.

Topreservethetax-freetreatmenttoLillyanditsshareholdersoftheSplit-Offandcertainrelatedtransactions,underthetaxmattersagreement,Elancoisrestrictedfromtakinganyactionthatpreventssuchtransactionsfrombeingtax-freeforU.S.federalincometaxpurposes.TheserestrictionsmaylimitElanco'sabilitytopursuecertainstrategictransactionsorengageinothertransactions,includingusingElanco'scommonstocktomakeacquisitionsandinconnectionwithequitycapitalmarkettransactionsthatmightincreasethevalueofElanco'sbusiness.See"CertainRelationshipsandRelatedPartyTransactions—RelationshipbetweenElancoandLilly—TaxMattersAgreement."

TableofContents

Lilly's rights as licensor under the intellectual property and technology license agreement could limit Elanco's ability to develop and commercialize certain products.

Priortotheseparation,ElancohadtheabilitytoleveragecertainofLilly'sintellectualproperty.Aspartoftheseparation,Elancoenteredintoanintellectualpropertyandtechnologylicenseagreement.Pursuanttotheintellectualpropertyandtechnologylicenseagreement,LillylicensestoElancocertainofitsintellectualproperty(excludingtrademarks)relatedtotheanimalhealthbusinessandalsograntsalicenseforElancotouseLilly'sproprietarycompoundlibraryforaperiodoftwoyearsplusuptothreeadditionalone-yearperiods,eachsuchperiodtobegrantedunderLilly'ssolediscretion.IfElancofailstocomplywithitsobligationsunderthisagreementandLillyexercisesitsrighttoterminateit,Elanco'sabilitytocontinuetoresearch,developandcommercializeproductsincorporatingthatintellectualpropertywillbelimited.Inaddition,thisagreementincludeslimitationsthataffectElanco'sabilitytodevelopandcommercializecertainproducts,includingincircumstanceswhereLillyhasaninterestinthelicensedintellectualpropertyinconnectionwithitshumanhealthdevelopmentprograms.Theselimitationsandterminationrightsmaymakeitmoredifficult,timeconsumingorexpensiveforElancotodevelopandcommercializecertainnewproducts,ormayresultinElanco'sproductsbeinglatertomarketthanthoseofitscompetitors.Forasummarydescriptionofthetermsoftheintellectualpropertyandtechnologylicenseagreement,see"CertainRelationshipsandRelatedPartyTransactions—RelationshipbetweenElancoandLilly—IntellectualPropertyandTechnologyLicenseAgreement."

Elanco's historical consolidated and combined financial data is not necessarily representative of the results it would have achieved as a standalone company and may not be a reliable indicator of its future results.

Elanco'shistoricalconsolidatedandcombinedfinancialdataincludedinthisprospectusdoesnotreflectthefinancialcondition,resultsofoperationsorcashflowsitwouldhaveachievedasastandalonecompanyduringtheperiodspresentedorthoseitwillachieveinthefuture.Thisisprimarilytheresultofthefollowingfactors:

• Elanco'shistoricalconsolidatedandcombinedfinancialdatadoesnotreflecttheseparation;

• Elanco'shistoricalconsolidatedandcombinedfinancialdatareflectsexpenseallocationsforcertainsupportfunctionsthatareprovidedonacentralizedbasiswithinLilly,suchasexpensesforexecutiveoversight,treasury,legal,finance,humanresources,tax,internalaudit,financialreporting,informationtechnologyandinvestorrelationsthatmaybehigherorlowerthanthecomparableexpensesElancowouldhaveactuallyincurred,orwillincurinthefuture,asastandalonecompany;

• Elanco'scostofdebtandElanco'scapitalstructureisdifferentfromthatreflectedinitshistoricalconsolidatedandcombinedfinancialstatements;

• significantincreasesmayoccurinElanco'scoststructureasaresultofElancobeingastandalonepubliccompany,includingcostsrelatedtopubliccompanyreporting,investorrelationsandcompliancewiththeSarbanes-OxleyAct;and

• lossofeconomiesofscaleasaresultofElanconolongerbeingapartofLilly.

Elanco'sfinancialconditionandfutureresultsofoperations,aftergivingeffecttotheseparation,willbemateriallydifferentfromamountsreflectedinElanco'shistoricalconsolidatedandcombinedfinancialstatementsincludedinthisprospectus.Asaresultoftheseparation,itmaybedifficultforinvestorstocompareElanco'sfutureresultstohistoricalresultsortoevaluateElanco'srelativeperformanceortrendsinElanco'sbusiness.

TableofContents

Elanco has incurred and will continue to incur significant charges in connection with the separation and incremental costs as a standalone public company.

Elancowillneedtoreplicateorreplacecertainfunctions,systemsandinfrastructuretowhichElanconolongerhasthesameaccessaftertheseparation.ElancomayalsoneedtomakeinvestmentsorhireadditionalemployeestooperatewithoutthesameaccesstoLilly'sexistingoperationalandadministrativeinfrastructure.Theseinitiativesmaybecostlytoimplement.Duetothescopeandcomplexityoftheunderlyingprojectsrelativetotheseefforts,theamountoftotalcostscouldbemateriallyhigherthanElanco'sestimate,andthetimingoftheincurrenceofthesecostsissubjecttochange.

Priortotheseparation,LillyperformedorsupportedmanyimportantcorporatefunctionsforElanco.Elanco'sconsolidatedandcombinedfinancialstatementsreflectchargesfortheseservicesonanallocatedbasis.Followingtheseparation,manyoftheseservicesaregovernedbyElanco'stransitionalservicesagreementwithLilly.UnderthetransitionalservicesagreementElancoisabletousetheseLillyservicesforafixedtermestablishedonaservice-by-servicebasis.PartialreductionintheprovisionofanyserviceorterminationofaservicepriortotheexpirationoftheapplicablefixedtermrequiresLilly'sconsent.Inaddition,eitherpartyisabletoterminatetheagreementduetoamaterialbreachoftheotherparty,uponpriorwrittennotice,subjecttolimitedcureperiodsoriftheotherpartyundergoesachangeofcontrol.

ElancopaysLillymutuallyagreed-uponfeesfortheseservices,whicharebasedonLilly'scosts(includingthird-partycosts)ofprovidingtheservicesthroughMarch31,2021andsubjecttoamark-upof7%thereafter,withadditionalinflation-basedescalationbeginningJanuary1,2022.However,sinceElanco'stransitionalservicesagreementwasnegotiatedinthecontextofaparent-subsidiaryrelationship,thetermsoftheagreement,includingthefeeschargedfortheservices,maybehigherorlowerthanthosethatwouldbeagreedtobypartiesbargainingatarm'slengthforsimilarservicesandmaybehigherorlowerthanthecostsreflectedintheallocationsinElanco'shistoricalconsolidatedandcombinedfinancialstatements.Inaddition,whiletheseservicesarebeingprovidedtoElancobyLilly,Elanco'soperationalflexibilitytomodifyorimplementchangeswithrespecttosuchservicesortheamountsElancopaysforthemwillbelimited.

Elancomaynotbeabletoreplacetheseservicesorenterintoappropriatethird-partyagreementsontermsandconditions,includingcost,comparabletothosethatElancoreceivedfromLillyunderthetransitionalservicesagreement.Additionally,afterthetransitionalservicesagreementterminates,ElancomaybeunabletosustaintheservicesatthesamelevelsorobtainthesamebenefitsaswhenElancowasreceivingsuchservicesandbenefitsfromLilly.WhenElancobeginstooperatethesefunctionsseparately,ifElancodoesnothaveitsownadequatesystemsandbusinessfunctionsinplace,orisunabletoobtainthemfromotherproviders,itmaynotbeabletooperateitsbusinesseffectivelyoratcomparablecosts,anditsprofitabilitymaydecline.Inaddition,ElancohashistoricallyreceivedinformalsupportfromLilly,whichmaynotbeaddressedinthetransitionalservicesagreement.Thelevelofthisinformalsupportmaydiminishorbeeliminatedinthefuture.

Inaddition,Elanco'shistoricalconsolidatedandcombinedfinancialstatementsincludetheattributionofcertainassetsandliabilitiesthathistoricallyhavebeenheldattheLillycorporatelevelbutwhicharespecificallyidentifiableorattributabletothebusinessesthatweretransferredtoElancoinconnectionwiththeseparation.ThevalueoftheassetsandliabilitiesElancoassumedinconnectionwiththeseparationcouldultimatelybemateriallydifferentthansuchattributions,whichcouldhaveamaterialadverseeffectonElanco'sfinancialcondition.

TableofContents

Risks Related to Elanco's Indebtedness

Elanco has substantial indebtedness.

Elancohasasignificantamountofindebtedness,whichcouldmateriallyadverselyaffectitsbusiness,financialconditionandresultsofoperations.AsofMarch31,2019,Elancohasincurredapproximately$2.5billionaggregateprincipalamountofseniorindebtedness,consistingofthenotesandtheTermFacility.Elancohasanadditional$750millionofborrowingcapacity($1,000millionifcertainconditionsaremet)undertheRevolvingFacility(asdefinedbelow).See"DescriptionofCertainOtherIndebtedness."

Elancomayincursubstantialadditionaldebtfromtimetotimetofinanceworkingcapital,capitalexpenditures,investments,acquisitionsorforotherpurposes.IfElancodoesso,therisksrelatedtoitshighlevelofdebtcouldintensify.Specifically,Elanco'shighlevelofdebtcouldhaveimportantconsequences,including:

• makingitmoredifficultforElancotosatisfyitsobligationswithrespecttoitsdebt;

• limitingElanco'sabilitytoobtainadditionalfinancingtofundfutureworkingcapital,capitalexpenditures,businessdevelopmentorothergeneralcorporaterequirements,includingdividends;

• increasingElanco'svulnerabilitytogeneraladverseeconomicandindustryconditions;

• exposingElancototheriskofincreasedinterestratesascertainofitsborrowingsareandmayinthefuturebeatvariableratesofinterest;

• limitingElanco'sflexibilityinplanningforandreactingtochangesintheanimalhealthindustry;

• impactingElanco'seffectivetaxrate;and

• increasingElanco'scostofborrowing.

Elanco may not be able to generate sufficient cash to service all of its indebtedness and may be forced to take other actions to satisfy its obligations under its indebtedness, which may not be successful.

Elanco'sabilitytomakescheduledpaymentsonorrefinanceitsdebtobligationsdependsonitsfinancialconditionandoperatingperformance,whicharesubjecttoprevailingeconomicandcompetitiveconditionsandtocertainfinancial,business,legislative,regulatoryandotherfactorsbeyonditscontrol.Elancomaybeunabletomaintainalevelofcashflowsfromoperatingactivitiessufficienttopermitittopaytheprincipalandinterestonitsindebtedness.

IfElanco'scashflowsandcapitalresourcesareinsufficienttofunditsdebtserviceobligations,itcouldfacesubstantialliquidityproblemsandcouldbeforcedtoreduceordelayinvestmentsandcapitalexpenditures,ortodisposeofmaterialassetsoroperations,alteritsdividendpolicy,seekadditionaldebtorequitycapitalorrestructureorrefinanceitsindebtedness.Elancomaynotbeabletoeffectanysuchalternativemeasuresoncommerciallyreasonabletermsoratalland,evenifsuccessful,thosealternativeactionsmaynotallowittomeetitsscheduleddebtserviceobligations.TheinstrumentsthatwillgovernElanco'sindebtednessmayrestrictitsabilitytodisposeofassetsandmayrestricttheuseofproceedsfromthosedispositionsandmayalsorestrictitsabilitytoraisedebtorequitycapitaltobeusedtorepayotherindebtednesswhenitbecomesdue.Elancomaynotbeabletoconsummatethosedispositionsortoobtainproceedsinanamountsufficienttomeetanydebtserviceobligationswhendue.

Inaddition,Elancoconductsitsoperationsthroughitssubsidiaries.Accordingly,repaymentofElanco'sindebtednesswilldependonthegenerationofcashflowbyitssubsidiaries,includingcertaininternationalsubsidiaries,andtheirabilitytomakesuchcashavailabletoElanco,bydividend,debt

TableofContents

repaymentorotherwise.Elanco'ssubsidiariesmaynothaveanyobligationtopayamountsdueonElanco'sindebtednessortomakefundsavailableforthatpurpose.Elanco'ssubsidiariesmaynotbeableto,ormaynotbepermittedto,makeadequatedistributionstoenableElancotomakepaymentsinrespectofitsindebtedness.Eachsubsidiaryisadistinctlegalentityand,undercertaincircumstances,legal,taxandcontractualrestrictionsmaylimitElanco'sabilitytoobtaincashfromitssubsidiaries.IntheeventthatElancodoesnotreceivedistributionsfromitssubsidiaries,itmaybeunabletomakerequiredprincipalandinterestpaymentsonitsindebtedness.

Elanco'sinabilitytogeneratesufficientcashflowstosatisfyitsdebtobligations,ortorefinanceitsindebtednessoncommerciallyreasonabletermsoratall,maymateriallyadverselyaffectElanco'sbusiness,financialconditionandresultsofoperationsanditsabilitytosatisfyitsobligationsunderitsindebtedness.

The notes are unsecured and are effectively junior to any secured indebtedness.

Thenotesareourunsecuredgeneralobligations.Holdersofanyfuturesecuredindebtednesswillhaveclaimsthatarepriortoyourclaimsasholdersofthenotes,totheextentoftheassetssecuringsuchindebtedness.Intheeventofabankruptcy,liquidation,dissolution,reorganizationorsimilarproceeding,ourpledgedassetswouldbeavailabletosatisfyobligationsofoursecuredindebtednessbeforeanypaymentcouldbemadeonthenotes.Totheextentthatsuchassetscannotsatisfyinfulloursecuredindebtedness,theholdersofsuchindebtednesswouldhaveaclaimforanyshortfallthatwouldrankequallyinrightofpaymentwiththenotes.Inanyoftheforegoingevents,wecannotassureyouthattherewillbesufficientassetstopayamountsdueonthenotes.Asaresult,holdersofthenotesmayreceiveless,ratably,thanholdersofanysecuredindebtedness.AsofMarch31,2019,wehadapproximately$2.5billionoflong-termdebtnetoforiginalissuedebtdiscount.

Risks Relating to Participation in the Exchange Offers

Our board of directors has not made a recommendation as to whether you should tender your Original Notes in exchange for Exchange Notes in the Exchange Offers, and we have not obtained a third-partydetermination that the Exchange Offers are fair to holders of our Original Notes.

Ourboardofdirectorshasnotmade,andwillnotmake,anyrecommendationastowhetherholdersofOriginalNotesshouldtendertheirOriginalNotesinexchangeforExchangeNotespursuanttotheExchangeOffers.Wehavenotretained,anddonotintendtoretain,anyunaffiliatedrepresentativetoactsolelyonbehalfoftheholdersoftheOriginalNotesforpurposesofnegotiatingthetermsoftheseExchangeOffers,orpreparingareportormakinganyrecommendationconcerningthefairnessoftheseExchangeOffers.Therefore,ifyoutenderyourOriginalNotes,youmaynotreceivemorethanorasmuchvalueasifyouchosetokeepthem.HoldersofOriginalNotesmustmaketheirownindependentdecisionsregardingtheirparticipationintheExchangeOffers.

If you fail to exchange your Original Notes, they will continue to be restricted securities and may become less liquid.

OriginalNotesthatyoudonottenderorthatwedonotacceptwill,followingtheExchangeOffers,continuetoberestrictedsecurities,andyoumaynotoffertosellthemexceptpursuanttoanexemptionfrom,orinatransactionnotsubjectto,theSecuritiesActandapplicablestatesecuritieslaw.WewillissueExchangeNotesinexchangefortheOriginalNotespursuanttotheExchangeOffersonlyfollowingthesatisfactionoftheproceduresandconditionssetforthin"TheExchangeOffers—Conditions"and"TheExchangeOffers—ProceduresforTenderingOriginalNotes".TheseproceduresandconditionsincludetimelyreceiptbytheExchangeAgentofsuchOriginalNotes(oraconfirmationofbook-entrytransfer)andofaproperlycompletedanddulyexecutedletteroftransmittal(oranagent'smessagefromDTC).

TableofContents

BecauseweanticipatethatmostholdersofOriginalNoteswillelecttoexchangetheirOriginalNotes,weexpectthattheliquidityofthemarketforanyOriginalNotesremainingafterthecompletionoftheExchangeOfferswillbesubstantiallylimited.AnyOriginalNotestenderedandexchangedintheExchangeOfferswillreducetheaggregateprincipalamountoftheapplicableseriesofOriginalNotesoutstanding.FollowingtheExchangeOffers,ifyoudonottenderyourOriginalNotes,yougenerallywillnothaveanyfurtherregistrationrights,andyourOriginalNoteswillcontinuetobesubjecttocertaintransferrestrictions.Accordingly,theliquidityofthemarketfortheOriginalNotescouldbeadverselyaffected.

If an active trading market does not develop for the Exchange Notes, you may be unable to sell the Exchange Notes or to sell them at a price you deem sufficient.

TheExchangeNotesareanewissueofsecuritiesforwhichthereiscurrentlynopublictradingmarket.WedonotintendtolisttheExchangeNotesonanynationalsecuritiesexchange.Accordingly,therecanbenoassurancesthatanactivetradingmarketwilldevelopuponcompletionoftheExchangeOffersor,ifitdevelops,thatsuchmarketwillbesustained,orastotheliquidityofanymarket.Ifanactivetradingmarketdoesnotdeveloporisnotsustained,themarketpriceandtheliquidityoftheExchangeNotesmaybeadverselyaffected.Inaddition,theliquidityofthetradingmarketfortheExchangeNotes,ifitdevelops,andthemarketpricequotedfortheExchangeNotes,maybeadverselyaffectedbychangesintheoverallmarketforthosesecuritiesandbychangesinourfinancialperformanceorprospectsorintheprospectsforcompaniesinourindustrygenerally.

TableofContents

USE OF PROCEEDS

WewillnotreceiveanycashproceedsfromtheissuanceoftheExchangeNotespursuanttotheExchangeOffers.InconsiderationforissuingtheExchangeNotesascontemplatedinthisprospectus,wewillreceiveinexchangealikeprincipalamountofOriginalNotes,thetermsofwhichareidenticalinallmaterialrespectstotheExchangeNotes,exceptthattheExchangeNoteswillnotcontaintermswithrespecttotransferrestrictions,registrationrightsandadditionalinterestforfailuretoobservecertainobligationsintheexchangeandregistrationrightsagreement.TheOriginalNotessurrenderedinexchangefortheExchangeNoteswillberetiredandcancelledandcannotbereissued.Accordingly,theissuanceoftheExchangeNoteswillnotresultinanychangeinourcapitalization.

TableofContents

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED AND COMBINED STATEMENT OF OPERATIONS

Thefollowingunauditedproformacondensedconsolidatedandcombinedstatementofoperationsshouldbereadinconjunctionwiththesectionentitled"Management'sDiscussionandAnalysisofFinancialConditionandResultsofOperations"andElanco'sconsolidatedandcombinedfinancialstatementsandaccompanyingnotesincludedelsewhereinthisprospectus.

Elanco'sunauditedproformacondensedconsolidatedandcombinedstatementofoperationsisbasedonandhasbeenderivedfromElanco'shistoricalconsolidatedandcombinedfinancialstatementsincludedelsewhereinthisprospectus.

Inmanagement'sopinion,theunauditedproformacondensedconsolidatedandcombinedstatementofoperationsreflectcertainadjustmentsthatarenecessarytopresentfairlyElanco'sunauditedproformacondensedconsolidatedandcombinedresultsofoperationsfortheperiodindicated.Theproformaadjustmentsgiveeffecttoeventsthatare(i)directlyattributabletothetransactionsdescribedbelow,(ii)factuallysupportable,and(iii)expectedtohaveacontinuingimpactonElanco.TheproformaadjustmentsarebasedonassumptionsthatElanco'smanagementbelievesarereasonablegiventhebestinformationcurrentlyavailable.

TheunauditedproformacondensedconsolidatedandcombinedstatementofoperationsisforillustrativeandinformationalpurposesonlyandisnotintendedtorepresentwhatElanco'sresultsofoperationswouldhavebeenhaditoperatedasanindependent,publiclytradedcompanyduringtheperiodpresentedorifthetransactionsdescribedbelowhadactuallyoccurredasofthedateindicated.TheunauditedproformacondensedconsolidatedandcombinedstatementofoperationsalsoshouldnotbeconsideredindicativeofElanco'sfutureresultsofoperationsasanindependent,publiclytradedcompany.

Theunauditedproformacondensedconsolidatedandcombinedstatementofoperationsgiveeffecttothefollowingtransactions,whicharereferredtoasthe"Transactions,"asiftheyeachhadoccurredonJanuary1,2018:

• theimpactoftheDebtTransactionsandtheuseoftheproceedstherefrom.

Duetolocalregulatoryandoperationalrequirements,incertainnon-U.S.jurisdictions,thetransferofcertainassetsandliabilitiesofLilly'sanimalhealthbusinesseshavenotlegallyoccurred.Elancohasnotadjustedtheaccompanyingunauditedproformacondensedconsolidatedandcombinedstatementofoperationsforthepotentialimpactofthedelayedtransfersbecauseanyimpactofthesetransfersisnotmaterialtoitsunauditedproformacondensedconsolidatedandcombinedstatementofoperations,individuallyorintheaggregate.

Elanco'scondensedconsolidatedandcombinedstatementofoperationsincludesexpenseallocationsrelatedtocertainLillycorporatefunctionspriortotheIPO,including,butnotlimitedto,executiveoversight,treasury,legal,finance,humanresources,tax,internalaudit,financialreporting,informationtechnologyandinvestorrelations.TheseexpenseshavebeenallocatedtoElancobasedondirectusageorbenefitwherespecificallyidentifiable,withtheremainderallocatedprimarilyonaproratabasisofrevenue,headcountorothermeasures.Elanco'smanagementbelievesthatthisexpensemethodology,andtheresultsthereof,isreasonableforallperiodspresented.However,theallocationsmaynotbeindicativeoftheactualexpensethatwouldhavebeenincurredifElancowouldhaveoperatedasanindependent,publiclytradedcompanyfortheentiretyoftheperiodpresented.LillycontinuestoprovideElancowithsomeoftheservicesrelatedtothesefunctionsonatransitionalbasisinexchangeforagreed-uponfeesandElancoexpectstoincurothercoststoreplacetheservicesandresourcesthatwillnotbeprovidedbyLilly.Elancowillalsocontinuetoincurnewcostsrelatingtoitspublicreportingandcomplianceobligationsasanindependent,publiclytradedcompany.Theaccompanyingunauditedproformacondensedconsolidatedandcombinedstatementofoperationshas

TableofContents

notbeenadjustedforanychangeinsuchcosts,astheyareprojectedamountsbasedonestimatesandarenotfactuallysupportable.

Theunauditedproformacondensedconsolidatedandcombinedstatementofoperationsexcludescertainadjustmentsfornon-recurringcoststhatElancohasincurredorexpectstoincurrelatedtotheseparation,including,amongotherthings,thecreationofastandaloneinfrastructureinareassuchasinformationtechnology,facilitiesmanagement,distribution,humanresources,manufacturing,financeandotherfunctions.Elancocurrentlyestimatesthesecostsintheaggregatetobeinarangefrom$240millionto$290million,netofpotentialrealestatedispositions,ofwhichaportionwillbecapitalizedandtheremainderwillbeexpensed.

TableofContents

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED AND COMBINED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

SeeaccompanyingNotestoUnauditedProFormaCondensedConsolidatedandCombinedStatementofOperations.

Historical Pro Forma

Adjustments Notes Pro Forma (In millions, except per share data) Revenue $ 3,066.8 — $ 3,066.8Costs,expensesandother: Costofsales 1,573.8 — 1,573.8Researchanddevelopment 246.6 — 246.6Marketing,sellingandadministrative 735.2 — 735.2Amortizationofintangibleassets 197.4 — 197.4Assetimpairment,restructuringandotherspecialcharges 128.8 — 128.8Interestexpense,netofcapitalizedinterest 29.6 81.1 (a) 110.7Other(income)expense,net 41.3 — 41.3

Income/(loss)beforeincometaxexpense 114.1 (81.1) 33.0Incometaxexpense(benefit) 27.6 (19.5) (b) 8.1Netloss $ 86.5 $ (61.6) $ 24.9Netlosspershare—basicanddiluted $ 0.28 $ 0.08Weightedaveragesharesoutstanding—basicanddiluted 313.7 313.7

TableofContents

Notes to Unaudited Pro Forma Condensed Consolidated and Combined Statement of Operations.

(a) ReflectsinterestexpenserelatedtotheSeniorNotesOffering,TermLoanandamortizationoftheassociateddeferreddebtissuancecosts.TheinterestexpensehasbeencalculatedbasedonthefixedinterestratesforthenotesissuedintheSeniorNotesOfferingandforborrowingsundertheTermLoan,alongwithanestimated$24.5millionofdebtissuancecostsamortizedoverthetermofthedebt,calculatedasfollows:

(b) ReflectstheimpactoftheproformaadjustmentsonincometaxcalculatedusingElanco'sU.S.effectivetaxrateof24%fortheyearendedDecember31,2018.

Principal Interest Rate

Year Ended December 31,

2018 (Dollars in millions) Seniornotes: 3year $ 500.0 3.912%$ 19.65year 750.0 4.272% 32.010year 750.0 4.900% 36.8

Termloan* 500.0 3.772% 18.9Debtissuancecost 24.5 — 4.8Totalcost $ 2,524.5 — $ 112.1Less:Historicalinterestpayment** — — (31.0)Proformaadjustment — — $ 81.1

* RepresentsinterestrateasofDecember31,2018

** Interestexpenseincludedwithin"Interestexpense,netofcapitalizedinterest"financialstatementlineitem.

TableofContents

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of Elanco's financial condition and results of operations as of, and for, the periods presented. You should read the following discussion and analysis of Elanco's financialcondition and results of operations together with the sections entitled "Prospectus Summary—Selected Historical and Pro Forma Financial Data," "Risk Factors," "Cautionary Statement Concerning Forward-LookingStatements," "Unaudited Pro Forma Condensed Consolidated and Combined Statement of Operations" and Elanco's consolidated and combined financial statements and related notes thereto included elsewhere in thisprospectus.

Overview

Foundedin1954aspartofEliLillyandCompany,Elancoisapremieranimalhealthcompanythatinnovates,develops,manufacturesandmarketsproductsforcompanionandfoodanimals.HeadquarteredinGreenfield,Indiana,Elancoisthefourthlargestanimalhealthcompanyintheworld,withrevenueof$3.1billionfortheyearendedDecember31,2018.Globally,itis#1inmedicinalfeedadditives,#2inpoultryand#3incattle,measuredby2017revenue,accordingtoVetnosis.Elancoalsohasoneofthebroadestportfoliosofpetparasiticidesinthecompanionanimalsector.Elancooffersadiverseportfolioofmorethan125brandsthatmakeitatrustedpartnertoveterinariansandfoodanimalproducersinmorethan90countries.

Elancooperatesitsbusinessinasinglesegmentdirectedatfulfillingitsvisionofenrichingthelivesofpeoplethroughfood—makingproteinmoreaccessibleandaffordable—andthroughpetcompanionship—helpingpetslivelonger,healthierlives.Elancoadvancesitsvisionbyofferingproductsinfourprimarycategories:

Companion Animal Therapeutics ("CA Therapeutics"). Elancohasabroadpainandosteoarthritisportfolioacrossspecies,modesofaction,indicationsanddiseasestages.Petownersareincreasinglytreatingosteoarthritisintheirpets,andElanco'sGalliprant productisoneofthefastestgrowingosteoarthritistreatmentsintheU.S.Elancoalsohastreatmentsforotitis(earinfections),aswellascardiovascularanddermatologyindications.

• Food Animal Future Protein & Health ("FA Future Protein & Health"). Elanco'sportfoliointhiscategory,whichincludesvaccines,nutritionalenzymesandanimal-onlyantibiotics,servesthegrowingdemandforproteinandincludesinnovativeproductsinpoultryandaquacultureproduction,wheredemandforanimalhealthproductsisoutpacingoverallindustrygrowth.Elancoisfocusedondevelopingfunctionalnutritionalhealthproductsthatpromotefoodanimalhealth,includingenzymes,probioticsandprebiotics.Elancoisaleaderinprovidingvaccinesasalternativestoantibioticstopromoteanimalhealthbasedonshareofrevenue.

• Food Animal Ruminants & Swine ("FA Ruminants & Swine"). Elancohasdevelopedarangeoffoodanimalproductsusedextensivelyinruminant(e.g.,cattle,sheepandgoats)andswineproduction.

ForthethreemonthsendedMarch31,2019and2018,Elanco'srevenuewas$731.1millionand$736.2million,respectively,andfortheyearsendedDecember31,2018,2017and2016,Elanco'srevenuewas$3.1billion,$2.9billionand$2.9billion,respectively.ForthethreemonthsendedMarch31,2019and2018,Elanco'snetincomewas$31.5millionand$72.7million,respectively,and

TableofContents

fortheyearsendedDecember31,2018,2017and2016,Elanco'snetincome(loss)was$86.5million,$(310.7)millionand$(47.9)million,respectively.

Key Trends and Conditions Affecting Elanco's Results of Operations

Industry Trends

Theanimalhealthindustry,whichfocusesonbothfoodanimalsandcompanionanimals,isagrowingindustrythatbenefitsbillionsofpeopleworldwide.

Asdemandforanimalproteingrows,foodanimalhealthisbecomingincreasinglyimportant.Factorsinfluencinggrowthindemandforfoodanimalmedicinesandvaccinesinclude:

• oneinthreepeopleneedsimprovednutrition;

• increasedglobaldemandforprotein,particularlypoultryandaquaculture;

• naturalresourceconstraints,suchasscarcityofarableland,freshwaterandincreasedcompetitionforcultivatedland,drivingtheneedformoreefficientfoodproduction;

• lossofproductivityduetofoodanimaldiseaseanddeath;

• increasedfocusonfoodsafetyandfoodsecurity;and

• humanpopulationgrowth,increasedstandardsofliving,particularlyinmanyemergingmarkets,andincreasedurbanization.

Growthinfoodanimalnutritionalhealthproducts(enzymes,probioticsandprebiotics)isinfluenced,amongotherfactors,bydemandforantibioticalternativesthatcanpromoteanimalhealthandincreaseproductivity.

Factorsinfluencinggrowthindemandforcompanionanimalmedicinesandvaccinesinclude:

• increasedpetownershipglobally;

• petslivinglonger;and

• increasedpetspendingaspetsareviewedasmembersofthefamilybyowners.

Product Development and New Product Launches

AkeyelementofElanco'stargetedvaluecreationstrategyistodrivegrowththroughportfoliodevelopmentandproductinnovation,primarilyinitsthreetargetedgrowthcategories:CADiseasePrevention,CATherapeuticsandFAFutureProtein&Health.Elanco'selevenproductlaunchesbetween2015andDecember31,2018havehadasignificantpositiveimpactonitsrevenueoverthoseperiods,andElancoexpectsnewproductsandinnovationwillcontinuetohaveapositiveimpactonrevenueinthefuture.Revenuefromtheseproductlaunchescontributed$274.2milliontorevenuefortheyearendedDecember31,2018and$97.8milliontorevenueforthethreemonthsendedMarch31,2019.Elancocontinuestopursuethedevelopmentofnewchemicalandbiologicalmoleculesthroughitsapproachtoinnovation.Elanco'sfuturegrowthandsuccessdependsonbothitspipelineofnewproducts,includingnewproductsthatitmaydevelopthroughjointventuresandproductsthatitisabletoobtainthroughlicenseoracquisition,andtheexpansionoftheuseofitsexistingproducts.ElancobelievesitisanindustryleaderinanimalhealthR&D,withatrackrecordofproductinnovation,businessdevelopmentandcommercialization.

TableofContents

Impact of Changing Market Demand for Antibiotics

Inrecentyears,Elanco'soperationalresultshavebeen,andwillcontinuetobe,affectedbyregulationsandchangingmarketdemandrelatingtotheuseofantibioticsandotherproductsintendedtoincreasefoodanimalproduction.

Therearetwoclassesofantibioticsusedinanimalhealth,shared-class,ormedicallyimportant,antibioticsandanimal-onlyantibiotics.Shared-classantibioticsareusedtotreatinfectiousdiseasecausedbypathogensthatoccurinbothhumansandanimals.AspartofElanco'santibioticstewardshipplanandincompliancewithFDAguidance,shared-classantibioticsarelabeledonlyforthetreatmentofanestablishedneedinanimalsandonlywithveterinarianoversight.However,notallpathogensthatcausediseaseinanimalsareinfectiousinhumans,andaccordinglyanimal-onlyantibioticsarenotusedinhumanmedicine(i.e.,notmedicallyimportant).From2015to2018,Elanco'srevenuefromshared-classantibioticsdeclinedataCAGRof6%,excludingtheimpactofforeignexchange.Thiswasdrivenprimarilybychangingregulationsinmanymarkets,includingtheVeterinaryFeedDirective,aswellaschangingmarketdemandandElanco'stiered-approachtoantibioticstewardship,whichincludedremovinggrowthpromotionfromlabelsandrequiringveterinaryoversightintheU.S.andothermarkets.Globally,during2018,Elanco'srevenuefromshared-classantibioticsdeclined2%,excludingtheimpactofforeignexchange,andrepresented12%(4%fromsalesintheU.S.and8%fromsalesoutsideoftheU.S.)oftotalrevenue,downfrom16%in2015.From2015to2018,Elanco'srevenuefromanimal-onlyantibioticsgrewataCAGRof5%,excludingtheimpactofforeignexchange,drivenbysalesoutsidetheU.S.,whichoffsetaslightdeclineintheU.S.Globally,during2018,Elanco'srevenuefromanimal-onlyantibioticsgrew8%,excludingtheimpactofforeignexchange,andrepresented25%oftotalrevenue,upfrom23%in2015.During2018,87%ofElanco'srevenuefromanimal-onlyantibioticsresultedfromthesaleofionophores.Ionophoresareaspecialclassofanimal-onlyantimicrobials,andbecauseoftheiranimal-onlydesignation,modeofactionandspectrumofactivity,theirusehasnottodatebeenimpactedbyregulationsorchangingmarketdemandinmanymarketsoutsideoftheU.S.

Elancohasintentionallyshiftedawayfromshared-classantibiotics,andisfocusingonanimal-onlyantibiotics,aswellasantibiotic-freesolutions.Whenananimal-onlyantibioticexists,Elancobelievesitshouldbethefirst,preferredantibiotictreatment.Antibioticresistanceconcerns,orotherhealthconcernsregardingfoodanimalproducts,mayresultinadditionalrestrictions,expandedregulationsorchangesinmarketdemandtofurtherreducetheuseofantibioticsinfoodanimals.Elancobelievesitisimportanttoprotectthebenefitsofantibioticsinhumanmedicine,whileresponsiblyprotectingthehealthoffoodanimalsandthesafetyofourfoodsupply.

Impact of Competition

Theanimalhealthindustryiscompetitive.Establishedanimalhealthcompanieswhoconsistentlydeliverhighqualityproductsenjoybrandloyaltyfromtheircustomers,whichoftencontinuesafterthelossofpatent-basedorregulatoryexclusivity.In2018,approximately72%ofElanco'srevenuewasfromproductsthatdidnothavepatentprotection.Inanimalhealth,whilepotentiallysignificant,erosionfromgenericcompetitionisoftennotassteepasinhumanhealth,withtheoriginatoroftenretainingasignificantmarketshare.WhileElanco'slargestproduct,Rumensin ,hasbeensubjecttogenericcompetitionfrommonensinoutsidetheU.S.formorethan10years,revenuefromRumensin salesoutsidetheU.S.grewataCAGRof5%from2015to2018.However,genericcompetitioncanneverthelesssignificantlyaffectElanco'sresults.ElancohasexperiencedsignificantcompetitiveheadwindsfromgenericractopamineintheU.S.Inthethirdquarterof2013,alarge,establishedanimalhealthcompanyreceivedU.S.approvalforgenericractopamine.U.S.revenueforOptaflexx ,Elanco'sractopaminebeefproduct,hasdeclinedataCAGRof24%from2015to2018asaresultofgenericcompetitionandtheimpactofinternationalregulatoryrestrictions.In2018,Elancohadan

TableofContents

estimated70%marketshareofallU.S.ractopamine-treatedbeefcattlebasedonElancomanagementestimates.

AlthoughElancobelievesbrandloyaltyisanimportantcontributortoaproduct'songoingsuccess,theanimalhealthindustryisalsoimpactedbyinnovation.Elancoexperiencedaninnovationlaginthecompanionanimalparasiticidespacefrom2015to2017.Intheabsenceofacompetitivecombinedoralfleaandtickproduct,Elanco'sU.S.companionanimalparasiticideportfoliorevenuedeclined15%in2017,excludingtheimpactonrevenueresultingfromareductionininventorylevelswithinElanco'sdistributionchannel.InFebruary2018,ElancolaunchedCredelio intheU.S.forthetreatmentoffleasandticks.SincethelaunchofCredelio ,Elanco'ssalesofparasiticidesintheU.S.havebeguntogrowagain.

Productivity

Elanco'sresultsduringtheperiodspresentedhavebenefittedfromoperationalandproductivityinitiativesimplementedfollowingrecentacquisitionsandinresponsetochangingmarketdemandforantibioticsandotherheadwinds.Elancoestimatesthattheseinitiativeshavegeneratedmorethan$500millioninannualizedcostsavingsfromthebeginningof2015throughtheendof2017.

Elanco'sacquisitionsofLohmannAnimalHealthin2014,NovartisAnimalHealthin2015andtheBIVetmedicaU.S.vaccinesportfolioin2017addedintheaggregate$1.4billioninrevenue,4,500full-timeemployees,12manufacturingandeightR&Dsites.Inaddition,from2015to2018,changingmarketdemandforantibioticsandotherheadwinds,suchascompetitionwithgenericsandinnovation,affectedsomeofElanco'shighestgrossmarginproducts,resultinginachangetoElanco'sproductmixanddrivingoperatingmarginlower.Inresponse,Elancoimplementedanumberofinitiativesacrossmanufacturing,R&Dandmarketing,sellingandadministrative,suchasrationalizationofstockkeepingunits,reductionofcontractmanufacturingorganizations,implementationofleanmanufacturingprinciplesandprocurementinitiatives.

Foreign Exchange Rates

SignificantportionsofElanco'srevenueandcostsareexposedtochangesinforeignexchangerates.Elanco'sproductsaresoldinmorethan90countriesand,asaresult,itsrevenueisinfluencedbychangesinforeignexchangerates.ForthethreemonthsendedMarch31,2019and2018,approximately42%and47%,respectively,ofElanco'srevenuewasdenominatedinforeigncurrencies.FortheyearsendedDecember31,2018and2017,approximately52%and50%,respectively,ofElanco'srevenuewasdenominatedinforeigncurrencies.Elancoseekstomanageforeignexchangerisk,inpart,throughoperationalmeans,includingmanagingsame-currencyrevenueinrelationtosame-currencycosts,andsame-currencyassetsinrelationtosame-currencyliabilities.AsElancooperatesinmultipleforeigncurrencies,includingtheeuro,Britishpound,Brazilianreal,Australiandollar,Japaneseyen,Canadiandollar,Chineseyuan,andothercurrencies,changesinthosecurrenciesrelativetotheU.S.dollarwillimpactitsrevenue,costofgoodsandexpenses,andconsequently,netincome.ExchangeratefluctuationsinemergingmarketsmayalsohaveanimpactbeyondElanco'sreportedfinancialresultsanddirectlyimpactoperations.ThesefluctuationsmayalsoaffecttheabilitytobuyandsellElanco'sproductsbetweenmarketsimpactedbysignificantexchangeratevariances.TherehasbeenlimitedimpactonElanco'srevenueduetocurrencymovementsduringthethreemonthsendedMarch31,2019and2018.Foreignexchangerateshadanegligibleeffectonrevenuefrom2016to2018.

General Economic Conditions

Inadditiontoindustry-specificfactors,Elanco,likeotherbusinesses,faceschallengesrelatedtoglobaleconomicconditions.Growthinboththefoodanimalandcompanionanimalsectorsisdrivenin

TableofContents

partbyoveralleconomicdevelopmentandrelatedgrowth,particularlyinmanyemergingmarkets.Inrecentyears,certainofElanco'scustomersandsuppliershavebeenaffecteddirectlybyeconomicdownturns,whichdecreasedthedemandforElanco'sproducts.

ThecostofElanco'sproductstofoodanimalproducersissmallrelativetotheirotherproductioncosts,includingfeed,andtheuseofElanco'sproductsisintendedtoimproveeconomicoutcomesforfoodanimalproducers.Similarly,industrysourceshavereportedthatpetownersindicatedapreferenceforreducingspendingonotheraspectsoftheirlifestyle,includingentertainment,clothingandhouseholdgoods,beforereducingspendingonpetcare.Whilethesefactorshavemitigatedtheimpactofrecentdownturnsintheglobaleconomy,furthereconomicchallengescouldincreasecostsensitivityamongElanco'scustomers,whichmayresultinreduceddemandforElanco'sproductsandcouldhaveamaterialadverseeffectonElanco'sfinancialconditionandresultsofoperations.

Weather Conditions and the Availability of Natural Resources

TheanimalhealthindustryanddemandformanyofElanco'sanimalhealthproductsinaparticularregionareaffectedbyweatherconditions,varyingweatherpatternsandweather-relatedpressuresfrompests,suchasfleasandticks.Asaresult,Elancomayexperienceregionalandseasonalfluctuationsinitsresultsofoperations.

Foodanimalproducersdependontheavailabilityofnaturalresources,includinglargesuppliesoffreshwater.Theiranimals'healthandtheirabilitytooperatecouldbeadverselyaffectediftheyexperienceashortageoffreshwaterduetohumanpopulationgrowthorfloods,droughtsorotherweatherconditions.

Droughtconditionscouldnegativelyimpact,amongotherthings,thesupplyofcornandtheavailabilityofgrazingpastures.Adecreaseinharvestedcornresultsinhighercornprices,whichcouldnegativelyimpacttheprofitabilityoffoodanimalproducersofruminants,porkandpoultry.Highercornpricesandreducedavailabilityofgrazingpasturescontributetoreductionsinherdorflocksizesthatinturnresultinlessspendingonanimalhealthproducts.Assuch,aprolongeddroughtcouldhaveamaterialadverseeffectonElanco'sfinancialconditionandresultsofoperations.FactorsinfluencingthemagnitudeandtimingofeffectsofadroughtonElanco'sperformanceinclude,butmaynotbelimitedto,weatherpatternsandherdmanagementdecisions.

Inaddition,veterinaryhospitalsandpractitionersdependonvisitsfromandaccesstotheanimalsundertheircare.Veterinarians'patientvolumeandabilitytooperatecouldbeadverselyaffectediftheyexperienceprolongedsnow,iceorothersevereweatherconditions,particularlyinregionsnotaccustomedtosustainedinclementweather.AdverseweatherconditionsorashortageoffreshwatermaycauseveterinariansandfoodanimalproducerstopurchaselessofElanco'sproducts.

Disease Outbreaks

SalesofElanco'sfoodanimalproductscouldbeadverselyaffectedbytheoutbreakofdiseasecarriedbyanimals.Outbreaksofdiseasemayreduceregionalorglobalsalesofparticularanimal-derivedfoodproductsorresultinreducedexportsofsuchproducts,eitherduetoheightenedexportrestrictionsorimportprohibitions,whichmayreducedemandforElanco'sproducts.Also,theoutbreakofanyhighlycontagiousdiseasenearElanco'smainproductionsitescouldrequireElancotoimmediatelyhalttheproductionofproductsatsuchsitesorforceElancotoincursubstantialexpensesinprocuringrawmaterialsorproductselsewhere.Alternatively,salesofproductsthattreatspecificdiseaseoutbreaksmayincrease.

TableofContents

Manufacturing and Supply

InordertosellElanco'sproducts,Elancomustbeabletoreliablyproduceandshipproductsinsufficientquantities.ManyofElanco'sproductsinvolvecomplexmanufacturingprocessesandaresole-sourcedfromcertainmanufacturingsites.

MinordeviationsinElanco'smanufacturingorlogisticalprocesses,unpredictabilityofaproduct'sregulatoryorcommercialsuccessorfailure,theleadtimenecessarytoconstructhighlytechnicalandcomplexmanufacturingsites,andshiftingcustomerdemandincreasethepotentialforcapacityimbalances.

Components of Revenue and Costs and Expenses

Revenue

Elanco'srevenueisprimarilyderivedfromsalesofitsproductstothird-partydistributors,anddirectlytofoodproducersandveterinarians.ForadditionalinformationregardingElanco'sproducts,includingdescriptionsofitsproducts,see"BusinessofElanco—Products."

Elancoaggregatesitsproductsintofivecategoriestounderstandrevenuegrowth:

• CA Disease Prevention includesparasiticidesandvaccineproductsfordogsandcats;

• CA Therapeutics includesproductsforthetreatmentofpain,osteoarthritis,otitis,cardiovascularanddermatologyindicationsindogsandcats;

• FA Future Protein & Health includesvaccines,antibiotics,parasiticidesandotherproductsusedinpoultryandaquacultureproduction,aswellasfunctionalnutritionalhealthproducts,includingenzymes,probioticsandprebiotics;

• FA Ruminants & Swine includesvaccines,antibiotics,implants,parasiticides,andotherproductsusedinruminantsandswineproduction,aswellascertainotherfoodanimalproducts;and

• Strategic Exits includesbusinessactivitiesthatElancohaseitherexitedormadethestrategicdecisiontoexit,includingthetransitionalcontractmanufacturingactivitythatitacquiredinconnectionwithitsacquisitionoftheBIVetmedicaU.S.vaccinesportfolio,twoterminatedlegacyU.S.distributionagreements,aterminateddistributionagreementoutsidetheU.S.,anequineproductnotcoretoitsbusinessandtransitionalcontractmanufacturingactivityassociatedwiththesupplyofhumangrowthhormonetoLilly.

Costs, Expenses and Other

Cost of sales consistsprimarilyofcostofmaterials,facilitiesandotherinfrastructureusedtomanufactureElanco'sproducts,shippingandhandling,inventorylossesandexpiredproducts.

Marketing, selling and administrative expensesconsistof,amongotherthings,thecostsofmarketing,promotionandadvertisingandthecostsofadministration(businesstechnology,facilities,legal,finance,humanresources,businessdevelopment,externalaffairsandprocurement).

Amortization of intangible assetsconsistoftheamortizationexpenseforintangibleassetsthathavebeenacquiredthroughbusinesscombinations.

R&D expensesconsistofprojectcostsspecifictonewproductR&Dandproductlifecyclemanagement,overheadcostsassociatedwithR&Doperations,regulatory,productregistrationsandinvestmentsthatsupportlocalmarketclinicaltrialsforapprovedindications.ElancomanagesoverallR&DbasedonitsstrategicopportunitiesanddoesnotdisaggregateitsR&Dexpensesincurredbynatureorbyproductasitdoesnotuseormaintainsuchinformationinmanagingitsbusiness.

TableofContents

Asset impairment, restructuring and other special charges consistsprimarilyofimpairmentoflong-termassets,restructuringcharges,costsassociatedwithacquiringandintegratingbusinesses,andcertainnon-recurringexpenses,includingcostsrelatedtothebuildoutofprocessesandsystemstosupportfinanceandglobalsupplyandlogistics,amongothers,asElancobecomesanindependentcompany.

Other—(income) expense, net consistsofnetinterest(income)/expense,realizedorunrealizedforeignexchangelossesandlossorimpairmentonotherinvestments.

Comparability of Historical Results

Elanco'shistoricalresultsofoperationsfortheperiodspresentedmaynotbecomparablewithpriorperiodsorwithitsresultsofoperationsinthefutureduetomanyfactors,includingbutnotlimitedtothefactorsidentifiedin"—KeyTrendsandConditionsAffectingElanco'sResultsofOperations."

Elanco's Relationship with Lilly and Additional Standalone Costs

PriortotheIPO,Elanco'sbusinessoperatedaspartofadivisionofLilly.Elanco'sconsolidatedandcombinedfinancialstatementshavebeenderivedfromLilly'sconsolidatedfinancialstatementsandaccountingrecordsfortheperiodspriortotheIPO.Elanco'sconsolidatedandcombinedfinancialstatementsreflectitsfinancialposition,resultsofoperationsandcashflowsofthebusinessthatweretransferredatthetimeoftheseparationanddonotpurporttoreflectwhattheresultsofoperations,comprehensiveincome/(loss),financialposition,equityorcashflowswouldhavebeenhadElancooperatedasanindependent,publiclytradedcompanyduringtheperiodspresentedpriortotheIPO.

Elanco'shistoricalresultsreflectanallocationofcostsforcertainLillycorporatecostsfortheperiodspriortotheIPO,including,amongothers,executiveoversight,treasury,legal,finance,humanresources,tax,internalaudit,financialreporting,informationtechnologyandinvestorrelations.TheseallocationsarenotnecessarilyindicativeoftheexpensesElancomayincurasastandalonepubliccompany.AlthoughElancoenteredintocertainagreementswithLillyinconnectionwiththeIPOandtheseparation,theamountandcompositionofitsexpensesmayvaryfromhistoricallevelssincethefeeschargedfortheservicesundertheagreementmaybehigherorlowerthanthecostsreflectedinthehistoricalallocations.ThetotalallocationsincludedinElanco'sresultsforthethreemonthsendedMarch31,2019and2018were$0.0millionand$35.6million,respectively.ThetotalallocationsincludedinElanco'sresultsfortheyearsendedDecember31,2018,2017and2016were$105.2million,$151.7millionand$145.3million,respectively.SeeNote19:RelatedPartyAgreementsandTransactionstoElanco'sauditedconsolidatedandcombinedfinancialstatementsandNote15:RelatedPartyAgreementsandTransactionstoElanco'sunauditedconsolidatedandcombinedfinancialstatements.

Elancoiscurrentlyinvestinginexpandingitsownadministrativefunctions,including,butnotlimitedto,informationtechnology,facilitiesmanagement,distribution,humanresourcesandmanufacturing,toreplaceservicespreviouslyprovidedbyLilly.Becauseofinitialstand-upcostsandoverlapswithservicespreviouslyprovidedbyLilly,Elancohasincurredandexpectstocontinuetoincurcertaintemporary,duplicativeexpensesinconnectionwiththeseparation.Elancoalsoincurredandexpectstocontinuetoincurcostsrelatedtothebuildoutofprocessesandsystemstosupportfinanceandglobalsupplyandlogistics,amongothers.Elancocurrentlyestimatesthesecoststakentogethertobeinarangefrom$240millionto$290million,netofpotentialrealestatedispositions,ofwhichaportionwillbecapitalizedandtheremainderwillbeexpensed.See"CertainRelationshipsandRelatedPartyTransactions—RelationshipbetweenLillyandElanco."

TableofContents

LillyutilizesacentralizedtreasurymanagementsystemofwhichElancowaspartuntilitsIPO.ForperiodspriortotheIPO,Elanco'sconsolidatedandcombinedfinancialstatementsreflectcashheldonlyinbankaccountsinitslegalnameandnoallocationofcombinedcashpositions.Elanco'sconsolidatedandcombinedfinancialstatementsdonotreflectanallocationofLilly'sdebtoranyassociatedinterestexpense.InconnectionwiththeIPO,Elancoincurred$2.5billionoflong-termborrowings.Elanco'shistoricalresultsreflect$29.6millionofinterestexpenseduringtheyearendedDecember31,2018duetothetimingoftheborrowings,incomparisonto$20.8millionforthethreemonthsendedMarch31,2019.Elancohasestimatedinterestexpenseofapproximately$85milliononanannualbasis.

FortheperiodspriortotheIPO,Elanco'sconsolidatedandcombinedfinancialstatementsreflectincometaxexpense(benefit)computedonaseparatecompanybasis,asifoperatingasastandaloneentityoraseparateconsolidatedgroupineachmaterialjurisdictioninwhichElancooperates.Elanco'sconsolidatedandcombinedfinancialstatementsfortheperiodspriortotheIPOalsoreflectcertaindeferredtaxassetsandliabilitiesandincometaxespayablebasedonthisapproachthatdidnottransfertoElancoupontheseparation,astheunderlyingtaxattributeswereusedbyLillyorretainedbyLilly.AsaresultofpotentialchangestoElanco'sbusinessmodelandthefactthatcertaindeferredtaxassetsandliabilitiesandincometaxespayabledidnottransfertoElanco,incometaxexpense(benefit)includedintheconsolidatedandcombinedfinancialstatementsmaynotbeindicativeofElanco'sfutureexpectedtaxrate.

Elanco'shistoricalresultspriortotheIPOalsodonotreflecttheimpactofcostsElancohasincurredandexpectstocontinuetoincurasaconsequenceofbecomingastandalonecompany,includingincrementalcostsassociatedwithbeingapubliclytradedcompany.

Elancoisseekingtoinstitutecompetitivecompensationpoliciesandprogramsasastandalonepubliccompany,theexpenseforwhichmaydifferfromthecompensationexpenseallocatedbyLillyinElanco'sconsolidatedandcombinedfinancialstatements.

AsaresultoftheIPO,ElancobecamesubjecttothereportingrequirementsoftheExchangeActandtheSarbanes-OxleyAct.Elancohasadditionalproceduresandpracticestoestablishorexpandasastandalonepubliccompany.Asaresult,Elancowillcontinuetoincuradditionalcostsasastandalonepubliccompany,includinginternalaudit,externalaudit,investorrelations,stockadministration,stockexchangefeesandregulatorycompliancecosts.

Recent Significant Acquisitions

Elanco'sfinancialresultshavebeenimpactedbyacquisitionsandintegrations.Fortheperiodspresented,theseincludeprimarilytheacquisitionsandintegrationsofNovartisAnimalHealth,whichclosedonJanuary1,2015,certainrightstodevelop,manufacture,marketandcommercializeGalliprant outsidetheU.S.andco-promoteitintheU.S.acquiredfromAratanaTherapeutics,Inc.,whichclosedonApril22,2016,andBIVetmedicaU.S.vaccinesportfolio,whichclosedonJanuary3,2017.Formoreinformation,seeNote6:AcquisitionstoElanco'sconsolidatedandcombinedfinancialstatements.

OnApril26,2019,Elancoenteredintoanagreement(theMergerAgreement)toacquireAratanaTherapeutics,Inc.(Aratana).Aratanaisapettherapeuticscompanyfocusedoninnovativetherapiesfordogsandcats,andcreatorofthecanineosteoarthritismedicine,Galliprant®,therightstowhichElancoacquiredin2016.SubjecttothetermsandconditionssetforthintheMergerAgreement,upontheconsummationofthemerger,eachshareofAratanacommonstockwillbeconvertedintotherighttoreceive0.1481sharesofElanco'scommonstockplusonecontingentvalueright,whichshallrepresenttherighttoreceiveacontingentpaymentof$0.25incashupontheachievementofaspecifiedmilestoneasoutlinedintheMergerAgreement.BasedontheclosingpriceofashareofElancocommonstockonApril24,2019,thedateonwhichtheexchangeratiowasset,thestockportionofthemergerconsiderationrepresentedapproximately$234million.Themaximumaggregate

TableofContents

contingentpaymentisapproximately$12million.Thetransactionisexpectedtocloseinthemiddleof2019,subjecttocustomaryclosingconditions,includingtheregistrationofsharesofElancocommonstockissuableinthemerger,receiptofregulatoryapprovals,andapprovalbythestockholdersofAratana.

Asset Impairment, Restructuring and Other Special Charges

DuringtheyearsendedDecember31,2018,2017and2016includinginconnectionwiththeproductivityinitiativesdescribedaboveunder"—KeyTrendsandConditionsAffectingElanco'sResultsofOperations—Productivity,"Elancoincurredchargesrelatedtoassetimpairment,restructuringandotherspecialcharges,includingintegrationofacquiredbusinesses.ThesechargesincludeseverancecostsresultingfromactionstakentoreduceElanco'scosts,assetimpairmentchargesprimarilyrelatedtocompetitivepressuresforcertaincompanionanimalproducts,productrationalizations,siteclosures,andintegrationcostsrelatedtoacquiredbusinesses,primarilyNovartisAnimalHealth,andcostsrelatedtothebuildoutofprocessesandsystemstosupportfinanceandglobalsupplyandlogistics,amongothers,asElancobecomesanindependentcompany.

Formoreinformationonthesecharges,seeNote7:AssetImpairment,RestructuringandOtherSpecialChargestoElanco'sconsolidatedandcombinedfinancialstatements.

Results of Operations

ThefollowingdiscussionandanalysisofElanco'sconsolidatedandcombinedstatementsofoperationsshouldbereadalongwithElanco'sconsolidatedandcombinedfinancialstatementsandthenotestheretoincludedelsewhereinthisprospectus,whichreflecttheresultsofoperationsofthebusinesstransferredtoElancofromLilly.Formoreinformation,seeNote2:BasisofPresentationtoElanco'sauditedconsolidatedandcombinedfinancialstatementsandElanco'sunauditedconsolidatedandcombinedfinancialstatements.

Three Months Ended

March 31, % Change Year Ended December 31, % Change (Dollars in millions) 2019 2018 19/18 2018 2017 2016 18/17 17/16 Revenue $ 731.1 736.2 (1)% $ 3,066.8 $ 2,889.0 $ 2,913.5 6% (1)%Costs,expensesandother: Costofsales 343.8 360.0 (5)% 1,573.8 1,493.9 1,409.0 5% 6%%ofrevenue 47% 49% (2)% 51% 52% 48%

Researchanddevelopment 64.1 65.2 (2)% 246.6 251.7 265.8 (2)% (5)%%ofrevenue 9% 9% —% 8% 9% 9% Marketing,sellingandadministrative 181.1 180.0 1% 735.2 779.8 784.8 (6)% (1)%%ofrevenue 25% 24% 1% 24% 27% 27%

Amortizationofintangibleassets 49.0 49.2 —% 197.4 221.2 170.7 (11)% 30%%ofrevenue 7% 7% —% 6% 8% 6% Assetimpairment,restructuringandotherspecialcharges 24.9 2.4 938% 128.8 375.1 308.4 (66)% 22%Interestexpense,netofcapitalizedinterest 20.8 — 100% 29.6 — — NM NMOther(income)expense,net 2.6 1.9 NM 41.3 (0.1) (2.8) NM NM

Income(loss)beforetaxes 44.8 77.5 NM 114.1 $ (232.6) $ (22.4) NM NM%ofrevenue 6% 11% (5)% 4% (8)% (1)% NM NM

Incometaxexpense 13.3 4.8 177% 27.6 78.1 25.5 NM NMNetincome(loss) $ 31.5 $ 72.7 NM $ 86.5 $ (310.7) $ (47.9) NM NM

Certainamountsandpercentagesmayreflectroundingadjustments.

TableofContents

Revenue

Onaglobalbasis,Elanco'srevenuewithinElanco'sproductcategorieswasasfollows:

Onaglobalbasis,theeffectofprice,foreignexchangeratesandvolumesonrevenuewasasfollows:

Revenue

Total revenue

ThreemonthsendedMarch31,2019vs.threemonthsendedMarch31,2018

Totalrevenuedecreased$5.1millionor1%forthethreemonthsendedMarch31,2019ascomparedtothethreemonthsendedMarch31,2018,reflectinga2%increaseduetohighervolumeswhichweremorethanoffsetbya3%unfavorableforeignexchangerateimpactandzeroimpactduetoprices.

Three Months Ended

March 31, % Change Year Ended December 31, % Change (Dollars in millions) 2019 2018 19/18 2018 2017 2016 18/17 17/16 CADiseasePrevention $ 185.9 201.3 (8)% $ 804.6 $ 660.2 $ 628.4 22% 5%CATherapeutics(a) 81.4 62.3 31% 283.1 260.8 255.6 9% 2%FAFutureProtein&Health 167.2 166.7 —% 711.2 649.2 630.8 10% 3%FARuminants&Swine 274.1 282.5 (3)% 1,174.0 1,175.0 1,309.2 (0)% (10)%Subtotal 708.6 712.8 (1)% 2,972.9 $ 2,745.2 $ 2,824.0 8% (3)%StrategicExits(a) 22.5 23.4 (4)% 93.9 143.8 89.5 (35)% 61%Total $ 731.1 $ 736.2 (1)% $ 3,066.8 $ 2,889.0 $ 2,913.5 6% (1)%

(a) RepresentsrevenuefrombusinessactivitiesthatElancohaseitherexitedormadeastrategicdecisiontoexit.OnJune30,2018,Elancomadethedecisiontoexitanequineproductnotcoretoitsbusiness.RevenuefromthisproductisreflectedinStrategicExitsfortheyearendedDecember31,2018andinCATherapeuticsfortheyearsendedDecember31,2017and2016.Revenuefromthisproductwas$1.6million,$3.4millionand$3.7million,fortheyearsendedDecember31,2018,2017and2016,respectively.

Full year 2018 Revenue Price FX Rate Volume Total CER* (in millions) CADiseasePrevention $ 804.6 8% 0% 14% 22% 22%CATherapeutics 283.1 7% 1% 0% 9% 7%FAFutureProtein&Health 711.2 4% (0)% 6% 10% 10%FARuminants&Swine 1,174.0 (1)% (0)% 1% (0)% (0)%Subtotal $ 2,972.9 3% 0% 5% 8% 8%StrategicExits 93.9 (0)% 0% (34)% (35)% (35)%Total $ 3,066.8 3% 0% 3% 6% 6%

Certainamountsandpercentagesmayreflectroundingadjustments.

* CER=Constantexchangerate

TableofContents

Insummary,thetotalrevenuedecreasewasdueprimarilyto:

• anincreaseinrevenueof$21.4millionor34%fromCATherapeuticsproducts,excludingtheimpactofforeignexchangerates;

• anincreaseinrevenueof$9.0millionor5%fromFAFutureProtein&Healthproducts,excludingtheimpactforeignexchangerates;and

morethanoffsetby:

• adecreaseinrevenueof$12.2millionor6%fromCADiseasePreventionproducts,excludingtheimpactofforeignexchangerates;

• adecreaseinrevenueof$1.3millionfromFARuminants&Swineproducts,excludingtheimpactofforeignexchangerates;

• adecreaseinrevenueof$0.9millionfromStrategicExits,excludingtheimpactofforeignexchangerates;and

• adecreaseinrevenueof$21.2millionduetothenegativeimpactofforeignexchangerates.

Thedetailedchangeinrevenuebyproductcategorywasasfollows:

• CADiseasePreventionrevenuedecreasedby$15.4millionor8%,primarilydrivenbylowervolumeandprice,aswellasunfavorableimpactfromforeignexchangerates.DeclinesinoldergenerationparasiticideproductsandCompanionAnimalvaccineswerepartiallyoffsetbycontinuedgrowthinCredelio,InterceptorPlusandcertainover-the-counterparasiticideproducts.

• CATherapeuticsrevenueincreasedby$19.1millionor31%,drivenbyincreasedvolumeandtoalesserextentprice,partiallyoffsetbytheimpactofforeignexchangerates.TherevenueincreasewasprimarilydrivenbythesalesofGalliprantandAtopica.Inthequarter,backordersofGalliprantinthechannelwereresolvedandtheproductwaslaunchedinseveralEuropeanmarkets.

• FAFutureProtein&Healthrevenuewasflatforthequarter,drivenbybothincreasedvolumeandprice,fullyoffsetbyanunfavorableimpactfromforeignexchangerate.Growthwasdrivenbytheaquaportfolioandpoultryvaccines,offsetbytimingofinternationalpurchasingpatternsforpoultryanimal-onlyantibiotics.

• FARuminants&Swinerevenuedecreasedby$8.4millionor3%withflatvolumenegativelyimpactedbyforeignexchangeratesanddecreasedprice.Excludingtheimpactofforeignexchangerates,theincreaseinrevenueforElanco'sU.S.businessanddecreaseinrevenueforitsinternationalbusinesslargelyoffseteachother.TheU.S.ruminantsbusinessprimarilybenefittedfromthereplenishmentofthechannelforMicotil®afterthestockoutagein2018aswellaspurchasingpatternsforRumensin.Theinternationalbusinesssawsoftnessinswineantibiotics,particularlyinAsiaprimarilydrivenbytheimpactofAfricanSwineFever,continuedimplementationofantimicrobialpoliciesacrosstheregionandproductionrationalizationsalignedwithElanco'sproductivityagenda.

• StrategicExitsrevenuedecreasedby$0.9millionor4%andrepresented3%oftotalrevenue.

2018vs.2017

Totalrevenueincreased$177.8millionor6%in2018ascomparedto2017,reflectinga3%increaseduetohigherrealizedpricesanda3%increaseduetohighervolumes.

TableofContents

Insummary,thetotalrevenueincreasewasdueprimarilyto:

• anincreaseinrevenueof$142.1millionor22%fromCADiseasePreventionproducts,excludingtheimpactofforeignexchangerates;

• anincreaseinrevenueof$18.4millionor7%fromCATherapeuticsproducts,excludingtheimpactofforeignexchangerates;

• anincreaseinrevenueof$63.8millionor10%fromFAFutureProtein&Healthproducts,excludingtheimpactofforeignexchangerates;

partiallyoffsetby:

• adecreaseinrevenueof$0.8millionor0%fromFARuminants&Swine,excludingtheimpactofforeignexchangerates;and

• adecreaseinrevenueof$49.9millionor35%fromStrategicExits,excludingtheimpactofforeignexchangerates.

• CADiseasePreventionrevenueincreasedby$144.4millionor22%dueprimarilytoareductioninchannelinventoryin2017providingafavorableyear-on-yearcomparison,continueduptakeofCredelio andInterceptor Plus ,aswellasrealizedpriceincreasesprimarilyimpactingTrifexis ,Capstar (afleatreatment)andComfortis ,partiallyoffsetbyvolumedeclinesincertainparasiticides,primarilyTrifexis andComfortis volumes.

• CATherapeuticsrevenueincreasedby$22.3millionor9%dueprimarilytothecontinueduptakeofGalliprant andOsurnia ,aswellasincreaseddemandforOnsior ,partiallyoffsetbyatemporarysupplyshortageofPercorten V usedforthetreatmentofcanineAddison'sDisease.

• FAFutureProtein&Healthrevenueincreasedby$62.0millionor10%dueprimarilytothelaunchofImvixa andthegrowthinpoultryanimal-onlyantibioticsandpoultryvaccines.

• FARuminants&Swinerevenuedecreasedby$1.0milliondueprimarilytocompetitiveheadwindsforractopaminebasedproducts,offsetbygrowthinanimal-onlyantibiotics,primarilyincattle.

• StrategicExitsrevenuedecreasedby$49.9millionor35%dueprimarilytotheterminationofalegacyU.S.distributionagreementinthethirdquarterof2017,partiallyoffsetbyrevenuefromthecontractmanufacturingagreementtosupplyhumangrowthhormonetoLilly.

2017vs.2016

Totalrevenuedecreased$24.5millionor1%in2017ascomparedto2016,duetolowervolumes.

Insummary,thetotalrevenuedecreasewasdueprimarilyto:

• adeclineinrevenueof$133.6millionor10%fromFARuminants&Swineproducts,excludingtheimpactofforeignexchangesrates;and

• adeclineinrevenueof$113.6millionor18%fromCADiseasePreventionproducts,excludingtheimpactofacquisitionandforeignexchangerates;

partiallyoffsetby:

• theacquisitionoftheBIVetmedicaU.S.vaccinesportfoliowhichcontributed$216.7millionin2017;and

TableofContents

• anincreaseinrevenueof$18.7millionor3%fromFAFutureProtein&Healthproducts,excludingtheimpactofforeignexchangerates.

• CADiseasePreventionrevenueincreasedby$31.8millionor5%.ExcludingproductrevenuefromtheacquisitionoftheBIVetmedicaU.S.vaccinesportfolioandtheimpactofforeignexchangerates,revenuedeclined$113.6millionor18%dueprimarilytocompetitionincertainparasiticides,primarilyimpactingTrifexis andComfortis ,andareductionininventorylevelswithinElanco'sU.S.companionanimaldistributionchannelpartiallyoffsetbythegrowthofInterceptor Plus .

• CATherapeuticsrevenueincreasedby$5.2millionor2%dueprimarilytothelaunchofGalliprant ,partiallyoffsetbyvolumedeclinesfromcompetitioninElanco'sdermatologyportfolio.

• FAFutureProtein&Healthrevenueincreasedby$18.4millionor3%dueprimarilytogrowthinpoultryproducts,includinganimal-onlyantibiotics,enzymesandvaccines,andtoalesserextentaquacultureproducts.

• FARuminants&Swinerevenuedecreasedby$134.2millionor10%dueprimarilytocompetitionfromgenericractopamine-basedproducts,aswellasdeclinesinshared-classantibioticsandareductionininventorylevelswithinElanco'sChinadistributionchannel,partiallyoffsetbygrowthinanimal-onlyantibiotics.

• StrategicExitsrevenueincreasedby$54.3millionor61%dueprimarilytotheacquisitionofatransitionalcontractmanufacturingarrangementatFortDodgeaspartoftheBIVetmedicaU.S.vaccinesportfolioacquisition,partiallyoffsetbytheterminationinthethirdquarterof2017ofalegacyU.S.distributionagreementacquiredaspartofElanco'sNovartisAnimalHealthacquisition.

Costs, Expenses and Other

Cost of sales

Costofsalesdecreased$16.2millioninthethreemonthsendedMarch31,2019ascomparedtothethreemonthsendedMarch31,2018dueprimarilytomanufacturingproductivityimprovements,partiallyoffsetbytheimpactofforeignexchangerates,unfavorableproductmix,andhigheraffiliatelossesandlogisticscosts.

2018vs.2017

Costofsalesincreased$79.9millionin2018ascomparedto2017primarilydueto:

• increasedvolumeofproductssold;and

• thewrite-offofinventoryrelatedtothesuspensionofactivitiesforImrestor in2018;

partiallyoffsetby:

• non-recurringcostsincurredin2017associatedwithfairvalueadjustmentstoinventoryacquiredintheBIVetmedicaU.S.vaccinesportfolioacquisitionandsubsequentlysold.

TableofContents

2017vs.2016

Costofsalesincreased$84.9millionin2017ascomparedto2016dueprimarilyto:

• theadditionofapproximately$134.1millionofcostsin2017relatedtotheacquisitionoftheBIVetmedicaU.S.vaccinesportfolio,including$54.0millionassociatedwithStrategicExitscontractmanufacturingobligationsandapproximately$42.7millioninnon-recurringcostsassociatedwiththeincrementalpurchaseaccountingchargesrelatedtothefairvalueadjustmentstoinventoryacquiredthatwassubsequentlysold;

• anunfavorableproductmixasaresultofdisproportionalrevenuedecreasesofhighermarginproductsprimarilyresultingfromchangingmarketdemandforantibioticsandcompetitionheadwinds;and

• contractualincreasesinthird-partymanufacturingagreements;

partiallyoffsetby:

• operationalefficienciesandcostsavingsassociatedwithmanufacturingfootprintconsolidationandoverallcostreductions.

Research and development

R&Dexpensesdecreased$1.1millionforthethreemonthsendedMarch31,2019ascomparedtothethreemonthsendedMarch31,2018primarilydrivenbynormalprojectspendfluctuationsandexternalinnovationmilestonepaymentsinthefirstquarterof2018thatcreatedafavorablecomparison.

2018vs.2017

R&Dexpensesdecreased$5.1millionfor2018ascomparedto2017dueprimarilytocostcontrolmeasuresandtimingofprojectsleadingtolowerspendin2018.

2017vs.2016

R&Dexpensesdecreased$14.1millionin2017ascomparedto2016dueprimarilytosavingsrealizedfromtheconsolidationofacquiredR&Dsitesandoperations,aswellastheterminationofcertainR&Dprojects.ThisdecreasewaspartiallyoffsetbyexpensesincurredinconnectionwiththeacquisitionoftheBIVetmedicaU.S.vaccinesportfolioin2017.

Marketing, selling and administrative

Marketing,sellingandadministrativeexpensesincreased$1.1millionforthethreemonthsendedMarch31,2019ascomparedtothethreemonthsendedMarch31,2018dueprimarilytoincreasedexpensesasaresultofoperatingasapubliccompany,whichwerepartiallyoffsetbycontinuedproductivityinitiativesandcostcontrolmeasuresacrossthebusiness.

2018vs.2017

Marketing,sellingandadministrativeexpensesdecreased$44.6millionfor2018ascomparedto2017dueprimarilytoproductivityinitiativesinsalesandadministrativefunctionsandreduceddirecttoconsumerprogramscombinedwithnewproductlaunchesin2017.

TableofContents

2017vs.2016

Marketing,sellingandadministrativeexpensesdecreased$5.0millionin2017ascomparedto2016dueprimarilytosavingsfromproductivityinitiativesrelatedtosalesforce,marketingandadministrativefunctions,morethanoffsettingtheincreasefromtheacquisitionoftheBIVetmedicaU.S.vaccinesportfolio.

Amortization of intangible assets

Amortizationofintangibleassetsdecreased$0.2millionforthethreemonthsendedMarch31,2019ascomparedtothethreemonthsendedMarch31,2018duetoanumberofassetsbecomingfullyamortizedduring2018.

2018vs.2017

Amortizationofintangibleassetsdecreased$23.8millionfor2018ascomparedto2017dueprimarilytotheaccelerationofamortizationrelatedtocertainproductexitsin2017.

2017vs.2016

Amortizationofintangibleassetsincreased$50.5millionin2017ascomparedto2016dueprimarilytotheimpactoftheacquisitionoftheBIVetmedicaU.S.vaccinesportfolioand,toalesserextent,theaccelerationofamortizationrelatedtocertainproductexits.

Asset impairment, restructuring and other special charges

ForadditionalinformationregardingElanco'sassetimpairment,restructuringandotherspecialcharges,seeNote7:AssetImpairment,RestructuringandOtherSpecialChargestoElanco'sauditedconsolidatedandcombinedfinancialstatementsandNote6:AssetImpairment,RestructuringandOtherSpecialChargestoElanco'sunauditedconsolidatedandcombinedfinancialstatements.

Assetimpairment,restructuringandotherspecialchargesincreased$22.5millionforthethreemonthsendedMarch31,2019ascomparedtothethreemonthsendedMarch31,2018primarilyduetointegrationcostsassociatedwiththeimplementationofnewsystems,programs,andprocessesduetotheSeparationfromLilly.

2018vs.2017

Assetimpairment,restructuringandotherspecialchargesdecreased$246.3millionfortheyearendedDecember31,2018ascomparedtotheyearendedDecember31,2017primarilyduetoadecreaseinseverancerelatedtotheU.S.voluntaryearlyretirementprogramofferedin2017aswellasadecreaseinintegrationcostsrelatedtotheacquisitionoftheBIVetmedicaU.S.vaccinesportfolioin2017,partiallyoffsetbyagainonthe2017disposalofasitethatwaspreviouslyclosedaspartoftheacquisitionandintegrationofNovartisAnimalHealth.

2017vs.2016

Assetimpairment,restructuringandotherspecialchargesincreased$66.7millionin2017ascomparedto2016dueprimarilytohigherseverancecostsrecognizedin2017duetotheU.S.voluntaryearlyretirementprogramofferedtoElanco'semployees,partiallyoffsetbylowerintegrationcostsrelatingtoElanco'sacquiredbusinesses.

TableofContents

Interest expense, net of capitalized interest

Interestexpense,netofcapitalizedinterest,was$20.8millionforthethreemonthsendedMarch31,2019duetoElanco'sissuanceofdebtinthethirdquarterof2018.TherewasnointerestexpenseinthethreemonthsendedMarch31,2018.

2018vs.2017

Interestexpensewas$29.6millionfortheyearendedDecember31,2018duetoElanco'sissuanceofdebtinthethirdquarterof2018.Therewasnointerestexpensein2017andprioryears.

Other (income) expense, net

2018vs.2017

Other(income)expense,netwasexpenseof$41.3millionin2018comparedtoincomeof$0.1millionin2017.TheincreaseinexpenseisprimarilyduetotheincreaseintheAratanaTherapeutics,Inc.contingentconsiderationliabilityof$37.6millionassociatedwiththeGalliprant acquisition.

2017vs.2016

Other(income)expense,netwasflatwhencomparing2017to2016withincomeof$0.1millionin2017comparedtoincomeof$2.8millionin2016,adecreaseof$2.7million.

Income tax expense

Elanco'shistoricalincometaxexpensemaynotbeindicativeofitsfutureexpectedtaxrate.See"—ComparabilityofHistoricalResults—Elanco'sRelationshipwithLillyandAdditionalStandaloneCosts."

Incometaxexpenseincreased$8.5millionforthethreemonthsendedMarch31,2019ascomparedtothethreemonthsendedMarch31,2018primarilyduetothebenefitreceivedinthethreemonthsendedMarch31,2018fromthereleaseofcertainvaluationallowancesrelatedtonetoperatinglossesgeneratedinpriorperiodsofElanco'sseparatecompanyfinancialstatements.SeeNote11:IncomeTaxestoElanco'sunauditedconsolidatedandcombinedfinancialstatementsforfurtherinformation.

2018vs.2017

Incometaxexpensedecreased$50.5millionfortheyearendedDecember31,2018ascomparedtotheyearendedDecember31,2017primarilyduetoadecreaseintheU.S.valuationallowancewhichwasrecordedin2017baseduponthepre-IPOseparatereturnmethodology(seeNote2:BasisofPresentationtoElanco'sconsolidatedandcombinedfinancialstatements).

2017vs.2016

Incometaxexpenseincreased$52.6milliondueprimarilytoanincreaseinunrecognizeddeferredtaxassetsin2017duetoavaluationallowanceandthetaxeffectofassetimpairment,restructuringandotherspecialcharges,partiallyoffsetbyanincometaxbenefitrelatedtoU.S.taxreform.

TableofContents

Quarterly Results of Operations

ThefollowingtablespresentElanco'squarterlyresultsfortheyearsendedDecember31,2018,2017and2016.

Liquidity and Capital Resources

Elanco'sprimarysourcesofliquidityarecashonhand,cashflowsfromoperationsandfundsavailableunderitsCreditFacilities.AsasignificantportionofElanco'sbusinessisconductedoutsidetheU.S.,ElancoholdsasignificantportionofcashoutsideoftheU.S.Elancomonitorsandadjuststheamountofforeigncashbasedonprojectedcashflowrequirements.Elanco'sabilitytouseforeigncash

Quarter Second Quarter

Third Quarter

Fourth Quarter

(In millions, except per share data) 2018: Revenue 736.2 770.2 761.1 799.3Costs,expensesandother(a) 654.4 733.4 656.4 708.8Assetimpairment,restructuringandotherspecialcharges 2.4 68.0 12.4 46.0Netincome(loss) 72.7 (62.8) 60.2 16.4Earnings(loss)pershare:Basicanddiluted 0.25 (0.21) 0.20 0.04Weightedaveragesharesoutstanding:Basicanddiluted(b) 293.3 293.3 301.9 365.6

Third Quarter

Fourth Quarter

2017: Revenue 704.8 732.8 697.1 754.3Costs,expensesandother(a) 650.8 687.4 684.4 724.0Assetimpairment,restructuringandotherspecialcharges 106.8 58.8 23.7 185.8Netincome(loss) (98.3) (30.2) (20.7) (161.5)Earnings(loss)pershare:Basicanddiluted (0.34) (0.10) (0.07) (0.55)Weightedaveragesharesoutstanding:Basicanddiluted(b) 293.3 293.3 293.3 293.3

Third Quarter

Fourth Quarter

2016: Revenue 689.2 794.3 648.9 781.1Costs,expensesandother(a) 670.4 693.3 595.7 670.9Assetimpairment,restructuringandotherspecialcharges 130.2 59.8 45.7 72.7Netincome(loss) (117.9) 45.7 6.0 18.3Earnings(loss)pershare:Basicanddiluted (0.40) 0.16 0.02 0.06Weightedaveragesharesoutstanding:Basicanddiluted(b) 293.3 293.3 293.3 293.3

(a) ExcludesAssetimpairment,restructuringandotherspecialcharges;other(income)expense,net;interestexpense,netofcapitalizedinterest;andincometaxexpense.

(b) PriortotheIPO,thisrepresentsanaggregateof293,290,000sharesofElancocommonstockheldbyLilly(whichrepresentsthe100sharesofElancocommonstockheldbyLillypriortogivingeffecttothe2,932,900-for-1stocksplitthatoccurredonSeptember19,2018).InconnectionwiththecompletionoftheIPO,72,335,000additionalsharesofElancocommonstockwereissued.Elancohascalculatedearningspersharebasedon365,625,000sharesofElancocommonstockoutstandingforthefullperiodpost-IPOandweightedaveragefor2018year-to-date.

TableofContents

tofundcashflowrequirementsintheU.S.maybeimpactedbylocalregulationsand,toalesserextent,followingU.S.taxreforms,theincometaxesassociatedwithtransferringcashtotheU.S.See"BusinessofElanco."Elancocurrentlyintendstoindefinitelyreinvestforeignearningsforcontinueduseinitsforeignoperations.AsElanco'sstructureevolvesasastandalonecompany,Elancomaychangethatstrategy,particularlytotheextentitidentifiestaxefficientreinvestmentalternativesforitsforeignearningsorchangeitscashmanagementstrategy.

Elanco'sprincipalliquidityneedsgoingforwardincludefundingexistingmarketedandpipelineproducts,capitalexpenditures,businessdevelopmentinitstargetedareas,interestexpenseandananticipateddividend.

Elancobelievesitscashandcashequivalentsonhand,itsoperatingcashflowsanditsexistingfinancingarrangementswillbesufficienttosupportitscashneedsfortheforeseeablefuture,includingforatleastthenext12months.

Elanco'sabilitytomeetfuturefundingrequirementsmaybeimpactedbymacroeconomic,businessandfinancialvolatility.Asmarketschange,Elancowillcontinuetomonitoritsliquidityposition.However,achallengingeconomicenvironmentoraneconomicdownturnmayimpactElanco'sliquidityorabilitytoobtainfuturefinancing.See"CautionaryStatementConcerningForward-LookingStatements"and"RiskFactors—RisksRelatedtoElanco'sIndebtedness—Elancomaynotbeabletogeneratesufficientcashtoserviceallofitsindebtednessandmaybeforcedtotakeotheractionstosatisfyitsobligationsunderitsindebtedness,whichmaynotbesuccessful."

AsofDecember31,2018,cashandcashequivalentswas$474.8million,anincreaseof$151.4million,comparedto$323.4millionatDecember31,2017.Elancoalsoheld$202.7millionofrestrictedcashatDecember31,2018,whichisavailablesolelytopaytheremainderofthepurchasepriceforElanco'sbusinessestoLilly.ElancohasacorrespondingliabilityrecordedonitsbalancesheetandincludedinPayabletoLilly.SeeElanco'sconsolidatedandcombinedstatementsofcashflowsforadditionaldetailsonthesignificantsourcesandusesofcashfortheyearsendedDecember31,2018andDecember31,2017.

AsofMarch31,2019,cashandcashequivalentswas$272.1million,adecreaseof$202.7million,comparedto$474.8millionatDecember31,2018.Elancoalsoheld$28.5millionofrestrictedcashatMarch31,2019,whichisavailablesolelytopaytheremainderofthepurchasepriceforElanco'sbusinessestoLilly.Elancohasareceivableof$35.5millionduefromLillyrecordedonitsbalancesheetasofMarch31,2019.

Revolving and Term Credit Facilities

OnSeptember5,2018,ElancoenteredintotheRevolvingFacilitywithasyndicateofbanksprovidingforafive-year$750.0millionseniorunsecuredrevolvingcreditfacility.TheRevolvingFacilitybearsinterestatavariablerateplusspecifiedmarginasdefinedintheagreementandispayablequarterly.TherewerenoborrowingsoutstandingundertheRevolvingFacilityatMarch31,2019.TheRevolvingFacilityispayableinfullattheendoftheterm.

OnSeptember5,2018Elancoalsoenteredintothe$500.0millionthree-yearTermFacilitywithasyndicateofbanks.TheTermFacilitybearsinterestatavariablerateplusmarginasdefinedinTermFacility(3.75%atMarch31,2019).Interestispaidmonthly,while1.5%ofprincipalispayablequarterly.TheTermFacilityalsorequiresaquarterlyprincipalpaymentequalto1.5%oftheaggregateinitialprincipallessanyprepayment.TheTermFacilityispayableinfullattheendoftheterm.

TheCreditFacilitiesaresubjecttovariousfinancialandothercovenantsincludingrestrictionsonthelevelofborrowingsbasedonaconsolidatedleverageratioandaconsolidatedinterestcoverageratio.ElancowasincompliancewithallsuchcovenantsasofMarch31,2019.SeeNote8:DebttoElanco'sunauditedconsolidatedandcombinedfinancialstatements.

TableofContents

Senior Notes

OnAugust28,2018,Elancoissued$2.0billionofSeniorNotesintheSeniorNotesOffering.TheSeniorNotesarecomprisedof$500.0millionof3.912%SeniorNotesdueAugust27,2021,$750.0millionof4.272%SeniorNotesdueAugust28,2023,and$750.0millionof4.900%SeniorNotesdueAugust28,2028.ElancowasincompliancewithallcovenantsundertheindenturegoverningtheSeniorNotesasofMarch31,2019.Long-termdebtasofDecember31,2017wasnotmaterial.SeeNote9:DebttoElanco'sauditedconsolidatedandcombinedfinancialstatementsandNote8:DebttoElanco'sunauditedconsolidatedandcombinedfinancialstatements.

Capitalexpenditureswere$134.5millionduring2018,anincreaseof$35.9millioncomparedto2017.

Cash Flows

Thefollowingtableprovidesasummaryofcashflowsfromoperating,investingandfinancingactivitiesfortheperiodspresented:

Operating activities

Elanco'scashprovidedbyoperatingactivitiesdecreasedby$41.4million,from$47.0millionforthethreemonthsendedMarch31,2018to$5.6millionforthethreemonthsendedMarch31,2019.Thedecreaseinoperatingcashflowswasprimarilyattributableto:

• adecreaseinnetincome;

• anincreaseinaccountsreceivable;and

• adecreaseinaccountspayable.

TheimpactoftheaboveitemswaspartiallyoffsetbyanincreaseintheamountduetoLillyforcertainservicesandbackofficefunctionsthataresharedbyElancoandLilly(seeNote15:RelatedPartyAgreementsandTransactionsinElanco'sunauditedconsolidatedandcombinedfinancialstatementsforfurtherdiscussion).

2018vs.2017

Elanco'scashflowfromoperatingactivitiesincreasedby$313.5millionfrom$173.8millionfortheyearendedDecember31,2017to$487.3millionfortheyearendedDecember31,2018.Theincreaseisaresultofanincreaseinnetincome,whichwaspartiallyoffsetbycashusedtofinanceworkingcapital,primarilyfocusedonaccountsreceivableandinventory.

Three Months Ended

March 31, % Change Year Ended December 31, % Change (Dollars in millions) 2019 2018 19/18 2018 2017 2016 18/17 17/16 Netcashprovidedby/(usedin): Operatingactivities $ 5.6 $ 47.0 (88)% $ 487.3 $ 173.8 $ 155.9 180% 11%Investingactivities (28.5) (34.4) (17)% (127.0) (964.6) (182.1) (87)% 430%Financingactivities (339.5) (76.5) 344% (35.2) 847.5 (149.6) (104)% (667)%

Effectofexchange-ratechangesoncashandcashequivalents (14.5) 3.9 (472)% 29.0 7.9 (26.0) 267% (130)%Netincreaseincash,cashequivalentsandrestrictedcash $ (376.9) $ (60.0) 528% $ 354.1 $ 64.6 $ (201.8) 448% (132)%

TableofContents

2017vs.2016

Elanco'snetcashprovidedbyoperatingactivitieswas$173.8millionin2017ascomparedtocashprovidedbyoperatingactivitiesof$155.9millionin2016.Thisincreaseinoperatingcashflowswasprimarilyattributableto:

• adecreaseinreceivablesin2017ascomparedtoanincreasein2016duetoaone-timeimpactofstandardizingpaymenttermsacrossElanco'sacquiredbusinessesaswellaspaymentreceipttimingduetointegrationofacquiredassets;

• adecreaseinotherassetsin2017ascomparedtoanincreasein2016primarilyduetothetimingoftaxpayments;and

• asmallerincreaseininventorylevelsin2017ascomparedto2016;

partiallyoffsetby:

• increasednetlosses.

Investing activities

Elanco'scashusedforinvestingactivitiesdecreased$5.9million,to$(28.5)millionforthethreemonthsendedMarch31,2019comparedto$(34.4)millionforthethreemonthsendedMarch31,2018.Thechangewasprimarilydrivenbyadecreaseincapitalexpendituresfrom2018to2019.

2018vs.2017

Elanco'scashflowusedininvestingactivitiesdecreasedfrom$964.6millionfortheyearendedDecember31,2017to$127.0millionfortheyearendedDecember31,2018.Elanco'snetcashusedininvestingactivitiesfortheyearendedDecember31,2017included$882.1millionrelatedtotheacquisitionoftheBIVetmedicaU.S.vaccinesportfolioin2017.Thisdecreasewasoffsetbyanetincreaseof$35.9millionincapitalexpendituresfrom2017to2018.

2017vs.2016

Elanco'snetcashusedininvestingactivitieswas$964.6millionin2017ascomparedtocashusedininvestingactivitiesof$182.1millionin2016.ThisincreaseinnetcashflowsusedininvestingactivitieswasprimarilyattributabletotheacquisitionoftheBIVetmedicaU.S.vaccinesportfolioin2017.

Financing activities

Elanco'scashusedforfinancingactivitiesincreased$263.0million,from$76.5millionforthethreemonthsendedMarch31,2018to$339.5millionforthethreemonthsendedMarch31,2019.Theincreasewasprimarilyattributableto$174.2millionofrestrictedcashpaidtoLillyinconnectionwiththeSeparationduringthethreemonthsendedMarch31,2019andotherfinancingwithLillyduringtheperiod.

AspartofElanco'sseparationfromLilly,foraperiodoftime,Elancocontinuestooperatethroughasingletreasurysettlementprocessandincertaininstances(asdescribedabove)continuedtotransactthroughLilly'sprocesses.Asaresultoftheseactivities,therewasacertainamountoffinancingthatoccurredbetweenLillyandElancoduringthethree-monthperiodendedMarch31,

TableofContents

2019.Thisresultedinanetfinancingcashoutflowduringtheperiodof$156.4million,whichwillberepaidtoElancointhesecondquarterof2019.

2018vs.2017

Elanco'scashfromfinancingactivitieswasauseofcashof$35.2millionin2018comparedtocashprovidedbyfinancingactivitiesof$847.5millionin2017,achangeof$882.7million.Thecashflowsin2017relatetonetcashprovidedbytransactionswithLillyof$848.3millioncomparedtocashusedintransactionswithLillyof$154.4millionin2018,areductioninfinancingofcashflowsbetweenperiodsof$1.0billion.This,inadditiontotheconsiderationpaidtoLillyinconnectionwiththeseparation,waspartiallyoffsetbynetcashprovidedfromfinancingtransactionsrelatedtotheseparationincludingtheproceedsfromlong-termdebtandtheIPO.TheremainderoftheproceedsfromthefinancingrelatedtotheseparationwillbepaidtoLillyinfutureperiodsandisreflectedasrestrictedcashinElanco'sconsolidatedbalancesheet.

2017vs.2016

Elanco'snetcashprovidedbyfinancingactivitieswas$847.5millionin2017ascomparedtocashusedinfinancingactivitiesof$149.6millionin2016.ThisincreaseinnetcashprovidedwasprimarilyattributabletofinancingprovidedbyLillyfortheacquisitionoftheBIVetmedicaU.S.vaccinesportfolioin2017.

Contractual Obligations

PaymentsdueundercontractualobligationsasofDecember31,2018,aresetforthbelow:

Off-Balance Sheet Arrangements

Elancohasnooff-balancesheetarrangementsthathaveamaterialcurrenteffectorthatarereasonablylikelytohaveamaterialfutureeffectonElanco'sfinancialcondition,changesinfinancialcondition,revenueorexpenses,resultsofoperations,liquidity,capitalexpendituresorcapitalresources.

Critical Accounting Policies

ThepreparationoffinancialstatementsinaccordancewithU.S.GAAPrequiresElancotomakeestimatesandjudgmentsthataffectthereportedamountsofassets,liabilities,revenuesandexpenses.CertainofElanco'saccountingpoliciesareconsideredcriticalbecausethesepoliciesarethemostimportanttothedepictionofElanco'sfinancialstatementsandrequiresignificant,difficultorcomplexjudgmentsbyElanco,oftenrequiringtheuseofestimatesabouttheeffectsofmattersthatare

(Dollars in millions) Total (2) Less Than

1 Year 1 - 3 Years 4 - 5 Years More Than

5 Years Long-termdebtobligations $ 2,958.4 $ 79.9 $ 1,137.9 $ 829.7 $ 910.9Operatingleases 95.6 25.2 33.6 18.3 18.5Purchaseobligations(1) 1,207.9 1,108.9 42.8 39.8 16.4Otherlong-termliabilities 12.3 0.5 10.8 0.1 0.9Total $ 4,274.2 $ 1,214.5 $ 1,225.1 $ 887.9 $ 946.7

(1) RepresentsopenpurchaseordersasofDecember31,2018andcontractualpaymentobligationswitheachofElanco'ssignificantvendorsthatarenoncancelableandarenotcontingent.

(2) Elancoexcludeddeferredtaxesbecauseitcannotreasonablyestimatethetimingoffuturecashoutflowsassociatedwiththoseliabilities.

TableofContents

inherentlyuncertain.ActualresultsthatdifferfromElanco'sestimatescouldhaveanunfavorableeffectonElanco'sfinancialpositionandresultsofoperations.Elancoappliesestimationmethodologiesconsistentlyfromyeartoyear.TherehavebeennosignificantchangesintheapplicationofElanco'scriticalaccountingpoliciesduringthethreemonthsendedMarch31,2019,asidefromitsadoptionofASC842,Leases ,onJanuary1,2019.SeeNote10:LeasesinElanco'sunauditedconsolidatedandcombinedfinancialstatementsforfurtherinformation.ThefollowingisasummaryofaccountingpoliciesthatElancoconsiderscriticaltotheconsolidatedandcombinedfinancialstatements.

Revenue Recognition

Elanco'sgrossproductrevenueissubjecttodeductionsthataregenerallyestimatedandrecordedinthesameperiodthattherevenueisrecognizedandprimarilyrepresentsrevenueincentives(rebatesanddiscounts)andsalesreturns.Forexample:

• forrevenueincentives,Elancousesitshistoricalexperiencewithsimilarincentivesprogramsandcurrentsalesdatatoestimatetheimpactofsuchprogramsonrevenueandcontinuallymonitortheimpactofthisexperienceandadjustasnecessary;and

• forsalesreturns,Elancoconsidersitemssuchas:localreturnspoliciesandpractices;returnsasapercentageofrevenue;anunderstandingofthereasonsforpastreturns;estimatedshelflifebyproduct;andestimateoftheamountoftimebetweenshipmentandreturntoestimatetheimpactofsalesreturns.

Ifanyoftheseratios,factors,assessments,experiencesorjudgmentsarenotindicativeoraccuratepredictorsofElanco'sfutureexperience,Elanco'sresultscouldbemateriallyaffected.

Althoughtheamountsrecordedfortheserevenuedeductionsaredependentonestimatesandassumptions,historicallyElanco'sadjustmentstoactualresultshavenotbeenmaterial.ThesensitivityofElanco'sestimatescanvarybyprogram,typeofcustomerandgeographiclocation.Amountsrecordedforrevenuedeductionscanresultfromacomplexseriesofjudgmentsaboutfutureeventsanduncertaintiesandcanrelyonestimatesandassumptions.

Acquisitions and Fair Value

Elancoaccountsfortheassetsacquiredandliabilitiesassumedinanacquisitionbasedonthefairvaluesasoftheacquisitiondate.Theexcessofthepurchasepriceoverthefairvalueoftheacquirednetassets,whereapplicable,isrecordedasgoodwill.

Thejudgmentsmadeindeterminingestimatedfairvaluesassignedtoassetsacquiredandliabilitiesassumedinabusinesscombination,aswellasestimatedassetlives,canmateriallyaffectElanco'sconsolidatedresultsofoperations.Thefairvaluesofintangibleassetsarere-determinedusinginformationavailableneartheacquisitiondatebasedonexpectationsandassumptionsthataredeemedreasonablebyElanco'smanagement.Dependingonthefactsandcircumstances,Elancomaydeemitnecessarytoengageanindependentvaluationexperttoassistinvaluingsignificantassetsandliabilities.

Thefairvalueofanycontingentconsiderationliabilitythatresultsfromabusinesscombinationisdeterminedusingamarketapproachbasedonquotedmarketvalues,significantotherobservableinputsforidenticalorcomparableassetsorliabilities,oradiscountedcashflowanalysis.Estimatingthefairvalueofcontingentconsiderationrequirestheuseofsignificantestimatesandjudgments,including,butnotlimitedto,revenueandthediscountrateandwillberemeasuredeveryreportingperiod.

Impairment of Indefinite-Lived and Long-Lived Assets

Elancoreviewsthecarryingvalueoflong-livedassets(bothintangibleandtangible)forpotentialimpairmentonaperiodicbasisandwhenevereventsorchangesincircumstancesindicatethecarrying

TableofContents

valueofanasset(orassetgroup)maynotberecoverable.Elancoidentifiesimpairmentbycomparingtheprojectedundiscountedcashflowstobegeneratedbytheasset(orassetgroup)toitscarryingvalue.Ifanimpairmentisidentified,alossisrecordedequaltotheexcessoftheasset'snetbookvalueoveritsfairvalueutilizingadiscountedcashflowanalysis,andthecostbasisisadjusted.

Goodwillandindefinite-livedintangibleassetsarereviewedforimpairmentatleastannuallyandwhencertainimpairmentindicatorsarepresent.Whenrequired,acomparisonoffairvaluetothecarryingamountofassetsisperformedtodeterminetheamountofanyimpairment.

TheestimatedcashflowsandfairvaluesusedinElanco'simpairmentreviewsrequiresignificantjudgmentwithrespecttofuturevolume;useofworkingcapital;foreigncurrencyexchangerates;theselectionofappropriatediscountrates;productmix;incometaxratesandotherassumptionsandestimates.SuchestimatesandassumptionsaredeterminedbaseduponElanco'sbusinessplansandwhenapplicable,marketparticipants'viewsofElancoandothersimilarcompanies.ElancomakesthesejudgmentsbasedonElanco'shistoricalexperience,relevantmarketsize,historicalpricingofsimilarproductsandexpectedindustrytrends.Theseassumptionsaresubjecttochangeinfutureperiodsbecauseof,amongotherthings,additionalinformation,financialinformationbasedonfurtherhistoricalexperience,changesincompetition,Elanco'sinvestmentdecisions,volatilityinforeigncurrencyexchangerates,andresultsofresearchanddevelopment.Achangeintheseassumptionsortheuseofalternativeestimatesandassumptionscouldhaveasignificantimpactontheestimatedfairvaluesoftheassets,andmayresultinanimpairmentoftheexistingassetsinafutureperiod.

DuringtheyearsendedDecember31,2018,2017and2016,Elancorecordedassetimpairmentsof$81.9million,$110.6millionand$98.3million,respectively,duetochangesinestimatesorjudgmentsrelatedtotheuseoftheassets.FormoreinformationrelatedtoElanco'simpairmentcharges,seeNote7:AssetImpairment,RestructuringandOtherSpecialChargestoElanco'sconsolidatedandcombinedfinancialstatements.

DuringthethreemonthsendedMarch31,2019,Elancorecordedanassetimpairmentof$4.0millionwhichresultedfromtheadjustmenttofairvalueofintangibleassetsthatweresubjecttoproductrationalization.

Deferred Tax Asset Valuation Allowances

Elancomaintainsvaluationallowancesunlessitismorelikelythannotthatalloraportionofthedeferredtaxassetwillberealized.ChangesinvaluationallowancesareincludedinElanco'staxprovisionintheperiodofchange.Indeterminingwhetheravaluationallowanceiswarranted,Elancoevaluatesfactorssuchaspriorearningshistory,expectedfutureearnings,carrybackandcarryforwardperiods,andtaxstrategiesthatcouldpotentiallyenhancethelikelihoodofrealizationofadeferredtaxasset.Therealizabilityassessmentsmadeatagivenbalancesheetdatearesubjecttochangeinthefuture,particularlyifearningsofasubsidiaryaresignificantlyhigherorlowerthanexpected,orifElancotakesoperationalortaxplanningactionsthatcouldimpactthefuturetaxableearningsofasubsidiary.AchangeintheseassumptionsmayresultinanincreaseordecreaseintherealizabilityofElanco'sexistingdeferredtaxassets,andthereforeachangeinthevaluationallowance,infutureperiods.AsofDecember31,2018and2017,Elancohadvaluationallowancesof$21.4millionand$127.7million,respectively.

AsofMarch31,2019,Elancohadavaluationallowanceof$19.8million.

Qualitative and Quantitative Disclosures About Market Risk

Foreign Exchange Risk

Elancooperatesonaglobalbasisandisexposedtotheriskthatitsearnings,cashflowsandequitycouldbeadverselyimpactedbyfluctuationsinforeignexchangerates.Elancoisprimarilyexposedto

TableofContents

foreignexchangeriskwithrespecttonetassetsdenominatedintheeuro,Britishpound,Canadiandollar,AustraliandollarandBrazilianreal.Lillymaintainsaforeigncurrencyriskmanagementprogramthroughacentralsharedentity,whichentersintoderivativecontractstohedgeforeigncurrencyriskassociatedwithforecastedtransactionsfortheentirecompany,includinghistoricallyforElanco'soperations.GainsandlossesonderivativecontractsenteredintobyLillyhavebeenallocatedtoElanco'sresultstotheextenttheyweretocoverexposurerelatedtoElanco'sbusinessandoffsetgainsandlossesonunderlyingforeigncurrencyexposures.Elancointendstoimplementitsownforeigncurrencyriskmanagementprogrambytheendofthesecondquarterof2019.

ElancoalsofacescurrencyexposurethatarisesfromtranslatingtheresultsofitsglobaloperationstotheU.S.dollaratexchangeratesthathavefluctuatedfromthebeginningoftheperiod.Elancomayenterintoforeigncurrencyforwardoroptionderivativecontractstoreducetheeffectoffluctuatingcurrencyexchangeratesinfutureperiods,butitshistoricalresultsdonotreflecttheimpactofanysuchderivativesrelatedtoitsexposuretoforeigncurrencyimpactsontranslation.

Elancoestimatesthatahypothetical10%adversemovementinallforeigncurrencyexchangeratesrelatedtothetranslationoftheresultsofElanco'sforeignoperationswoulddecreaseitsnetincomebyapproximately$11.9millionforthethreemonthsendedMarch31,2019.

Elancoalsobearsforeignexchangeriskassociatedwiththefuturecashsettlementofanexistingnetinvestmenthedge.InOctober2018,Elancoenteredintoafixedinterestrate,5-year,750millionSwissfrancNIHagainstSwissfrancassets.TheNIHisexpectedtogenerateapproximately$25millionincashandcontrainterestexpenseperyear;however,thereispotentialforsignificant2023settlementexposureonthe750millionSwissfrancnotionaliftheU.S.dollardevaluesversustheSwissfranc.

Interest Risk

Elancoisexposedtointerestrateriskonthelong-termdebtElancoincurredinconnectionwithitsIPO.PriortotheIPO,Elancodidnothaveanyinterestrateexposure.Elancohascashflowriskassociatedwithits$485.0millionofborrowingsthatpayinterestbasedonvariablerates.Elancoactivelymonitorsitsexposureandmayenterintofinancialinstrumentsforthepurposeoflimitingitsexposurebasedonitsassessmentofrisk.

Recently Issued Accounting Pronouncements

FordiscussionofElanco'snewaccountingstandards,seeNote4:SummaryofSignificantAccountingPolicies—ImplementationofNewFinancialAccountingPronouncementstoElanco'sauditedconsolidatedandcombinedfinancialstatementsandNote4:ImplementationofNewFinancialAccountingPronouncementstoElanco'sunauditedconsolidatedandcombinedfinancialstatements.

TableofContents

INDUSTRY

Overview

GlobalanimalhealthindustryrevenueisprojectedtogrownominallyataCAGRof5%from2017to2023,accordingtoVetnosis.Importantly,thisgrowingindustry,whichincludesbothfoodandcompanionanimals,benefitsbillionsofpeopleworldwide.Thefoodanimalsectorfocusesonspeciesraisedtoprovideanimalprotein,suchascattle,otherruminants(e.g.,sheepandgoats),swine,poultryandaqua.Thecompanionanimal—orpet—sectorfocusesprimarilyondogsandcats.

Animalhealthmedicines,vaccinesandfunctionalnutritionalsrepresentanestimatedglobalmarketof$34.3billion,basedon2017revenue,accordingtoindustrysources.Medicinesandvaccinesrepresentaglobalmarketof$32.0billion,basedon2017revenue,andgrewataCAGRof4%from2007to2017,accordingtoVetnosis.Elanco'smanagementexpectsthistrendtocontinuethroughatleast2023basedonindustryprojections.Functionalnutritionals(specificallyenzymes,probioticsandprebiotics)usedinfoodanimalproductionrepresentaglobalmarketof$2.3billion,accordingtoindustrysources.Basedonindustryprojections,Elanco'smanagementexpectsfunctionalnutritionalstogrowfasterthanthemedicinesandvaccinesmarket.

Food Animal. Foodanimalmedicinesandvaccines,includingaquaculture,represented$21.2billionofrevenuein2017andgrewataCAGRof4%from2007to2017,accordingtoVetnosis.

Factorsinfluencinggrowthindemandforfoodanimalmedicinesandvaccinesinclude:

• oneinthreepeopleneedsimprovednutrition;

• increasedglobaldemandforprotein,particularlypoultryandaquaculture;

• naturalresourceconstraints,suchasscarcityofarableland,freshwaterandincreasedcompetitionforcultivatedland,drivingtheneedformoreefficientfoodproduction;

• lossofproductivityduetofoodanimaldiseaseanddeath;

• increasedfocusonfoodsafetyandfoodsecurity;and

• humanpopulationgrowth,increasedstandardsofliving,particularlyinmanyemergingmarkets,andincreasedurbanization.

Functionalnutritionalsusedinfoodanimalproductionrepresentanadditionalmarketestimatedat$2.3billion.Growthinfunctionalnutritionalsisinfluenced,amongotherfactors,bydemandforantibioticalternativesthatcanpromoteanimalhealthandincreaseproductivity.

Companion Animal. Companionanimalmedicinesandvaccinesrepresented$10.8billionofrevenuein2017andgrewataCAGRof4%from2007to2017,accordingtoVetnosis.

Factorsinfluencinggrowthindemandforcompanionanimalmedicinesandvaccinesinclude:

• increasedpetownershipglobally;

• petslivinglonger;and

• increasedpetspendingaspetsareviewedasmembersofthefamilybyowners.

Food Animal Sector

Food Animal Growth Drivers

Theglobalfoodanimalsectorisprimarilyfocusedontheproductionofcattle(bothdairyandbeef),otherruminants,swine,poultryandfish.Theseanimalsarethebasisformostoftheworldwideconsumptionofanimal-basedprotein.

TableofContents

Animalproteinnowconstitutesalargerpercentageoftheaveragehumandietthaneverbefore.Annualmeatproductionwouldneedtoriseby74%,orover200milliontons,toreach470milliontonsby2050tomeetexpectedglobaldemand.Thegrowthinanimalproteinconsumptionisbeinginfluencedinpartbyagrowingmiddleclassindevelopingcountries,theglobalindustrializationoffoodanimalproductionandeasieraccesstosafeandaffordablemeatproducts.Withbillionsofpeoplecurrentlyreceivinginsufficientdailynutrition,Elancoexpectsthedemandforfoodanimalproteintocontinuetorisetoaddressthisunmetneed.

Tomeetthegrowingdemandforanimalprotein,additionaloutputisnecessary.Simplyaddinglivestockstrainstheenvironmentandresultsintheoveruseofnaturalresources.Inordertomeettheincreaseddemandforanimalprotein,producersareincreasinglylookingforwaystodriveefficiencyandpromoteanimalhealththroughtheuseofmedicinesandvaccines.

Industrysourcesestimatethat20%ofproductionanimalsarelosttodiseaseanddeath.Byimprovinghealthandloweringmortalityratesoffoodanimals—predominantlybyactivelypreventingcommonparasites,diseasesandviruses—producersareabletoincreaseproductionyieldsandpromotemoreefficientfeeding.Elancobelievesmostfoodproducersfindthatthepositiveimpactofthesetherapiesoutweighstheirprice,especiallyastheyrepresentasmallportionofthetotalcostofproduction.Consequently,Elancoexpectsthatuseofthesetreatmentswillcontinue.

Food Animal Product Categories

Foodanimalmedicines,vaccinesandfunctionalnutritionalsaredividedintotwomaincategories:FARuminants&SwineandFAFutureProtein&Health.

FA Ruminants & Swine

Ruminantsandswine,whichiscomprisedofbeefanddairycattle,sheep,goatsandpigs,constitutedapproximatelythreequartersofthefoodanimalsectorrevenuebyspeciesin2017,representinganestimated$15.5billionofrevenue,accordingtoVetnosis.Ruminantsandswineareimportantsourcesofanimalproteinthroughouttheworld,andElancobelievesitwillcontinuetobeamaterialcategorygoingforward.Managementbelievesthiscategorywillcontinuetogrow,albeitataslowerpacethanFAFutureProtein&Health,andthatmedicinesandvaccineswillcontinuetoplayaprominentroleinthehealthandproductivityoffoodanimals.

FA Future Protein & Health (Poultry, Aquaculture and Functional Nutritionals)

Poultryandfishareamongthefastestgrowingproteinsinthefoodanimalsector.Therapidgrowthoftheseproteinsisexpectedtocontinue.

Fishisthefastestgrowinganimalproteinglobally.Aquaculture—thefarmingofaquaticorganismssuchasfishandcrustaceans—remainsanimmaturemarketwherelowproductionyieldsandhighcostsduetomortalityandbiologicalchallengeshavelimitedmarketgrowth.Thesefactorshaveledtoincreasedexpendituresonaquaculture-specificanimalhealthproducts.

Theuseoffunctionalnutritionalstopromoteanimalhealthandimmunityisanotherpathtohelpproducersmaximizeanimalproductionefficiencyandlimituseofantibiotics.Enzymes,prebioticsandprobioticsarebeingstudiedandusedacrossfoodanimalspeciestoday.Enzymesinanimalfeedacttoimprovefeeddigestibilityandreducegutinflammation,improvingnutrientabsorptionandreducingcostforproducers.Prebioticsarenon-digestiblefunctionalingredientsfermentedinthelargecolonthatfeedthebeneficialbacteriaintheanimal'sgutandsupportmicrobiomehealth.Probioticsarelivebacteriaaddedtofeedinordertomanagethemicrobiomeandpreventinfections.Thiscategoryisexpectedtogrowfasterthanthefoodanimalmedicinesandvaccinesmarket.TheFAFutureProtein&Healthmarketrepresentedanestimated$7.9billionofrevenuein2017.

TableofContents

Companion Animal Sector

Companion Animal Growth Drivers

Petsarebecomingalargerpartoftheaveragefamilydynamicandareincreasinglyviewedas"membersofthefamily."ThenumberofpetsownedintheU.S.hasincreasedinrecentyears,andin2017,68%ofallU.S.householdsownedapet.Withpetslivinglonger,consumersarespendingmoredisposableincometogivetheir"familymember"ahealthier,morecomfortablelife.Mostveterinaryexpendituresarepaidoutofpocket.Evenintimesofrecession,petownersarelesssensitivetotheoverallpriceofpetcarethantootheraspectsoftheirlifestyle.Asnewinnovationsemerge,petownersnowhaveagreaterabilitytoextendthelifeoftheirpetbytreatingchronicdiseasesandailmentsassociatedwitholdage.

TheU.S.petownershiptrendisbeingechoedinotherpartsoftheworld.OutsidetheU.S.,thenumberofdogsandcatsreceivinghealthcareisgrowingwiththeincreasingmiddleclass.Inemergingmarkets,from2003to2016,catanddogpetownershipgrewbyapproximately50%.

Companion Animal Product Categories

Companionanimalmedicinesandvaccinesaredividedintotwomaincategories:CADiseasePreventionandCATherapeutics.

CA Disease Prevention

CADiseasePreventionconsistsprimarilyofparasiticides,whichpredominantlytargetfleas,ticks,heartworms,roundworms,hookworms,whipwormsandtapeworms;andvaccines,whichtargetrabies,rhinotracheitis,felineleukemia,hepatitis,parainfluenzaandotherconditions.Aspetownersbecomeincreasinglywillingtospendmoneyontheirpets,theyareextendingthelivesandqualityoflifeoftheirpetsthroughpreventativecare,mirroringhumanhealthtrends.Preventionoffleas,ticks,wormsandotherparasites,aswellasvaccinationagainstinfection,havebecomewidelyadoptedbyconsumers.TheCADiseasePreventionmarketrepresentedanestimated$6.4billionofrevenuein2017.

CA Therapeutics

CATherapeuticsconsistsofproductsusedtotreatormanagechronicdiseaseinpets.Examplesincludeproductsforpain,inflammation,arthritis,cardiovascularissues,otitis(earinfections),dermatologyconditions,diabetesandmanyothers.Thesetherapies,whichofferahigherqualityoflifeforpets,aregrowing,drivenbyinnovationinnewmoleculesandimproveddeliveryformulations.Aspetslivelongerandowners'willingnesstoprovidethemwithmedicaltreatmentstrengthens,innovationhasfurtherexpandedwiththerapiesinfluencedbyhumanhealth,offeringthepotentialfordevelopmentofnewanimalhealthmedicinesandcapabilities.TheCATherapeuticsmarketrepresentedanestimated$4.4billioninrevenuein2017.

Key Structural Characteristics of the Animal Health Industry

• Brands often have long, sustainable value. Brandedanimalhealthproductsoftenretainsignificant,andoccasionallyincreased,marketshareaftermanyyearsonthemarket,evenafterthelossofpatentprotection.Asanexample,fiveofElanco'stop10products,basedon2018revenue,havebeenonthemarketforover25years.Inthefoodanimalsector,thelevelofcompetitionisinfluencedbymacro-economicfactors,brandloyalty,distributionmodelsandtheabsenceofgovernmentalorthird-partypayersystems.Inthecompanionanimalsector,competitionisinfluencedbybrandloyalty,newinnovation,relationshipswithveterinarians,channelexpansionandtheoverallgrowthinpetownership.

TableofContents

• Diversified product portfolios. Animalhealthcompaniesoftenderivetheirrevenuefromdozens,ifnothundreds,ofproductsandarefrequentlynotdependentonaselectfewflagshipproducts.Forexample,Elanco'stop10productsaccountedforonly42%ofrevenuein2018.Elancobelievescompanieswithdiversifiedglobalcompanionandfoodanimalproductportfolioscanbemoreresilienttochangingmarketdynamicsandarestructuredtobetterbalancepotentialgeographic,productandspeciesvolatility.

• Deep customer relationships. Directcustomermodelsallowanimalhealthsalesrepresentativesandveterinaryconsultantstodevelopadeepunderstandingofcustomerneeds,whichoftenfacilitatestrongandimpactfulrelationships.Representativesandconsultantsfrequentlypartnerwithcustomersthroughproductsupportandanalytics,drivingadditionalvalueforthecustomer.

• Fast and efficient R&D model. Productapprovalstypicallyrequirealimitednumberoftargetedstudiesinanimals,whichmoderatesresearchexpenses.Theapprovalprocessisgenerallypredictablegiventhenumberofstudiesrequired,leadingtoaveragetimelinesfrominitiationofdevelopmenttoapprovalofthreetosevenyearsatacostof$50millionto$100million.

• Self-pay market. Foodanimalproducers,petownersandveterinarianstypicallypayforproductsoutofpocket,makingthemtheprimarydecisionmakers.Thisresultsinmanufacturersbeingabletopriceproductsbasedprimarilyontheendcustomer'srealizedvalue.

TableofContents

BUSINESS

Overview

Elancoisapremieranimalhealthcompanythatinnovates,develops,manufacturesandmarketsproductsforcompanionandfoodanimals.HeadquarteredinGreenfield,Indiana,Elancoisthefourthlargestanimalhealthcompanyintheworld,withrevenueof$3.1billionfortheyearendedDecember31,2018.Globally,Elancois#1inmedicinalfeedadditives,#2inpoultryand#3incattle,measuredby2017revenue,accordingtoVetnosis.Elancoalsohasoneofthebroadestportfoliosofpetparasiticidesinthecompanionanimalsector.Elancooffersadiverseportfolioofmorethan125brandsthatmakeitatrustedpartnertoveterinariansandfoodanimalproducersinmorethan90countries.

OnSeptember24,2018,theIPOwascompleted,pursuanttowhichElancoissuedandsold19.8%ofElanco'stotaloutstandingshares.OnSeptember20,2018,ElancocommonstockbegantradingontheNYSEunderthesymbol"ELAN."OnSeptember24,2018,immediatelyprecedingthecompletionoftheIPO,LillytransferredtoElancosubstantiallyallofitsanimalhealthbusinessesinexchangefor(i)allofthenetproceeds($1,659.7million)ElancoreceivedfromthesaleofElancocommonstockintheIPO,includingthenetproceedsitreceivedasaresultoftheexerciseinfulloftheunderwriters'optiontopurchaseadditionalshares,(ii)allofthenetproceeds(approximately$2,000million)ElancoreceivedintheSeniorNotesOfferingand(iii)allofthenetproceeds($498.6million)ElancoreceivedfromtheentryintotheTermFacility.

OnMarch11,2019,Lillycompletedthedispositionofitsremaininginterestinusthroughatax-freeexchangeofferpursuanttowhichittransferreditsremainingholdingsinustoitsshareholdersinexchangeforsharesofLillycommonstock.Werefertothistransactioninthisprospectusasthe"Split-Off."FollowingtheSplit-Off,Lillynolongerownsanysharesinus,andweareanindependentpubliclytradingcompany.

Inaddition,immediatelypriortothecompletionoftheIPO,ElancoandLillyenteredintocertainagreementsthatprovideaframeworkforElanco'songoingrelationshipwithLilly,whichagreementsremainineffectfollowingthecompletionoftheSplit-Off.Formoreinformation,see"CertainRelationshipsandRelatedPartyTransactions—RelationshipbetweenElancoandLilly."

Elanco'svisionistoenrichthelivesofpeoplethroughfood—makingproteinmoreaccessibleandaffordable—andthroughpetcompanionship—helpingpetslivelonger,healthierlives.Elancoadvancesitsvisionbyofferingproductsinfourprimarycategories:

• Companion Animal Therapeutics ("CA Therapeutics"). Elancohasabroadpainandosteoarthritisportfolioacrossspecies,modesofaction,indicationsanddiseasestages.Petownersareincreasinglytreatingosteoarthritisintheirpets,andElanco'sGalliprant productisoneofthefastestgrowingosteoarthritistreatmentsintheU.S.Elancoalsohastreatmentsforotitis(earinfections),aswellascardiovascularanddermatologyindications.

• Food Animal Future Protein & Health ("FA Future Protein & Health"). Elanco'sportfoliointhiscategory,whichincludesvaccines,nutritionalenzymesandanimal-onlyantibiotics,servesthegrowingdemandforproteinandincludesinnovativeproductsinpoultryandaquacultureproduction,wheredemandforanimalhealthproductsisoutpacingoverallindustrygrowth.Elancoisfocusedondevelopingfunctionalnutritionalhealthproductsthatpromotefoodanimal

TableofContents

health,includingenzymes,probioticsandprebiotics.Elancoisaleaderinprovidingvaccinesasalternativestoantibioticstopromoteanimalhealthbasedonshareofrevenue.

• Food Animal Ruminants & Swine ("FA Ruminants & Swine"). Elancohasdevelopedarangeoffoodanimalproductsusedextensivelyinruminant(e.g.,cattle,sheepandgoats)andswineproduction.

Elancohasatopfourpresenceinallfourkeyindustrygeographicregions:NorthAmerica("NA");Europe,theMiddleEastandAfrica("EMEA");LatinAmerica("LATAM");andAsia-Pacific("APAC"),asmeasuredby2017revenue,accordingtoVetnosis.ThefollowinggraphsdemonstrateElanco'srevenuefortheyearendedDecember31,2018byproductcategory,geographyanditshighestrevenueproducts:

Percentage of 2018 Revenue By Product Category (1)

(1) Certainpercentagesmayreflectroundingadjustments.

(2) StrategicExitsincludesrevenuefromthird-partymanufacturing,distributionandothercontractualarrangements,aswellasanequineproductnotcoretoElanco'sbusinessandtransitionalcontractmanufacturingactivityassociatedwiththesupplyofhumangrowthhormonetoLilly,whichElancohaseitherexitedormadethedecisiontoexit.

TableofContents

Percentage of 2018 Revenue By Region (1)

(1) Certainpercentagesmayreflectroundingadjustments.

(2) LATAMincludesaquacultureinallregions.

Throughitsglobalsalesforceofapproximately1,475salesrepresentatives,itsveterinaryconsultantsanditskeydistributors,Elancoseekstobuildstrongcustomerrelationshipsandfulfilldemandforitsfoodanimalproductsprimarilywithfoodanimalproducers,veterinariansandnutritionists,andforElanco'scompanionanimalproductsprimarilywithveterinariansand,insomemarkets,petowners.Elancoisalsoexpandingintoretailchannelsinordertomeetpetownerswheretheywanttopurchase.

Elanco'sinclusiveapproachtosourcinginnovationhelpsitidentify,attract,fundanddevelopnewideasthatenhanceitspipelineandreduceriskascomparedtoanin-houseonlyapproach.Elancohaslaunchedelevenproductsfrom2015to2018thatdelivered$24.7millionofrevenuein2015,$97.9millionofrevenuein2016,$143.8millionofrevenuein2017and$274.2millionofrevenuein2018.

Elancobelievesithasanexperiencedleadershipteamthatfostersanadaptive,purpose-drivencultureamongapproximately5,780employeesworldwideasofDecember31,2018andthatElanco'semployeesshareadeepconvictionforachievingitsvisionoffoodandcompanionship,enrichinglife.

ForthethreemonthsendedMarch31,2019and2018,Elanco'srevenuewas$731.1millionand$736.2million,respectively,andfortheyearsendedDecember31,2018,2017and2016,Elanco'srevenuewas$3.1billion,$2.9billionand$2.9billion,respectively.ForthethreemonthsendedMarch31,2019and2018,Elanco'snetincomewas$31.5millionand$72.7million,respectively,andfortheyearsendedDecember31,2018,2017and2016,Elanco'snetincome(loss)was$86.5million,$(310.7)millionand$(47.9)million,respectively.

Products

Elancohasadiverseportfolioofproductsmarketedundermorethan125brands,includingproductsforbothfoodanimalsandcompanionanimals.

TableofContents

Elanco'sfoodanimalproductsaredesignedtoenableproducerstokeepanimalshealthyanddelivermorefoodwhileusingfewerresources.Elanco'santibacterials,anticoccidials,vaccinesandparasiticidesaimtomakefoodsaferbypreventingandcontrollingdisease.Elancooffersproductsandsupporttoenhancetheintegrityofthefoodsupply,whileElanco'sproductivityenhancershelpmakefoodmoreaffordableandabundantbyincreasingtheamountofmeat,milkoreggsananimalcansupply.Furthermore,Elanco'sexpertiseanddataanalyticshelpitscustomersimproveproductionefficiencyandbusinessperformance.Foodanimalproductsrepresentedapproximately61%ofElanco'srevenuefortheyearendedDecember31,2018.

Elanco'scompanionanimalproductshelpveterinariansbettercareforpets.Elancopartnerswithpetownersandveterinariansforthepurposeofprovidingaconsistentflowofinnovativeandeffectiveproductsandsupport.Elanco'sR&Dfocusesonproductsthatpreventandtreatdisease,improveandextendqualityoflifeandimprovethetypeofcarereceivedbypets.Elancoalsopartnerscloselywithveterinarianstoprovidetechnicalsupportandcasemanagementforitsproducts.Companionanimalproductsrepresentedapproximately35%ofElanco'srevenuefortheyearendedDecember31,2018.

Elancogroupsitsproductsintofourprincipalcategories:

• CA Disease Prevention: includesparasiticidesandvaccineproductsforcaninesandfelines.

• CA Therapeutics: includesproductsforthetreatmentofpain,osteoarthritis,otitis,cardiovascularanddermatologyindicationsincaninesandfelines.

• FA Future Protein & Health: includesvaccines,antibiotics,parasiticidesandotherproductsusedinpoultryandaquacultureproduction,aswellasfunctionalnutritionalhealthproducts,includingenzymes,probioticsandprebiotics.

• FA Ruminants & Swine: includesvaccines,antibiotics,implants,parasiticidesandotherproductsusedinruminantsandswineproduction,aswellascertainotherfoodanimalproducts.

Elanco'srevenuebyproductcategoryfortheyearsendedDecember31,2018,2017,2016and2015wasthefollowing:

Elancopursuesthedevelopmentofnewchemicalandbiologicalmoleculesthroughitsinnovationstrategy.Since2015,Elancohaslaunchedthefollowingelevenproducts:

• InCADiseasePrevention,Credelio andInterceptor Plus .

• InCATherapeutics,Galliprant andOsurnia.

• InFAFutureProtein&Health,Inteprity ,Imvixa ,Clynav and Correlink .

• InFARuminants&Swine,Imrestor, Kavault and Prevacent .

Inthesecondquarterof2018,ElancosuspendedcommercializationofImrestor andplanstopursueadditionalindications.

Year Ended December 31, 2018 2017 2016 2015 CADiseasePrevention $ 804.6 $ 660.2 $ 628.4 $ 591.2CATherapeutics 283.1 260.8 255.6 245.2FAFutureProtein&Health 711.2 649.2 630.8 633.2FARuminants&Swine 1,174.0 1,175.0 1,309.2 1,356.6Other $ 93.9 143.8 89.5 82.9TotalRevenue $ 3,066.8 $ 2,889.0 $ 2,913.5 $ 2,909.1

TableofContents

In2016,ElancoannouncedthecreationofitsNutritionalHealthorganization,whichfocusesonfunctionalnutritionproducts,includingenzymes,probioticsandprebiotics,whichimpactanimalmicrobiomesandotherdietaryfactorstoreducediseaseincidence,improveguthealthandenhancefeeddigestibility.Elancofirstfocusedonnutritionalhealthin2012,withtheacquisitionofChemGenandtheHemicell brand.In2016,ElancoenteredintoanagreementwithAgroBiosciences,Inc.tocommercializeCorrelink —anoveldirect-fedmicrobial(probiotic)productoutsidetheU.S.Inearly2018,Elancoannouncedanewglobal,exclusivein-licensingagreementwithAbEDiscoverytofurtherdevelopandbringtothemarketaninfeedantibodyproductfocusedonreducingandcontrollingcoccidiosis.

Rumensin ,Elanco'stopsellingproduct,contributedapproximately11%ofitsrevenuein2018and10%ofitsrevenuein2017,2016and2015.Nootherproductcontributed10%ormoreofElanco'srevenue.Elanco'stopfivesellingproducts,Rumensin ,Trifexis ,Maxiban ,Denagard andInterceptor Plus ,collectivelycontributedapproximately31%ofits2018revenue.Elanco'stop10productscollectivelycontributed42%ofits2018revenue.

SetforthbelowisinformationregardingElanco'sprincipalproducts.

CA Disease Prevention Products

Product Description Primary Species

Bronchi Shield III andBronchi Shield Oral (vaccines) BronchiShieldIII—Toprotectagainstadenovirus,parainfluenzaandBordetellabronchiseptica(Bb)indogs. Dogs

BronchiShieldOral—ToprotectagainstBbindogs.

Comfortis (spinosad)

Tokillfleasandpreventandtreatfleainfestations(Ctenocephalides felis )incats14weeksofageorolderandweighingatleast4.1lbs.anddogs14weeksofageorolderandweighingatleast5.0lbs.

Cats,Dogs

Credelio (lotilaner)

Tokilladultfleasandtotreatfleainfestations(Ctenocephalides felis )andtreatandcontroltickinfestations(Amblyommaamericanum (lonestartick),Dermacentor variabilis (Americandogtick),Ixodes scapularis (black-leggedtick)andRhipicephalus sanguineus (browndogtick))foronemonthindogsandpuppies8weeksofageorolderandweighingatleast4.4lbs.

Duramune (vaccines)

Includesmultipleproductsthatcollectivelyprotectagainstdistemper,adenovirus,parvovirus,corona,parainfluenza,leptospiracanicola,andotherdiseasesindogs.

Rabvac (vaccines)

Toprotectagainstrabies,includesa1-yearand3-yearshot.

Cats,Dogs

Fel-O-Vax (vaccines)

IncludesmultipleproductsthatcollectivelyprotectagainstLeukemia,rhinovirus,calicivirus,panleukopenia,andchlamydiaincats.

Fel-O-Guard (vaccines)

IncludesmultipleproductsthatcollectivelyprotectagainstLeukemia,rhinovirus,calicivirus,panleukopenia,andchlamydiaincats.

TableofContents

CA Therapeutics Products

Interceptor Plus (milbemycinoxime/praziquantel) TopreventheartwormdiseasecausedbyDirofilaria immitis andforthetreatmentandcontrolofadultroundworm(Toxocaracanis andToxascaris leonina ),adulthookworm(Ancylostoma caninum ),adultwhipworm(Trichuris vulpis ),andadulttapeworm(Taenia pisiformis ,Echinococcus multilocularis ,andEchinococcus granulosus )infectionsindogsandpuppiesweighingatleast2lbs.and6weeksofageorolder.Interceptor Plus isarelaunchofapreviouslyapprovedformula.

Milbemax (milbemycinoxime+praziquantel)

Totreatandcontrolparasiticinfectionsduetoadulthookworm,adultroundwormandadulttapewormandtopreventheartwormdiseasecausedbyDirofilaria immitis incatsanddogs.

Cats,Dogs

Trifexis (spinosad+milbemycinoxime)

Topreventheartwormdisease(Dirofilaria immitis )andtokillfleas.Trifexis isindicatedforthepreventionandtreatmentoffleainfestations(Ctenocephalides felis ),andthetreatmentandcontrolofadulthookworm(Ancylostoma caninum) ,adultroundworm(Toxocara canis andToxascaris leonina )andadultwhipworm(Trichuris vulpis )infectionsindogsandpuppies8weeksofageorolderandweighingatleast5lbs.

Atopica (cyclosporineA) Tocontrolatopicdermatitisindogsweighingatleast4lbs. Dogs

Fortekor Plus (benazepril+pimobendan)

Totreatcongestiveheartfailureduetoatrioventricularvalveinsufficiencyordilatedcardiomyopathyindogs.

Galliprant (grapiprant)

Tocontrolpainandinflammationassociatedwithosteoarthritisindogs.

Onsior (robenacoxib)

Tocontrolpostoperativepainandinflammationassociatedwithsofttissuesurgeryindogsweighingatleast5.5lbs.and4monthsofageorolderandcontrolpostoperativepainandinflammationassociatedwithorthopedicsurgery,ovariohysterectomyandcastrationincatsweighingatleast5.5lbs.and6monthsofageorolder;foruptoamaximumof3days.

Cats,Dogs

Osurnia (terbinafine+florfenicol+betamethasoneacetate)

Totreatotitisexternaindogsassociatedwithsusceptiblestrainsofbacteria(Staphylococcus pseudintermedius )andyeast(Malassezia pachydermatis ).

TableofContents

FA Future Protein & Health

FA Ruminants & Swine

AviPro (vaccines) IncludesmultipleproductsthatcollectivelyprotectagainstNewcastledisease,infectiousbronchitis,fowlcholera,paramyxovirusType3,BursalDisease,otherdiseasesandfoodbornepathogenslikeSalmonellainpoultry.

Poultry

Clynav (plasmiddeoxyribonucleicacidvaccine)ToimmunizeAtlanticsalmontoreduceimpaireddailyweightgain,andreducemortality,andcardiac,pancreaticandskeletalmusclelesionscausedbypancreasdiseasefollowinginfectionwithsalmonidalphavirussubtype3(SAV3).

Fish(Salmon)

Coban /Elancoban (monensin)Toaidinthepreventionofcoccidiosisinbroilerandreplacementchickens(causedbyEimeria necatrix, E. tenella, E. acervulina,E. brunetti, E. mivati ,andE. maxima ),inturkeys(causedbyEimeria adenoeides, E. meleagrimitis andE. gallopavonis )andingrowingBobwhitequail(causedbyEimeria dispersa andE. lettyae ).Coban/Elancobanisananimal-onlyantibioticandanionophore.

Poultry

Hemicell (endo-1,4-b-mannanase)Enzymesupplementforpoultryandswinefeedsthatcontainasourceofb-mannanase,whichhydrolysestheb-mannanspresentinsoybeanandcornmeal.

Poultry,Swine

Imvixa (lufenuron)Topreventandcontrolinfestationcausedbysealice,Caligus reogercresseyi, infarmedsalmon.

Fish(Salmon)

Maxiban (narasin+nicarbazin)TopreventcoccidiosisinbroilerchickenscausedbyEimeria necatrix, E. tenella, E. acervulina, E. brunetti, E. mivati andE.maxima. Maxiban isananimal-onlyantibioticandanionophore.

Poultry

Monteban (narasin)TopreventcoccidiosisinbroilerchickenscausedbyEimeria necatrix, E. tenella, E. acervulina, E. brunetti, E. mivati andE.maxima. Monteban isananimal-onlyantibioticandanionophore.

Poultry

Surmax / Maxus / Inteprity (avilamycin)TopreventmortalitycausedbynecroticenteritisassociatedwithClostridium perfringens inbroilerchickens.Surmax, Maxis andInteprity areanimal-onlyantibiotics.

Poultry

Denagard (tiamulin) TotreatSwineDysenteryassociatedwithSerpulina hyodysenteriae susceptibletotiamulinandfortreatmentofswinebacterialenteritiscausedbyEscherichia coli andSalmonella choleraesuis sensitivetochlortetracyclineandtreatmentofbacterialpneumoniacausedbyPasteurellamultocidasensitivetochlortetracycline.Denagard isashared-classantibiotic.

TableofContents

Optaflexx / Paylean (ractopaminehydrochloride) Toincreaserateofweightgain,improvefeedefficiencyandincreasecarcassleanness,andusedasatopdressfeedtoincreaserateofweightgainandimprovefeedefficiencyincattlefedinconfinementforslaughterduringthelast28to42daysonfeed.Ractopamine,theactiveingredientinPaylean and Optaflexx, isabetaadrenoreceptoragonist.

Cattle,Swine

Pulmotil (tilmicosin)Forswine:TocontrolswinerespiratorydiseaseassociatedwithActinobacillus pleuropneumoniae andPasteurellamultocida.

Cattle,Swine

Forcattle:Tocontrolbovinerespiratorydisease(BRD)associatedwithMannheimia haemolytica, Pasteurella multocidaandHistophilus somni ingroupsofbeefandnon-lactatingdairycattle,whereactiveBRDhasbeendiagnosedinatleast10%oftheanimalsinthegroup.Pulmotil isashared-classantibiotic.

Rumensin (monensin)Forcattlefedinconfinementforslaughter:ToimprovefeedefficiencyandpreventandcontrolcoccidiosisduetoEimeriabovis andEimeria zuernii .

Cattle

Fordairycows:Toincreasemilkproductionefficiency(productionofmarketablesolids-correctedmilkperunitoffeedintake).

Forgrowingcattleonpastureorindrylot(stockerandfeederanddairyandbeefreplacementheifers):ToincreaserateofweightgainandtopreventandcontrolcoccidiosisduetoEimeria bovis andEimeria zuernii .

Formaturereproducingbeefcows:ToimprovefeedefficiencywhenreceivingsupplementalfeedandtopreventandcontrolcoccidiosisduetoEimeria bovis andEimeria zuernii .

Forgoats:TopreventcoccidiosisduetoEimeria crandallis, Eimeria christenseni andEimeria ninakohlyakimovae ingoatsmaintainedinconfinement.

Forcalves(excludingvealcalves):TopreventandcontrolcoccidiosisduetoEimeria bovis andEimeria zuernii.

Rumensin isananimal-onlyantibioticandanionophore.

Tylan Premix (tylosinphosphate)TocontrolporcineproliferativeenteropathiesassociatedwithLawsonia intracellularis andtocontrolporcineproliferativeenteropathiesassociatedwithLawsonia intracellularis immediatelyaftermedicatingwithTylan Soluble (tylosintartrate)indrinkingwater.Tylan Premix isashared-classantibiotic.

Swine,Cattle,Poultry

TableofContents

Antibiotics

Antimicrobialresistanceinhumans,ortheriskthathumanpathogensevolveorotherwiseemergethatareresistanttoantibioticsorotherantimicrobials,isasignificanthealthconcern,andanimalagriculturecanplayaroleinmitigatingthisrisk.Asacompanydedicatedtothehealthandwell-beingofanimals,Elancoseekstohelpveterinariansandfarmersresponsiblyuseantibioticswhentreatinganimals.Initseffortstoaddressantibioticresistancewhileprotectinganimalhealth,Elancointroducedaglobalantibioticstewardshipplanfocusingonincreasingresponsibleantibioticuse;reducingtheneedforshared-classantibiotics;andreplacingantibioticswithalternativestohelplivestockproducerstreatandpreventanimaldisease.Antibiotics,usedresponsibly,alongwithgoodanimalcarepractices,helpenhancefoodsafetyandanimalwell-being.

Therearetwoclassesofantibioticsusedinanimalhealth:

• Animal-only antibiotics and ionophores: Notallpathogensthatcausediseaseinanimalsareinfectiousinhumans,andaccordinglyanimal-onlyantibioticsarenotusedinhumanmedicine(i.e.,notmedicallyimportant).Ionophoresareaspecialclassofanimal-onlyantimicrobialsuniquelydevelopedonlyforuseinanimals.InEuropeandcertainotherjurisdictions,ionophoresarenotcurrentlyclassifiedasantibiotics.Becauseoftheiranimal-onlydesignation,modeofaction,andspectrumofactivity,theiruseisnotconsideredtocreatethesameriskofresistanceinhumanpathogens.

• Shared-class antibiotics: Theseareusedinbothhumansandanimals.Someantibioticsareusedtotreatinfectiousdiseasecausedbypathogensthatoccurinbothhumansandanimals.Ofthe18majorantibioticresistancethreatsthattheCentersforDiseaseControlandPreventiontracks,twoareassociatedwithinfectiousdiseaseinanimals.AspartofElanco'sglobalantibioticstewardshipplanandincompliancewithFDAguidance,shared-classantibioticsarelabeledonlyforthetreatmentofanestablishedneedinanimalsandonlywithveterinarianoversight.

Elancohasintentionallyshiftedawayfromshared-classantibiotics,andisfocusingonanimal-onlyantibiotics,aswellasantibiotic-freesolutions.In2018,12%ofElanco'srevenuewasfromproductsclassifiedasshared-classantibiotics,ofwhich4%ofitsrevenuewasintheU.S.and8%wasoutsidetheU.S.,whereas25%ofElanco'srevenuewasfromanimal-onlyantibioticsandionophores,ofwhichionophoresconstituted21%ofitsrevenue.ThroughElanco'spoliciesandeffortsinthisarea,itseekstoprotectthebenefitsofantibioticsinhumanmedicine,whileresponsiblyprotectingthehealthoffoodanimalsandthesafetyofourfoodsupply.

Sales and Marketing

Elanco'ssalesorganizationincludessalesrepresentatives,veterinaryconsultantsandothervalueaddedspecialists.InmarketswhereElancodoesnothaveadirectcommercialpresence,itgenerallycontractswithdistributorsthatprovidelogisticsandsalesandmarketingsupportforitsproducts.

Elanco'ssalesrepresentativesvisititscustomers,includingconsultants,veterinarians,foodanimalproducers,andresellers,toinform,promoteandsellElanco'sproductsandtosupportcustomers.Elanco'sveterinaryconsultantsprovidescientificconsultingfocusedondiseasemanagementandherdmanagement,trainingandeducationondiversetopics,includingresponsibleproductuse,andgenerallyhaveadvanceddegreesinveterinarymedicine,veterinarynutritionorotheragriculture-relatedfields.

Vira Shield (vaccines) Includesmultipleproductsthatprotectagainstinfection,bovinerhinotracheitis,bovineviraldiarrhea,bovinerespiratorysyncytialvirus,bovinerespiratorydisease,leptospiracanicolaandotherdiseasesincattle.

Cattle

TableofContents

ThesedirectrelationshipswithcustomersallowElancotounderstandtheirneeds.Additionally,Elanco'ssalesrepresentativesandveterinaryconsultantsfocusoncollaboratingwithitscustomerstoeducateandsupportthemontopicssuchaslocaldiseaseawarenessandtohelpthemadoptnewandmoresophisticatedanimalhealthsolutions,includingthroughtheuseofElanco'sproducts.Asaresultoftheserelationships,Elanco'ssalesandconsultingvisitsprovideitwithaccesstocustomerdecisionmakers.Inaddition,Elanco'ssalesandmarketingorganizationprovidesenhancedvaluebyprovidingsupporttofoodanimalproducerstohelpmaximizetheiryieldsandreducecosts.Elanco'sanalyticshelpcustomersanalyzelargeamountsofhealthandproductiondata.AsofDecember31,2018,Elancohadapproximately1,475salesrepresentatives.

Customers

Elancoprimarilysellsitsfoodanimalproductstothird-partydistributorsanddirectlytoadiversesetoffoodanimalproducers,includingbeefanddairyfarmersaswellaspork,poultryandaquacultureoperations.Elancoprimarilysellsitscompanionanimalproductstothird-partydistributors,aswellasdirectlytoveterinariansthattypicallythensellElanco'sproductstopetowners.Elancoisalsoexpandingintoretailchannelsinordertomeetpetownerswheretheywanttopurchase.Elanco'slargestcustomer,anaffiliateofAmerisourceBergenCorp.,isathird-partyveterinarydistributorandrepresentedapproximately12%ofElanco'srevenuefortheyearendedDecember31,2018.Elanco'snextlargestcustomerrepresentedapproximately7%ofitsrevenuefortheyearendedDecember31,2018andnoothercustomerrepresentedmorethan5%ofElanco'srevenueforthesameperiod.

Research and Development

Elanco'sR&Dorganizationiscomprisedofinternalresearch,globaldevelopment,globalregulatoryandexternalinnovationcollaborationsandventureinvesting.AsofDecember31,2018,Elancoemployedapproximately690employeesinitsglobalR&DandRegulatoryAffairsorganizations.Elanco'sR&DheadquartersislocatedinGreenfield,Indiana.ElancohasR&DfacilitiesinBasel,Switzerland;PrinceEdwardIsland,Canada;andYarrandoo,AustraliaandR&Dfacilitiesco-locatedwithmanufacturingsitesinFortDodge,Iowa;andCuxhaven,Germany.AdditionalR&DoperationsarelocatedinSaoPaulo,Brazil;Shanghai,China;andBangalore,India.ElancoincurredR&Dexpensesof$246.6millionin2018,$251.7millionin2017and$265.8millionin2016.

NewproductinnovationisacorepartofElanco'sbusinessstrategy.Elanco'sR&Dinvestmentisfocusedonprojectsthattargetnovelproductintroductions,aswellasnewindications,presentations,combinationsandspeciesexpansion.Elanco'sapproachisabuild,buy,orallystrategytodevelopcompellingtargetsandconceptsthatoriginatefromitsscientistsandinnovators,academia,agribusiness,orhumanpharmaceuticalandbiotechnologyatallstagesofR&D.TheabilitytosourceitsconceptsfromdifferentareasallowsElancotocreateapipelinethatcanbecompetitiveinthecategoriesinwhichithaschosentocompete,whilereducingitsriskbynotowningandfundingallaspectsofitsR&Dprojects.

ElancoseekstoconcentrateitsresourcesinareaswhereitbelievesthescienceandElanco'scapabilitiesbestmatchtheopportunitiesintheanimalhealthmarket.Specifically,Elanco'sR&Dfocusesonsixareasacrosscompanionanimalsandfoodanimals.Forcompanionanimals,ElancohasR&Dactivitiesintherapeutics,vaccinesandparasiticides,whileinfoodanimalsElancoispursuingpharmaceuticals,vaccinesandnutritionalhealth.

TableofContents

Elanco'sR&Deffortsconsistofmorethan100activeprogramsbalancedacrossspeciesandtechnologyplatforms.Forbothfoodanimalsandcompanionanimals,Elancoappliesbothlargeandsmallmoleculeapproaches.Invaccines,Elanco'seffortsencompassafullrangeofmodifiedlive,inactivatedandnucleicacidstrategies.Innutritionalhealth,Elancofocusesonproductsbasedonenzymes,probiotics,prebioticsandotherapproachesthatmodulatebiologicalactivityintheanimaldigestivetract.Additionally,Elancoemploysvariousdeliverystrategiesforproductsincludingin-feed,injectable,oralandtopicalformulationsdevelopedinconjunctionwithitsmanufacturingteamtoassureproductionthatmaximizesthecapabilitieswithinElanco'sinternalandexternalmanufacturingnetwork.

ElancoengagesinlicensingandbusinessdevelopmenttoacquireassetsforitspipelineandnewR&DplatformsandtoestablishstrategicR&Dcollaborations.Elancomakesandmaintainscapitalinvestmentsinventurecapitalvehiclesthatfocusonagribusinessandanimalhealth,andElancoengagesinrisksharingcollaborationstoexpanditsexternalcapitalsourcestoaugmentinternalinvestments.TosupportcollaborationswithinnovationsourcesfocusedonhumanhealthElancohasdevelopedcapabilitiestoconducttranslationalcomparativemedicalresearchtrialsinanimalswithnaturallyoccurringconditionsthatmimicahumandiseaseordisorder.Thistypeofcollaborationde-risksunprovenorlesswell-validatedhumanhypotheseswhilepotentiallydefiningaclinicallyvalidatednewapproachinveterinarymedicine.

Elanco'sR&DandcommercialleadershipallocateR&Dinvestmentannuallywiththegoalofaligningnear-andlong-termstrategicopportunitiesandobjectives.Portfolioinvestmentdecisionsaremadebasedontheprobabilityoftechnicalsuccessandregulatoryapproval,timingofapproval/launchandearliermilestones,feasibilityandcostofdevelopmentandmanufacture,intellectualpropertyprotectionandmarketattractiveness/commercialforecast.R&DprojectsaresupportedbypharmaceuticalprojectmanagementapproachesandElancoaimsforallofitssupportingR&Dfunctionalcapabilitiesandcapacitiestobemanagedandmatchedtotheevolvingdemandsofthepipeline.ElancobelievesthisoverallR&Dmanagementsystemhasenabledittoconsistentlygainproductapprovalswhilemaintainingclearvisibilitytopipelinebreadthanddepthtosupportsustainedlaunchesintothefuture.

Manufacturing and Supply Chain

Priortotheseparation,Elanco'sproductsweremanufacturedatbothsitesoperatedbyElancoandsitesoperatedbythird-partyCMOs.

Elancoownsandoperates12internalmanufacturingsites,fourofwhichfocusonvaccines,sixofwhichfocusonotheranimalhealthproductsandtwoofwhichareregionalsitesthatfocusonpackaging:

Elancowillcontinuetomanufactureoneproduct,humangrowthhormone,forLillyatoneofthesesitesforaperiodoftwoyearsfollowingthedateoftheseparation.Lillyhastheoptiontoextendforthreeadditionalyears.

Elanco'sglobalmanufacturingandsupplychainisalsosupportedbyanetworkofCMOs.AsofDecember31,2018,thisnetworkwascomprisedofapproximately100CMOs.Elanco'sExternal

Site Location Site LocationClinton Indiana,U.S. Winslow Maine,U.S.Speke Liverpool,U.K. FortDodge Iowa,U.S.KansasCity Kansas,U.S. Cuxhaven GermanyHuningue France Chungli TaiwanWusi China Barueri BrazilTerreHaute Indiana,U.S. PrinceEdwardIsland Canada

TableofContents

ManufacturingNetworkcentrallygovernsitsglobalCMOrelationshipsandprovidesoversighttotheseCMOsthroughfourhubs.

ElancoselectsCMOsbasedonseveralfactors:(i)theirabilitytoreliablysupplyproductsormaterialsthatmeetElanco'squalitystandardsatanoptimizedcost;(ii)theiraccesstospecialtyproductsandtechnologies;(iii)capacity;and(iv)financialanalyses.Elanco'sExternalManufacturingNetworkseekstoensurethatalloftheCMOsElancousesadheretoitsstandardsofmanufacturingquality.

Elancopurchasescertainrawmaterialsnecessaryforthecommercialproductionofitsproductsfromavarietyofthird-partysuppliers.Elancoutilizeslogisticsserviceprovidersasapartofitsglobalsupplychain,primarilyforshippingandlogisticssupport.

Elancoservesaglobalcustomerbasethroughthird-partydistributionrelationshipsandadirectcommercialpresence.Elancointendstomaintainsuchcommercialpresencein50orfewercountriesbytheendofthe2019,reducedfrom70countriesin2015.Elancointendstocontinueitsefficiencyimprovementprogramsinitsmanufacturingandsupplychainorganization.Elancohasstronggloballymanagedandcoordinatedqualitycontrolandqualityassuranceprogramsinplaceatallinternalmanufacturingsitesandexternalmanufacturinghubs,anditregularlyinspectsandauditsitsinternalsitesandCMOlocations.Elancorecentlyconductedareviewofitsglobalmanufacturingandsupplynetworktoimproveefficiency.AsaresultofthisreviewandElanco'soperationalefficiencyprogram,since2015,ElancohasexitedownershipofitsmanufacturingsitesinVacaville,California;Dundee,Scotland;Sligo,Ireland;Larchwood,Iowa;andCali,Colombia,reducedheadcountfromapproximately3,500toapproximately2,300employeesandeliminatedover2,800stockkeepingunits,orSKUs.Elancocurrentlysuppliesapproximately4,500SKUs.

Elanco'smanufacturingsitesexperiencedapproximately200externalregulatoryinspectionsgloballyfrom2015to2018,forwhichsuchregulatorsmadenomaterialcriticalfindings.

Competition

Elancofacesintensecompetitioninthesectorsandregionsonwhichitfocuses.Principalmethodsofcompetitionvarydependingontheparticularregion,species,productcategory,orindividualproduct.Someofthesemethodsincludenewproductdevelopment,quality,price,serviceandpromotion.

Elanco'sprimarycompetitorsincludeanimalhealthmedicinesandvaccinescompaniessuchasZoetisInc.;BoehringerIngelheimVetmedica,Inc.,theanimalhealthdivisionofBoehringerIngelheimGmbH;MerckAnimalHealth,theanimalhealthdivisionofMerck&Co.,Inc.;andBayerAnimalHealth,theanimalhealthdivisionofBayerAG.Elancoalsofacescompetitiongloballyfrommanufacturersofgenericdrugs,aswellasfromproducersofnutritionalhealthproducts,suchasDSMNutritionalProductsAGandDaniscoAnimalNutrition,theanimalhealthdivisionofE.I.duPontdeNemoursandCompany,asubsidiaryofDowDuPont,Inc.Therearealsoseveralnewstart-upcompaniesworkingintheanimalhealtharea.Inaddition,Elancocompeteswithnumerousotherproducersofanimalhealthproductsthroughouttheworld.

Intellectual Property

Elanco'stechnology,brandsandotherintellectualpropertyareimportantelementsofitsbusiness.Elancoreliesonpatent,trademark,copyrightandtradesecretlaws,aswellasregulatoryexclusivityperiodsandnon-disclosureagreementstoprotectitsintellectualpropertyrights.Elanco'spolicyistovigorouslyprotect,enforceanddefenditsrightstoitsintellectualproperty,asappropriate.

Elanco'sproductportfolioandcertainproductcandidatesenjoytheprotectionofapproximately3,000patentsandapplications,filedinover50countries,withconcentrationinElanco'smajormarket

TableofContents

countriesaswellasothercountrieswithstrongpatentsystems,suchasAustralia,Brazil,Canada,Europe,JapanandtheU.S.ManyofthepatentsandpatentapplicationsinElanco'sportfolioaretheresultofitsownwork,whileotherpatentsandpatentapplicationsinitsportfoliowereatleastpartiallydeveloped,andlicensedtoElanco,bythirdparties.AsubsetofElanco'scurrentproductsorproductcandidatesarecoveredbypatentsandpatentapplicationsinitsportfolio.

Patentsforindividualproductsexpireatdifferenttimesbasedonthedateofthepatentfiling(orsometimesthedateofpatentgrant)andthelegaltermofpatentsinthecountrieswheresuchpatentsareobtained.Forexample,Galliprant's activeingredient,grapiprant,isencompassedbybothcompoundandphysicalformpatentsintheU.S.,Europe,Canadaandotherkeymarkets,withtermsthatexpirebetweenatleastOctober2021andMarch2026.Variousformulationandmethodofusepatentsencompassthespinosadpesticideproducts,Comfortis andTrifexis .TheComfortis formulationpatentextendsthroughAugust2020intheU.S.,CanadaandAustralia,and,upongrantofapplicablesupplementingprotectioncertificate("SPC"),throughAugust2025inEurope.TheTrifexis formulationandmethodofusepatentsextendsthroughSeptember2021intheU.S.,CanadaandAustralia,and,upongrantofapplicableSPC,throughSeptember2026inEurope.Elancotypicallymaintainsallofitspatentsandassertsitspatentrightsagainstthirdpartiesasappropriate.

Additionally,manyofElanco'svaccineproducts,includingtheDuramune familyofvaccines,arebasedonproprietaryorpatentedmasterseedsandformulations.Elancoactivelyseekstoprotectitsproprietaryinformation,includingitstradesecretsandproprietaryknow-how,throughavarietyofmeansincludingbyseekingtorequireElancoemployees,consultants,advisorsandpartnerstoenterintoconfidentialityagreementsandotherarrangementsuponthecommencementoftheiremploymentorengagement.

InordertofacilitatetheseparationandallowLilly'sandElanco'soperationstocontinuewithminimalinterruption,LillylicensedtoElancotherighttousecertainintellectualpropertyrightsintheanimalhealthfield.Inaddition,LillyhasgrantedElancoatransitionallicensetousecertainofLilly'strademarksforaperiodoftimefollowingtheIPO.See"CertainRelationshipsandRelatedPartyTransactions—RelationshipbetweenElancoandLilly—TransitionalTrademarkLicenseAgreement."

Elancoseekstofileandmaintaintrademarksaroundtheworldbasedoncommercialactivitiesinmostregionswhereithas,ordesirestohave,abusinesspresenceforaparticularproduct.Elancocurrentlymaintainsmorethan9,000trademarkapplicationsandregistrationsinmajorregions,primarilyidentifyingproductsdedicatedtothecareoflivestockandcompanionanimals.

Regulatory

ThesaleofanimalhealthproductsisgovernedbythelawsandregulationsspecifictoeachcountryinwhichElancosellsitsproducts.Tomaintaincompliancewiththeseregulatoryrequirements,Elancohasestablishedprocesses,systemsanddedicatedresourceswithend-to-endinvolvementfromproductconcepttolaunchandmaintenanceinthemarket.Elanco'sregulatoryfunctionactivelyseekstoengageindialoguewithvariousglobalagenciesregardingtheirpoliciesthatrelatetoanimalhealthproducts.InthemajorityofElanco'smarkets,therelevanthealthauthorityisseparatefromthosegoverninghumanmedicinalproducts.

United States

U.S. Food and Drug Administration. TheregulatorybodythatisresponsiblefortheregulationofanimalhealthpharmaceuticalsintheU.S.istheCenterforVeterinaryMedicine,adivisionoftheFDA.Allmanufacturersofanimalhealthpharmaceuticalsmustdemonstratetheirproductstobesafe,effectiveandproducedbyaconsistentmethodofmanufactureasdefinedundertheFederalFood,Drug,andCosmeticAct(the"FFDCA").TheFDA'sbasisforapprovinganewanimaldrugapplicationisdocumentedinaFreedomofInformationSummary.Post-approvalmonitoringofproductsis

TableofContents

requiredbylaw,withreportsbeingprovidedtotheCVM'sOfficeofSurveillanceandCompliance.Reportsofproductqualitydefects,adverseeventsorunexpectedresultsaremaintainedandsubmittedinaccordancewiththelaw.Additionally,aspartofthedrugexperiencereport,Elancoisrequiredtosubmitallnewinformationpertainingtothesafetyoreffectivenessofaproduct,regardlessofthesource.

U.S. Department of Agriculture. TheregulatorybodyintheU.S.forveterinarybiologicalsistheU.S.DepartmentofAgriculture(the"USDA").TheCenterforVeterinaryBiologicswithintheAnimalandPlantHealthInspectionServiceintheUSDAisresponsiblefortheregulationofanimalhealthbiologicals,whichincludesbutisnotlimitedtovaccines,bacterins,allergens,antibodies,antitoxins,toxoids,immunostimulants,certaincytokines,antigenicorimmunizingcomponentsoflivemicroorganisms,anddiagnosticcomponentsofnaturalorsyntheticorigin,orthatarederivedfromsynthesizingoralteringvarioussubstancesorcomponentsofsubstancessuchasmicroorganisms,genesorgeneticsequences,carbohydrates,proteins,antigens,allergensorantibodies.Allmanufacturersofanimalhealthbiologicalsmustshowtheirproductstobepure,safe,effectiveandproducedbyaconsistentmethodofmanufactureasdefinedundertheVirusSerumToxinAct.Post-approvalmonitoringofproductsisrequired.Reportsofproductqualitydefects,adverseeventsorunexpectedresultsaremaintainedandsubmittedinaccordancewiththeagencyrequirements.

Environmental Protection Agency. ThemainregulatorybodyintheU.S.forveterinarypesticidesistheEnvironmentalProtectionAgency(the"EPA").TheEPA'sOfficeofPesticideProgramsisresponsiblefortheregulationofmostpesticideproductsappliedtoanimalsinaccordancewithamemorandumofunderstandingbetweentheFDAandEPAforproductsthataresubjecttoregulationunderboththeFFDCAandtheFederalInsecticide,FungicideandRodenticideAct.Allmanufacturersofanimalhealthpesticidesmustshowtheirproductswillnotcauseunreasonableadverseeffectstomanortheenvironmentasstatedintheact.WithintheU.S.,individualstatepesticideauthoritiesmust,beforedistributioninthatstate,alsoapprovepesticideproductsthatareapprovedbytheEPA.Post-approvalmonitoringofproductsisrequired,withreportsprovidedtotheEPAandsomestateregulatoryagencies.

Food Safety Inspection Service. TheFDAisauthorizedtodeterminethesafetyofsubstances(including"generallyrecognizedassafe"substances,foodadditivesandcoloradditives),aswellasprescribetheirsafeconditionsofuse.However,althoughtheFDAhastheresponsibilityfordeterminingthesafetyofsubstances,theFoodSafetyandInspectionService,thepublichealthagencyintheUSDA,retains,underthetenetsoftheFederalMeatInspectionActandthePoultryProductsInspectionActandtheirimplementingregulations,theauthoritytodeterminethatnewsubstancesandnewusesofpreviouslyapprovedsubstancesaresuitableforuseinmeatandpoultryproducts.

Inaddition,theFCPAprohibitsU.S.corporationsandtheirrepresentativesfromoffering,promising,authorizingormakingpaymentstoanyforeigngovernmentofficial,governmentstaffmember,politicalpartyorpoliticalcandidateinanattempttoobtainorretainbusinessabroad.ThescopeoftheFCPAincludesinteractionswithcertainhealthcareprofessionalsinmanycountries.Othercountrieshaveenactedsimilaranti-corruptionlawsand/orregulations.InsomecountriesinwhichElancooperates,thepharmaceuticalandlifesciencesindustriesareexposedtoahighriskofcorruptionassociatedwithsalestohealthcareprofessionalsandinstitutions.NotwithstandingElanco'sreasonableeffortstoconductitsoperationsinmaterialcompliancewiththeFCPA,Elanco'sinternationalbusinesscouldexposeittopotentialliabilityundertheFCPA,whichmayresultinElancoincurringsignificantcriminalandcivilpenalties,andtopotentialliabilityundertheanti-corruptionlawsandregulationsofotherjurisdictionsinwhichitoperates.Inaddition,thecostsElancomayincurindefendingagainstanFCPAinvestigationcouldbesignificant.

TableofContents

Outside of the United States

European Union (EU). ElancoisgovernedbythefollowingEUregulatorybodies:

• TheEuropeanMedicinesAgency("EMA")isacentralizedagencyoftheEU,currentlylocatedinLondon,England.DuetothedecisionoftheUKtoleavetheEU,theagencywillrelocatetoAmsterdam.TheagencyisresponsibleforthescientificevaluationofVeterinaryMedicinalProducts("VMP")developedbypharmaceuticalcompaniesforuseintheEU.Theagencyhasaveterinaryreviewsectiondistinctfromthemedicalreviewsectionforhumanproducts.TheCommitteeforVeterinaryMedicinalProducts("CVMP")isresponsibleforscientificreviewofthesubmissionsforVMPandImmunologicalVeterinaryMedicinalProducts.IftheCVMPconcludesthatallrequirementsforquality,safetyandefficacyaremet,theyissueapositiveopinionthatisforwardedtotheEuropeanCommission,whotakesthefinaldecisionfollowingtheEuropeancomitologyprocedure.Thecentralizedmarketingauthorization(commissiondecision)oftheEuropeanCommissionisvalidinalloftheEU.AllcountriesthatarenotpartoftheEUbutbelongtotheEuropeanEconomicArea("EEA"),i.e.,Norway,IcelandandLiechtenstein,arepartofthescientificassessmentdonebytheCVMP.ThesecountriesissueanationalmarketingapprovalinaccordancewiththeCommissionDecision.Aseriesofregulations,directives,guidelines,EUPharmacopeiaMonographsandotherlegislationprovidetherequirementsforapprovalintheEU.Ingeneral,theserequirementsaresimilartothoseintheU.S.,requiringdemonstratedevidenceofpurity,safety,efficacyandconsistencyofmanufacturingprocesses.

Ifapprovalissoughtforproductsthateithercannotordonotneedtofollowthecentralizedprocedure,approvalcanalsobeachievedbynationalapprovalinanEEAcountryagency.ThisnationalauthorizationcanbemutuallyrecognizedbyotherEEAcountries/EUmemberstates(MutualRecognitionProcedure).Inaddition,nationalandmutualrecognitioncanbedoneinacombinedprocedure(DecentralizedProcedure).

• TheEuropeanFoodSafetyAuthority("EFSA")istheagencyoftheEUthatprovidesscientificadviceandcommunicateswithrespecttoexistingandemergingrisksassociatedwiththefoodchain.EFSAwasestablishedinFebruary2002andisbasedinParma,Italy.BasedonEFSA'smandate,theagencyevaluatesapplicationsforfeedadditives,includingenzymesandseveralnutritionalsforanimals.

• TheEuropeanChemicalAgency("ECHA")istheagencyoftheEUforthesafeuseofchemicals.ECHAwasfoundedin2007andisbasedinHelsinki,Finland.BasedonECHA'smandate,theagencyconductstheevaluationofbiocidesfortheEU.

InregardtoBrexit,theEUandtheUKarecontinuingtoworkonplansfordealingwiththewithdrawaloftheUKfromtheEU,currentlyscheduledforMarch29,2019.Post-separation,theUKhasindicatedtheywilllooktocontinueworkingcloselywiththeEMA,andthatexistingagreementsbetweentheEMAandothercountriessuchasSwitzerland,theU.S.andCanadaprovideaprecedentonwhichtheUKcouldbuild.

Brazil. TheMinistryofAgriculture,LivestockProductionandSupply("MAPA")istheregulatorybodyinBrazilthatisresponsiblefortheregulationandcontrolofpharmaceuticals,biologicalsandmedicinalfeedadditivesforanimaluse.MAPA'sregulatoryactivitiesareconductedthroughtheSecretaryofAgriculturalDefenseanditsLivestockProductsInspectionDepartment.Inaddition,regulatoryactivitiesareconductedatalocallevelthroughtheFederalAgricultureSuperintendence.Theseactivitiesincludetheinspectionandlicensingofbothmanufacturingandcommercialestablishmentsforveterinaryproducts,aswellasthesubmission,reviewandapprovalofpharmaceuticals,biologicalsandmedicinalfeedadditives.MAPAisoneofthemostactiveregulatoryagenciesinLatinAmerica,havingpermanentseatsatseveralinternationalanimalhealthforums,such

TableofContents

asCodexAlimentarius,WorldOrganizationforAnimalHealthandCommitteeofVeterinaryMedicinesfortheAmericas.MAPAwasalsorecentlyinvitedtobeaLatinAmericanrepresentativeatInternationalCooperationonHarmonisationofTechnicalRequirementsforRegistrationofVeterinaryMedicinalProducts("VICH")meetings.SeveralnormativeinstructionsissuedbyMAPAhavesetregulatorytrendsinLatinAmerica.

Japan. TheMinistryofAgriculture,ForestryandFishery("MAFF")istheregulatorybodyinJapanthatisresponsiblefortheregulationandcontrolofpharmaceuticals(includingbiologicalsandpesticide/disinfectant)andfeedadditive/feedforanimaluse.MAFF'sregulatoryactivitiesareconductedthroughtheLivestock&AquacultureProductSafetyControlDivisionundertheConsumerSafetyBureau.Theanimaldrugreviewsandapprovals,reexaminationreviews,GxPcompliancechecks,GxPsiteinspectionsandproductassaychecks(includingvaccinenationalassays)aredonebyNationalVeterinaryAssayLaboratory("NVAL").MAFFcoordinateswithotheragenciessuchasMinistryofHealth,LaborandWelfare("MHLW")andFoodSafetyCommission("FSC")toperformvariouslicensecompliancechecks(e.g.,marketingauthorizationholder,manufacturerandoverseasiteaccreditation)andensuregoodpromotionalactivities.Routineinspections,antimicrobialfeedadditivenationalassaysandmanufacturinginspectionsaredonebytheFood&AgricultureMaterialInspectionCenter.Forfoodanimalproducts,animaldrugreviewisdonebyNVALbutthehumanfoodsafetyreviewisdonebyFSC(acceptabledailyintakeestablishmentandantimicrobialriskassessment)andMHLW(maximumresiduelimitestablishment).Thesethreeagencies(NVAL,FSCandMHLW)worktogethertoapprovefoodanimalproducts.Inadditiontothosecentralgovernmentagencies,variouslicensesaredelegatedtothelocalmunicipalgovernment,suchasanimaldrugwholesalerandretailerlicensesandfeedadditivedistributorlicenses.

China. TheMinistryofAgriculture("MOA")istheregulatorybodythatisresponsiblefortheregulationandcontrolofpharmaceuticals,biologicals,disinfectants,medicinalfeedadditives,pesticideandfeed/feedadditivesforanimaluse.TherearethreeorganizationsundertheMOAthatregulateanimalhealth:

• TheInstituteofVeterinaryDrugControlisresponsiblefortheevaluationofnewapplications,renewals,variations,manufacturers,qualitymethodsandtissueresiduemethodsforpharmaceuticals,biologicals,disinfectantsandmedicinalfeedadditives.

• TheFeed/FeedAdditiveOfficeisresponsiblefortheregistrationandrenewaloffeedandfeedadditives.

• ThePesticideBureauisresponsiblefortheregistrationandrenewalofpesticideproducts.

Australia. TheAustralianPesticidesandVeterinaryMedicinesAuthority("APVMA")isanAustraliangovernmentstatutoryauthorityestablishedin1993tocentralizetheregistrationofallagriculturalandveterinaryproductsintotheAustralianmarketplace.Previously,eachstateandterritorygovernmenthaditsownsystemofregistration.TheAPVMAassessesapplicationsfromcompaniesandindividualsseekingregistrationsotheycansupplytheirproducttothemarketplace.ApplicationsundergorigorousassessmentusingtheexpertiseoftheAPVMA'sscientificstaffanddrawingonthetechnicalknowledgeofotherrelevantscientificorganizations,Commonwealthgovernmentdepartmentsandstateagriculturedepartments.Iftheproductworksasintendedandthescientificdataconfirmsthatwhenusedasdirectedontheproductlabelitwillhavenoharmfulorunintendedeffectsonpeople,animals,theenvironmentorinternationaltrade,theAPVMAwillregistertheproduct.Aswellasregisteringnewagriculturalandveterinaryproducts,theAPVMAreviewsolderproductsthathavebeenonthemarketforasubstantialperiodoftimetoensuretheystilldothejobusersexpectandaresafetouse.TheAPVMAalsoreviewsregisteredproductswhenparticularconcernsareraisedabouttheirsafetyandeffectiveness.Thereviewofaproductmayresultinconfirmationofitsregistrationoritmayseeregistrationcontinuewithsomechangestothewaytheproductcanbeused.Insomecases

TableofContents

thereviewmayresultintheregistrationofaproductbeingcancelledandtheproducttakenoffthemarket.

Rest of world. Country-specificregulatorylawstypicallyhaveprovisionsthatincluderequirementsforcertainlabeling,safety,efficacyandmanufacturers'qualitycontrolprocedures(toassuretheconsistencyoftheproducts),aswellascompanyrecordsandreports.Othercountries'regulatoryagenciestypicallyeitherrefertotheFDA,USDA,EUorotherinternationalanimalhealthentities,includingtheWorldOrganizationforAnimalHealth,CodexAlimentariusandVICH(seebelow),inestablishingstandardsandregulationsforveterinarypharmaceuticalsandvaccines,orreviewthequality,safetyandeffectivenessoftheproductsthemselvesaccordingtotheirownnationalrequirements.

Global policy and guidance

Joint FAO/WHO Expert Committee on Food Additives. TheJointFAO/WHOExpertCommitteeonFoodAdditives("JECFA")isaninternationalexpertscientificcommitteethatisadministeredjointlybytheFoodandAgricultureOrganizationoftheUnitedNations("FAO")andtheWorldHealthOrganization("WHO").Theyprovideariskassessment/safetyevaluationofresiduesofveterinarydrugsinanimalproducts,exposureandresiduedefinitionandmaximumresiduelimitproposalsforveterinarydrugs.Similarly,theJointFAO/WHOMeetingonPesticideResidues("JMPR")isaninternationalexpertscientificgroupadministeredjointlybytheFAOandWHO.JMPRreviewsresiduesandanalyticalaspectsofthepesticides,estimatethemaximumresiduelevels,reviewtoxicologicaldataandestimateacceptabledailyintakesforhumansofthepesticidesunderconsideration.Elancoworkswiththesecommitteestoestablishacceptablesafelevelsofresidualproductinfood-producinganimalsaftertreatmentwithveterinarydrugsorpesticides.ThisinturnenablesthecalculationofappropriatewithdrawaltimesforElanco'sproductspriortoananimalenteringthefoodchain.

Advertising and promotion review. Promotionofethicalanimalhealthproductsiscontrolledbyregulationsinmanycountries.Theserulesgenerallyrestrictadvertisingandpromotiontothoseclaimsandusesthathavebeenreviewedandendorsedbytheapplicableagency.Elancoconductsareviewofpromotionmaterialforcompliancewiththelocalandregionalrequirementsinthemarketswhereitsellsanimalhealthproducts.

Import and Export of Products. Theimportationandexportationofanimalhealthproductsiscontrolledbyregulationsinmanycountries.Insomejurisdictionsthismayincludeobtainingseparatepermitsorlicensesbyproductorbycompanyorfilingnoticeswithapplicableregulatoryagenciespriortoimportorexportofproduct.Elancoensurescompliancewithlocalandglobalregulationsinthemarketswhereitimports/exportsitsanimalhealthproducts.

International Cooperation on Harmonization of Technical Requirements for Registration of Veterinary Medicinal Products. VICHisatrilateral(EU-Japan-USA)programlaunchedin1996aimedatharmonizingtechnicalrequirementsforveterinaryproductregistration.Severalothercountrieshaveobtainedobserverstatus,forexample,Canada,NewZealand,AustraliaandSouthAfrica,orarelinkedtoVICHonbasisoftheVICHOutreachForum,aVICHinitiativewiththemainobjectiveofprovidingabasisforwiderinternationalharmonizationoftechnicalrequirements.Inaddition,theWorldOrganizationforAnimalHealthisanassociatememberofVICH.

TheobjectivesoftheVICHareasfollows:

• EstablishandimplementharmonizedtechnicalrequirementsfortheregistrationofveterinarymedicinalproductsintheVICHregions,whichmeethighquality,safetyandefficacystandardsandminimizetheuseoftestanimalsandcostsofproductdevelopment.

TableofContents

• ProvideabasisforwiderinternationalharmonizationofregistrationrequirementsthroughtheVICHOutreachForum.

• MonitorandmaintainexistingVICHguidelines,takingparticularnoteoftheworkprogramofthecorrespondinghumandruggroupand,wherenecessary,updatetheseVICHguidelines.

• EnsureefficientprocessesformaintainingandmonitoringconsistentinterpretationofdatarequirementsfollowingtheimplementationofVICHguidelines.

• Bymeansofaconstructivedialoguebetweenregulatoryauthoritiesandindustry,providetechnicalguidanceenablingresponsetosignificantemergingglobalissuesandsciencethatimpactregulatoryrequirementswithintheVICHregions.

Employees

AsofDecember31,2018,Elancoemployedapproximately5,590fulltimeemployees.Inaddition,Elancoemployedapproximately190fixed-durationemployees,whichareindividualshiredforapre-definedlengthoftime(onetofouryears).Together,theytotalapproximately5,780worldwide.Ofthe5,780employeesglobally,approximately2,440areU.S.-basedandapproximately3,340areemployedinotherjurisdictions.Someoftheseemployeesaremembersofunions,workscouncils,tradeassociationsorareotherwisesubjecttocollectivebargainingagreements,includingapproximately150unionemployeesintheU.S.locatedatElanco'sFortDodge,Iowamanufacturing/R&Dfacility.Approximately40%ofElanco'sglobalpopulationisincustomer-facingroles,includingbutnotlimitedto,traditionalsalesroles,technicalconsultants,accountmanagersandcommercialandgeneralmanagers.

Property

ElancohasR&Doperationsco-locatedwithcertainofitsmanufacturingsitesintheU.S.tofacilitatetheefficienttransferofproductionprocessesfromElanco'slaboratoriestomanufacturingsites.Inaddition,ElancomaintainsR&Doperationsatnon-manufacturinglocationsintheU.S.,Switzerland,Australia,BrazilandChina.Aspartoftheseparation,LillytransferredtoElancoitsinterestineachoftheseR&Dfacilities.Elanco'slargestR&DfacilityisitsU.S.R&DsitelocatedinFortDodge,Iowa,whichhasapproximately0.3millionsquarefeet.

TheaddressofElanco'sprincipalexecutiveofficesiscurrentlyc/oElanco,2500InnovationWay,GreenfieldIN,46140.

Elanco'sglobalmanufacturingnetworkiscomprisedof12manufacturingsites.ThelargestmanufacturingsiteinElanco'sglobalmanufacturingnetworkisitsmanufacturingsitelocatedinClinton,Indiana,whichhasapproximately0.7millionsquarefeet.Inaddition,Elanco'sglobalmanufacturingnetworkwillcontinuetobesupplementedbyapproximately100CMOs.See"—ManufacturingandSupplyChain."

Elancoownsorleasesvariousadditionalpropertiesforotherbusinesspurposesincludingofficespace,warehousesandlogisticscenters.Inaddition,underthetransitionalservicesagreement,LillyprovidesElancowithcontinuedaccesstocertainofLilly'spremisescurrentlyoccupiedbyElanco'semployeesforuptotwoyearsfromthedateoftheseparation.

Elancobelievesthatitsexistingproperties,assupplementedbyCMOsandaccesstoLillyfacilitiesthatareprovidedunderthetransitionalservicesagreement,areadequateforElanco'scurrentrequirementsandforitsoperationsinthenearfuture.

TableofContents

Environmental, Health and Safety

Elancoissubjecttovariousfederal,state,localandforeignenvironmental,healthandsafety("EHS")lawsandregulations.Theselawsandregulationsgovernmatterssuchastheemissionanddischargeofhazardousmaterialsintotheground,airorwater;thegeneration,use,storage,handling,treatment,packaging,transportation,exposureto,anddisposalofhazardousandbiologicalmaterials,includingrecordkeeping,reportingandregistrationrequirements;andthehealthandsafetyofElanco'semployees.DuetoElanco'soperations,theselawsandregulationsalsorequireittoobtain,andcomplywith,permits,registrationsorotherauthorizationsissuedbygovernmentalauthorities.TheseauthoritiescanmodifyorrevokeElanco'spermits,registrationsorotherauthorizationsandcanenforcecompliancethroughfinesandinjunctions.

Certainenvironmentallawsimposejointandseveralliability,withoutregardtofault,forcleanupcostsonpersonswhohavedisposedoforreleasedhazardoussubstancesintotheenvironment,includingatthird-partysitesoroffsitedisposallocations,orthatcurrentlyownoroperate(orformerlyownedoroperated)siteswheresuchareleaseoccurred.ElancocouldbesubjecttoliabilityfortheinvestigationandremediationoflegacyenvironmentalcontaminationcausedbyhistoricalindustrialactivityatsitesthatElancoownsoronwhichitoperates.Inadditiontoclean-upactionsbroughtbyfederal,state,localandforeigngovernmentalentities,privatepartiescouldraisepersonalinjuryorotherclaimsagainstElancoduetothepresenceof,orexposureto,hazardousmaterialson,fromorotherwiserelatingtosuchaproperty.

Elancohasmade,andintendstocontinuetomake,necessaryexpendituresforcompliancewithapplicableEHSlawsandregulations.Elancoisalsomonitoringandinvestigatingenvironmentalcontaminationfrompastindustrialactivityatcertainsites.WhileElancocannotpredictwithcertaintyitsfuturecapitalexpendituresoroperatingcostsforenvironmentalcomplianceortheinvestigationandremediationofcontaminatedsites,ElancoanticipateshavingcapitalandoperationalexpendituresfortheyearsendingDecember31,2019and2020forenvironmentalcompliancepurposesandforthemonitoring,investigationorclean-upofcertainpastindustrialactivitiesasfollows:

• environmental-relatedcapitalexpenditures—$0.7million;and

• otherenvironmental-relatedexpenditures—$0.7million.

Inconnectionwithpastacquisitionsanddivestitures,Elancohasundertakencertainindemnificationobligationsthatmayrequireitinthefuture,toconductorfinanceenvironmentalcleanupsatsitesthatitnolongerownsoroperates.Elancohasalsoenteredintoindemnificationagreementsinwhichitisormaybeindemnifiedforvariousenvironmentalcleanups;however,suchindemnitiesarelimitedinbothtimeandscopeandmaybefurtherlimitedinthepresenceofnewinformation,ormaynotbeavailableatall.

Legal Proceedings

Elancoisfromtimetotimesubjecttoclaimsandlitigationarisingintheordinarycourseofbusiness.Theseclaimsandlitigationmayinclude,amongotherthings,allegationsofviolationofU.S.andforeigncompetitionlaw,laborlaws,consumerprotectionlawsandenvironmentallawsandregulations,aswellasclaimsorlitigationrelatingtoproductliability,intellectualproperty,securities,breachofcontractandtort.Elancooperatesinmultiplejurisdictionsand,asaresult,aclaiminonejurisdictionmayleadtoclaimsorregulatorypenaltiesinotherjurisdictions.Elancointendstovigorouslydefendagainstanypendingorfutureclaimsandlitigation,asappropriate.

Atthistime,intheopinionofElanco'smanagement,thelikelihoodisremotethattheimpactofsuchproceedings,eitherindividuallyorintheaggregate,wouldhaveamaterialadverseeffectonElanco'scombinedresultsofoperations,financialconditionorcashflows.However,oneormoreunfavorableoutcomesinanyclaimorlitigationagainstElancocouldhaveamaterialadverseeffectfor

TableofContents

theperiodinwhichtheyareresolved.Inaddition,regardlessoftheirmeritsortheirultimateoutcomes,suchmattersarecostly,divertmanagement'sattentionandmaymateriallyadverselyaffectElanco'sreputation,evenifresolvedinitsfavor.

Available Information

Elanco'swebsiteaddressiswww.elanco.com .OnElanco'swebsite,thecompanymakesavailable,freeofcharge,itsannual,quarterlyandcurrentreports,includingamendmentstosuchreports,assoonasreasonablypracticableafterthecompanyelectronicallyfilessuchmaterialwith,orfurnishessuchmaterialto,theSEC.

InformationrelatingtocorporategovernanceatElanco,includingElanco'sCorporateGovernanceGuidelines,CodeofConduct,FinancialCodeofEthics,ArticlesofIncorporation,Bylaws,CommitteeCharters;informationconcerningElanco'sexecutiveofficersandmembersofitsboardofdirectors;andwaystocommunicateareavailableonElanco'swebsite.ElancowillprovideanyoftheforegoinginformationwithoutchargeuponwrittenrequesttoElanco'sCorporateSecretary,Elanco,2500InnovationWay,Greenfield,Indiana46140.InformationrelatingtoshareholderservicesisalsoavailableonElanco'swebsite.TheinformationcontainedonElanco'swebsitedoesnotconstituteapartofthisprospectus.

TableofContents

MANAGEMENT

Directors and Executive Officers

Thefollowingtablesetsforththenames,ages,asofMay10,2019,andtitlesofElanco'sexecutiveofficersandmembersofElanco'sboardofdirectors.Certainbiographicalinformationwithrespecttothoseexecutiveofficersanddirectorsfollowsthetable.

Jeffrey N. Simmons hasservedasElanco'sPresidentandChiefExecutiveOfficerandasadirectoronElanco'sboardsinceJuly2018.Mr.SimmonsservedasthePresidentoftheElancoAnimalHealthdivisionofLillyandSeniorVicePresidentofLillyfrom2008untilSeptember2018.Priorto2008,Mr.SimmonsheldvariousleadershiprolesforElanco,includingDistrictSalesManager,InternationalMarketingManager,CountryDirectorforBrazil,AreaDirectorforWesternEuropeandExecutiveDirectorforU.S.andGlobalResearch&Development.

Mr.Simmons'experiencedescribedabove,includinghisknowledgeofElancoandtheanimalhealthindustryandhisbusinessandmanagementexperience,provideshimwiththequalificationsandskillstoserveasadirectoronElanco'sboard.

Todd S. Young hasservedasElanco'sExecutiveVicePresidentandChiefFinancialOfficersinceNovember2018.PriortojoiningElanco,Mr.YoungwastheExecutiveVicePresidentandChiefFinancialOfficeratACADIAPharmaceuticalssince2016.PriortohistimeatACADIA,Mr.YoungservedasSeniorVicePresidentandTreasurerleadingthecreationofacapitalstructureforBaxaltaupuntiltheiracquisitionbyShireinJune2016.PriortoBaxalta,Mr.Youngworkedforover14yearsatBaxterinmultipleleadershiproles,includingCorporateVicePresidentandTreasurer,VicePresident,InternationalFinance,andVicePresident,GlobalFinancialPlanningandAnalysis.

James M. Meer hasservedasElanco'sVicePresidentandChiefAccountingOfficersinceSeptember2018.PriortojoiningElanco,Mr.MeerservedastheChiefFinancialOfficerofHealthx,Inc.sinceJune2017.PriortojoiningHealthx,heservedasSeniorVicePresidentofFinanceatAppiriofrom2014to2017andasVicePresidentandCorporateControlleratSalesforce(previouslyExactTarget)from2011to2014.Priorto2011,Mr.Meerheldvariousfinancial,accountingandstrategy

Name Age PositionJeffreyN.Simmons 51 President,ChiefExecutiveOfficerandDirectorToddS.Young 47 ExecutiveVicePresidentandChiefFinancialOfficerJamesM.Meer 49 VicePresident,ChiefAccountingOfficerRamiroM.Cabral 47 ExecutiveVicePresident,ElancoInternationalMichael-BryantHicks 44 ExecutiveVicePresident,GeneralCounselandCorporateSecretaryDavidS.Kinard 52 ExecutiveVicePresident,HumanResourcesSarenaS.Lin 48 ExecutiveVicePresident,ElancoUSA,CorporateStrategyandGlobalMarketingAaronL.Schacht 52 ExecutiveVicePresident,Innovation,RegulatoryandBusinessDevelopmentDavidA.Urbanek 53 ExecutiveVicePresident,ManufacturingandQualityR.DavidHoover 73 Director(Chairman)KapilaK.Anand 65 DirectorJohnP.Bilbrey 62 DirectorArtA.Garcia 58 DirectorMichaelJ.Harrington 56 DirectorDeborahT.Kochevar 63 DirectorLawrenceE.Kurzius 61 DirectorKirkMcDonald 52 DirectorDeniseScots-Knight 60 Director

TableofContents

positionsat3M(previouslyAearoTechnologiesInc.),Hill-Rom,HillenbrandIndustriesandErnst&YoungLLP.Mr.Meerisacertifiedpublicaccountant.

Ramiro M. Cabral hasservedasElanco'sExecutiveVicePresident,ElancoInternationalsinceJanuary2019.Mr.CabralservedasExecutiveVicePresident,ElancoInternationalandGlobalCustomerValuefromJuly2018toDecember2018andasVicePresidentandChiefMarketingOfficeroftheElancoAnimalHealthdivisionofLillyfrom2017untilSeptember2018.Mr.CabraljoinedLillyin2005andheldvariousleadershippositionsforElanco,includingVicePresidentandHeadofOperationsforElancoEMEAfrom2013to2017andSeniorDirector,U.S.BeefBusinessUnitfrom2011to2013.

Michael-Bryant Hicks hasservedasElanco'sExecutiveVicePresident,GeneralCounselandCorporateSecretarysinceJuly2018.Mr.HicksservedasGeneralCounseloftheElancoAnimalHealthdivisionofLillyfromMay2018toSeptember2018.PriortojoiningElanco,Mr.Hicksservedinvariouslegalroles,includingGeneralCounselatMallinckrodtPublicLiabilityCompanyfrom2016to2018,SeniorVicePresident,GeneralCounselandCorporateStrategyatTheProvidenceServiceCorporationfrom2014to2016andasAssistantGeneralCounselatDaVitaInc.from2011to2013.

David S. Kinard hasservedasElanco'sExecutiveVicePresident,HumanResourcessinceJanuary2019.Mr.KinardservedasElanco'sExecutiveVicePresident,HumanResourcesandCorporateAffairsfromJuly2018toDecember2018andasVicePresidentofHumanResourcesandGlobalLearningandDevelopmentfortheElancoAnimalHealthdivisionofLillyfromMay2018toSeptember2018.PriortoMay2018,Mr.KinardservedinvariousleadershiprolesforLilly,includingVicePresidentofHumanResourcesforavarietyofLillybusinesses,includingLillyInternationalin2017,Bio-MedicinesandEmergingMarketsfrom2015to2017andLillyDiabetesandGlobalEmployeeRelations/HROperationsfrom2011to2015.

Sarena S. Lin hasservedasElanco'sExecutiveVicePresident,ElancoUSA,CorporateStrategyandGlobalMarketingsinceJanuary2019.Ms.LinservedasExecutiveVicePresident,ElancoUSAandGlobalStrategyfromJuly2018toDecember2018andasSeniorVicePresidentofNorthAmericanOperationsandStrategyattheElancoAnimalHealthdivisionofLillyfromJanuary2018toSeptember2018.PriortojoiningLilly,Ms.LinservedasPresidentofCargillFeed&Nutritionfrom2014to2017.Priorto2014,Ms.LinservedasGlobalHeadofStrategyandBusinessDevelopmentforCargillfrom2011to2014.Ms.Linservedontheboardofdirectorsfortheanimalhealthanddentaldistributor,PattersonCompanies,from2014to2018.

Aaron L. Schacht hasservedasElanco'sExecutiveVicePresident,Innovation,RegulatoryandBusinessDevelopmentsinceJuly2018.Mr.SchachtservedastheVicePresidentofglobalresearchanddevelopmentoftheElancoAnimalHealthdivisionofLillyfrom2015toSeptember2018.Priorto2015,Mr.SchachtservedinvariousleadershiprolesforLilly,includingGlobalBrandDevelopmentLeaderofPaininLillyBioMedicinesin2014,SeniorAdvisorofStrategy&BusinessDevelopmentforLillyBioMedicinesfrom2012to2014andExecutiveDirectorofGlobalExternalR&DatLillyfrom2008to2012.

David A. Urbanek hasservedasElanco'sExecutiveVicePresident,ManufacturingandQualitysinceJuly2018.Mr.UrbanekservedasVicePresidentofManufacturingattheElancoAnimalHealthdivisionofLillyfromNovember2017toSeptember2018.Priortothat,Mr.UrbanekservedinvariousleadershiprolesforLilly'sManufacturingdivision,includingSeniorDirectorofEmergingMarketsManufacturingfrom2013to2017,SeniorDirectorofGlobalDiabetesManufacturingfrom2011to2013andSeniorDirectorofExternalDrugProductsOperationsfrom2009to2011.

R. David Hoover hasservedasthechairmanofElanco'sboardsinceMay2018.Mr.Hooverhasbeenretiredsince2013.Priortothat,Mr.HooverservedinvariousrolesatBallCorporation,includingChairmanfrom2002to2013,ChiefExecutiveOfficerfrom2010to2011,PresidentandChief

TableofContents

ExecutiveOfficerfrom2001to2010,ChiefOperatingOfficerfrom2000to2001andChiefFinancialOfficerfrom1998to2000.Mr.HoovercurrentlyservesontheboardsofdirectorsofBallCorporationandEdgewellPersonalCareCompany.

Mr.Hoover'sexperiencedescribedabove,includinghisextensivemanagementexperienceasChiefExecutiveOfficerandChiefFinancialOfficeratBallCorporationandcorporategovernanceexperiencethroughhisserviceonotherpublicboards,includingnineyearshepreviouslyservedasadirectorforLilly,provideshimwiththequalificationsandskillstoserveasadirectoronElanco'sboard.

Kapila K. Anand hasservedasadirectoronElanco'sboardsinceSeptember2018.Ms.AnandhasservedasaSeniorAdvisortoKPMGLLPsince2016.Priortothat,Ms.AnandservedinvariousleadershiprolesasapartneratKPMGLLP,includingIndustrySegmentLeader—Travel,LeisureandHospitalityfrom2011to2017,PartnerinCharge—PublicPolicyBusinessInitiativesfrom2009to2013,KPMGLLPBoardmemberfrom2005to2010,AdvisoryLeader—PrivateEquity,RealEstateandHospitalityfrom2002to2009andAuditPartner—RealEstateandHospitalityfrom1989to2002.Ms.AnandcurrentlyservesontheboardsofdirectorsofExtendedStayAmerica,Inc.andOmegaHealthcareInvestors,Inc.

Ms.Anand'sexperiencedescribedabove,includingherextensivefinancial,managerialandcorporategovernanceexperience,providesherwiththequalificationsandskillstoserveasadirectoronElanco'sboard.

John P. Bilbrey ,alsoknownasJ.P.,hasservedasamemberoftheBoardsinceMarch2019.HeservedastheCEOandPresidentofTheHersheyCompany,amultinationalconsumerfoodcompany,from2011untilhisretirementin2017,andasChairmanoftheBoardfrom2015until2018.Previously,Mr.BilbreyservedinvariousrolesatTheHersheyCompany,includingastheChiefOperatingOfficerandEVPfrom2010to2011,thePresidentofNorthAmericafrom2007to2010,thePresidentofInternationalCommercialgroupfrom2005to2007.PriortojoiningTheHersheyCompany,heheldleadershippositionsatMissionFoods,DanoneWatersofNorthAmerica,Inc.,BilbreyFarmsandRanchandProcter&GambleCompany.Mr.BilbreycurrentlyservesontheboardofdirectorsofColgate-PalmoliveCompanyandhaspreviouslyservedontheboardsofdirectorsofTheHersheyCompanyandMcCormick&Company,Incorporated.

Mr.Bilbrey'sexperiencedescribedabove,includingtheuniquecombinationoflivestockproduction,foodindustryandconsumerinsightsexperience,provideshimwiththequalificationsandskillstoserveasadirectoronElanco'sboard.

Art A. Garcia hasservedasamemberoftheBoardsinceMay2019.Mr.GarciaservedinvariousleadershiprolesatRyderSystems,Inc.,includingExecutiveVicePresidentandChiefFinancialOfficerfrom2010untilhisretirementinApril2019,SeniorVicePresidentandControllerfrom2005to2010andVicePresidentandControllerfrom2002to2005.Mr.Garciaisacertifiedpublicaccountant.Mr.GarciacurrentlyservesontheboardofdirectorsofABMIndustriesIncorporated.

Mr.Garcia'sexperiencedescribedaboveandhisextensivestrategic,financialandtechnicalexpertise,aswellasstrongfocusongrowth,provideshimwiththequalificationsandskillstoserveasadirectoronElanco'sboard.

Michael J. Harrington hasservedasadirectoronElanco'sboardsinceSeptember2018.Mr.HarringtonhasservedastheSeniorVicePresidentandGeneralCounselforLillysinceJanuary2013.Priorto2013,Mr.HarringtonservedinvariouslegalrolesforLilly,includingVicePresidentandDeputyGeneralCounselofGlobalPharmaceuticalOperationsfrom2010to2012andVicePresidentandGeneralCounsel,Corporatefrom2004to2010.

TableofContents

Mr.Harrington'sexperiencedescribedabove,includinghisknowledgeofElancoandtheanimalhealthindustryandhisbusinessandmanagementexperience,provideshimwiththequalificationsandskillstoserveasadirectoronElanco'sboard.

Deborah T. Kochevar ,D.V.M.,Ph.D.,DACVCP,hasservedasamemberoftheBoardsinceMarch2019.Dr.KochevarhasservedhasservedastheprovostandseniorvicepresidentadinterimatTuftsUniversitysince2018.SheservedastheDeanoftheCummingsSchoolofVeterinaryMedicineatTuftsUniversityfrom2006through2018.Previously,Dr.Kochevarwasalong-timefacultymemberandadministratorattheCollegeofVeterinaryMedicineandBiomedicalSciences,TexasA&MUniversity,wheresheheldtheWileyChairofVeterinaryMedicalEducation.Dr.Kochevarisapast-presidentoftheAssociationofAmericanVeterinaryMedicalCollegesandAmericanCollegeofVeterinaryClinicalPharmacology.Dr.KochevarisactiveintheAmericanVeterinaryMedicalAssociation,havingchaireditsCouncilonEducationandtheEducationalCommissionforForeignVeterinaryGraduates.Dr.KochevarcurrentlyservesontheboardofdirectorsofCharlesRiverLaboratoriesInternational,Inc.

Dr.Kochevar'sexperiencedescribedabove,includingherdeepanimalhealthexpertiseandOneHealthapproach,willaddtoElanco'sfocusondeliveringbest-in-classinnovationacrosstheportfolioandprovidesherwiththequalificationsandskillstoserveasadirectoronElanco'sboard.

Lawrence E. Kurzius hasservedasadirectoronElanco'sboardsinceSeptember2018.Mr.KurziushasservedinvariousleadershiprolesatMcCormick&Company,includingdirectorsince2015andChairmanoftheBoardofDirectorssince2017,ChiefExecutiveOfficersince2016,Presidentsince2015,ChiefOperatingOfficerfrom2015to2016,ChiefAdministrativeOfficerfrom2013to2015,President,InternationalBusinessesfrom2008to2013,President,Europe,MiddleEastandAfricafrom2007to2008andPresident,U.S.ConsumerFoodsfrom2005to2006.

Mr.Kurzius'experiencedescribedabove,includinghisextensivemanagementexperienceandcorporategovernanceexperience,provideshimwiththequalificationsandskillstoserveasadirectoronElanco'sboard.

Kirk McDonald hasservedasamemberoftheBoardsinceMarch2019.Mr.McDonaldhasservedastheChiefMarketingOfficerofXandr,AT&T'sAdvertisingandAnalyticscompany,sinceNovember2017.PriortoXandr,McDonaldservedasthePresidentofPubMatic,acompanydevelopingandimplementingonlineadvertisingsoftwareandstrategies,since2011.BeforejoiningPubMatic,hewasPresidentofDigitalatTimeInc.,from2009to2011andtheChiefAdvertisingOfficeroftheFortune--MoneyGroup.HehasalsoservedastheSVPofSales,MarketingandClientServicesforDRIVEpmandAtlas,bothunitsofMicrosoft'sadvertisingbusiness,aswellasinvariousrolesatCNET,ZiffDavisandCondéNast.McDonaldservesonseveralprofessionalandnot-for-profitboards.HewasaformeradvisorontheLUMAPartnersboardandiscurrentlytheChairmanofanon-profit,CodeInteractive,whichisfocusedoninspiringthenextgenerationoftechnologyleadersfromunderservedcommunities.

Mr.McDonald'sexperiencedescribedabove,includinghisproficiencydrivingdigitaltransformation,marketingcapabilityandknow-howinusingcutting-edgetechnologytoconnectwithtoday'scustomers,provideshimwiththequalificationsandskillstoserveasadirectoronElanco'sboard.

Denise Scots-Knight ,PhD,hasservedasamemberoftheBoardsinceMarch2019.Dr.Scots-Knightwastheco-founderof,andhasservedastheChiefExecutiveOfficerandmemberoftheboardofMereoBioPharmaGroupplc,aspecialtybiopharmaceuticalcompany,since2015.From2010until2015,shewastheManagingPartnerofPhase4PartnersLtd.,agloballifescienceventurecapitalfirm.From2004to2010,Dr.Scots-KnightwasheadofNomuraPhase4Ventures,aventurecapitalaffiliateofNomuraInternationalplc,aleadingJapanesefinancialinstitution.Dr.Scots-Knighthasservedon

TableofContents

theboardsofdirectorsofOncomedPharmaceuticals,Inc.,IdenixPharmaceuticals,Inc.andNabrivaTherapeuticsAG.

Dr.Scots-Knight'sexperiencedescribedabove,includingherextensivepreviousboardleadership,historyleadinganinnovationandgrowth-orientedcompany,andexpertisebuildinginnovationmodelsandpartnerships,providesherwiththequalificationsandskillstoserveasadirectoronElanco'sboard.

Board of Directors

Elanco'sbusinessandaffairsaremanagedunderthedirectionofitsboardofdirectors.Elanco'samendedandrestatedarticlesofincorporationandamendedandrestatedbylawsprovidethatitsboardofdirectorswillconsistofnotlessthanfivedirectors.AsofMay10,2019,Elanco'sboardofdirectorsiscomposedof10directors.CertainindividualswhoservedasElanco'sdirectorswhowereofficersoremployeesofLillyresigneduponthecompletionoftheSplit-Off,andatsuchtimeweappointedadditionalindependentdirectors.

Elanco'sboardisdividedintothreeclasses,denominatedasClassI,ClassIIandClassIII,witheachclassholdingofficeforstaggeredthree-yearterms.AteachannualmeetingofElanco'sshareholdersbeginningin2019,thesuccessorstothedirectorswhosetermexpiresatthatmeetingwillbeelectedtoserveuntilthethirdannualmeetingaftertheirelectionoruntiltheirsuccessorshavebeenelectedandqualified.Currentlythemembersofeachclassinclude:

ClassI(termsexpiringatthe2022annualmeeting):KapilaK.Anand,JohnP.Bilbrey,R.DavidHooverandLawrenceE.Kurzius.

ClassII(termsexpiringatthe2020annualmeeting):MichaelJ.Harrington,DeborahT.KochevarandKirkMcDonald.

ClassIII(termsexpiringatthe2021annualmeeting):ArtA.Garcia,DeniseScots-KnightandJeffreyN.Simmons.

Director Independence

Theboardannuallydetermines,takingintoconsiderationtherecommendationsoftheNominatingandCorporateGovernanceCommittee,anddisclosestheindependenceofdirectors.Nodirectorisconsideredindependentunlesstheboardhasdetermined,basedonallrelevantfactsandcircumstances,thatheorshehasnomaterialrelationshipwiththecompany,eitherdirectlyorasapartner,significantshareholder,orofficerofanorganizationthathasamaterialrelationshipwiththecompany.TheboardhasadoptedthecategoricalindependencestandardsfordirectorsestablishedintheNYSElistingstandards.

OntherecommendationoftheNominatingandCorporateGovernanceCommittee,theboardhasdeterminedthateachofKapilaK.Anand,JohnP.Bilbrey,ArtA.Garcia,R.DavidHoover,DeborahT.Kochevar,LawrenceE.Kurzius,KirkMcDonaldandDeniseScots-KnightisindependentundertheapplicablerulesoftheNYSEandtheExchangeAct.TheboardalsodeterminedthateachofthemembersoftheAuditCommittee,theCompensationCommittee,andtheNominatingandCorporateGovernanceCommitteealsomeetourindependencestandards.Theboarddeterminedthatnoneofthenon-employeedirectors,otherthanMichaelJ.Harrington,hashadduringthelastthreeyears(i)anyoftherelationshipsidentifiedinthecompany'scategoricalindependencestandardsor(ii)anyothermaterialrelationshipwiththecompanythatwouldcompromisehisorherindependence.

Compensation Committee Interlocks and Insider Participation

Elancodoesnothaveanyinterlockingrelationshipsbetweenanymembersofitscompensationcommitteeandanyofitsexecutiveofficersthatwouldrequiredisclosureundertheapplicablerulespromulgatedunderthefederalsecuritieslaws.

TableofContents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Introduction

Thiscompensation,discussionandanalysis("CD&A")providesdetailedinformationregardingElanco'sChiefExecutiveOfficer,ChiefFinancialOfficer,formerChiefFinancialOfficer,formerActingChiefFinancialOfficerandthreemosthighly-compensatedexecutiveofficerswhoarenamedbelow(collectively,the"NamedExecutiveOfficers")withrespectto2018compensation:

PriortotheIPO,Elanco'sbusinessoperatedaspartofadivisionofLilly.Asaresult,thediscussioninthisCD&AasitrelatestoElanco'scompensationprogramspriortotheIPO,relatestoLilly'scompensationphilosophybecauseLillyestablishedandmanagedthecompensationforalloftheNamedExecutiveOfficersuntilthecompletionoftheIPOonSeptember24,2018.BecauseMs.LinandMessrs.Montarce,Jensen,KinardandUrbanekwerenotexecutiveofficersofLilly,theircompensationpriortotheIPOwasdeterminedbyLilly'sseniormanagementconsistentwithLilly'scompensationphilosophy,butwasnotspecificallydeterminedorreviewedbytheLillycompensationcommittee.AsaLillyexecutiveofficerpriortotheIPO,Mr.Simmons'compensationwasreviewedanddeterminedbyLilly'scompensationcommittee,withtheadviceofthecompensationconsultantengagedbyLilly'scompensationcommittee.

InconnectionwiththeIPO,theElancoboardofdirectorsapprovedthepaypackagesfortheexecutiveofficersofElanco,includingcertainoftheNamedExecutiveOfficers.InconnectionwithhishiringfollowingtheIPO,Mr.Young'scompensationwasreviewedandapprovedbytheElancocompensationcommittee.ThisElancocompensationfor2018ismorefullydescribedbelowunder"ElancoCompensationProgram—CompensationArrangements."

ThisCD&AdiscussesthecompensationprogramsapplicabletoNamedExecutiveOfficersandtheircompensationthereunderin2018,includingadescriptionofLilly'scompensationphilosophy,theelementsofeachcompensationprogram,thefactorsthatLillyconsideredinsettingcompensation,andhowresultsaffectedincentivepayoutsfor2018performanceforeachoftheNamedExecutiveOfficerswithrespecttotheperiodpriortotheIPO.ThisCD&AalsodescribescertainelementsofElanco'scompensationprogramsandpoliciesfollowingtheIPOthroughDecember31,2018,whichlargelyreflectElanco'sdeterminationtogenerallymaintainLilly'scompensationphilosophyandotherelementsofLilly'scompensationprogramsandpoliciesthroughtheSplit-Off,withcertainadjustments

Name TitleJeffreyN.Simmons President,ChiefExecutiveOfficerandDirectorToddS.Young(1) ExecutiveVicePresidentandChiefFinancialOfficerSarenaS.Lin ExecutiveVicePresident,ElancoUSA,CorporateStrategyandGlobalMarketingDavidA.Urbanek ExecutiveVicePresident,ManufacturingandQualityDavidS.Kinard ExecutiveVicePresident,HumanResourcesChristopherW.Jensen(2) FormerChiefFinancialOfficerLucasE.Montarce(3) FormerActingChiefFinancialOfficer

(1) Mr.YounghasservedasElanco'sChiefFinancialOfficersinceNovember1,2018.

(2) Mr.JensenservedasElanco'sChiefFinancialOfficerbeginningonApril23,2018,butbeganamedicalleaveofabsenceonoraboutAugust1,2018anddidnotreturntohisposition.

(3) Mr.MontarcewasnamedActingChiefFinancialOfficeronAugust1,2018andservedinthatrolethroughOctober31,2018.

TableofContents

topaypackagesinconnectionwiththeIPOasdescribedunder"ElancoCompensationProgram"below.

Lilly's Philosophy on Compensation

Lilly'scompensationprogramsaredesignedtohelpachievethegoalsofattracting,engagingandretaininghighlytalentedindividualswhoarecommittedtoitscorevaluesofintegrity,excellenceandrespectforpeoplewhilebalancingthelong-terminterestsofitsshareholdersandcustomers.

Lilly'scompensationandbenefitsprogramsarebasedonthefollowingobjectives:

• Reflect individual and company performance. Lillyreinforcesahigh-performanceculturebylinkingpaywithindividualperformanceandcompanyperformance.AsLillyemployeesassumegreaterlevelsofresponsibility,theproportionoftotalcompensationbasedoncompanyperformanceandshareholderreturnsincreases.Lillyperformsanannualreviewtoensureitsprogramsprovideincentivestodeliverlong-term,sustainablebusinessresultswhilediscouragingexcessiverisk-takingorotheradversebehaviors.

• Attract and retain talented employees. LillyaimsforcompensationopportunitiesatLillytobecompetitivewithitspeergroupandreflectthelevelofjobimpactandresponsibility.Retentionoftalentisanimportantfactorinthedesignofitscompensationandbenefitprograms.

• Implement broad-based programs. Whiletheamountofcompensationpaidtoemployeesvaries,theoverallstructureofLilly'scompensationandbenefitprogramsisbroadlysimilaracrosstheorganizationtoencourageandrewardallemployeeswhocontributetoitssuccess.

• Consider shareholder input. LillymanagementandtheLillycompensationcommitteeconsidertheresultsofitsannualsay-on-payvoteandothersourcesofshareholderfeedbackwhendesigningLilly'scompensationandbenefitprograms.

ForthetimebetweenthecompletionoftheIPOandtheendoftheperformanceperiodonDecember31,2018,ElancogenerallycontinuedLilly'scompensationphilosophy.TheElancocompensationcommitteewillfurtherreviewandadjustthisphilosophyasitdeemsappropriatein2019.

Compensation Processes and Analysis

Process for Setting Compensation

TheLillycompensationcommitteeconsideredindividualperformanceassessments,compensationrecommendationsfromseniorleadership,Lilly'scompanyperformance,Elancoperformance(asapplicable),Lilly'speergroupdata,inputfromitscompensationconsultantanditsownjudgmentwhendeterminingcompensationforitsexecutiveofficers.WhendeterminingthecompensationforemployeeswhowerenotexecutiveofficersofLilly,Lilly'sseniormanagementconsideredsimilarfactorsconsistentwithLilly'sphilosophy,focusingonindividualperformanceassessments,compensationrecommendationsfromseniorleadership,Elanco'sperformance(asapplicable)andtheirownjudgment.

• Assessment of individual performance. TheapplicableNamedExecutiveOfficer'sindividualperformanceassessmentwasbasedonachievementofobjectivesestablishedatthestartofeachyear,includingthedemonstrationofLillyvaluesandleadershipbehaviors.

• Assessment of company performance. LillycompanyperformanceandElancoperformance,asapplicable,wereconsideredintwoways:

• Overallperformanceoftheprioryearbasedonavarietyofmetrics,whichwasafactorinestablishingtargetcompensation.

TableofContents

• Specificperformancegoalswereestablishedatthebeginningofeachperformanceyeartodeterminepayoutsundercashandequityincentiveprograms.

• Peer group analysis. Lillyuseddatafromitspeergroupasamarketcheckforcompensationdecisions,butdidnotusethisdataasthesolebasisforitscompensationtargets.

• Input from an independent compensation consultant concerning executive pay. Lilly'scompensationcommitteereceivedtheadviceofitsindependentcompensationconsultant,FredericW.Cook&Co.,Inc.,whensettingLillyexecutiveofficercompensation.

Lilly Peer Group

Lilly'speergroupfor2018wascomprisedofcompaniesthatdirectlycompetedwithLilly,operatedinasimilarbusinessmodelandemployedpeoplewiththeuniqueskillsrequiredtooperateanestablishedbiopharmaceuticalcompany.Lilly'scompensationcommitteeselectedapeergroupwhosemedianmarketcapandrevenueswerebroadlysimilartoLilly's.Lilly'speergroupfor2018consistedofthefollowingcompanies:

WiththeexceptionofJohnson&Johnson,NovartisandPfizer,peercompanieswerenogreaterthanthreetimesLilly'ssizeonbothmeasures.Lilly'scompensationcommitteeincludedthesethreecompaniesdespitetheirsizebecausetheycompetedirectlywithLilly,havesimilarbusinessmodelsandseektohirefromthesamepoolofmanagementandscientifictalent.

Components of Executive Compensation

TheexecutivecompensationprogramfortheNamedExecutiveOfficersfor2018,bothbeforeandaftertheIPO,wasprimarilycomprisedofbasesalary,annualcashbonusandequityawards.

• PriortotheIPO,theannualcashbonusprogramsincluded:

• ElancoCorporateBonusPlan("ElancoBonusPlan"),underwhichbonusesarecalculatedbasedonElanco'sperformanceascomparedtoElanco'sinternaltargetsforrevenueandoperatingmargin,Elanco'sinnovationprogressandLilly'sperformanceunderTheEliLillyandCompanyBonusPlan("LillyBonusPlan").Mr.Simmons'bonuspayoutundertheElancoBonusPlanwasalsosubjecttothetermsoftheLillyExecutiveOfficerIncentivePlan(EOIP)throughthedateoftheIPO;and

• LillyBonusPlan,underwhichbonusesarecalculatedbasedonLilly'sperformanceascomparedtoLilly'sinternaltargetsforrevenue,earningspershare("EPS"),andLillyinnovationprogress.

• FollowingtheIPO,ElancomaintainedtheElancoBonusPlanwiththesamemetricsandeligibilityfortheremainderof2018,butadjustedtheannualbonustargetsforcertainNamedExecutiveOfficers.Mr.Simmons'bonuspayoutfortheperiodfollowingtheIPOwasnolongersubjecttotheEOIP.See"2018Compensation—SettingTargetCompensation—AnnualCashBonusTargets"below.

Abbvie Celgene MerckAmgen Gilead NovartisAstraZeneca GlaxoSmithKline PfizerBaxter Hoffman-LaRoche Sanofi-AventisBiogen Johnson&Johnson ShireBristol-MyersSquibb Medtronic

TableofContents

• PriortotheIPO,equityincentivesincluded:

• Performanceawards("LillyPAs"),whichareLillyequityawardswithaperformancecomponentmeasuringLilly'stwo-yeargrowthinEPSrelativetotheexpectedpeergroupgrowth.ForperformanceawardsgrantedtoLillyexecutiveofficers("ExecutiveOfficerPAs"),includingMr.Simmons,thetwo-yearperformanceperiodisimmediatelyfollowedbyathirteen-monthservice-vestingperiod;

• Shareholdervalueawards("LillySVAs"),whichareLillyequityawardswithaperformancecomponentmeasuringabsoluteLillystockpricegrowthoverathree-yearperformanceperiod.ForshareholdervalueawardsgrantedtoLillyexecutiveofficers("ExecutiveOfficerSVAs"),includingMr.Simmons,Lillyalsoappliesameasureoftotalshareholderreturn("TSR")relativetopeersandaone-yearholdingperiod;and

• LillyRestrictedStockUnits("LillyRSUs"),whichareLillytime-vestedequityawardsissuedtoexecutivesforpurposesofretentionortopartiallyoffsetoutstandingawardsthatwereforfeitedwhentransitioningtheiremploymenttoLilly.

• FollowingtheIPO,equityawardsincluded:

• Elancostockoptions("ElancoOptions"),whichareElancononqualifiedstockoptionswithathree-yearvestingperiodfollowedbyaseven-yearexerciseperiod.ElancoOptionswereissuedtocertainexecutiveofficersofElanco,includingourNamedExecutiveOfficers(otherthanMr.MontarceandMr.Young,whojoinedElancoonNovember1,2018);and

• ElancoRestrictedStockUnits("ElancoRSUs"),whichareElancotime-vestingequityawardsissuedtocertainexecutiveofficersofElanco,includingourNamedExecutiveOfficers(otherthanMr.Montarce).

LillyemployeespriortotheIPO,whichincludedtheNamedExecutiveOfficers(otherthanMr.Young),alsoreceivedacompanybenefitspackage,describedbelowunder"OtherCompensationPracticesandInformation—EmployeeBenefits."FollowingtheIPO,Elancoemployees,includingtheNamedExecutiveOfficers,receivedbenefitsthatweresubstantiallysimilartotheLillybenefitspackagepriortotheIPO.

1. Base Salary

BasesalariesforLillyemployees,includingfortheNamedExecutiveOfficerswhowereLillyemployeespriortotheIPO,werereviewedandestablishedannuallybyLillyandmaybeadjusteduponpromotion,followingachangeinjobresponsibilitiesortomaintainmarketcompetitiveness.Salariesarebasedoneachperson'slevelofcontribution,responsibility,expertiseandcompetitivenesswithLillypeergroupdata.

Basesalaryincreasesfor2018wereestablishedbaseduponaLillycorporatebudgetforsalaryincreases,whichweresetconsideringLillyperformanceovertheprioryear,expectedLillyperformanceforthefollowingyearandgeneralexternaltrends.Insettingsalaries,Lillyseekstoretain,motivateandrewardsuccessfulperformers,whilemaintainingaffordabilitywithinthecompany'sbusinessplan.

InconnectionwiththeIPO,thebasesalariesofcertainoftheNamedExecutiveOfficerswereadjustedasdescribedunder"ElancoCompensationProgram"below.

2. Annual Cash Bonus

TheNamedExecutiveOfficersparticipatedintheElancoBonusPlanduring2018,whichwasadministeredbyLillypriortotheIPOandbyElancofortheperiodfromthecompletionoftheIPOthroughDecember31,2018.TheElancoBonusPlanfor2018wasdesignedtorewardtheachievement

TableofContents

ofElanco'sfinancialgoals,innovationobjectivesandcontributionstoLilly'soverallfinancialsuccessfortheyear.Thebonusisbasedonfourareasthataremeasuredrelativetointernaltargets:Elancorevenue,Elancooperatingmargin,ElancoinnovationprogressandLillycorporateobjectivesasmeasuredundertheLillyBonusPlan(referredtoastheLillyBonusPlanMultiple).

Mr.KinardalsoparticipatedintheLillyBonusPlanthroughApril2018afterwhichheparticipatedintheElancoBonusPlan.Mr.MontarceparticipatedintheElancoBonusPlanthroughOctober2018,atwhichtimehesteppeddownfromserviceasElanco'sActingCFOtoreturntoLilly,afterwhichheparticipatedintheLillyBonusPlan.TheLillyBonusPlanisdesignedtorewardtheachievementofLilly'sfinancialgoalsandinnovationobjectives.Thebonusisbasedonthreeareasthataremeasuredrelativetointernaltargets:Lillyrevenue,LillyEPSandLillyinnovationprogress.

ElancoandLillyperformancegoalsundertheElancoBonusPlanandtheLillyBonusPlanandindividualbonustargetsaresetatthebeginningofeachyear.Actualpayoutcanrangefrom0%to200%ofanindividual'sbonustarget.Performancetargetsandtheassessmentoftherelativeweightingforeachobjectiveisbaseduponannualoperatingplanswithathreshold,targetandmaximumsetforeachobjective(withstraightlineinterpolationforachievementbetweenrelevantlevels).The2018weightingswereasfollows:

Elanco Bonus Plan

Basedonthisweighting,theElancoBonusPlanmultipleiscalculatedasfollows:

(0.25 × revenue multiple) + (0.25 × operating margin multiple) + (0.25 × innovation multiple) + (0.25 × Lilly Bonus Plan Multiple) = Elanco Bonus Plan multiple

TheannualElancoBonusPlanpayoutforeachindividualiscalculatedasfollows:

Elanco Bonus Plan multiple × individual bonus target × base salary earnings = payout

Lilly Bonus Plan

Basedonthisweighting,theLillyBonusPlanmultipleiscalculatedasfollows:

(0.25 × revenue multiple) + (0.50 × EPS multiple) + (0.25 × innovation multiple) = Lilly Bonus Plan multiple

TheannualLillyBonusPlanpayoutforeachindividualiscalculatedasfollows:

Lilly Bonus Plan multiple × individual bonus target × base salary earnings = payout

ForMr.Simmons,whowasaLillyexecutiveofficerpriortotheIPO,theannualbonuswassubjecttothetermsoftheLillyExecutiveOfficerIncentivePlan(EOIP).UndertheEOIP,themaximumannualcashbonusallowableiscalculatedbasedonLilly'snon-GAAPnetincomefortheyear.ForMr.Simmons,themaximumamountfor2018was0.15%ofnon-GAAPnetincome,whichwouldonly

Elanco Goals Weighting Elancorevenueperformance 25%Elancooperatingmarginperformance 25%Elancoinnovationprogress 25%LillyBonusPlanMultiple 25%

Lilly Goals Weighting Lillyrevenueperformance 25%LillyEPSperformance 50%Lillyinnovationprogress 25%

TableofContents

applyfortheportionoftheyearduringwhichhewasaLillyexecutiveofficer.NoneoftheLillyexecutiveofficers,whichincludedMr.SimmonspriortotheIPO,receiveanannualcashbonuspaymentunlessLillyhaspositivenon-GAAPnetincomefortheyear.

UndertheEOIP,oncethemaximumpayoutforMr.Simmonshasbeendetermined,theLillycompensationcommitteehasthediscretiontoreduce(butnotincrease)theamounttobepaid.Inexercisingthisdiscretion,thecommittee'sintentistoawardthelesserof(i)thebonusMr.SimmonswouldhavereceivedundertheElancoBonusPlanor(ii)theEOIPmaximumpayout.Accordingly,for2018,theLillycompensationcommittee,initsdiscretion,reducedMr.Simmons'bonuspayoutundertheEOIPtoalevelthatwasbasedentirelyonElancoperformance,whichwaspro-ratedfortheperiodpriortotheIPOduringwhichhewasaLillyexecutiveofficer.FordetailregardingElancoBonusPlanpayoutsbeforeandaftertheIPO,see"2018CompensationPayouts—ElancoBonusPlan"below.

3. Equity Incentives

Lillyprimarilygrantstwotypesofequityincentivestoexecutivesandcertainotheremployeesduringitsannualcycle—LillyPAsandLillySVAs.LillyPAsaredesignedtofocusleadersonmulti-yearoperationalperformancerelativetopeercompanies.LillySVAsalignearnedcompensationwithlong-termgrowthinLillyshareholdervalue.TheLillycompensationcommitteehasthediscretiontoadjustdownward(butnotupward)anyequityawardpayout,includingLillyexecutiveofficer'spayoutfromtheamountyieldedbytheapplicableformula.

ExecutiveOfficerPAsandExecutiveOfficerSVAsareawardedtoLillyexecutiveofficers,whichincludedMr.SimmonspriortotheIPO.TheElancoequityawardsgrantedtotheNamedExecutiveOfficersfollowingtheIPOaredescribedunder"ElancoCompensationProgram"below.

InconnectionwiththeSplit-Off,allthen-unvestedLillyequityawardsheldbytheNamedExecutiveOfficers(otherthanMr.Montarce,whowillremainemployedbyLilly)wereforfeitedfornoconsideration.TheElancocompensationcommitteehasauthorizedtheissuanceofElancoequityawardsofsimilarvalueanddurationtotheforfeitedawardsfollowingtheSplit-Off.See"2019Compensation"below.

Performance Awards (Lilly PAs and Executive Officer PAs)

Messrs.Kinard,Montarce,andUrbanekreceivedLillyPAsthatvestovertwoyears.PotentialLillysharesarebasedonachievingLillyEPSgrowthtargetsoveratwo-yearperformanceperiod.Thegrowth-ratetargetsaresetrelativetothemedianexpectedEPSgrowthforLilly'speergroup.Theseawardsdonotaccumulatedividends.

Lillyexecutiveofficers,includingMr.Simmons,receivedtheExecutiveOfficerPAs,whichusethesametwo-yearEPSgrowth-ratetargetsastheLillyPAsfordeterminingthenumberofLillyshares;however,theperformanceperiodisfollowedbyanadditionalthirteen-monthservice-vestingperiodduringwhichtheawardisheldintheformofLillyrestrictedstockunits.Executiveofficersaccumulatedividendequivalentunitsduringthethirteen-monthservicevestingperiodwhicharepaiduponthevestingoftheunderlyingaward.

TheLillycompensationcommitteebelievesEPSgrowthisaneffectivemeasureofoperationalperformancebecauseitiscloselylinkedtoshareholdervalue,isbroadlycommunicatedtothepublic,iseasilyunderstoodbyitsemployeesandallowsforobjectivecomparisonstoitspeergroupperformance.Consistentwithitscompensationobjectives,Lillycompanyperformanceexceedingtheexpectedpeergroupmedianresultsinabove-targetpayouts,whileLillycompanyperformancelaggingtheexpectedpeergroupmedianresultsinbelow-targetpayouts.Possiblepayoutsrangefrom0%to150%ofthetarget,dependingonLillyEPSgrowthovertheperformanceperiod.

TableofContents

Shareholder Value Awards (Lilly SVAs and Executive Officer SVAs)

Messrs.Kinard,MontarceandUrbanekreceivedLillySVAs.TheseawardsarebasedonLilly'ssharepriceappreciationoverathree-yearperformanceperiod.LillySVAspayabovetargetifLilly'sstockoutperformsanexpectedrateofreturnandbelowtargetifLilly'sstockunderperformsthatexpectedrateofreturn.Theexpectedrateofreturnisbasedonthethree-yearTSRthatareasonableinvestorwouldconsiderappropriatewheninvestinginabasketoflarge-capU.S.companies,asdeterminedbytheLillycompensationcommittee.TheminimumpricetoachievetargetiscalculatedbymultiplyingthestartingsharepriceofLilly'sstockbythethree-yearcompoundedexpectedrateofreturnlessLilly'sdividendyield.

Lillyexecutiveofficers,includingMr.Simmons,receivedExecutiveOfficerSVAs.TheseawardsarethesameasLillySVAsexceptexecutiveofficersreceivenopayoutifLilly'sTSRforthethree-yearperiodiszeroornegative,andamodifierbasedonLilly'sthree-yearcumulativeTSRrelativetoitspeercompanies'medianTSRperformancewillbeappliedtopayouts.IfLilly'sTSRisabovethemedianofLilly'speers,thepayoutisincreasedby1%foreverypercentagepointthatLilly'sTSRexceedsthemedian(uptoamaximumof20%).Likewise,ifLilly'sTSRisbelowthemedian,thepayoutwillbereducedbyuptoamaximumof20%.AddingtherelativeTSRmodifiertotheExecutiveOfficerSVAshelpsensureLillyexecutiveofficers'rewardsalignwithshareholderexperiencewhilealsorewardingstrongperformancerelativetoourpeergroup.

2018 Compensation

Setting Target Compensation

TheNamedExecutiveOfficers'2017compensationand2018compensationthroughSeptember19,2018wereapprovedbyLilly'scompensationcommitteeormanagement,asapplicable,fortheperiodsthatsuchpersonswereemployedbyLilly.TheNamedExecutiveOfficers'compensationfromSeptember20,2018throughDecember31,2018wasapprovedbytheElancoboardofdirectors,exceptforMr.Young,whojoinedElancoonNovember1,2018andwhosecompensationwasapprovedbytheElancocompensationcommittee.

Theactualcompensationreceivedin2018issummarizedbelowin"2018CompensationPayouts."

Base Salary

ThefollowingtableincludestheactualannualsalaryearnedbytheNamedExecutiveOfficersin2017and2018,asreflectedintheSummaryCompensationTableinthesectionentitled"ExecutiveCompensationTables"below.

Name 2017 Annual Base Salary

2018 Annual Base Salary

Mr.Simmons $ 688,118 $ 775,185(1)Mr.Young N/A $ 91,667Ms.Lin N/A $ 500,556(1)Mr.Urbanek $ 297,174 $ 381,885(1)Mr.Kinard $ 405,632 $ 420,972(1)Mr.Jensen N/A $ 390,345Mr.Montarce $ 280,673 $ 335,175

(1) RepresentsablendofsalarypriortotheIPOandasalaryincreaseinconnectionwiththeIPO.See"ElancoCompensationProgram"below.

TableofContents

Annual Cash Bonus Targets

Bonustargetsfor2017and2018areshowninthetablebelowasapercentageoftheNamedExecutiveOfficer'sactualbasesalaryearnings.ElancocontinuedtheexistingElancoBonusPlanforalloftheNamedExecutiveOfficersfortheperiodfromthecompletionoftheIPOthroughDecember31,2018andtheElancoboardofdirectorsadjustedbonustargetsforcertainoftheNamedExecutiveOfficersforthatperiod.

Lilly Equity Program—Target Grant Values

For2018pre-IPOequitygrants,LillysetthetotaltargetvalueforMessrs.Simmons,Urbanek,KinardandMontarcebasedoninternalpayequity,LillyandElanco(asapplicable)performance,individualperformanceandLillypeergroupdata(asapplicable).Mr.Simmonshad60%ofhisequitytargetallocatedtoExecutiveOfficerSVAsand40%toExecutiveOfficerPAs.Messrs.Urbanek,KinardandMontarcehad50%oftheirequityallocatedtoLillySVAsand50%toLillyPAs.Totaltargetvaluesforthe2017and2018equitygrantstotheapplicableNamedExecutiveOfficerswereasfollows:

2017 Bonus Target

Pre-IPO 2018

Bonus Target

Post-IPO 2018 Bonus

Target

Weighted 2018 Bonus Target (2)

Mr.Simmons 80% 80% 120% 91%Mr.Young N/A N/A 70% 70%Ms.Lin N/A 55% 60% 56%Mr.Urbanek 35% 45% 60% 49%Mr.Kinard 45% 45% 60% 49%Mr.Jensen N/A 70% 70% 70%Mr.Montarce 34% 40% 40% 40%

(1) The2017bonustargetsforMessrs.MontarceandUrbanekareaweightedaverageresultedfromchangesinpositionsheldduringtheyear.

(2) The2018bonustargetsforMs.LinandMessrs.Simmons,Urbanek,andKinardrepresentaweightedaverageoftheamountsapprovedbyLillymanagementfortheperiodpriortotheIPOandamountsapprovedbytheElancoboardofdirectorsinconnectionwiththeIPO.Foradditionaldetail,see"ElancoCompensationProgram"below.

Name 2017 Annual Equity Grant

2018 Annual Equity Grant

(1) Mr.Simmons $ 2,000,000 $ 1,200,000Mr.Young N/A N/AMs.Lin N/A N/AMr.Urbanek $ 80,000 $ 500,000Mr.Kinard $ 415,000 $ 400,000Mr.Jensen N/A N/AMr.Montarce $ 90,000 $ 300,000

(1) Ms.LinandMessrs.YoungandJensenwerenoteligibleforanannualLillyequitygrantsincetheywerenotactiveemployeesonJanuary1,2018.

TableofContents

Performance Goals for 2018 Lilly Incentive Programs

Annual Bonus Goals

PerformancetargetsfortheElancoBonusPlanandtheLillyBonusPlanwerebasedonthe2018operatingplanforeachofElancoandLilly,respectively.Thesetargetsaredescribedbelowunder"2018CompensationPayouts."

Performance Award (Lilly PAs and Executive Officer PAs)

InFebruary2018,theLillycompensationcommitteeestablishedacumulative,compoundedtwo-yearLillyEPSgrowthtargetof8.1%peryearforthe2018-2019performanceperiod,basedoninvestmentanalysts'growthestimatesforLilly'speergroupcompaniesatthattime.Payoutsforthe2018-2019LillyPAsand2018-2020ExecutiveOfficerPAsrangefrom0%to150%ofthetarget,asillustratedbelow:

Shareholder Value Award (Lilly SVAs and Executive Officer SVAs)

ForpurposesofestablishingtheLillystockpricetargetforthe2018-2020LillySVAs,thestartingpricewas$84.70pershare,theaverageLillyclosingstockpriceforalltradingdaysinNovemberandDecember2017.TheLillytargetsharepricewasestablishedusingtheexpectedannualrateofreturnforlarge-capcompanies(8%),lessanassumedLillydividendyieldof2.66%.Todeterminepayouts,theendingpricewillbetheaverageoftheclosingpricesofLillystockforalltradingdaysinNovemberandDecember2020.

Lilly SVA

Messrs.Kinard,MontarceandUrbanekreceivedLillySVAswiththepossiblepayoutsonsharepricerangesillustratedinthegridbelow:

Ending Stock Price Less than

$42.35 $42.35 to

$88.19 $88.20 to

$99.01 $99.02 to $109.83

$109.84 to $120.65

Greater than $120.65

CompoundedAnnualSharePriceGrowthRate(excludingdividends) Lessthan(20.6%) (20.6%)to1.4% 1.4%to5.3% 5.3%to9.0% 9.1%to12.5% Greaterthan12.5%PercentofTarget 0% 50% 75% 100% 125% 150%

TableofContents

Executive Officer SVA

TheExecutiveOfficerSVAisdesignedtodelivernopayoutifthetotalshareholderreturn(includingprojecteddividends)iszeroornegative.Mr.SimmonsreceivedExecutiveOfficerSVAswithpayoutsbasedonsharepricerangesillustratedinthegridbelow:

Mr.Simmons'ExecutiveOfficerSVAsaresubjecttoarelativeTSRmodifier,asoutlinedinthegridbelow.ThenumberofLillysharestobepaidwillincreaseordecreaseby1%foreverypercentagepointLilly'sthree-yearTSRdeviatesfromLilly'speergroup'smedianthree-yearTSR,cappedat20%.

2018 Compensation Payouts

TheinformationinthissectionreflectstheamountspaidtotheNamedExecutiveOfficersundertheElancoBonusPlan,LillyBonusPlanandinrespectofLillyequityawardsgrantedinprioryearsforwhichtherelevantperformanceperiodendedin2018,asapplicable.

Elanco Performance

In2018,Elancoexceededitsannualoperatingmarginby0.1%;however,itmisseditsannualrevenuetargetby0.9%.Elancomadestrongprogressonitsinnovationgoals,andendedwithaninnovationratingabovetargetat3.6.ThetwomajorapprovalswereGalliprantintheEUandCredeliointheU.S.Inaddition,Elancomadesignificantprogressonitslong-termstrategicagenda,improvingcoststructure,reducingglobalheadcount,rationalizingkeyassetsandproductsandacceleratingimportantpipelineprojects.The2018resultsdescribedbelowreflectElanco's2018performancewithrespecttotheElancoBonusPlantargetsandarenotpresentedonthesamebasisas,andarenotdirectlycomparableto,ourcombinedfinancialresultspresentedinthisprospectus.

Ending Stock Price Less than

$77.38 $77.38 to

$88.19 $88.20 to

$99.01 $99.02 to $109.83

$109.84 to $120.65

Greater than $120.65

CompoundedAnnualSharePriceGrowthRate(excludingdividends) Lessthan(3.0)% (3.0)%to1.4% 1.4%to5.3% 5.3%to9.0% 9.1%to12.5% Greaterthan12.5%PercentofTarget 0% 50% 75% 100% 125% 150%

TableofContents

Elanco Bonus Plan

Elanco'sperformancecomparedtothe2018targetsforrevenue,operatingmargin,innovationprogressandtheLillyCompanyBonusMultiple,aswellastheresultingbonusmultiple,issetforthbelow.

Elanco's2018innovationtargetwas3.0onascaleof1.0to5.0.Elanco'sinnovationmultipleiscomprisedofthefollowingfactors:(i)achievementofproductapprovals,(ii)entrantsintoearlyandlatestagedevelopment,(iii)adherencetoapprovaltimelinesand(iv)aqualitativeassessmentbyElanco'sheadofR&Dofoverallperformance.Basedontheweightedoutcomesofthesefactors,Elancoachieveda3.60score,whichcorrelatestoa1.30innovationmultipleforuseintheElancobonuscalculation.

Whencombined,theElancorevenue,operatingmargininnovationandLillyCorporateBonusmultiplesyieldeda2018ElancoBonusPlanmultipleof:

(0.25 × 0.85) + (0.25 × 1.10) + (0.25 × 1.30) + (0.25 × 1.73) = 1.24 bonus multiple

The2018bonusestobepaidtotheapplicableNamedExecutiveOfficersundertheElancoBonusPlanareasfollows:

Elanco Target 2018

Elanco Results Multiple Revenue $ 3.171B $ 3.143B 0.85OperatingMargin 20.0% 20.2% 1.10Innovation 3.00 3.60 1.30LillyCompanyBonusMultiple 1.73ResultingElancoBonusMultiple 1.24

Name 2018 Bonus ($) Mr.Simmons $ 907,450(2)Mr.Young(1) $ 79,567Ms.Lin(1) $ 350,552(3)Mr.Urbanek $ 233,083(3)Mr.Kinard(1) $ 180,180(3)Mr.Jensen(1) $ 222,439Mr.Montarce(1) $ 138,404

(1) Pro-ratedbasedupontheactualtime-periodworkedatElanco.

TableofContents

Lilly Performance

In2018,LillyexceededbothitsannualrevenueandEPStargets.Lillyalsomadesignificantprogressonitspipeline,meetingorexceedingallofitspipelinetargets.KeypipelinehighlightsincludefirstregulatoryapprovalforEmgality,alongwithelevenothernewapprovals,indicationsorlineextensions.

Lilly Bonus Plan

Lilly'sperformancecomparedtoits2018targetsforrevenue,EPSandpipelineprogress,aswellastheresultingbonusmultiple,isillustratedbelow.

Lilly'sScienceandTechnologyCommitteeassessedLilly'sprogresstowardachievingproductpipelinegoalsbasedonthefollowingfactors:(i)achievementofproductapprovals,(ii)newchemicalentityentrantsintoPhase1andPhase3clinicaltrials,(iii)newindicationorlineextensionentrantsintoPhase3clinicaltrials,(iv)speedofdevelopment,(v)adherencetotimelinesand(iv)aqualitativeassessmentofoverallperformance.BasedontherecommendationoftheScienceandTechnologyCommittee,Lilly'scompensationcommitteecertifiedapipelinescoreof3.90,resultinginapipelinemultipleof1.45.

(2) Representsthesumofapro-ratedEOIPpayoutof$492,050throughSeptember19,2018,whichreflectsthereductionofMr.Simmons'bonuspayoutundertheEOIPbytheLillycompensationcommittee,initsdiscretion,toalevelthatwasbasedentirelyonElancoperformanceandthatwaspro-ratedfortheperiodpriortotheIPOduringwhichMr.SimmonswasaLillyexecutiveofficer,andtheElancoBonusPlanpayoutof$415,400fortheremainderof2018.See"AnnualCashBonusTargets"above.

(3) RepresentsaweightedaverageoftheamountsapprovedbyLillymanagementfortheperiodpriortotheIPOandamountsapprovedbytheElancoboardofdirectorsinconnectionwiththeIPO.

Lilly Target 2018

Adjusted Results Multiple Revenue $ 23.457B $ 24.556B 1.48EPS $ 4.91 $ 5.49 2.00PipelineScore 3.00 3.90 1.45ResultingLillyBonusMultiple 1.73

TableofContents

Whencombined,theLillyrevenue,EPS,andpipelinemultiplesyieldeda2018LillyBonusPlanmultipleof:

(0.25 × 1.48) + (0.50 × 2.00) + (0.25 × 1.45) = 1.73 bonus multiple

The2018bonusespaidtoMessrs.MontarceandKinardundertheLillyBonusPlanwereasfollows:

Performance Awards (Lilly PAs and Executive Officer PAs)

ThetargetcumulativeLillyEPSforthe2017-2018LillyPAsandthe2017-2019ExecutiveOfficerPAswassetinthefirstquarterof2017,reflectingexpectedindustrygrowthof5.3%eachyearoverthetwo-yearperformanceperiodof2017-2018.Lilly'sactualannualEPSgrowthforthetwo-yearperiodwas22.5%.ThisoutcomewaslargelydrivenbyvolumegrowthfromnewerLillyproducts.

FortheNamedExecutiveOfficers,thenumberofLillysharesearnedunderthe2017-2018LillyPAsor,forMr.Simmons,the2017-2019ExecutiveOfficerPAs,issetforthinthetablebelow.Mr.Simmons'sharesearnedunderthe2017-2019ExecutiveOfficerPAaresubjecttoanadditionalthirteen-monthservice-vestingperiodatLillyorElancofollowingvesting.

Name 2018 Bonus ($) Mr.Kinard $ 107,498Mr.Montarce $ 38,845

Name Target Shares Shares Earned Mr.Simmons 10,878 16,317Mr.Young(1) N/A N/AMs.Lin(1) N/A N/AMr.Urbanek 544 816Mr.Kinard 2,822 4,233Mr.Jensen(1) N/A N/AMr.Montarce 612 918

(1) Ms.LinandMessrs.YoungandJensenwerenoteligiblefora2017-2018LillyPAsincetheywerenotactiveLillyemployeesonJanuary1,2017.

TableofContents

Shareholder Value Award (Lilly SVAs and Executive Offer SVAs)

ThetargetLillystockpricerangeof$98.55to$109.06(17.7%to30.2%stockpricegrowth)forthe2016-2018LillySVAswassetin2016basedonabeginningLillystockpriceof$83.74,whichwastheaverageclosingpriceforLillystockforalltradingdaysinNovemberandDecember2015.TheendingLillystockpriceof$112.38representsastockpricegrowthofapproximately34.2%overtherelevantthree-yearperiod.Lilly'sperformancecomparedtotargetfor2016-2018LillySVAsisshownbelow.

Theperformancemultipleof1.25wasmodifiedforMr.Simmonsbytherelativetotalshareholderreturnmetric.ThecumulativetotalshareholderreturnmedianfortheLillypeergroupwas16.6%,andLilly'stotalshareholderreturnoverthesameperiodwas44.9%asdepictedonthechartbelow:

Giventhispositiverelativeperformance,theExecutiveOfficerSVApayoutmultiplewasincreasedby20%makingthefinalperformancemultiplea1.50.

ThesharesearnedbytheNamedExecutiveOfficersduring2018underthe2016-2018LillySVAs(ExecutiveOfficerSVAsforMr.Simmons)wereasfollows:

Name Target Shares Shares Paid Out Mr.Simmons 29,190 43,785Mr.Young(1) N/A N/AMs.Lin(1) N/A N/AMr.Urbanek 819 1,024Mr.Kinard 3,854 4,818Mr.Jensen(1) N/A N/AMr.Montarce 1,012 1,265

(1) Ms.LinandMessrs.YoungandJensenwerenoteligiblefora2016-2018LillySVAgrantsincetheywerenotactiveLillyemployeesonJanuary1,2016.

TableofContents

Other Lilly Compensation Practices and Information

Lilly Employee Benefits

Lillyofferscoreemployeebenefitscoverageto:

• providetheLillyworkforcewithareasonableleveloffinancialsupportintheeventofillnessorinjury;

• providepost-retirementincome;and

• enhanceproductivityandjobsatisfactionthroughbenefitprogramsthatfocusonoverallwell-being.

ThebenefitsthatwereavailabletotheNamedExecutiveOfficersduringtheiremploymentwithLillyweregenerallythesameasthoseavailabletoallU.S.Lillyemployeesandincludedmedicalanddentalinsurance,disabilityinsuranceandlifeinsurance.Inaddition,TheLillyEmployee401(k)plan("Lilly401(k)Plan")andTheLillyRetirementPlanprovideU.S.Lillyemployeesareasonablelevelofretirementincomereflectingemployees'careerswithLilly.

TotheextentthatanyLillyemployee'sretirementbenefitexceedsInternalRevenueService(IRS)limitsforamountsthatcanbepaidthroughaqualifiedplan,Lillyalsooffersanonqualifiedpensionplanandanonqualifiedsavingsplan.TheNamedExecutiveOfficersparticipatedinthesenonqualifiedplansin2018.TheseplansprovideonlythedifferencebetweenthecalculatedbenefitsandtheIRSlimits,andtheformulaisthesameforallU.S.Lillyemployees.ThecostofLillyemployeebenefitsispartiallybornebytheemployee,whichincludedtheNamedExecutiveOfficerswhoreceivedLillyemployeebenefits.

The Lilly Deferred Compensation Plan

Lillyexecutiveofficers,which,priortotheIPO,includedMr.Simmons,maydeferreceiptofallorpartoftheircashcompensation.OtherU.S.LillyexecutivesmaydeferreceiptofallorpartoftheircashbonusunderTheLillyDeferredCompensationPlan,whichallowsparticipantstosaveforretirementinatax-effectivewayatminimalcosttoLilly.Underthisunfundedplan,amountsdeferredbytheparticipantarecreditedataninterestrateof120%oftheapplicablefederallong-termrate,asdescribedinmoredetailfollowingthe"NonqualifiedDeferredCompensationin2018"table.

Elanco Compensation Program

ThefollowingsectiondescribesElanco'scurrentcompensationprogram,whichcontinuestobedevelopedbytheElancocompensationcommittee.

Elanco Compensation Committee

Elanco'scompensationcommitteedeterminesandapprovesexecutiveofficercompensationandprovidesoversightofElanco'scompensationphilosophy.TheElancocompensationcommitteewillannuallyreviewandevaluateElanco'sexecutivecompensationplansandprogramstoensuretheyarealignedwithitscompensationphilosophy.TheElancocompensationcommitteedeterminedtogenerallymaintainLilly'scompensationphilosophythroughtheSplit-OffandanticipatesreviewingitsphilosophyandpayprogramsfollowingtheSplit-Off.

TableofContents

Elanco Peer Group

BasedontheadviceofWillisTowersWatson,thecompensationconsultantengagedbyLillymanagementtoprovideadviceontheElancopeergroupinconnectionwiththeIPO,thefollowinggroupof18companieswereidentifiedasElanco's"core"peers:

TodeterminetheelementsofElanco'scompensationprogramsforitsNamedExecutiveOfficers,theElancoboardapprovedcompensationpackagesderivedfromfollowingbenchmarks,amongothers:

• Proxystatementdataforthe"core"peergroupasdisclosedineachcompany'sprioryearcompensationdiscussionandanalysisandexecutivecompensationtables;and

• Surveydatafromsimilarly-sizedcompanieswithinthelifesciencesindustry,inparticular,fromtheWillisTowersWatsonsurveythatencompassedlife-sciencecompanieswithannualrevenuesoflessthanorequalto$20billion.

TheElancocompensationcommitteeexpectstoperiodicallyreviewthepeergroupandmakeadjustmentstoitssizeandcomposition,whenappropriate,withinitsdiscretion.

Compensation Arrangements

InconnectionwiththeIPO,theElancoboardofdirectorsapprovednewpaypackagesforeachofMessrs.Simmons,Urbanek,KinardandMs.Lin.Mr.Jensen'spaypackagewasnotmodifiedashejoinedElancoinMarch2018andbeganamedicalleaveonoraboutAugust1,2018.Mr.JensendidnotreturntohispositionwithElancofollowinghismedicalleave.FollowinghisdeathonDecember14,2018,Mr.Jensen'sestatereceivedbenefitspursuanttothetermsofhisemploymentarrangementwithElanco(see"PaymentsUponTerminationorChangeinControl(asofDecember31,2018)"below).

Mr.MontarcewasnamedActingChiefFinancialOfficerfromAugust1,2018throughOctober31,2018,duringwhichtimehispaypackagealsodidnotchange.AsofNovember1,2018,Mr.MontarcereturnedtohispositionatLillyandreceivedaone-timecashawardof$200,000fromLillyinconnectionwiththetransitiontohisnewrole.Mr.Young'scompensationwasdeterminedbytheElancocompensationcommitteeinconnectionwithhishiringonNovember1,2018.

ThefollowingpaypackagesoftheNamedExecutiveOfficersweredevelopedbasedontheexperienceprofileoftheexecutiveandcompetitivepositioningagainstpeergroupbenchmarkingasdescribedabove.AlloftheNamedExecutiveOfficers'compensationpackagesreflecttheconsiderationofbenchmarkingdatafromtheWillisTowersWatsonlifesciencessurveyregressedforrelativecompany

AgilentTechnologies EndoInternational PerkinElmerAlexionPharmaceuticals Hologic PerrigoCompanyBostonScientific IDEXXLaboratories SterisCatalent JazzPharmaceuticals VarianMedicalSystemsDENTSPLYSIRONA Mallinckrodt WestPharmaceuticalServicesEdwardsLifesciences OPKOHealth Zoetis

TableofContents

size,andthecompensationpackageforMr.Simmonswasalsobenchmarkedagainstthecompensationofthe18corepeercompanieslistedabove.

2018 Founders Awards

ElancoNamedExecutiveOfficers,exceptMessrs.MontarceandYoung,receivedaFoundersAwardonOctober20,2018.TheFounders'Awardswereallocatedevenly(basedongrantdatefairvalue)betweenElancoRSUsandElancoOptionsthateachvestonthatdatethatisthreeyearsafterthegrantdate,subjecttocontinuedservice.Thenumberofsharesgrantedareassetforthbelow:

Stock Ownership and Holding Requirements

Elanco'sboardofdirectorshasadoptedequityownershiprequirementsforexecutiveofficers,whichrequiretheChiefExecutiveOfficerofElancotoholdthenumberofsharesofElancocommonstockequaltosixtimes(6x)hisorherbasesalaryandotherofficerstoholdthenumberofsharesofElancocommonstockequaltothreetimes(3x)theirbasesalaries.AllNamedExecutiveOfferswere

Mr.Simmons: AsthePresidentandChiefExecutiveOfficer,Mr.Simmonsreceives$1,000,000inbasesalaryandiseligibletoparticipateintheElancoBonusPlanwithatargetof120%ofbasesalary.

Mr.Young: AstheChiefFinancialOfficer,Mr.Youngreceives$550,000inbasesalaryandiseligibletoparticipateintheElancoBonusPlanwithatargetof70%ofbasesalary.Mr.Youngreceivedaone-timecashpaymentof$200,000lessapplicabletaxesuponstartinghisElancoemployment.Healsoreceivedaone-timeequityawardof$300,000inDecember2018inconnectionwithjoiningElanco.

Ms.Lin: AstheExecutiveVicePresident,ElancoUSA,CorporateStrategyandGlobalMarketing,Ms.Linreceives$530,000inbasesalaryandiseligibletoparticipateintheElancoBonusPlanwithatargetof60%ofbasesalary.Ms.Linreceivedaone-timecashpaymentof$500,000lessapplicabletaxesuponstartingherElancoemployment.Shealsoreceivedaone-timeequityawardof$900,000inFebruary2018inconnectionwithjoiningElanco.

Mr.Urbanek: AstheExecutiveVicePresident,ManufacturingandQuality,Mr.Urbanekreceives$385,000inbasesalaryandiseligibletoparticipateintheElancoBonusPlanwithatargetof60%ofbasesalary.

Mr.Kinard: AstheExecutiveVicePresident,HumanResources,Mr.Kinardreceives$430,000inbasesalaryandiseligibletoparticipateintheElancoBonusPlanwithatargetof60%ofbasesalary.

Mr.Montarce: Mr.Montarcereceives$336,810inbasesalaryandparticipatesinanannualcashincentiveprogramwithatargetof40%.Mr.Montarce'scompensationwasnotadjustedduringthetimeheservedasActingChiefFinancialOfficerofElanco.

Name Elanco RSUs Elanco Options Mr.Simmons 36,287 109,642Ms.Lin 6,979 21,086Mr.Urbanek 6,979 21,086Mr.Kinard 6,979 21,086Mr.Jensen 19,449 58,766

TableofContents

compliantwiththeannualawardshareretentionguideline,whichrequirestheretentionof50%ofallequityawardsuntiltheirstockownershiprequirementsaresatisfied,astheyeachbuildtowardtheirrespectiveownershiprequirements.Mr.Montarcehasaholdingrequirementof5,000LillysharesundertheLillyshareownershipandretentionguidelinesandhewascompliantwiththeLillyshareretentionguidelineashebuilttowardhisrespectiveownershiprequirement.

Hedging/Pledging Policy

Elanco'scompensationcommitteeadoptedahedgingandpledgingpolicyunderwhichournon-employeedirectorsandemployeesarenotpermittedtohedgetheireconomicexposurestoElancostockthroughshortsalesorderivativetransactions.Non-employeedirectorsandallmembersofseniormanagementareprohibitedfrompledginganyElancostock(i.e.,usingElancostockascollateralforaloanortradingsharesonmargin).

Executive Compensation Recovery Policy

AllElancoincentiveawardsgenerallyaresubjecttoforfeitureuponterminationofemploymentpriortotheendoftheperformanceorvestingperiodorfordisciplinaryreasons.Inaddition,theElancocompensationcommitteehasadoptedanElancoexecutivecompensationrecoverypolicythatgivestheElancocompensationcommitteebroaddiscretiontoclawbackElancoincentivepayoutsfromanymemberofElancoseniormanagement,whichincludesourNamedExecutiveOfficers,whosemisconductresultsinamaterialviolationoflaworcompanypolicythatcausessignificantharmtoElancoorwhofailsinhisorhersupervisoryresponsibilitytopreventsuchmisconductbyothers.TheElancorecoverypolicycoversanyElancoincentivecompensationawardedorpaidtoanemployeeatatimewhenheorsheisamemberofElancoseniormanagement.Subsequentchangesinstatus,includingretirementorterminationofemployment,donotaffectElanco'srightstorecovercompensationunderthepolicy.RecoveriesundertheElancoplancanextendbackasfarasthreeyears.

2019 Compensation

TheElancocompensationcommitteeapprovedthecontinuanceoftheexistingElancoBonusPlanforalloftheNamedExecutiveOfficersfortheperiodfromthecompletionoftheIPOthroughDecember31,2018.ThecompensationcommitteesubsequentlyadoptedanewElancoBonusPlanfor2019thatincludesthreemeasures:Revenue(30%),EBIT(40%)andprogressoftheinnovationpipeline(30%).

LillyequityawardspreviouslygrantedtotheNamedExecutiveOfficerscontinuedtovestinaccordancewiththeirterms,withtheirservicetoElancocountingasservicetoLillyforallpurposesuntiltheSplit-Off.UpontheSplit-Off,unvestedLillyequityawardsterminatedinaccordancewiththeirtermsfornoconsiderationpaidtotheNamedExecutiveOfficers(otherthanMr.Montarce,whoremainsemployedbyLilly).TheElancocompensationcommitteeauthorizedtheissuanceofElancoequityawardsofsimilarvalueanddurationsubjecttotherequirementsofapplicablelawandthetermsofthe2018ElancoStockPlanandapplicableawardagreements.

Elancoprovidesretirementincometoeligibleemployees,whichincludestheNamedExecutiveOfficers,throughTheElanco401(k)Plan,adefinedcontributionplanqualifiedunderSections401(a)and401(k)oftheInternalRevenueCode.Participantsmayelecttocontributeaportionoftheirbasesalarytotheplan,andElancoprovidesmatchingcontributionsonemployees'contributionsupto6%ofbasesalaryuptoIRSlimits.Inaddition,Elancoprovidesanon-electivecontributionintheamountof3%ofbasesalary,pendingactiveemploymentonDecember31ofeachyear.Theemployeecontributions,ElancocontributionsandearningsthereonarepaidoutinaccordancewithelectionsmadebytheparticipantunderthetermsandconditionsofthePlan.

TableofContents

NeitherElanconoritssubsidiariessponsor(1)adefinedbenefitretirementplanforU.S.employees,however,eligibleemployeesmayreceivetransitionservicecreditforvestingandeligibilitypurposesundercertainretirementplanssponsoredbyEliLillyandCompanyor(2)anonqualifieddeferredcompensationplanor(3)anonqualifiedsavingsplan.

Executive Compensation Tables

AllamountsincludedinthetablesbelowrepresentcompensationpaidtoorearnedbytheapplicableNamedExecutiveOfficersfor2018ortheyearindicatedintheapplicabletable.Ms.LinandMessrs.YoungandJensenjoinedElancoin2018andthereforedonothaveanycompensationfromLillyin2017.

Summary Compensation Table

Name and Principal Position Year Salary

($) Bonus ($) (1)

Stock Awards

($) (2)

Option Awards

($) (3)

Non-Equity Incentive

Plan Compensation

($) (4)

Change in Pension Value

and Nonqualified

Deferred Compensation

Earnings ($) (5)

All Other Compensation

($) (6)

Total Compensation

($) JeffreySimmons 2018 $ 775,185 $ 0 $ 2,530,654 $ 1,119,445 $ 907,450 $ 0 $ 46,511 $ 5,379,245PresidentandChief 2017 $ 688,118 $ 0 $ 2,400,000 $ 0 $ 379,841 $ 1,261,845 $ 41,287 $ 4,771,091ExecutiveOfficer

ToddYoung

2018 $ 91,667 $ 200,000 $ 300,032 $ 0 $ 79,567 $ 1,102 $ 8,285 $ 680,653ExecutiveVicePresidentand 2017 N/A N/A N/A N/A N/A N/A N/A N/AChiefFinancialOfficer

SarenaLin

2018 $ 500,556 $ 500,000 $ 1,115,384 $ 215,288 $ 350,552 $ 5,742 $ 171,338 $ 2,858,860ExecutiveVicePresident, 2017 N/A N/A N/A N/A N/A N/A N/A N/AElancoUSA,CorporateStrategyandGlobalMarketing

DavidUrbanek

2018 $ 381,885 $ 0 $ 825,302 $ 215,288 $ 233,083 $ 202,856 $ 22,913 $ 1,881,328ExecutiveVicePresident, 2017 $ 297,174 $ 0 $ 300,040 $ 0 $ 76,887 $ 333,402 $ 17,830 $ 1,025,333ManufacturingandQuality

DavidKinard

2018 $ 420,972 $ 0 $ 703,302 $ 215,288 $ 180,180 $ 0 $ 25,258 $ 1,652,499ExecutiveVicePresident, 2017 $ 405,632 $ 0 $ 518,750 $ 0 $ 244,596 $ 379,379 $ 24,338 $ 1,572,696HumanResources

ChristopherJensen

2018 $ 390,345 $ 200,000 $ 600,002 $ 600,001 $ 222,439 $ 7,135 $ 75,676 $ 2,095,597FormerChiefFinancial 2017 N/A N/A N/A N/A N/A N/A N/A N/AOfficer

LucasMontarce

2018 $ 335,175 $ 200,000 $ 616,019 $ 0 $ 138,404 $ 5,5674 $ 20,111 $ 1,354,228FormerActingChief 2017 $ 280,673 $ 0 $ 112,500 $ 0 $ 83,976 $ 24,896 $ 16,200 $ 518,245FinancialOfficer

(1) Ms.LinandMessrs.YoungandJensenreceivedone-timecashbonuspaymentsof$500,000,$200,000and$200,000,respectively,aspartoftheiremploymentoffers.Mr.Montarcereceivedaone-timecashbonuspaymentof$200,000fromLillyinconnectionwithhistransitionfromElancotohisnewroleatLillyasofNovember1,2018.

(2) ThiscolumnshowsthegrantdatefairvalueoftheLillyPAs,ExecutiveOfficerPAs,LillySVAs,ExecutiveOfficerSVAs,LillyRSUsandElancoRSUs,asapplicable,awardedtotheNamedExecutiveOfficersin2017and2018computedinaccordancewithFASBASCTopic718,basedupontheprobableoutcomeoftheperformanceconditionsasofthegrantdateandtheassumptionsinNote13:Stock-BasedCompensationtoElanco'sconsolidatedandcombinedfinancialstatementsincludedelsewhereinthisprospectus,"Note11:Stock-BasedCompensation"footnotetotheconsolidatedfinancialstatementsintheAnnualReportonForm10-KforthefiscalyearendedDecember31,2018filedbyLillyonFebruary19,2019,and"Note11—StockBasedCompensation"footnotetotheconsolidatedfinancialstatementsintheAnnualReportonForm10-KforthefiscalyearendedDecember31,2017,filedbyLillyonFebruary20,2018.ThegrantdatefairvaluefortheLillyPAs,ExecutiveOfficerPAs,LillySVAsandExecutiveOfficerSVAsincludedinthe"StockAwards"columnarebasedontheprobablepayoutoutcomeanticipatedatthetimeofgrant,whichfortheLillyPAsandExecutiveOfficerPAswasat144%oftargetandfortheLillySVAsandExecutiveOfficerSVAswastargetvalue.

The"StockAwards"columnalsoincludesone-timeLillyRSUandElancoRSUawardsasfollows:

• Ms.LinreceivedaLillyRestrictedStockUnitaward,whichwasgrantedonFebruary1,2018withagrantdatefairvalueof$900,082.Shereceivedthisasaone-timeawardtopartiallyoffsetcompensationforfeitedfromapreviousemployer.One-thirdofhergrantisscheduledvestonFebruary1,2019,one-thirdonFebruary1,2020andtheremainingone-thirdonFebruary1,2021.

TableofContents

Grants of Plan-Based Awards During 2018

Thefollowingtablereflectsgrantsofplan-basedawardsdescribedintheCD&Aundereachofthefollowingplans:theElancoBonusPlanandLillyBonusPlan(eachplanisanon-equityincentiveplan),

• Mr.YoungreceivedanElancoRestrictedStockUnitaward,whichwasgrantedonDecember3,2018withagrantdatefairvalueof$300,032.Hereceivedthisasaone-timeawardtopartiallyoffsetcompensationforfeitedfromapreviousemployer.One-halfofthisgrantwillvestonDecember3,2019andtheremainingone-halfwillvestonDecember3,2020.

• Mr.MontarcereceivedaLillyRestrictedStockUnitaward,whichwasgrantedonMay1,2018withagrantdatefairvalueof$250,019.HereceivedthisawardinrecognitionofhiscontributionstoLillyandtohelpsecurehisservicesasvicepresident,CFOLillyInternationalthroughMay2023.One-thirdofhisgrantwillvestonMay1,2021andtheremainingtwo-thirdswillvestonMay1,2023.

Theseone-timerestrictedstockunitawardswillbeforfeitedifMs.LinorMessrs.YoungorMontarceterminateemploymentwithLillyorElanco,asapplicable,priortothevestingdates,otherthantheeventofcertainqualifyingterminations.

The"StockAwards"columnalsoincludesFounders'AwardElancoRSUsforMs.LinandMessrs.Simmons,Urbanek,KinardandJensen.TheseawardsweregrantedaftertheIPOonOctober20,2018,whichwillvestonOctober20,2021.Thegrantdatefairvalueswere$1,119,454forMr.Simmonsand$215,302forMs.LinandMessrs.UrbanekandKinard.

ThesupplementaltablebelowshowsthetotaltargetgrantdatefairvaluesoftheannualequityawardsapprovedbytheLillycompensationcommitteeforMr.SimmonsandapprovedbyLillymanagementfortheremainingNamedExecutiveOfficers,asapplicable:

Name 2017

Total Equity 2018

Total Equity Mr.Simmons $ 2,000,000 $ 1,200,000Mr.Young* N/A N/AMs.Lin* N/A N/AMr.Urbanek $ 80,000 $ 500,000Mr.Kinard $ 415,000 $ 400,000Mr.Jensen* N/A N/AMr.Montarce $ 90,000 $ 300,000

* Ms.LinandMessrs.YoungandJensenwerenoteligibleforanannualLillyequitygrantsincetheywerenotactiveemployeesofLillyonJanuary1,2018.

Thetablebelowshowstheminimum,targetandmaximumpayouts(usingthegrantdatefairvalue)forthe2018-2019LillyPAs(2018-2020ExecutiveOfficerPAforMr.Simmons)includedinthiscolumnofthe"SummaryCompensationTable."

Name Payout

Date Minimum

Payout Target Payout

Maximum Payout

Mr.Simmons January2021 $ 0 $ 480,000 $ 720,000Mr.Urbanek January2020 $ 0 $ 250,000 $ 375,000Mr.Kinard January2020 $ 0 $ 200,000 $ 300,000Mr.Montarce January2020 $ 0 $ 150,000 $ 225,000

Thetablebelowshowstheminimum,targetandmaximumpayouts(usingthegrantdatefairvalue)forthe2018-2020LillySVAs(2018-2020ExecutiveOfficerSVAsforMr.Simmons)includedinthiscolumnofthe"SummaryCompensationTable."

Name Payout

Date Minimum

Payout Target Payout

Maximum Payout

Mr.Simmons January2021 $ 0 $ 720,000 $ 1,296,000Mr.Urbanek January2021 $ 0 $ 250,000 $ 375,000Mr.Kinard January2021 $ 0 $ 200,000 $ 300,000Mr.Montarce January2021 $ 0 $ 150,000 $ 225,000

(3) The"OptionAwards"columnincludesFounders'AwardsofElancooptionsforMs.LinandMessrs.Simmons,Urbanek,KinardandJensen.ThesenonqualifiedstockoptionawardsweregrantedaftertheIPOonOctober20,2018.Generally,theyvestonthethirdanniversaryofthegrantdate,followedbyaseven-yearexerciseperiod,exceptforMr.JensenwhoseoptionawardimmediatelyvesteduponhisdeathonDecember14,2018andexpiredonMarch14,2019.Thegrantdatefairvalueswere$1,119,445forMr.Simmons,$600,001forMr.Jensenand$215,288forMs.LinandMessrs.UrbanekandKinard.

(4) ThiscolumnshowspaymentsundertheElancoBonusPlanand/ortheLillyBonusPlanforperformancein2018.See"—2018CompensationPayouts"abovefordetailson2018payoutsfortheNamedExecutiveOfficersundertheapplicablecashbonusplan.

(5) TheamountsinthiscolumnreflectthechangeinLillypensionvalue,calculatedbyLilly'sactuary,andareaffectedbyadditionalserviceaccrualsandpayearned,aswellasactuarialassumptionchanges.The2018changeinpensionvalueswasdriventoalargeextentbyahigherdiscountratewhichdecreasedthenetpresentvalueoftheapplicableNamedExecutiveOfficers'pension.Thedesignofthepensionbenefitdidnotchange.See"—PensionBenefits"belowforinformationabouttheactuarialassumptionsused.NoneoftheNamedExecutiveOfficersreceivedanypreferentialorabove-marketearningsondeferredcompensation.

(6) TheamountsinthiscolumnconsistsolelyofLillymatchingcontributionsforeachindividual's401(k)planandnonqualifiedsavingsplancontributions.Therewerenoreportableperquisites,personalbenefitsortaxreimbursementsorgross-upspaidtoanyoftheNamedExecutiveOfficersfor2018.

TableofContents

the2002LillyStockPlan(whichprovidesforthegrantofperformanceawards(PAs),shareholdervalueawards(SVAs),restrictedstockunits(RSUs)andthe2018ElancoStockPlan.ToreceiveapayoutundertheLillyPAs,ExecutiveOfficerPAs,LillySVAsorExecutiveOfficerSVAs,aparticipantmustremainemployedwithLillythroughtheendoftherelevantawardperiod(exceptinthecaseofdeath,disability,retirementorredundancy).Nodividendsaccrueoneitherperformanceawardsorshareholdervalueawardsduringtheperformanceperiod.FortheExecutiveOfficerPAs,dividendequivalentsunitsaccrueduringthethirteen-monthservice-vestingperiod(followingthetwo-yearperformanceperiod)andarepaiduponvesting.InconnectionwiththeSplit-Off,allthen-unvestedLillyequityawardsheldbytheNamedExecutiveOfficers(otherthanMr.Montarce,whowillremainemployedbyLilly)wereforfeitedfornoconsideration.TheElancocompensationcommitteehasauthorizedtheissuanceofElancoequityawardsofsimilarvalueanddurationtotheforfeitedawardsfollowingtheSplit-Off.

All Other Stock

Awards:Number

of Shares

of Stock

or Units

Lilly/ Elanco

compensation committee

Estimated Future Payouts Under Non-Equity Incentive

Plan Awards(1)

Estimated Future Payouts Under Equity Incentive Plan

Awards

All Other Option

Awards: Number of Securities Underlying

Options

Grant Date Fair Value of

Stock and Option

Awards (9)

Exerciseor Base Price of Option Awards

Name Award Grant Date (2)

Action Date

Threshold($)

Target ($)

Maximum ($)

Threshold(#)

Target (#)

Maximum(#)

Mr.Simmons ElancoBonusPlan $ 182,954 $ 731,815 $ 1,463,629

2018-2020Executive

OfficerPAs(3) 2/9/2018 12/11/2017 3,351 6,701 10,052 $ 691,200

2018-2020Executive

OfficerSVAs(4) 2/9/2018 12/11/2017 6,988 17,471 31,448 $ 720,000 ElancoRSUs(5) 10/20/2018 9/5/2018 36,287 $ 1,119,454 ElancoOptions(5) 10/20/2018 9/5/2018 109,642 $ 31.61 $ 1,119,445

Mr.Young ElancoBonusPlan $ 16,042 $ 64,167 $ 128,333 ElancoRSUs(6) 12/3/2018 11/12/2018 8,983 $ 300,032

Ms.Lin ElancoBonusPlan $ 70,676 $ 282,703 $ 565,407 LillyRSU(7) 2/1/2018 N/A 10,922 $ 900,082 ElancoRSUs(5) 10/20/2018 9/5/2018 6,979 $ 215,302 ElancoOptions(5) 10/20/2018 9/5/2018 21,086 $ 31.61 $ 215,288

Mr.Urbanek ElancoBonusPlan $ 46,993 $ 187,970 $ 375,940

2018-2020LillyPAs(3) 2/9/2018 N/A 1,745 3,490 5,235 $ 360,000

2018-2020LillySVAs(4) 2/9/2018 N/A 2,442 4,883 7,325 $ 250,000

ElancoRSUs(5) 10/20/2018 9/5/2018 6,979 $ 215,302 ElancoOptions(5) 10/20/2018 9/5/2018 21,086 $ 31.61 $ 215,288

Mr.Kinard ElancoBonusPlan $ 36,327 $ 145,306 $ 290,612 LillyBonusPlan $ 15,534 $ 62,138 $ 124,275

2018-2020LillyPAs(3) 2/9/2018 N/A 1,396 2,792 4,188 $ 288,000

2018-2020LillySVAs(4) 2/9/2018 N/A 1,953 3,906 5,859 $ 200,000

ElancoRSUs(5) 10/20/2018 9/5/2018 6,979 $ 215,302 ElancoOptions(5) 10/20/2018 9/5/2018 21,086 $ 31.61 $ 215,288

Mr.Jensen ElancoBonusPlan $ 44,847 $ 179,386 $ 358,772 ElancoRSUs(5) 10/20/2018 9/5/2018 19,449 $ 600,002 ElancoOptions(5) 10/20/2018 9/5/2018 58,766 $ 31.61 $ 600,001

Mr.Montarce ElancoBonusPlan $ 27,904 $ 111,616 $ 223,232 LillyBonusPlan $ 5,614 $ 22,454 $ 44,908

2018-2020LillyPAs(3) 2/9/2018 N/A 1,047 2,094 3,141 $ 216,000

2018-2020LillySVAs(4) 2/9/2018 N/A 1,465 2,930 4,395 $ 150,000

LillyRSU(8) 5/1/2018 N/A 3,162 $ 250,019

(1) Thesecolumnsshowthethreshold,targetandmaximumpayoutsforperformanceundertheElancoBonusPlanand/orLillyBonusPlan.Bonuspayoutsrangefrom0%to200%oftarget.Thethreshold,targetandmaximumamountsrepresentsaweightedaverageoftheamountsapprovedbyLillymanagementfortheperiodpriortotheIPOandamountsapprovedbytheElancoboardofdirectorsorcompensationcommittee,asapplicable,inconnectionwiththeIPO.

(2) Toassuregranttimingisnotmanipulatedforemployeegain,theannualgrantdateforLillyawardsisestablishedinadvancebytheLillycompensationcommittee.Lillyequityawardstonewhiresandotheroff-cyclegrantsaregenerallyeffectiveonthefirsttradingdayofthefollowingmonth.

(3) Thisrowshowsthepossiblepayoutsfor2018-2019LillyPAsandthe2018-2020ExecutiveOfficerPAs,rangingfrom0%to150%oftarget.TheLillyPAs,totheextentearnedandvested,willpayoutinJanuary2020,andtheExecutiveOfficerPAs,totheextentearnedandvested,willpayoutinJanuary2021.ThegrantdatefairvalueoftheLillyPAsandExecutiveOfficerPAsisbasedontheprobablepayoutoutcomeatthetimeofgrant,whichassumespayoutat144%oftargetvalue.

TableofContents

ThetargetandmaximumvaluesarelistedfortheseawardsinNote2totheSummaryCompensationTable,above.ForallNamedExecutiveOfficersotherthanMr.Montarce(whowillremainemployedbyLilly),theseawardswereforfeitedfornoconsiderationinconnectionwiththeSplit-Off.TheElancocompensationcommitteehasauthorizedtheissuanceofElancoequityawardsofsimilarvalueanddurationoftheforfeitedawardsfollowingtheSplit-Off.

(4) Thisrowshowstherangeofpayoutsfor2018-2020LillySVAsandthe2018-2020ExecutiveOfficerSVAs.TheseshareholdervalueawardswillpayoutinJanuary2021,withpayoutsforthe2018-2020LillySVAsrangingfrom0%to150%andthepayoutsforthe2018-2020ExecutiveOfficerSVAsrangingfrom0%to180%oftarget.LillymeasuresthefairvalueofLillySVAsandtheExecutiveOfficerSVAawardsonthegrantdateusingaMonteCarlosimulationmodel.Thegrantdatefairvalueoftheseshareholdervalueawardsisbasedontheprobablepayoutoutcomeatthetimeofgrant,whichassumespayoutatthetargetvalue.ThetargetandmaximumvaluesarelistedfortheseawardsinNote2totheSummaryCompensationTable,above.ForallNamedExecutiveOfficersotherthanMr.Montarce(whowillremainemployedbyLilly),theseawards,totheextentnotthenvested,wereforfeitedfornoconsiderationinconnectionwiththeSplit-Off.TheElancocompensationcommitteehasauthorizedtheissuanceofElancoequityawardsofsimilarvalueanddurationtotheforfeitedawardsfollowingtheSplit-Off.

(5) FollowingtheIPO,Ms.LinandMessrs.Simmons,Urbanek,KinardandJensenreceivedaFounder'sAwardintheformof50%ElancoOptionsand50%ElancoRSUs.Generally,theElancoOptionswillvestinthreeyears,followedbyaseven-yearexerciseperiodandtheElancoRSUswillvestonOctober20,2021,exceptforMr.Jensen,whoseFounders'Awardsaccelerateduponhisdeath.

(6) TheElancoRSUrepresentsaone-timeawardtopartiallyoffsetcompensationforfeitedfromapreviousemployer.Mr.YoungwasgrantedtheawardonDecember3,2018;one-halfofthisgrantwillvestonDecember3,2019andtheremainingone-halfwillvestonDecember3,2020.

(7) TheLillyRSUrepresentsaone-timeawardtopartiallyoffsetcompensationforfeitedfromapreviousemployer.Ms.LinwasgrantedonFebruary1,2018;one-thirdofthisgrantwillvestonFebruary1,2019,one-thirdwillvestonFebruary1,2020andtheremainingone-thirdwillvestonFebruary1,2021.InconnectionwiththeSplit-Off,thethen-unvestedportionofthisawardwereforfeitedfornoconsideration.TheElancocompensationcommitteehasauthorizedtheissuanceofElancoequityawardsofsimilarvalueanddurationtotheforfeitedawardsfollowingtheSplit-Off.

(8) TheLillyRSUrepresentstheawardMr.MontarcereceivedinrecognitionofhiscontributionstoEliLillyandCompanyandtohelpsecurehisservicesthroughMay2023.TheawardwasgrantedonMay1,2018;one-thirdofthisgrantwillvestonMay1,2021,andtheremainingtwo-thirdswillvestonMay1,2023.Thegrantdatefairvalueoftheawardwas$250,019.

(9) ThiscolumnshowsthegrantdatefairvalueoftheLillyPAs,ExecutiveOfficerPAs,LillySVAsandExecutiveOfficerSVAscomputedinaccordancewithFASBASCTopic718,basedupontheprobableoutcomeoftheperformanceconditionsasofthegrantdateaswellasthegrantdatefairvalueoftheLillyRSUandElancoRSUawardsgrantedtoMs.LinandMessrs.YoungandMontarce.Seenotes3through8tothistable.

TableofContents

Outstanding Lilly and Elanco Equity Awards at December 31, 2018

The2018Elancoclosingstockpriceof$31.53andtheLillyclosingstockpriceof$115.72wereusedtocalculatethevaluesinthetablebelow.

Stock Awards

Equity Incentive Plan

Awards: Market or

Payout Value of

Unearned Shares, Units,

or Other Rights

That Have Not Vested

Equity Incentive Plan

Awards: Number of Unearned

Shares, Units, or Other

Rights That Have Not

Vested (#)

Option Awards

Number ofShares

or Units of

Stock That Have Not Vested

Name Award

Number of Securities Underlying

Options Exercisable

Number of Securities

Underlying Options

Unexercisable(#)

Option Exercise

Option Expiration

Market Value of Shares or

Units of Stock That Have Not

Vested ($)

Mr.Simmons 2018-2020ExecutiveOfficerSVA 31,448(1) $ 3,639,163

2017-2019ExecutiveOfficerSVA 33,074(2) $ 3,827,323

2018-2020ExecutiveOfficerPA 10,052(3) $ 1,163,217

ElancoRSUs 36,287(6) $ 1,144,129 ElancoOptions 109,642(7) $ 31.61 10/20/2028

Mr.Young

ElancoRSUs 8,983(8) $ 283,234

Ms.Lin

LillyRSUs 10,922(9) $ 1,263,894 ElancoRSUs 6,979(6) $ 220,048 ElancoOptions 21,086(7) $ 31.61 10/20/2028

Mr.Urbanek

2018-2020LillySVA 7,325(1) $ 847,649 2017-2019LillySVA 902(2) $ 104,379 2018-2020LillyPA 5,235(3) $ 605,794 LillyRSU 2,498(10) $ 289,069 ElancoRSUs 6,979(6) $ 220,048 ElancoOptions 21,086(7) $ 31.61 10/20/2028

Mr.Kinard

2018-2020LillySVA 5,859(1) $ 678,003 2017-2019LillySVA 4,676(2) $ 541,107 2018-2020LillyPA 4,188(3) $ 484,635 ElancoRSUs 6,979(6) $ 220,048 ElancoOptions 21,086(7) $ 31.61 10/20/2028

Mr.Jensen

ElancoOptions 58,766(11) $ 31.61 3/14/2019

Mr.Montarce

2018-2020LillySVA 4,395(1) $ 508,589 2017-2019LillySVA 1,014(2) $ 117,340 2018-2020LillyPA 3,141(3) $ 363,477 LillyRSUs 3,162(12) $ 365,907

(1) LillySVAsandExecutiveOfficerSVAsgrantedforthe2018-2020performanceperiod,totheextentearned,arescheduledtovestonDecember31,2020.ThenumberofLillysharesreportedreflectsthemaximumpayout,whichwillbemadeiftheaverageclosingLillystockpriceinNovemberandDecember2020isover$120.65.Actualpayoutsmayvaryfrom0%to180%oftargetfortheExecutiveOfficerSVAsand0%to150%fortheLillySVAs.NetLillysharesreceivedinrespectofExecutiveOfficerSVApayoutsmustbeheldbyMr.Simmonsforaminimumofoneyear.ForallNamedExecutiveOfficersotherthanMr.Montarce(whowillremainemployedbyLilly),theseawards,totheextentnotthenvested,wereforfeitedfornoconsiderationinconnectionwiththeSplit-Off.TheElancocompensationcommitteehasauthorizedtheissuanceofElancoequityawardsofsimilarvalueanddurationtotheforfeitedawardsfollowingtheSplit-Off.

(2) LillySVAsandExecutiveOfficerSVAsgrantedforthe2017-2019performanceperiodarescheduledtovestonDecember31,2019.ThenumberofLillysharesreportedreflectsthemaximumpayout,whichwillbemadeiftheaverageclosingLillystockpriceinNovemberandDecember2018isover$101.79.Actualpayoutsmayvaryfrom0%to180%oftargetfortheExecutiveOfficerSVAand0%to150%fortheLillySVA.NetLillysharesfromanypayoutmustbeheldbytheapplicableNamedExecutiveOfficerforaminimumofoneyear.ForallNamedExecutiveOfficersotherthanMr.Montarce(whowillremainemployedbyLilly),theseawards,totheextentnotthenvested,wereforfeitedfornoconsiderationinconnectionwiththeSplit-Off.TheElancocompensationcommitteehasauthorizedtheissuanceofElancoequityawardsofsimilarvalueanddurationtotheforfeitedawardsfollowingtheSplit-Off.

TableofContents

Lilly and Elanco Stock Vested in 2018

(3) ForMr.Simmons,thisnumberrepresentsthemaximumvalueofExecutiveOfficerPAsharesthatcouldpayoutfor2018-2019performanceperiodprovidedperformancegoalsaremet.OncethecombinedcumulativeLillyEPSresultandassociatedpayoutlevelisdeterminedattheendoftheperformanceperiod,theresultantnumberofsharesowedtoMr.SimmonswillbeissuedasLillyRSUsthatvestinFebruary2021.ForMessrs.Urbanek,KinardandMontarce,thisnumberrepresentsthemaximumvalueofLillyPAsharesthatcouldpayoutfor2018-2019performanceperiodprovidedperformancegoalsaremet.ActualpayoutsforbothLillyPAsandExecutiveOfficerPAsmayvaryfrom0%to150%oftarget.ForallNamedExecutiveOfficersotherthanMr.Montarce(whowillremainemployedbyLilly),theseawards,totheextentnotthenvested,wereforfeitedfornoconsiderationinconnectionwiththeSplit-Off.TheElancocompensationcommitteehasauthorizedtheissuanceofElancoequityawardsofsimilarvalueanddurationtotheforfeitedawardsfollowingtheSplit-Off.

(4) TheperformanceperiodendingDecember31,2018forthe2017-2019ExecutiveOfficerPAresultedinMr.SimmonsbeingissuedLillyRSUsfor150%oftargetshares.TheRSUsarescheduledtovestinFebruary2020.

(5) RSUsvestinginFebruary2019fromthe2016-2018ExecutiveOfficerPA,whichoccurredpriortotheSplit-Off.

(6) ElancoRSUsgrantmadeafterElanco'sIPOwithathree-yearvestvestingonOctober20,2021.

(7) ElancononqualifiedstockoptionsgrantmadeafterElanco'sIPOwithathree-yearvestvestingonOctober20,2021followedbyaseven-yearexerciseperiodendingOctober20,2028.

(8) ElancoRSUgrantedonDecember3,2018.One-halfofthisgrantwillvestonDecember3,2019andtheremainingone-halfwillvestonDecember3,2020.

(9) LillyRSUgrantedonFebruary1,2018.One-thirdofthisgrantvestedonFebruary1,2019,one-thirdwillvestonFebruary1,2020andtheremainingone-thirdwillvestonFebruary1,2021.Thisaward,totheextentnotthenvested,wasforfeitedfornoconsiderationinconnectionwiththeSplit-Off.TheElancocompensationcommitteehasauthorizedtheissuanceofElancoequityawardsofsimilarvalueanddurationtotheforfeitedawardsfollowingtheSplit-Off.

(10) LillyRSUgrantmadein2017outsideofthenormalannualcycle.ThisgrantwillvestonSeptember1,2020.Thisaward,totheextentnotthenvested,wasforfeitedfornoconsiderationinconnectionwiththeSplit-Off.TheElancocompensationcommitteehasauthorizedtheissuanceofElancoequityawardsofsimilarvalueanddurationtotheforfeitedawardsfollowingtheSplit-Off.

(11) UponMr.Jensen'sdeath,thisElancononqualifiedstockoptiongrantmadeafterElanco'sIPOimmediatelyvestedonDecember14,2018.TheoptiontoexercisethisoptionexpiredonMarch14,2019.

(12) LillyRSUgrantmadeonMay1,2018outsideofthenormalannualcycle.One-thirdofthisgrantwillvestonMay1,2021,andtheremainingtwo-thirdswillvestonMay1,2023.

Lilly Stock Awards Elanco Stock Awards

Number of Shares

Acquired on Vesting (#)

Value Realized on

Vesting ($) (1)

Number of Shares

Acquired on Vesting (#)

Value Realized on Vesting ($)

(1) Mr.Simmons 20,000(2) $ 1,621,400 — —

21,326(3) $ 1,737,003 — — 43,785(4) $ 5,261,643 — —

Mr.Young — — — —Ms.Lin — — — —Mr.Urbanek 816(5) $ 98,059 — —

1,024(6) $ 123,054 — —Mr.Kinard 4,233(5) $ 508,680 — —

4,818(6) $ 578,979 — — 6,726(7) $ 718,001 — —

Mr.Jensen — — 19,449(8) $ 629,564Mr.Montarce 918(5) $ 110,316 — —

1,265(6) $ 152,015 — —

(1) AmountsreflectthemarketvalueoftheLillystockonthedaytheLillystockvestedorthemarketvalueoftheElancostockonthedaytheElancostockvestedasapplicable.

(2) Thelastinstallmentofaone-timeRSUawardedtoMr.Simmonsin2008outsideofthenormalgrantcycle.

(3) Lillyrestrictedstockunitsresultingfromthe2015-2017ExecutiveOfficerPAthatvestedinFebruary2018.

TableofContents

Retirement Benefits

LillyprovidesretirementincometoeligibleU.S.Lillyemployees,whichincludedcertainoftheNamedExecutiveOfficerspriortotheIPO,throughthefollowingplans:

• TheLilly401(k)Plan,adefinedcontributionplanqualifiedunderSections401(a)and401(k)oftheInternalRevenueCode.Participantsmayelecttocontributeaportionoftheirbasesalarytotheplan,andLillyprovidesmatchingcontributionsonemployees'contributionsupto6%ofbasesalaryuptoIRSlimits.Theemployeecontributions,Lillycontributionsandearningsthereonarepaidoutinaccordancewithelectionsmadebytheparticipant.Seethe"AllOtherCompensation"columnintheSummaryCompensationTableforinformationaboutLillycontributionsunderthe401(k)PlanfortheapplicableNamedExecutiveOfficers.

• TheLillyRetirementPlan,atax-qualifieddefinedbenefitplanthatprovidesmonthlybenefitstoretirees.SeethePensionBenefitstablebelowforadditionalinformationaboutthevalueofthesepensionbenefits.

Sections401and415oftheCodegenerallylimittheamountofannualpensionthatcanbepaidfromatax-qualifiedplanto$275,000in2018aswellastheamountofannualearningsthatcanbeusedtocalculateapensionbenefit.However,since1975LillyhasmaintainedanonqualifiedpensionplanthatpaysretireesthedifferencebetweentheamountpayableundertheRetirementPlanandtheamounttheywouldhavereceivedwithouttheCodelimits.TheLillynonqualifiedpensionplanisunfundedandsubjecttoforfeitureintheeventofbankruptcy.Likewise,Lillymaintainsanonqualifiedsavingsplanthatallowsparticipantstocontributeupto6%ofbasesalaryexceedingtheIRSlimit.Lillymatchesthesecontributionsasdescribedinthe401(k)Plan.Formoreinformation,seethedisclosureimmediatelyfollowingthefootnotestotheNonqualifiedDeferredCompensationin2018table.

ThefollowingtableshowsbenefitsthattheapplicableNamedExecutiveOfficershaveaccruedundertheLillyRetirementPlanandtheLillynonqualifiedpensionplan.

(4) Payoutofthe2016-2018ExecutiveOfficerSVAat125%oftargetwith+20%TSRmodifier,resultinginanoverall150%payout.

(5) Payoutofthe2017-2018LillyPAat150%oftarget.

(6) Payoutofthe2016-2018LillySVAat125%oftarget.

(7) Thelastinstallmentofaone-timeRSUawardedtoMr.Kinardin2008outsideofthenormalgrantcycle.

(8) PayoutofMr.Jensen'sElancoRSUusingtheclosingpriceofElancostockonDecember14,2018of$32.37.

TableofContents

Pension Benefits

TheLillyRetirementPlanbenefitsshowninthetablearenetpresentvalues.Thebenefitsarenotpayableasalumpsum;theyaregenerallypaidasamonthlyannuityforthelifeoftheretireeand,ifelected,anyqualifyingsurvivor.TheannualbenefitundertheLillyretirementplaniscalculatedusingyearsofserviceandtheaverageoftheannualearnings(salaryplusbonus)forthehighestfiveoutofthelast10calendaryearsofservice(finalaverageearnings).

Name Plan

Number of Years of Credited Service

Present Value of

Accumulated Benefit ($) (1)

Payments During

Last Fiscal

Year ($) Mr.Simmons Lillyretirementplan(pre-2010) 21 $ 1,019,096

Lillyretirementplan(post-2009) 9 $ 207,040 Lillynonqualifiedplan(pre-2010) 21 $ 4,344,161 Lillynonqualifiedplan(post-2009) 9 $ 849,148 $ 6,419,745 $ 0

Mr.Young Lillyretirementplan(post-2009) 0 $ 551 Lillynonqualifiedplan(post-2009) 0 $ 551 $ 1,102 $ 0

Ms.Lin Lillyretirementplan(post-2009) 1 $ 3.300 Lillynonqualifiedplan(post-2009) 1 $ 2.442 $ 5,742 $ 0

Mr.Urbanek Lillyretirementplan(pre-2010) 22 $ 1,113,304 Lillyretirementplan(post-2009) 9 $ 223,687 Lillynonqualifiedplan(pre-2010) 22 $ 467,061 Lillynonqualifiedplan(post-2009) 9 $ 88,407 $ 1,892,459 $ 0

Mr.Kinard Lillyretirementplan(pre-2010) 13 $ 488,132 Lillyretirementplan(post-2009) 9 $ 207,040 Lillynonqualifiedplan(pre-2010) 13 $ 738,879 Lillynonqualifiedplan(post-2009) 9 $ 301,492 $ 1,735,543 $ 0

Mr.Jensen Lillyretirementplan(post-2009) 1 $ 3.300 Lillynonqualifiedplan(post-2009) 1 $ 3,835 $ 7,135 $ 0

Mr.Montarce Lillyretirementplan(post-2009) 6 $ 18,675 Lillynonqualifiedplan(post-2009) 6 $ 3,556 $ 22,231 $ 0

(1) ThefollowingactuarialassumptionswereusedtocalculatethepresentvalueoftheapplicableNamedExecutiveOfficer'saccumulatedpensionbenefit:

Discountrate: 4.52%forthequalifiedplanand4.36%fornon-qualifiedplanMortality(post-retirementdecrementonly): RP2006withgenerationalprojectionusingScaleMP2018Pre-2010jointandsurvivorbenefit(%ofpension): 50%untilage62;25%thereafterPost-2009benefitpaymentform: lifeannuity

TableofContents

Post-2009 Lilly Plan Information: FollowingamendmentoftheLillyRetirementPlanformulas,employeeshiredbyLillyonorafterFebruary1,2008haveaccruedretirementbenefitsonlyunderthenewLillyplanformula.EmployeeshiredbeforethatdatehaveaccruedbenefitsunderboththeoldLillyandnewLillyplanformulas.Alleligibleemployees,includingthosehiredonorafterFebruary1,2008,canretireatage65withatleastfiveyearsofserviceandreceiveanunreducedbenefit.TheannualbenefitunderthenewLillyplanformulaisequalto1.2%offinalaverageearningsmultipliedbyyearsofservice.EarlyretirementbenefitsunderthisLillyplanformulaarereduced6%foreachyearunderage65.Transitionbenefitswereaffordedtoemployeeswith50points(ageplusservice)ormoreasofDecember31,2009.ThesebenefitswereintendedtoeasethetransitiontothenewLillyretirementformulaforthoseemployeeswhowereclosertoretirementorhadbeenwithLillylongeratthetimetheLillyplanwaschanged.Forthetransitiongroup,earlyretirementbenefitsarereduced3%foreachyearfromage65toage60and6%foreachyearunderage60.Messrs.Simmons,UrbanekandKinardareinthistransitiongroup.

Pre-2010 Lilly Plan Information: EmployeeshiredbyLillypriortoFebruary1,2008,accruedbenefitsunderbothLillyplanformulas.Fortheseemployees,benefitsthataccruedbeforeJanuary1,2010werecalculatedundertheoldLillyplanformula.TheamountofthebenefitiscalculatedusingactualyearsofservicethroughDecember31,2009,whiletotalyearsofserviceisusedtodetermineeligibilityandearlyretirementreductions.Thebenefitamountisincreased(butnotdecreased)proportionately,basedonfinalaverageearningsatterminationcomparedtofinalaverageearningsatDecember31,2009.Fullretirementbenefitsareearnedbyemployeeswith90ormorepoints(thesumofhisorherageplusyearsofservice).Employeeselectingearlyretirementreceivereducedbenefitsasdescribedbelow:

• ThebenefitforLillyemployeeswithbetween80and90pointsisreducedby3%foreachyearunder90pointsorage62.

• ThebenefitforLillyemployeeswhohavefewerthan80points,butwhoreachedage55andhaveatleast10yearsofservice,isreducedasdescribedaboveandisfurtherreducedby6%foreachyearunder80pointsorage65.

TableofContents

Nonqualified Deferred Compensation

TheNonqualifiedDeferredCompensationtableaboveshowsinformationabouttwoLillyprograms:theLillynonqualifiedsavingsplanandtheLillyDeferredCompensationPlan.TheLillynonqualifiedsavingsplanisdesignedtoalloweachemployeetocontributeupto6%ofhisorherbasesalaryandreceiveaLillycompanymatchbeyondthecontributionlimitsprescribedbytheIRSwithregardto401(k)plans.TheLillyplanisadministeredinthesamemannerasthe401(k)Plan,withthesameparticipationandinvestmentelections.LillyexecutiveofficersmaydeferreceiptofallorpartoftheircashcompensationandotherU.S.LillyexecutivesmaydeferreceiptofallorpartoftheircashbonusundertheLillyDeferredCompensationPlan.AmountsdeferredbyexecutivesundertheLillyplanarecreditedwithinterestat120%oftheapplicablefederallong-termrateasestablishedtheprecedingDecemberbytheU.S.TreasuryDepartmentunderSection1274(d)oftheCodewithmonthlycompounding,whichwas3.1%for2018.Participantsmayelecttoreceivethefundsinalumpsumorinupto10annualinstallmentsfollowingterminationofemployment,butmaynotmakewithdrawalswhileemployedbyLilly,exceptintheeventofhardshipasapprovedbytheLillycompensationcommittee.Alldeferralelectionsandassociateddistributionschedulesareirrevocable.BothLillyplansareunfundedandsubjecttoforfeitureintheeventofbankruptcy.

Name Plan

Executive Contributions in Last Fiscal

Year ($) (1)

Registrant (Lilly)

Contributions in Last Fiscal

Year ($) (2)

Aggregate Earnings in Last Fiscal Year

Aggregate Withdrawals/ Distributions

in Last Fiscal Year

Aggregate Balance at Last Fiscal Year End

($) Mr.Simmons Lillynonqualifiedsavings $ 30,011 $ 30,011 $ 21,215 $ 0 $ 803,403

Lillydeferredcompensation $ 0 $ 0 $ 54,151 $ 1,789,759 Total $ 30,011 $ 30,011 $ 75,366 $ 0 $ 2,593,162

Mr.Young Lillynonqualifiedsavings $ 0 $ 0 $ 0 $ 0 $ 0 Lillydeferredcompensation $ 0 $ 0 $ 0 $ 0 Total $ 0 $ 0 $ 0 $ 0 $ 0

Ms.Lin Lillynonqualifiedsavings $ 13,533 $ 13,533 $ (2,092) $ 0 $ 24,974 Lillydeferredcompensation $ 0 $ 0 $ 0 $ 0 Total $ 13,533 $ 13,533 $ (2,092) $ 0 $ 24,974

Mr.Urbanek Lillynonqualifiedsavings $ 6,413 $ 6,413 $ (51) $ 0 $ 16,034 Lillydeferredcompensation $ 0 $ 0 $ 0 $ 0 Total $ 6,413 $ 6,413 $ (51) $ 0 $ 16,034

Mr.Kinard Lillynonqualifiedsavings $ 8,758 $ 8,758 $ (7,196) $ 0 $ 181,348 Lillydeferredcompensation $ 61,149 $ 0 $ 20,957 $ 703,833 Total $ 69,907 $ 8,758 $ 13,761 $ 0 $ 885,181

Mr.Jensen Lillynonqualifiedsavings $ 5,796 $ 5,796 $ (456) $ 0 $ 11,136 Lillydeferredcompensation $ 0 $ 0 $ 0 $ 0 Total $ 5,796 $ 5,796 $ (546) $ 0 $ 11,136

Mr.Montarce Lillynonqualifiedsavings $ 3,611 $ 3,611 $ (131) $ 0 $ 7,090 Lillydeferredcompensation $ 0 $ 0 $ 0 $ 0 Total $ 3,611 $ 3,611 $ (131) $ 0 $ 7,090

(1) TheamountsinthiscolumnarealsoincludedintheSummaryCompensationTable,inthe"Salary"column(nonqualifiedsavings)orthe"LillyNon-EquityIncentivePlanCompensation"column(deferredcompensation).

(2) TheamountsinthiscolumnarealsoincludedintheSummaryCompensationTable,inthe"AllOtherCompensation"columnasaportionofthesavingsplanmatch.

TableofContents

Payments Upon Termination or Change in Control (as of December 31, 2018)

ThefollowingtabledescribesthepotentialpaymentsandbenefitsunderElanco'scompensationandbenefitplansandarrangementstowhichtheapplicableNamedExecutiveOfficerswouldhavebeenentitleduponahypotheticalterminationofemploymentonDecember31,2018inthecircumstancesdescribedinthetable.ThenarrativefollowingthetabulardisclosurebelowcontainsmoredetailsonthetreatmentofcertainequityawardsuponaqualifyingterminationofemploymentfortheNamedExecutiveOfficers.Otherthanthepaymentsandbenefitsdescribedbelow,anyagreementtoprovideseverancepaymentsorbenefits(otherthanfollowingachangeincontrol)wouldbeatthediscretionofourcompensationcommittee.

Cash Severance Payment (1)

Continuation of Medical /

Welfare Benefits (present

value)

Value of Acceleration

of Equity Awards

Total Termination

Benefits Mr.Simmons • Involuntaryretirementorterminationwithoutcause $ 0 $ 0 $ 4,318,097(3) $ 4,318,097• Involuntaryorgoodreasonterminationafterchangeincontrol $ 4,400,000 $ 47,892(2) $ 12,341,104(5) $ 16,788,996Mr.Young • Involuntaryretirementorterminationwithoutcause $ 0 $ 0 $ 283,234(4) $ 283,234• Involuntaryorgoodreasonterminationafterchangeincontrol $ 1,870,000 $ 47,892(2) $ 283,234(4) $ 2,201,126Ms.Lin • Involuntaryretirementorterminationwithoutcause $ 0 $ 0 $ 1,483,942(3) $ 1,483,942• Involuntaryorgoodreasonterminationafterchangeincontrol $ 1,696,000 $ 31,039(2) $ 1,483,942(5) $ 3,210,981Mr.Urbanek • Involuntaryretirementorterminationwithoutcause $ 0 $ 0 $ 509,116(3) $ 509,116• Involuntaryorgoodreasonterminationafterchangeincontrol $ 1,232,000 $ 47,892(2) $ 1,925,558(5) $ 3,205,450Mr.Kinard • Involuntaryretirementorterminationwithoutcause $ 0 $ 0 $ 220,048(3) $ 220,048• Involuntaryorgoodreasonterminationafterchangeincontrol $ 1,376,000 $ 41,386(2) $ 1,810,735(5) $ 3,228,121

(1) AsofDecember31,2018,theNamedExecutiveOfficers(otherthanMessrs.MontarceandJensen),wereentitledtoseveranceunderTheElancoChange-in-ControlSeverancePayPlanforSelectEmployeesuponaninvoluntaryretirementorterminationwithoutcause(seebelow).

(2) See"ElancoChange-in-ControlSeverancePayPlanforSelectEmployees"belowforadiscussionofpaymentsfollowingachangeincontrol.

(3) IncludesamountsforMr.Simmonsthatwouldbepaidunderthe2016-2018ExecutiveOfficerPAs,2017-2019ExecutiveOfficerPAsandthefounders'awardElancoRSUs.ForMs.Lin,theamountincludesthefounders'awardElancoRSUsandtheLillyRSUgrantedonFebruary1,2018.ForMr.Urbanek,theamountincludesthefounders'awardElancoRSUsandtheLillyRSUgranted

TableofContents

Former Chief Financial Officer and Acting Chief Financial Officer

InconnectionwithMr.Jensen'sdeathonDecember14,2018,hisestatebecameentitledtocertainbenefits,includingalifeinsuranceanddeathbenefitof$1,300,000underTheEliLillyandCompanyLifeInsuranceandDeathBenefitPlan,whichgenerallyprovidesforabenefitequaltotwotimesanemployee'sbasesalaryandwasavailabletoallLillyandElancoemployeesin2018.Mr.Jensen'sElancoRSUawardwasaccelerated,whichresultedintheimmediatevestingof19,449sharesofElancostockwithavalueof$629,564,andhisElancooptionawardwasacceleratedandremainedexercisableuntilMarch14,2019.Inaddition,thematchingofhisaccountsunderTheLillyEmployee401(k)PlanandTheLillyExcessSavingsPlanwasacceleratedentitlinghisestatetopaymentsof$13,886and$5,796,respectively.Mr.Jensen'sspouseanddependentsareentitledtoCOBRAforaperiodofsixmonths.

Mr.MontarcewasnotentitledtoanyterminationpaymentsfromElancoinconnectionwithhistransitioninemploymentfromElancotoLillyonNovember1,2018.

Equity Acceleration in Connection with a Change-in-Control

UponaLillychangeincontrol,anythenoutstandingandunvestedLillySVAs,ExecutiveSVAs,PAsandExecutivePAswouldconvertintorestrictedstockunitsofthenewcompany,withthenumberofLillysharesearnedunderanyperformance-basedawardsbasedonactualperformanceatthetimeofthetransaction.TheseconvertedrestrictedstockunitsandotherLillyrestrictedstockunitawards(whichwouldalsoconvertintorestrictedstockunitsofthenewcompany)willcontinuetovestandpayoutupontheearlierofthecompletionoftheoriginalawardperiod,uponacoveredterminationofemployment(generallythesameasisdescribedbelowforElanco),orifthesuccessorentitydoesnotassume,substituteorotherwisereplacetheaward.

UponanElancochangeincontrol,unvestedElancoRSUsandoptionswillcontinuetovestandpayoutupontheearlierofthecompletionoftheoriginalawardperiod,uponacoveredterminationofemploymentasdescribedbelow,orifthesuccessorentitydoesnotassume,substituteorotherwisereplacetheaward.

Elanco Change-in-Control Severance Pay Plan for Select Employees

InconnectionwiththeIPO,Elanco'sboardofdirectorsadoptedElancochange-in-controlseverancepayplansfornearlyallElancoemployees,includingaplanthatappliestotheNamedExecutiveOfficers.TheElancoplansareintendedtopreserveElancoemployeemoraleandproductivityandencourageretentioninthefaceofthedisruptiveimpactofanactualorrumoredchangeincontrol.Inaddition,theElancoplansareintendedtoalignparticipatingElancoemployee

in2017.ForMr.Kinard,theamountincludesthefounders'awardElancoRSUs.Doesnotincludeamountsthatwouldbepaidunderthe2018-2020LillyPAs,2018-2020ExecutiveOfficerPA,2017-2019LillySVAs,2017-2019ExecutiveOfficerSVA,2018-2020LillySVAsor2018-2020ExecutiveOfficerSVAs,whichwouldresultinthefollowingestimatedamounts,ifcalculatedattarget,asofDecember31,2018:Mr.Simmons:$2,479,127;Mr.Urbanek:$436,650andMr.Kinard:$552,679.See"OutstandingLillyandElancoEquityAwardsatDecember31,2018"tableabove.

(4) IncludestheaccelerationofElancoRSUsrelatedtotheone-timeElancoRSUawardMr.Youngreceivedaspartofhishiringupontheeventofcertainqualifyingterminations.

(5) IncludestheaccelerationofElancoRSUsandoptionsandofLillySVAs,ExecutiveOfficerSVAs,PAs,ExecutiveOfficerPAsandRSUs,ineachcase,upontheeventofcertainqualifyingterminationsfollowingachange-in-control.

TableofContents

andElancoshareholderinterestsbyenablingexecutivestoevaluatecorporatetransactionsthatmaybeinthebestinterestsoftheElancoshareholdersandotherconstituentsofElancowithoutundueconcernoverwhetherthetransactionswouldjeopardizetheparticipatingemployee'sownemployment.Outsideofachangeincontrol,ElancowasnotobligatedtopayseverancetoitsNamedExecutiveOfficersuponterminationofemployment,butseverancecouldhavebeenpaidatthediscretionoftheElancocompensationcommittee.

ThebasicelementsoftheselectplanapplicabletotheNamedExecutiveOfficersinclude:

• Doubletrigger.Unlike"singletrigger"plansthatpayoutimmediatelyuponachangeincontrol,theselectplanrequiresa"doubletrigger"—achangeincontrolfollowedbyaninvoluntarylossofemploymentwithintwoyears.ThisisconsistentwithElanco'sintenttoprovideemployeeswithfinancialprotectionuponlossofemployment.

• Coveredterminations.OurparticipatingNamedExecutiveOfficersareeligibleforpaymentsunderourselectplanif,withintwoyearsofthechangeincontrol,theiremploymentisterminated(i)withoutcausebyElancoor(ii)forgoodreasonbytheemployee,eachasisdefinedintheplan.

• Severancepayment.NamedExecutiveOfficersareeligibleforuptotwoyears'basesalaryplustwotimestheirtargetbonusforthethen-currentyear.

• Benefitcontinuation.Basicemployeebenefitssuchashealthandlifeinsurancewouldcontinuefor18monthsfollowingaparticipatingNamedExecutiveOfficer'sterminationofemployment,unlesstheybecomeeligibleforcoveragewithanewemployerbeforethen.

• Nogross-ups.Insomecircumstances,thepaymentsorotherbenefitsreceivedbyaparticipatingemployeeinconnectionwithachangeincontrolcouldexceedlimitsestablishedunderSection280GoftheCoderesultinginanexcisetaxpayment.Elancowouldnotreimburseorgross-upemployeesforthesetaxes.However,theamountofchangeincontrol-relatedbenefitswouldbereducedtothemaximumamountthatwouldnotresultinanexcisetaxiftheeffectwouldbetodeliveragreaterafter-taxbenefitthantheemployeewouldreceiveifhisorherbenefitswerenotsoreduced.

Director Compensation

Elanco Non-Employee Director Compensation Program

DirectorswhoareemployedbyElancooranyofitsaffiliatesarenoteligibletoreceivecompensationfortheirserviceontheBoard.In2018,directorswhowereemployedbyLillyoritsaffiliatesweresimilarlynoteligibletoreceivecompensationfortheirserviceonourBoard.Currently,allmembersoftheBoard,otherthanthoseemployedbyElanco,receiveanannualretentionfeeof$70,000incashandanannualequityawardgrantedundertheElancoDirectors'DeferralPlaninthenumberofsharesofourcommonstockhavingagrantdatevalueequalto$180,000.ThechairmanofElanco'sboardofdirectorsalsoreceivesanannualretentionfeeof$100,000incash,thechairmanoftheElancoAuditCommitteealsoreceivesanannualretentionfeeof$18,000incash,andthechairmanoftheCompensationCommittee,FinanceCommitteeandNominatingandCorporateGovernanceCommitteeeachalsoreceiveanannualretentionfeeof$16,000incash.TheannualequityawardsgrantedtodirectorsaresubjecttomandatorydeferralundertheElancoDirectors'DeferralPlanandthecashcompensationissubjecttoelectivedeferralundersuchplan,asdescribedbelow.

Elanco'sdirectorsmaybereimbursedforreasonableout-of-pockettravelexpensesincurredinconnectionwithattendanceatboardandcommitteemeetingsandotherboard-relatedactivities.TheElancocompensationcommitteewillreviewdirectorcompensationfromtimetotimeandmakerecommendationstotheboardofdirectors.

TableofContents

2018 Director Compensation

ElancodirectorswhoarenotalsoemployeesofLillyorElancoreceivedthefollowingcompensationfortheirservicein2018,whichrepresentsproratedamountsfromthetimeoftheIPOthroughDecember31,2018unlessotherwiseindicated:

Director Letter Agreement with Chairman

InconnectionwiththeappointmentofR.DavidHooverasadirectorandchairmanofElanco'sboardofdirectors,ElancoenteredintoaletteragreementwithMr.Hoover,whichprovided,inpart,thatMr.Hooverwouldassistintheidentificationandrecruitmentofpotentialcandidatestoserveontheboardofdirectors.Undertheletteragreement,Mr.Hooverwasentitledtoapaymentof$10,000permonthpriortotheIPO.SincetheIPO,Mr.Hooverhasbeencompensatedinthesamemannerastheothernon-employeedirectorsasdescribedunder"ElancoNon-EmployeeDirectorCompensationProgram"above.

Elanco Directors' Deferral Plan

PriortotheIPO,theboardofdirectorsandLilly,asElanco'ssoleshareholder,approvedtheElancoDirectors'DeferralPlan(the"Directors'DeferralPlan"),whichbecameeffectiveonSeptember18,2018.UndertheElancoDirectors'DeferralPlan,non-employeedirectors'equitycompensation(butnomorethanthelesserof30,000sharesorthenumberofsharesequalinvalueto$800,000(asoftheapplicablevaluationdate)lessthedirectors'cashcompensationfortheapplicableplanyear)arecreditedannuallyinadeferredstockaccount(asdescribedbelow).TheElanco

Fees Earned or Paid in

Cash ($)

Stock Awards

($) (1)

All Other Compensation

Payments ($)

Total ($)

R.DavidHoover $ 62,000(2) $ 60,004 $ 0 $ 122,004LawrenceKurzius $ 28,667(3) $ 60,004 $ 0 $ 88,671KapilaAnand $ 29,333(4) $ 60,004 $ 0 $ 89,337

* During2018,inadditiontothedirectorslistedandJeffreyN.Simmonswhosecompensationisdisclosedinthe"SummaryCompensationTable,"ourboardalsoincludedMichaelJ.Harrington,CarlL.McMillian,DavidA.Ricks,AartiS.ShahandJoshuaL.Smiley,eachofwhomwasalsoanemployeeofLillyanddidnotreceiveanycompensationfromusfortheirserviceasourdirector.

(1) Eachnon-employeedirectorreceivedanawardofstockvaluedat$60,004(1,796shares),representingapro-ratedawardforapartialyearofservice,whichawardsaremandatorilydeferredandnotissueduntilthesecondJanuaryfollowingthedirector'sdeparturefromserviceundertheElancoDirectors'DeferralPlan.Thecolumnshowsthegrantdatefairvalueforeachdirector'sstockawardcomputedinaccordancewithFASBASCTopic718basedupontheclosingpriceonthegrantdateandtheassumptionsinNote13:Stock-BasedCompensationtoElanco'sconsolidatedandcombinedfinancialstatementsincludedelsewhereinthisprospectus.

(2) Alsoincludesafeeof$10,000permonthfromthedateofMr.Hoover'sappointmentasChairmanoftheboardofdirectorsfromMay26,2018throughtheIPO.See"DirectorLetterAgreementwithChairman"below.

(3) Includespro-ratedfeeforserviceasthechairmanoftheElancocompensationcommittee.

(4) Includespro-ratedfeeforserviceasthechairmanoftheElancoauditcommittee.

TableofContents

Directors'DeferralPlanalsoallowsnon-employeedirectorstodeferreceiptofallorpartoftheircashcompensationuntilaftertheirserviceonourboardofdirectorshasended.Eachdirectorcanchoosetoinvesttheirdeferredcashcompensationinoneorbothofthefollowingtwoaccounts:

Deferred Stock Account. Thisaccountallowsthedirector,ineffect,toinvesthisorherdeferredcashcompensationincompanystock.Fundsinthisaccountarecreditedashypotheticalsharesofcompanystockbasedontheclosingstockpriceonpre-setdates.Thenumberofsharescreditedinrespectofdeferredcashcompensationiscalculatedbytheamountdeferreddividedbytheclosingstockpriceonpre-setdates.Inaddition,theannualstockcompensationawardsdescribedaboveisalsocreditedtothisaccount.Deferredstockaccountsarealsocreditedfordividendsasifthecreditedshareswereactualshares,withsuchcrediteddividendscreditedinadditionalshares.

Deferred Compensation Account. Fundsinthisaccountearninteresteachyearatarateof120percentoftheapplicablefederallong-termrate,compoundedmonthly,asestablishedtheprecedingDecemberbytheU.S.TreasuryDepartmentunderSection1274(d)oftheInternalRevenueCodeof1986(theInternalRevenueCode).

BothaccountsmaygenerallyonlybepaidinalumpsuminJanuaryofthesecondplanyearfollowingtheplanyearinwhichthedirectorseparatesfromserviceorinannualinstallmentsoverbetweentwoand10years,beginningatthesametimethelumpsumpaymentwouldbemade.Amountscreditedtothedirector'sdeferredstockaccountwouldgenerallybepaidinsharesofcompanystockandamountscreditedtothedirector'sdeferredcompensationaccountwouldbepaidincash.

Stock Ownership Guidelines

Pursuanttoourcorporategovernanceguidelines,directorsshouldholdmeaningfulequityownershippositionsinthecompany.Accordingly,asignificantportionofdirectorcompensationismadeintheformofcompanyequity.Theboardwillconsiderfromtimetotimeequityownershiprequirementsfornon-employeedirectors.

Hedging/Pledging Policy

Elanco'sCompensationCommitteeadoptedahedgingandpledgingpolicyunderwhichournon-employeedirectorsandemployeesarenotpermittedtohedgetheireconomicexposurestoElancostockthroughshortsalesorderivativetransactions.Non-employeedirectorsandallmembersofseniormanagementareprohibitedfrompledginganyElancostock(i.e.,usingElancostockascollateralforaloanortradingsharesonmargin).

TableofContents

Securities Authorized for Issuance under Equity Compensation Plans

ThefollowingtablesummarizesinformationasofDecember31,2018relatingtoElanco'sequitycompensationplansunderwhichequitysecuritiesareauthorizedforissuance:

Number of securities to be

issued upon exercise of

outstanding options, warrants

and rights

Weighted-average exercise price of

outstanding options, warrants

and rights

Number of securities

remaining available for future issuance

under equity compensation plans

(excluding securities reflected

in column (a)) Plan Category (a) (b) (c) EquityCompensationPlansapprovedbysecurityholders 550,855(1) $ 31.61(2) 4,940,145EquityCompensationPlansnotapprovedbysecurityholders — — —Total 559,855 $ 31.61 4,940,145

(1) Includes421,297stockoptions,133,170sharesunderlyingRSUsgrantedunderthe2018ElancoStockPlanand5,388deferredRSUsgrantedundertheDirectors'DeferralPlan.

(2) Theweighted-averageexercisepriceisonlyapplicabletostockoptions.

TableofContents

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Relationship between Elanco and Lilly

OnSeptember24,2018,immediatelypriortothecompletionoftheIPO,ElancoenteredintoamasterseparationagreementandanumberofotheragreementswithLillytoeffecttheseparationofElanco'sbusinessfromLillyandtoprovideaframeworkforElanco'songoingrelationshipwithLillyaftertheIPOandtheseparation,eachofwhichremainineffectfollowingthecompletionoftheSplit-Off.ThefollowingisasummaryofthetermsofthemasterseparationagreementandothermaterialagreementsbetweenusandLilly,whicharefiledasexhibitstotheregistrationstatementofwhichthisprospectusisapart.ThesesummariessetforththetermsoftheagreementsthatElancobelievesarematerialandarequalifiedintheirentiretybyreferencetothefulltextofsuchagreements.

Master Separation Agreement

ElancoenteredintoamasterseparationagreementwithLillyimmediatelypriortothecompletionoftheIPO.Themasterseparationagreementgovernscertainpre-IPOtransactions,aswellastheongoingrelationshipbetweenLillyandElancofollowingtheIPOandtheseparation.

The separation of Elanco's business; contribution of entities. ThemasterseparationagreementgenerallyallocatescertainassetsandliabilitiesbetweenElancoandLillyaccordingtothebusinesstowhichsuchassetsorliabilitiesrelate.PriortothecompletionoftheIPO,Lillyoritsaffiliates,asapplicable,conveyed,contributed,assigned,distributed,deliveredorotherwisetransferredownershipofsubstantiallyalloftheassetsthatareusedexclusivelyin,relateexclusivelyto,orariseexclusivelyoutof,theoperationorconductofitsanimalhealthbusinesses,tocertaindirectandindirectsubsidiariesofLilly.

EffectiveasoftheclosingoftheIPOonSeptember24,2018,LillycontributedtoElanco,pursuanttothemasterseparationagreement,theequityinterestsofcertainentitiesthatheld,eitherdirectlyorindirectlythroughtheequityownershipofadditionalentities,substantiallyalloftheassetsofLilly'sanimalhealthbusinesses,whichnowformstheElancobusiness.ThemasterseparationagreementalsogenerallyprovidesfortheassumptionbyElancoortheentitiesthatarenowitssubsidiariespursuanttoforegoingcontribution,asapplicable,ofallhistoricalandfutureliabilitiestotheextentrelatingto,arisingoutoforresultingfromtheownershiporoperationofsuchanimalhealthbusiness.InexchangeforthetransfertoElancooftheentitiesholdingsubstantiallyalloftheassetsandliabilitiesofLilly'sanimalhealthbusinesses,Lillyreceived(i)allofthenetproceeds($1,659.7million)thatElancoreceivedfromthesaleofElancocommonstockintheIPO,includingthenetproceedsreceivedasaresultoftheexerciseoftheunderwriters'optiontopurchaseadditionalshares,(ii)allofthenetproceeds(approximately$2,000million)receivedintheSeniorNotesOfferingand(iii)allofthenetproceeds($498.6million)receivedfromtheentrybyElancointoatermloanfacility.FollowingtheIPO,ElancomadeapaymenttoLillyof$359.9millionpursuanttothetermsofthemasterseparationagreement,whichrequiredthatElancopayadditionalamountstoLillytotheextentthatElanco'stotalunrestrictedcashforworkingcapitalandothergeneralcorporatepurposesexceeded$300millionfollowingthecompletionoftheIPO.AportionofthetotalconsiderationtobepaidtoLillywastemporarilyretainedbyElancoasrestrictedcashinconnectionwiththeanticipatedtransfertoElancofromLillyofcertainanimalhealthassetsincertainjurisdictions.

Exceptasexpresslysetforthinanyofthetransactiondocuments,orasrequiredbylaw,theassetsthathavebeenorwillbeconveyed,contributedorassigned,transferred,distributedordeliveredtoElancooritssubsidiaries(includingentitiestheequityinterestsofwhichhavebeenorwillbetransferredtoElancobyLilly)arebeingsotransferredonan"asis,""whereis"basis,withoutanyrepresentationsorwarranties,andElancohasagreedtobeartheeconomicandlegalrisksthatanyconveyancewasinsufficienttovestinitgoodtitle,freeandclearofanysecurityinterest,thatany

TableofContents

necessaryconsentsorapprovalswerenotobtainedorthatanyconveyancewasnotdoneincompliancewithanyrequirementsoflaworjudgments.

Delayed transfers and further assurances. TotheextentthatthetransfersoftheassetsandtheassumptionsoftheliabilitiesallocatedtoElancounderthemasterseparationagreementwerenotcompletedonorpriortotheIPO,ElancoandLillyagreedtocooperatewitheachotherandusecommerciallyreasonableeffortstoeffectsuchtransfersandassumptionsaspromptlyaspracticablethereafteroratsuchothertimeasElancoandLillyhaveagreed.Underthemasterseparationagreement,untilthetransferofsuchassetsandtheassumptionofsuchliabilitieshaveoccurred,thebenefitsandburdensrelatingtoanysuchassetsandliabilitiesgenerallywillinure,aftertheIPO,totheentitywhowouldhavereceivedsuchassetorliability,haditbeentransferredpriortocompletionoftheIPO,including,inthecaseofthejurisdictionsinwhichLillyandElancohaveagreedtodefertheapplicabletransfersandassumptions,bycalculatingtheneteconomicbenefitanddetrimentattributabletosuchassetsandliabilitiesandmakingpaymentsinconnectiontherewithinthemanneragreeduponbyElancoandLilly.If,despiteLillyandElanco'scooperatingwithoneanotherandusingtheirrespectivecommerciallyreasonableefforts,thetransfersandassumptionsoftheapplicableassetsandliabilitiesinoneormoreofsuchjurisdictionshasnotoccurredonorpriortothedatepreviouslyagreeduponinwritingbyElancoandLilly,thenLillyshallbepaidanyremainingconsiderationretainedbyElancoasrestrictedcash,andshallbeentitledtoretain,sell,transferorotherwisedisposeofanysuchremainingassetorliability,initssolediscretion.

ElancoandLillyhaveagreedtocooperatewitheachotherandusetheirrespectivecommerciallyreasonableeffortstotakeorcausetobetakenallactions,andtodo,orcausetobedone,allthingsreasonablynecessary,properoradvisableunderapplicablelaw,regulationsandagreementstoconsummateandmakeeffectivethetransactionscontemplatedbythemasterseparationagreementandtheothertransactiondocuments.

Distribution. ThemasterseparationagreementprovidesthatElancowouldcooperatewithLillyinallrespectstomakeadistributiontoitsshareholdersofalloraportionofitsequityinterestsinElanco,includinginconnectionwiththeSplit-Off.

Insurance. FollowingthetimethatLillyholds50%orlessofElanco'scommonstock,subjecttocertainexceptions,ElancowillarrangeforitsowninsurancepoliciesandwillnolongerseekbenefitfromanyofLilly'soritsaffiliates'insurancepoliciesthatmayprovidecoverageforclaimsrelatingtotheanimalhealthbusinesspriortothedateonwhichElancoobtainsitsowninsurancecoverage.ThemasterseparationagreementcontainsproceduresfortheadministrationofinsuredclaimsandallocatestherighttoclaimcoverageandcontrolovertheprosecutionanddefenseofclaimsbetweenElancoandLilly.

Mutual releases and indemnification. Exceptforeachparty'sobligationsunderthemasterseparationagreement,theothertransactiondocumentsandcertainotherspecifiedliabilities,underthemasterseparationagreement,ElancoandLillyhavereleasedanddischargedtheotherfromanyandallliabilitiesexistingorarisingfromactsoreventsthatoccurred(orfailedtooccur)priortothecompletionofIPO.

Elancowillindemnify,defendandholdharmlessLilly,eachofitsaffiliatesandeachofitsandtheirrespectivedirectors,officers,managers,members,employeesandagentsfromandagainstanyandalllossesrelatingto,arisingoutoforresultingfrom,amongothers:

• theliabilitiesoftheanimalhealthbusinessesthatareallocatedtoElanco;

• anybreachbyElancooritssubsidiariesofthemasterseparationagreementoranyothertransactiondocument;

TableofContents

• anyuntruestatementoromissionofamaterialfactinLilly'sgovernmentalorpublicfilings,totheextentcausedbyinformationfurnishedbyElancoorincorporatedbyreferencefromElanco'spublicfilings;or

• anyuntruestatementoromissionofamaterialfactinElanco'sgovernmentalorpublicfilings,totheextentnotcausedbyinformationfurnishedbyLilly.

Lillywillindemnify,defendandholdharmlessElanco,eachofitsaffiliatesandeachofitsandtheirrespectivedirectors,officers,managers,members,employeesandagentsfromandagainstanyandalllossesrelatingto,arisingoutoforresultingfrom,amongothers:

• theliabilitiesallocatedtoLillyunderthemasterseparationagreement;

• anybreachbyLillyoritssubsidiariesofthemasterseparationagreementoranyothertransactiondocument;

• anyuntruestatementoromissionofamaterialfactinElanco'sgovernmentalorpublicfilings,totheextentcausedbyinformationfurnishedbyLillyorincorporatedbyreferencefromLilly'spublicfilings;or

• anyuntruestatementoromissionofamaterialfactinLilly'sgovernmentalorpublicfilings,totheextentnotcausedbyinformationfurnishedbyElanco.

Exchange of Information. ThemasterseparationagreementprovidesforthemutualsharingofinformationbetweenLillyandElancoinordertocomplywithapplicablelaw,reporting,filing,auditortaxrequirementsorotherapplicableobligations,orforuseinjudicialorotherproceedings.

Financial Reporting Covenants. Underthemasterseparationagreement,ElancoagreedtocomplywithcertaincovenantsrelatingtoitsfinancialreportingforsolongasLillywasrequiredtoconsolidateElanco'sresultsofoperationsandfinancialpositionortoaccountforitsinvestmentinElancoundertheequitymethodofaccounting.

Elancohasalsoagreedthat,forsolongasLillyprovidesElancoservicesunderthetransitionalservicesagreement,Elancowillnotchangeitsauditor,norwillElancoengageitsauditorforanynon-auditservices,ineachcase,withoutLilly'spriorconsent,andElancowillgenerallyimplementandmaintainLilly'sbusinesspracticesandstandardsinaccordancewithcertainpoliciesandproceduresspecifiedbyLilly,subjecttoappropriatematerialitythresholds.

Other covenants and approval rights. ThemasterseparationagreementalsocontainedcertainothercovenantsthatplacedrestrictionsonElanco'sactions,orrequiredLilly'spriorwrittenapprovaltosuchactions,untilLillydisposedofitsElancosharesintheSplit-Off.

Board representation. Themasterseparationagreementprovidedthat,forsolongasLillyanditsaffiliatesbeneficiallyownedatleast10%ofElancovotingshares,LillywasentitledtodesignatefornominationcertainrepresentativesontheBoard.FollowingthecompletionoftheSplit-Off,Lillynolongerhassuchrights.

No solicitation of employees. Subjecttocertaincustomaryexceptions,foraperiodof12monthsfollowingthedateonwhichLillyanditsaffiliatesnolongerownamajorityofElanco'soutstandingsharesofcommonstock,neitherElancooritsaffiliates,norLillyoritsaffiliates,willdirectlyorindirectlysolicitorencourageanyemployeeoftheotherpartyatthelevelofseniordirectorandabovetoleavehisorheremploymentwithoutthepriorwrittenconsentoftheotherparty.

Dispute resolution. ThemasterseparationagreementprovidesthatElancoandLillywillusetheirrespectivecommerciallyreasonableeffortstoresolvedisputesexpeditiouslyandonamutuallyacceptablenegotiatedbasisbyourrespectiveseniorlevelrepresentatives.Anydisputesunabletobe

TableofContents

resolvedthroughsuchprocesswillbereferredtomediation,fornon-bindingresolution.Subjecttocompliancewiththetermsofthemasterseparationagreement,eitherElancoorLilly,followingtheescalationandmediationproceduresinthemasterseparationagreement,maysubmitadisputetoacourtofcompetentjurisdictioninIndiana.

Term. ThemasterseparationagreementwillcontinueunlessterminatedbythemutualconsentofElancoandLilly,althoughcertainrightsandobligationsterminateduponareductioninLilly'sownershipofElanco'soutstandingcommonstock.

Transitional Services Agreement

Historically,LillyhasprovidedElancosignificantsharedservicesandresourcesrelatedtocorporatefunctionssuchasexecutiveoversight,treasury,legal,finance,humanresources,tax,internalaudit,financialreporting,informationtechnologyandinvestorrelations,whicharereferredtocollectivelyasthe"LillyServices."ThetransitionalservicesagreementbecameoperativeasofthecompletionofIPOandtheagreementwillcontinueuntiltheexpirationorterminationofthelastLillyServicetoexpireorbeterminated,unlesstheagreementisearlierterminatedaccordingtoitsterms.

Underthetransitionalservicesagreement,ElancoisabletouseLillyServicesforafixedtermestablishedonaservice-by-servicebasis.PartialreductionintheprovisionofanyLillyServiceorterminationofaLillyServicepriortotheexpirationoftheapplicablefixedtermrequiresLilly'sconsent.Inaddition,eitherpartycanterminatetheagreementduetoamaterialbreachoftheotherparty,uponpriorwrittennotice,subjecttolimitedcureperiodsoriftheotherpartyundergoesachangeofcontrol.

ElancowillpayLillymutuallyagreed-uponfeesfortheLillyServicesprovidedunderthetransitionalservicesagreement,whichwillbebasedonLilly'scost(includingthird-partycosts)ofprovidingtheLillyServicesthroughMarch31,2021andsubjecttoamark-upof7%thereafter,withadditionalinflation-basedescalationbeginningJanuary1,2020.

Tax Matters Agreement

Allocation of taxes. ElancoenteredintoataxmattersagreementwithLillyimmediatelyprecedingthecompletionoftheIPOthatgovernstheparties'respectiverights,responsibilitiesandobligationswithrespecttotaxliabilitiesandbenefits,taxattributes,thepreparationandfilingoftaxreturns,thecontrolofauditsandothertaxproceedingsandothermattersregardingtaxes.Ingeneral,undertheagreement:

• LillyisresponsibleforanyU.S.federal,state,localorforeigntaxes(andanyrelatedinterest,penaltiesorauditadjustmentsandincludingthosetaxesattributabletoElanco'sbusiness)reportableonaconsolidated,combinedorunitaryreturnthatincludesLillyoranyofitssubsidiaries(andElancoand/oranyofitssubsidiaries)foranyperiodsorportionsthereofendingonorpriortothedateoftheclosingoftheIPO.Elancoisresponsiblefortheportionofanysuchtaxesforperiodsorportionsthereofbeginningaftersuchdate,aswouldbeapplicabletoElancoifitfiledtherelevanttaxreturnsonastandalonebasis.

• ElancoisresponsibleforanyU.S.federal,state,localorforeigntaxes(andanyrelatedinterest,penaltiesorauditadjustments)thatarereportableonreturnsthatincludeonlyElancoand/oranyofitssubsidiaries,foralltaxperiodswhetherbeforeorafterthecompletionoftheIPO.

• LillyisresponsibleforcertaintaxesimposedonLillyand/oranyofitssubsidiariesandElancoand/oranyofitssubsidiariesarisingfrom,orattributableto,certaintransfersofassetsorliabilitiesintheseparation.

TableofContents

ElancoisnotgenerallyentitledtoreceivepaymentfromLillyinrespectofanyofElanco'staxattributesortaxbenefitsoranyreductionoftaxesofLilly.Neitherparty'sobligationsundertheagreementarelimitedinamountorsubjecttoanycap.Theagreementalsoassignsresponsibilitiesforadministrativematters,suchasthefilingofreturns,paymentoftaxesdue,retentionofrecordsandconductofaudits,examinationsorsimilarproceedings.Inaddition,theagreementprovidesforcooperationandinformationsharingwithrespecttotaxmatters.

LillyisprimarilyresponsibleforpreparingandfilinganytaxreturnwithrespecttotheLillyaffiliatedgroupforU.S.federalincometaxpurposesandwithrespecttoanyconsolidated,combined,unitaryorsimilargroupforU.S.stateorlocalorforeigntaxpurposesthatincludesLillyoranyofitssubsidiaries(includingthosethatalsoincludeElancoand/oranyofitssubsidiaries),aswellasanytaxreturnthatincludesonlyLillyand/oranyofitssubsidiaries(includingsuchtaxreturnsthatreflecttaxesattributabletoElanco'sbusiness).ElancoisgenerallyresponsibleforpreparingandfilinganytaxreturnsthatincludeonlyElancoand/oranyofitssubsidiaries.

Thepartyresponsibleforpreparingandfilingagiventaxreturngenerallyhasexclusiveauthoritytocontroltaxcontestsrelatedtoanysuchtaxreturn.ElancogenerallyhasexclusiveauthoritytocontroltaxcontestswithrespecttotaxreturnsthatincludeonlyElancoand/oranyofitssubsidiaries.

Preservation of the tax-free status of certain aspects of the separation. ElancoandLillyintendtheseparation,thetransferofnetcashproceedsfromtheIPOandcertainrelatedfinancingtransactions(whichwerefertoastheDebtTransactions)toLillyandtheSplit-Offtoqualifyasatax-freetransactionunderSection355,Section368(a)(1)(D)andrelatedprovisionsoftheCode.Inaddition,ElancoandLillyintendfortheseparation,thetransferofnetcashproceedsfromtheIPOandtheDebtTransactionstoLilly,theSplit-Offandcertainrelatedtransactionstoqualifyfortax-freetreatmentunderU.S.federal,stateandlocaltaxlawand/orforeigntaxlaw.

InconnectionwithcertainopinionsobtainedbyLillyfromitsoutsidetaxattorneysandadvisors,Elancohasmaderepresentationsregardingthepastandfutureconductofitsbusinessandcertainothermatters.Elancohasalsoagreedtocertaincovenantsthatcontainrestrictionsintendedtopreservethetax-freestatusoftheseparation,thetransferofnetcashproceedsfromtheIPOandtheDebtTransactionstoLilly,theSplit-Offandcertainrelatedtransactions.ElancomaytakecertainactionsprohibitedbythesecovenantsonlyifLillyreceivesaprivateletterrulingfromtheIRSorElancoobtainsandprovidestoLillyanopinionfromaU.S.taxcounseloraccountantofrecognizednationalstanding,ineithercaseacceptabletoLillyinitssoleandabsolutediscretion,totheeffectthatsuchactionwouldnotjeopardizethetax-freestatusofthesetransactions.Elancoisbarredfromtakinganyaction,orfailingtotakeanyaction,wheresuchactionorfailuretoactadverselyaffectsorcouldreasonablybeexpectedtoadverselyaffectthetax-freestatusofthesetransactions,foralltimeperiods.Inaddition,duringthetimeperiodendingtwoyearsafterthedateoftheSplit-OffthesecovenantsincludespecificrestrictionsonElanco's:

• issuanceorsaleofstockorothersecurities(includingsecuritiesconvertibleintoElancostockbutexcludingcertaincompensatoryarrangements);

• salesofassetsoutsidetheordinarycourseofbusiness;and

• enteringintoanyothercorporatetransactionwhichwouldcauseElancotoundergoa40%orgreaterchangeinitsstockownership.

ElancohasgenerallyagreedtoindemnifyLillyanditsaffiliatesagainstanyandalltax-relatedliabilitiesincurredbythemrelatingtotheseparation,thetransferofnetcashproceedsfromtheIPOandtheDebtTransactionstoLilly,theSplit-Offand/orcertainrelatedtransactionstotheextentcausedbyanacquisitionofElancostockorassetsorbyanyotheractionundertakenbyElanco.ThisindemnificationprovisionappliesevenifLillyhaspermittedElancototakeanactionthatwouldotherwisehavebeenprohibitedunderthetax-relatedcovenantsdescribedabove.

TableofContents

Employee Matters Agreement

ElancoenteredintoanemployeemattersagreementwithLillyimmediatelypriortothecompletionofIPO.TheemployeemattersagreementgovernsLilly's,Elanco'sandtheparties'respectivesubsidiaries'andaffiliates'rights,responsibilitiesandobligationsaftertheIPOwithrespecttoemployees,compensation,employment,employeebenefitplansandrelatedmatters.Belowisasummaryofthetermsoftheemployeemattersagreement.

Benefit plans generally. PriortothecompletionoftheIPO,exceptwithrespecttoanycashbonusorequitycompensationplans,ElancowasaparticipatingemployerintheLillybenefitplansinwhichElanco'semployeesparticipatedatsuchtime,totheextentpermittedundertheplans.Exceptasotherwiseagreedtobytheparties,ElancoceasedtobeaparticipatingemployerintheLillyplansandadopteditsownbenefitplansonJanuary1,2019,whichisreferredtoasthe"PlanTransitionDate."AnappropriateallocationofElancocostsincurredundertheLillybenefitplanspriortothePlanTransitionDateshallbechargedbacktoElanco.Lillywillretaintherighttoamendorterminateitsplans.AsofthecompletionoftheIPO,Elancoadoptedorretained,asapplicable,cashbonusandequitycompensationplansforitsemployees.Underthecashbonusplans,ElancopaysitsemployeesongenerallythesamebasisasineffectpriortotheIPOfortheperformanceperiodwhichincludestheIPOandwillassumeanyliabilityforthepaymentofbonusesunderLilly'sbonusplans,totheextentapplicable.AsofthePlanTransitionDate,ElancohasestablishedorwillestablishbenefitplansthataregenerallycomparabletotheLillyplansinwhichitsemployeesparticipatedpriortothePlanTransitionDate.TheemployeemattersagreementdoesnotobligateElancotoestablishanydefinedbenefitpensionplan,retireemedicalplanornonqualifiedplanforitsU.S.employees,unlessrequiredbylaworanapplicablecollectivebargainingagreement,andallliabilitiesrelatingtoanysuchplanmaintainedbyLillyshallremainwithLilly(otherthanasprovidedforunder"—Non-U.S.retirementbenefitarrangements").

Employment. PriortothecompletionoftheIPO,ElancogenerallyofferedemploymenttocertainemployeeswhoprovidedservicestoitsbusinessandwhodidnototherwisetransfertoElancoentitiesbyoperationoflaw.ThedateonwhichanysuchtransferringemployeeisconsideredtobeemployedbyElanco(eitherbyoperationoflaworofanoffer)forpurposesoftheemployeemattersagreementisreferredtoasthe"EmployeeTransferDate."TotheextentthatseveranceorterminationobligationsweretriggeredbyorasaresultofsuchtransfersorElanco'sfailuretomakeoffersorcontinueemploymentasrequiredbytheemployeemattersagreementorarerequiredtobepaidunderapplicablelaworaLillyplan,LillywilladministertheseverancepayorterminationpayobligationsinaccordancewiththetermsandconditionsoftheapplicableLillyseverancepayorterminationpayplanorpolicy,orasotherwiserequiredbyapplicablelaw,andElancowillindemnifyLillyforsuchliability.IfanyofElanco'sU.S.employeesbeganreceivinglong-termdisabilityleavebenefitsunderLilly'sdisabilityplanbeforetheapplicablePlanTransitionDate,suchemployeesremaineligibleforsuchbenefitsafterthePlanTransitionDate,subjecttoallapplicablerequirementsofthedisabilityplan.FortheperiodstartingasofthecompletionoftheIPOandendingonDecember31,2019,Elancoemployeeswillbeentitledtoreceive:(A)(i)atleastthesamesalaryorwages,andcashbonusopportunitiesattarget,(ii)equityincentivecommitmentsequaltotheequitybudgetvalueand(iii)othermaterialtermsandconditionsofemploymentassuchemployeeswereprovidedimmediatelybeforeJanuary1,2019;and(B)employeebenefitsandperquisites(otherthancashbonusopportunities,equityincentivecommitments,definedbenefitpension,retireemedicalandnonqualifiedbenefits)thataresubstantiallycomparableintheaggregatetotheemployeebenefitsandperquisitesthatsuchemployeeswereprovidedunderapplicableplansofLillybeforeJanuary1,2019.Elancowillusereasonableeffortstoassume,asoftheEmployeeTransferDate,anyapplicableemploymentagreementsorotherindividualbenefitorcompensationagreemententeredintobetweenLillyandatransferringemployeeandwillindemnifyLillyforallliabilitiesundersuchagreements.Inaddition,Elancoexpectstoprovidetoanyofitsemployeeswhoseemploymentisterminatedduringtheperiod

TableofContents

endingonDecember31,2019,alevelofseverancebenefitsthatisequaltothegreaterof(i)theseverancebenefitstheemployeewouldhavereceivedundertheapplicableLillyplansineffectimmediatelybeforeJanuary1,2019,or(ii)theseverancebenefitsprovidedunderElanco'sseverancearrangementsapplicabletosimilarly-situatedemployees,ineachcase,calculatedbasedontheemployee'scompensationandservice.

Unions and collective bargaining agreements. Thepartieswillcooperatetoinformandconsultwithanyapplicablerepresentativeofalaborunion,orsimilarorganization,coveringanytransferringemployee,totheextentrequiredbylawortheapplicablecollectivebargainingagreementorsimilararrangement.AsoftheEmployeeTransferDate,Elancowillassumeanycollectivebargaining,orsimilar,agreementsorarrangementscoveringanysuchemployeesandindemnifyLillyforallrelatedliabilities.

Credited service. Elancowillcauseitsemployeebenefitplanstocredititsemployees,withoutduplicationofbenefits,forservicewithLillyonorpriortotheEmployeeTransferDate,andforservicewithElancoonorfollowingtheEmployeeTransferDate,forpurposesofeligibilityandvestingunderallofElanco'semployeebenefitplansandarrangementsandcomputationofvacation,sickdaysorseverancebenefits,orasmayotherwiseberequiredbyapplicablelaw.

U.S. defined benefit and retiree medical plans. FollowingthePlanTransitionDate,U.S.employeeswillgenerallybeeligibletoreceivecreditforservicewithElancoforvestingandeligibilityservice(butnotbenefitservice)undertheEliLillyRetirementPlanandtheEliLillyandCompanyRetireeHealthPlanthroughadatenotlaterthanDecember31,2023,totheextentpermittedbyandsubjecttothetermsofsuchplans.

U.S. defined contribution plans. Elancoestablisheda401(k)planforitsU.S.employeeseffectiveasofthePlanTransitionDatewithtermsthataresubstantiallysimilartoLilly's401(k)plan,exceptthatitwillprovidefora6%companymatchand3%non-electivecompanycontribution.AnytransferringemployeewhoseEmployeeTransferDatewasonorbeforeJanuary1,2019is100%vestedinElanco's401(k)plan.ElancoacceptedthetransferfromtheU.S.LillyqualifieddefinedcontributionplantoitsqualifieddefinedcontributionplanofanyassetsandliabilitiesallocabletotheparticipantstransferringtoElanco.Elanco'semployeesare100%vestedintheiraccountbalancesundertheLillyqualifieddefinedcontributionbenefitplanasofthePlanTransitionDate,andceasedbeingeligibletoreceiveanyemployercontributionsfromLillyeffectiveDecember31,2018.

U.S. Lilly nonqualified plans. AsofthePlanTransitionDate,anytransferringemployeeceasedbeingeligibleforcontributionsfromLillyundertheEliLillyExcessSavingsPlanandDeferredCompensationPlanforservicesrenderedafterDecember31,2018.FollowingthePlanTransitionDate,U.S.employeeswillgenerallybeeligibletoreceivecreditforservicewithElancoforvestingandeligibilityservice(butnotbenefitservice)undertheEliLillyExcessBenefitRetirementPlanthroughadatenotlaterthanDecember31,2023,totheextentpermittedbyandsubjecttothetermsoftheplan.

Non-U.S. retirement benefit arrangements. TheemployeemattersagreementprovidesforthetransferfromLillytoElancoofanyretirementbenefitarrangementcoveringElancoemployeeslocatedoutsideoftheU.S.andofanyrelatedobligationsorliabilities,unlessotherwiseagreedbytheparties.

Lilly equity compensation. Theemployeemattersagreementprovidesthat,priortothecompletionoftheIPO,theboardofdirectorsofLillywoulddeterminehowanyLillyequity,equity-relatedandlong-termperformanceawardsgrantedtoElanco'stransferringemployeeswillbetreatedundertheapplicableLillyplans.

TableofContents

Toll Manufacturing and Supply Agreement

ElancoenteredintoatollmanufacturingandsupplyagreementwithLillyimmediatelypriortothecompletionoftheIPO.LillyhashistoricallymanufacturedHumatrope drugsubstanceforuseinthehumanhealthfieldatitsSpekemanufacturingsite,whichsiteisbeingtransferredtoElancoinconnectionwiththeseparation.Underthetollmanufacturingandsupplyagreement,ElancowillcontinuetoexclusivelymanufactureHumatrope forLillyattheSpekesiteuntilDecember31,2020;provided,however,thatsuchobligationmaycontinuethroughDecember31,2023(throughtheexerciseofthreeone-yearextensions)ifLilly'sreplacementthirdpartysupplierofHumatrope hasnotreceivedallnecessarygovernmentalapprovalsorcannotmeetLilly'svolumerequirements.

ThetollingfeethatElancochargesLillyfortheprovisionofsuchmanufacturingandsupplyservicesisbasedonlocalvalueaddedplusareasonablearm'slengthmark-up.ByOctober1ofeachcalendaryearduringthetermofthetollmanufacturingandsupplyagreement,Elancowillmutuallyagreeuponanewtollingfeetobeeffectiveforthefollowingcalendaryear.

Underthetollmanufacturingandsupplyagreement,ElancoagreesnottomanufactureorsellanyproductthatiscompetitivetoHumatrope foraperiodoffiveyearsaftertheexpirationorterminationoftheagreement.Inaddition,duringthetermoftheagreement,ElancoagreesnottomanufactureanyproductotherthanHumatrope atcertainbuildingsoftheSpekemanufacturingsitewithoutLilly'sconsent.

Intellectual Property and Technology License Agreement

ElancoenteredintoanintellectualpropertyandtechnologylicenseagreementwithLillyimmediatelypriortothecompletionoftheIPO.Undertheintellectualpropertyandtechnologylicenseagreement,LillygrantedElancoanexclusive,perpetuallicensetoexploitproductsintheanimalhealthfieldthatutilizeorusecertainofLilly'sintellectualproperty(excludingtrademarks).Inaddition,LillygrantedElancoanon-exclusive,non-sublicenseablelicensetoscreencertaincompoundsinLilly'scompoundlibrariestoexploitproductsintheanimalhealthfieldthatutilizeorusecertainofLilly'sintellectualproperty.Thisscreeninglicensehasaninitialtermoftwoyears,subjecttothreeone-yearextensions,eachofwhichrequiresLilly'sconsent.

IfElancomakesanyimprovementstothelicensedintellectualproperty,ElancoshallretainownershipofsuchimprovementsandprovideLillywithanon-exclusive,perpetuallicensetousetheintellectualpropertyinfieldsoutsideanimalhealth(includinghumanhealth).

Foraperiodoftwoyearsfollowingtheeffectivedateoftheintellectualpropertyandtechnologylicenseagreement,eachpartyhasarightoffirstofferwithrespecttothird-partyoffersthattheotherpartyreceivestolicensesuchotherparty'sintellectualpropertyinthefirstparty'sfield(animalhealthversushumanhealth).Inconnectionwithsuchright,Elancowillnegotiateexclusivelyastosuchofferfortheuseoftheotherparty'sintellectualpropertyinthefirstparty'sfield.

Undertheintellectualpropertyandtechnologylicenseagreement,ElancowillprovidequarterlyreportstoLillydescribinganyknow-howgeneratedundertheagreement,includinginventions,patentablesubjectmatter,discoveries,andtechnicaldata.Elancowillretainownershipofsuchgeneratedknow-howandwillprovideLillywithanon-exclusive,perpetuallicensetousetheknow-howinfieldsoutsideanimalhealth(includinghumanhealth).

Transitional Trademark License Agreement

ElancoenteredintoatransitionaltrademarklicenseagreementwithLillyimmediatelypriortothecompletionoftheIPO.Underthetransitionaltrademarklicenseagreement,LillygrantedElancoatransitionallicensetousecertainofLilly'strademarksforaperiodoftimefollowingtheIPO.Suchlicenseisnon-exclusiveandroyalty-free,andallowsElancotousecertainofLilly'strademarkson

TableofContents

Elanco'sproductpackaging,anyadvertisingmaterialsusedinconnectionwiththesaleanddistributionofElancoproducts,andgenerallyinconnectionwiththesaleanddistributionofitsproductsandintheday-to-dayoperationofitsbusiness(includinginElanco'sbooksandrecords).

Suchlicensewillterminateonaproduct-by-productandcountry-by-countrybasis.Thetermofthelicensewillnotextendbeyondfouryears;provided,however,thatthelicensecanextendforoneadditionalyear(beyondsuchfouryears)ifthepartiesmutuallyagreeuponsuchextension.Lillycanterminatethetransitionaltrademarklicenseagreementduetoourbreachofsuchagreement,uponpriorwrittennotice,subjecttoalimitedcureperiod.

Registration Rights Agreement with Lilly

ElancoenteredintoaregistrationrightsagreementwithLillyimmediatelypriortothecompletionoftheIPO,pursuanttowhichElancoagreedthat,upontherequestofLilly,ElancowoulduseitsreasonablebesteffortstoeffecttheregistrationunderapplicablefederalandstatesecuritieslawsofanysharesofElancocommonstockretainedbyLillyfollowingtheIPO.PriortothecommencementoftheexchangeofferrelatedtotheSplit-Off,wefiledaregistrationstatementonFormS-4registeringthesharesofourcommonstockexchangedbyLillyintheSplit-Off.Pursuanttotheregistrationrightsagreement,weweregenerallyresponsibleforallregistrationexpensesinconnectionwiththeperformanceofourobligationsundertheregistrationrightsprovisionsintheregistrationrightsagreement.Lillyisresponsibleforitsowninternalfeesandexpenses,anyapplicableunderwritingdiscountsorcommissionsandanystocktransfertaxes.TheagreementcontainsindemnificationandcontributionprovisionsbyusforthebenefitofLillyand,inlimitedsituations,byLillyforthebenefitofuswithrespecttotheinformationprovidedbyorfailedtobeprovidedbyLillyincludedoromitted,asapplicable,intheregistrationstatement,prospectusorrelateddocument.

Policy Concerning Related Person Transactions

Elanco'sboardofdirectorshasadoptedawrittenpolicy,whichisreferredtoasthe"relatedpersontransactionpolicy",forthereviewofanytransaction,arrangementorrelationshipinwhichElancoisaparticipant,iftheamountinvolvedexceeds$120,000andoneofElanco'sexecutiveofficers,directors,directornomineesorbeneficialholdersofmorethan5%ofElanco'stotalequity(ortheirimmediatefamilymembers),eachofwhomisreferredtoasa"relatedperson",hasadirectorindirectmaterialinterest.ThispolicywasnotineffectwhenElancoenteredintothetransactionsdescribedabove.

EachoftheagreementsbetweenElancoandLillyanditssubsidiariesthatwereenteredintopriortothecompletionoftheIPO,andanytransactionscontemplatedthereby,weredeemedtobeapprovedandnotsubjecttothetermsofsuchpolicy.Ifarelatedperson,otherthanLillyanditsaffiliates,proposestoenterintosuchatransaction,arrangementorrelationship,whichisreferredtoasa"relatedpersontransaction",therelatedpersonmustreporttheproposedrelatedpersontransactiontoElanco'sAuditCommittee.Thepolicycallsfortheproposedrelatedpersontransactiontobereviewedand,ifdeemedappropriate,approvedbytheAuditCommittee.Inapprovingorrejectingsuchproposedtransactions,theAuditCommitteewillberequiredtoconsiderrelevantfactsandcircumstances.TheAuditCommitteewillapproveonlythosetransactionsthat,inlightofknowncircumstances,aredeemedtobeinElanco'sbestinterests.IntheeventthatanymemberoftheAuditCommitteeisnotadisinterestedpersonwithrespecttotherelatedpersontransactionunderreview,thatmemberwillbeexcludedfromthereviewandapprovalorrejectionofsuchrelatedpersontransaction;provided,however,thatsuchAuditCommitteemembermaybecountedindeterminingthepresenceofaquorumatthemeetingoftheAuditCommitteeatwhichsuchtransactionisconsidered.IfElancobecomesawareofanexistingrelatedpersontransactionwhichhasnotbeenapprovedunderthepolicy,thematterwillbereferredtotheAuditCommittee.TheAuditCommitteewillevaluatealloptionsavailable,includingratification,revisionorterminationofsuchtransaction.Intheeventthat

TableofContents

managementdeterminesthatitisimpracticalorundesirabletowaituntilameetingoftheAuditCommitteetoconsummatearelatedpersontransaction,thechairmanoftheAuditCommitteemayapprovesuchtransactioninaccordancewiththerelatedpersontransactionpolicy.AnysuchapprovalmustbereportedtotheAuditCommitteeatitsnextregularlyscheduledmeeting.

AcopyofElanco'srelatedpersontransactionpolicyisavailableonElanco'swebsiteatinvestor.elanco.com under"Governance."

TableofContents

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Common Stock Ownership by 5% Beneficial Owners, Directors and Executive Officers

Thefollowingtablesetsforth,asofMay13,2019,beneficialownershipofsharesofElancocommonstockbyeachElancodirector,eachofElanco'snamedexecutiveofficersandalldirectorsandexecutiveofficersasagroup,aswellastheirtotalstock-basedholdings,andeachpersonorgroupknowntoElancotobethebeneficialownerofmorethan5%ofoutstandingsharesofElancocommonstock.Sharesarebeneficiallyownedwhenanindividualhasvotingand/orinvestmentpoweroverthesharesorcouldobtainvotingand/orinvestmentpowerovertheshareswithin60days.Votingpowerincludesthepowertodirectthevotingofthesharesandinvestmentpowerincludesthepowertodirectthedispositionoftheshares.Percentageofbeneficialownershipisbasedon365,707,234sharesofcommonstockoutstandingasofMay13,2019.

Unlessotherwiseindicated,theaddressforeachholderlistedbelowis2500InnovationWay,Greenfield,Indiana46140.Exceptasnotedbyfootnote,andsubjecttocommunitypropertylawswhereapplicable,ElancobelievesbasedontheinformationprovidedtoitthatthepersonsandentitiesnamedinthetablebelowhavesolevotingandinvestmentpowerwithrespecttoallsharesofElanco'scommonstockshownasbeneficiallyownedbythem.

NoneoftheElancodirectorsandexecutiveofficers,individuallyorasagroup,beneficiallyownsgreaterthan1%ofElanco'soutstandingsharesofElancocommonstock.Beneficialownershiprepresentinglessthan1%isdenotedwithanasterisk(*).

Shares of common stock beneficially owned

Directors' and officers' total stock-based holdings (2)

Name Number of shares (1)

Percentage of shares

T.RowePriceAssociates,Inc.(3) 38,678,903 10.57% N/APRIMECAPManagementCompany(4) 30,607,906 8.37% N/A

JeffreyN.Simmons 59,301 * 503,898DavidS.Kinard 10,477 * 77,883SarenaS.Lin 20,000 * 82,899LucasE.Montarce — — —DavidA.Urbanek 2,521 * 70,519ToddS.Young — — 18,883R.DavidHoover 30,920(5) * 34,959KapilaK.Anand 1,200 * 5,779JohnP.Bilbrey 7,750(6) — 10,533ArtA.Garcia — — —MichaelJ.Harrington — — 2,783DeborahT.Kochevar — — 2,783LawrenceE.Kurzius 10,000 * 14,579KirkMcDonald — — 2,783DeborahScots-Knight — — 2,783All directors and executive officers as a group (18 persons) 151,248 * 1,014,430

(1) IncludessharesofcommonstockbeneficiallyownedascalculatedunderSECrules,includingsharesthatmaybeacquireduponsettlementofRSUswithin60days,oruponexerciseofstockoptionsthatarecurrentlyexercisableorwillbecomeexercisablewithin60days.AsofMay13,2019,nosuchRSUsoroptionswereoutstanding.

TableofContents

(2) Thiscolumnshowstheindividual'stotalElancostock-basedholdings,includingsecuritiesshowninthe"Sharesofcommonstockbeneficiallyowned"columns(asdescribedabove),plusstock-basedholdingsthatcannotbeconvertedintosharesofElanco'scommonstockwithin60days,including,asapplicable,RSUssubjecttotime-basedvestingconditions,stockoptions,anddeferredstockunitsheldbydirectors.Thenumberdoesnotinclude(i)performance-basedawardsgrantedtoexecutiveofficersthataresubjecttoperformance-basedvestingconditions,or(ii)theannualawardofdeferredstockunitstobecreditedtonon-employeedirectorsinNovember2019undertheDirectors'DeferralPlanbasedonserviceduring2019.

(3) TheaddressforT.RowePriceAssociates,Inc.is100E.PrattStreet,Baltimore,MD21202.Ithassolevotingpowerwithrespectto12,897,118ofitssharesandsoledispositivepowerwithrespectto38,678,903ofitsshares.TheshareinformationisbasedsolelyonaSchedule13GfiledbyT.RowePriceAssociates,Inc.withtheSEConApril10,2019.

(4) TheaddressforPRIMECAPManagementCompanyis177E.ColoradoBlvd.,11thFloor,Pasadena,CA91105.Ithassolevotinganddispositivepowerwithrespectto30,607,906ofitsshares.TheshareinformationisbasedsolelyonaSchedule13GfiledbyPRIMECAPManagementCompanywiththeSEConMay7,2019.

(5) Includes920sharesheldintrustoverwhichMr.Hooversharesvotingandinvestmentpower.

(6) Includes7,750sharesownedbytheJohnP.BilbreyRevocableTrust.

TableofContents

THE EXCHANGE OFFERS

Purpose of the Exchange Offers

OnAugust28,2018,weissued$500,000,000aggregateprincipalamountofthe2021OriginalNotes,$750,000,000aggregateprincipalamountofthe2023OriginalNotesand$750,000,000aggregateprincipalamountofthe2028OriginalNotesinaprivateplacement.InconnectionwiththesaleoftheOriginalNotes,weenteredintoanexchangeandregistrationrightsagreementwiththerepresentativesoftheinitialpurchasers.Undertheexchangeandregistrationrightsagreementweagreed,forthebenefitoftheholdersoftheOriginalNotes,to:

• useourcommerciallyreasonableeffortsto(i)causetobefiledwiththeSECaregistrationstatementcoveringofferstotheholdersoftheOriginalNotesfortheExchangeNotesand(ii)havesuchregistrationstatementbecomeandremaineffectiveuntil180daysafterthelastdateofacceptanceforexchange;

• commencetheexchangeofferforeachseriesofOriginalNotespromptlyaftertheexchangeofferregistrationstatementisdeclaredeffectivebytheSEC;and

• useourcommerciallyreasonableeffortstocompletetheexchangeofferforeachseriesofOriginalNotesnotlaterthan60daysaftertheexchangeofferregistrationstatementbecomeseffective.

Asdescribedin"—RegistrationRights;AdditionalInterestonOriginalNotes,"wehavealsoagreedtofileashelfregistrationstatementfortheresaleofthenotesifwecannoteffecttheexchangeofferbyAugust28,2019andinothercircumstances.Youwillbeentitledtothepaymentofadditionalinterestifwedonotcomplywiththeseobligationswithinthattimeperiod.

WearemakingtheExchangeOffersinrelianceonthepositionoftheSECasdescribedinpreviousno-actionlettersissuedtothirdparties,includinginExxonCapitalHoldingsCorporation(April13,1988),MorganStanley&Co.,Inc.(June5,1991),Shearman&Sterling(July2,1993)andsimilarno-actionletters.However,wehavenotsoughtourownno-actionletter.BasedupontheseinterpretationsbytheSEC,webelievethataholderwhoexchangesOriginalNotesforExchangeNotesintheExchangeOffersgenerallymayoffertheExchangeNotesforresale,selltheExchangeNotesandotherwisetransfertheExchangeNoteswithoutfurtherregistrationundertheSecuritiesActandwithoutdeliveryofaprospectusthatsatisfiestherequirementsofSection10oftheSecuritiesAct.Theprecedingsentencedoesnotapply,however,toaholderwhoisour"affiliate"withinthemeaningofRule405oftheSecuritiesAct.Wealsobelievethataholdermayoffer,sellortransfertheExchangeNotesonlyiftheholderacknowledgesthattheholderisacquiringtheExchangeNotesintheordinarycourseofitsbusinessandisnotparticipating,doesnotintendtoparticipateandhasnoarrangementorunderstandingwithanypersontoparticipateina"distribution,"asdefinedintheSecuritiesAct,oftheExchangeNotes.WehavenotenteredintoanyarrangementorunderstandingwithanypersonwhowillreceiveExchangeNotesintheexchangeoffertodistributesuchExchangeNotesfollowingcompletionoftheexchangeoffer,and,tothebestofourinformationandbelief,wearenotawareofanypersonthatwillparticipateintheExchangeOfferswithaviewtodistributetheExchangeNotes.AholderwhoexchangesRestrictedNotesforExchangeNotesintheexchangeofferforthepurposeofdistributingsuchExchangeNotescannotrelyontheinterpretationsofthestaffoftheSECintheaforementionedno-actionletters,mustcomplywiththeregistrationandprospectusdeliveryrequirementsoftheSecuritiesActinconnectionwithanysecondaryresaleoftheExchangeNotesandmustbeidentifiedasanunderwriterintheprospectus.

Eachbroker-dealerthatreceivestheExchangeNotesforitsownaccountinexchangefortheOriginalNotes,wheretheOriginalNoteswereacquiredbyitasaresultofmarket-makingactivitiesorothertradingactivities,mustacknowledgethatitwilldeliveraprospectusthatmeetstherequirementsoftheSecuritiesActinconnectionwithanyresaleoftheExchangeNotesandthatithasnotentered

TableofContents

intoanyagreementorunderstandingwithusoranyofour"affiliates,"asdefinedinRule405undertheSecuritiesAct,toparticipateina"distribution,"asdefinedundertheSecuritiesAct,oftheExchangeNotes.Bysoacknowledgingandbydeliveringaprospectus,abroker-dealerwillnotbedeemedtoadmitthatitisan"underwriter"withinthemeaningoftheSecuritiesAct.See"PlanofDistribution."

TheExchangeOffersareintendedtosatisfyourobligationsundertheexchangeandregistrationrightsagreement.Thesummaryoftheexchangeandregistrationrightsagreementisnotcomplete.Youareencouragedtoreadthefulltextoftheexchangeandregistrationrightsagreement,whichhasbeenfiledasanexhibittotheregistrationstatementthatincludesthisprospectus.

Registration Rights; Additional Interest on Original Notes

IntheeventthatwedeterminethataregisteredexchangeofferisnotavailableormaynotbecompletedassoonaspracticableafterthelastdateforacceptanceofnotesforexchangebecauseitwouldviolateanyapplicablelaworapplicableinterpretationsofthestaffoftheSECor,iftheexchangeofferisnotforanyotherreasoncompletedbyAugust28,2019,or,incertaincircumstances,anyinitialpurchasersorequestsinconnectionwithanyofferorsaleofnotes,wewilluseourcommerciallyreasonableeffortstofileandtohavebecomeeffectiveashelfregistrationstatementrelatingtoresalesofthenotesandtokeepthatshelfregistrationstatementeffectiveuntilthedatethatthenotesceasetobe"registrablesecurities"(asdefinedintheexchangeandregistrationrightsagreement),includingwhenallnotescoveredbytheshelfregistrationstatementhavebeensoldpursuanttotheshelfregistrationstatement.Wewill,intheeventofsuchashelfregistration,providetoeachparticipatingholderofnotescopiesofaprospectus,notifyeachparticipatingholderofnoteswhentheshelfregistrationstatementhasbecomeeffectiveandtakecertainotheractionstopermitresalesofthenotes.Aholderofnotesthatsellsnotesundertheshelfregistrationstatementgenerallywillberequiredtomakecertainrepresentationstous(asdescribedintheexchangeandregistrationrightsagreement),tobenamedasasellingsecurityholderintherelatedprospectusandtodeliveraprospectustopurchasers,willbesubjecttocertainofthecivilliabilityprovisionsundertheSecuritiesActinconnectionwiththosesalesandwillbeboundbytheprovisionsoftheexchangeandregistrationrightsagreementthatareapplicabletosuchaholderofnotes(includingcertainindemnificationobligations).Holdersofnoteswillalsoberequiredtosuspendtheiruseoftheprospectusincludedintheshelfregistrationstatementunderspecifiedcircumstancesuponreceiptofnoticefromus.

Ifa"registrationdefault"(asdefinedintheexchangeandregistrationrightsagreement)withrespecttoaseriesofregistrablesecuritiesoccurs,thenadditionalinterestshallaccrueontheprincipalamountofthenotesofaparticularseriesthatare"registrablesecurities"atarateof0.25%perannum(whichratewillbeincreasedbyanadditional0.25%perannumforeachsubsequent90-dayperiodthatsuchadditionalinterestcontinuestoaccrue,providedthattherateatwhichsuchadditionalinterestaccruesmayinnoeventexceed1.00%perannum).Theadditionalinterestwillceasetoaccruewhentheregistrationdefaultiscured.Aregistrationdefaultoccursif(1)wehavenotexchangedExchangeNotesforallnotesvalidlytenderedinaccordancewiththetermsoftheexchangeofferonorpriortoAugust28,2019or,ifashelfregistrationstatementisrequiredandisnotdeclaredeffectivebythelaterofthelaterof90daysfromsuchshelfrequestAugust28,2019or(2)ifapplicable,ashelfregistrationstatementcoveringresalesofthenoteshasbeendeclaredeffectiveandsuchshelfregistrationstatementceasestobeeffectiveortheprospectuscontainedthereinceasestobeusable(a)onmorethantwooccasionsinany12-monthperiodduringtherequiredeffectivenessperiodor(b)atanytimeinany12-monthperiodduringtherequiredeffectivenessperiod,andsuchfailuretoremaineffectiveorbeusableexistsformorethan30days(whetherornotconsecutive)inany12-monthperiod.Aregistrationdefaultiscuredwithrespecttoaseriesofnotes,andadditionalinterestceasestoaccrueonanyregistrablesecuritiesofaseriesofnotes,whentheexchangeofferiscompletedortheshelf

TableofContents

registrationstatementisdeclaredeffectiveortheprospectusagainbecomesusable,asapplicable,orsuchnotesceasetobe"registrablesecurities."

Thenoteswillceasetoberegistrablesecuritiesupontheearliertooccurofthefollowing:(1)whenaregistrationstatementwithrespecttosuchnoteshasbecomeeffectiveandsuchnoteshavebeenexchangedordisposedofpursuanttosuchregistrationstatement,(2)whensuchnotesceasetobeoutstandingor(3)exceptinthecaseofnotesthatotherwiseremainregistrablesecuritiesandthatareheldbyaninitialpurchaserandthatareineligibletobeexchangedintheexchangeoffer,whentheexchangeofferisconsummated.

Terms of the Exchange Offers

Weareofferingtoexchange:

• upto$500,000,000aggregateprincipalamountofthe2021ExchangeNoteswhichhavebeenregisteredundertheSecuritiesActforalikeamountoftheunregistered2021OriginalNotes,

• upto$750,000,000aggregateprincipalamountofthe2023ExchangeNoteswhichhavebeenregisteredundertheSecuritiesActforalikeamountoftheunregistered2023OriginalNotes,and

• upto$750,000,000aggregateprincipalamountofthe2028ExchangeNoteswhichhavebeenregisteredundertheSecuritiesActforalikeamountoftheunregistered2028OriginalNotes.

Uponthetermsandsubjecttotheconditionssetforthinthisprospectusandintheaccompanyingletteroftransmittal,wewillacceptallOriginalNotesvalidlytenderedandnotwithdrawnbefore5:00p.m.,NewYorkCitytime,ontheexpirationdateoftheExchangeOffers.Wewillissue$1,000principalamountofExchangeNotesinexchangeforeach$1,000principalamountofoutstandingOriginalNotesweacceptintheExchangeOffers.HoldersmaytendersomeoralloftheirOriginalNotespursuanttotheExchangeOffersindenominationsof$2,000andintegralmultiplesof$1,000inexcessthereof.TheExchangeOffersarenotconditioneduponanyminimumamountofOriginalNotesbeingtendered.

TheformandtermsoftheExchangeNoteswillbethesameastheformandtermsoftheOriginalNotes,exceptthat:

• theExchangeNoteswillhaveadifferentCUSIPnumberfromtheOriginalNotes;

• theExchangeNoteswillberegisteredundertheSecuritiesActandthuswillnotbesubjecttotherestrictionsontransferorbearlegendsrestrictingtheirtransfer;

• theExchangeNoteswillnotbesubjecttotheregistrationrightsrelatingtotheOriginalNotes;and

• theExchangeNoteswillnotprovideforthepaymentofadditionalinterestundercircumstancesrelatingtothetimingoftheExchangeOffers.

TheExchangeNoteswillevidencethesamedebtastheOriginalNotesandwillbeissuedunder,andbeentitledtothebenefitsof,theindenturegoverningtheOriginalNotes.TheExchangeNoteswillaccrueinterestfromthemostrecentdatetowhichinteresthasbeenpaidontheOriginalNotes.Accordingly,registeredholdersofExchangeNotesontherecorddateforthefirstinterestpaymentdatefollowingthecompletionoftheExchangeOfferswillreceiveinterestaccruedfromthemostrecentdatetowhichinteresthasbeenpaidontheOriginalNotes.However,ifthatrecorddateoccurspriortocompletionoftheExchangeOffers,thentheinterestpayableonthefirstinterestpaymentdatefollowingthecompletionoftheExchangeOfferswillbepaidtotheregisteredholdersoftheOriginalNotesonthatrecorddate.

TableofContents

InconnectionwiththeExchangeOffers,youdonothaveanyappraisalordissenters'rightsundertheindenture.WeintendtoconducttheExchangeOffersinaccordancewiththeexchangeandregistrationrightsagreementandtheapplicablerequirementsoftheSecuritiesAct,theSecuritiesExchangeActof1934,asamended(the"ExchangeAct"),andtherulesandregulationsoftheSEC.TheExchangeOffersarenotbeingmadeto,norwillweaccepttendersforexchangefrom,aholderoftheOriginalNotesinanyjurisdictioninwhichtheExchangeOffersortheacceptancethereofwouldnotbeincompliancewiththesecuritiesorblueskylawsofthejurisdiction.

WewillbedeemedtohaveacceptedvalidlytenderedOriginalNoteswhenwehavegivenoralorwrittennoticeofouracceptancetotheexchangeagent.TheexchangeagentwillactasagentforthetenderingholdersforthepurposeofreceivingtheExchangeNotesfromus.

IfwedonotacceptanytenderedOriginalNotesbecauseofaninvalidtenderorforanyotherreason,thenwewillreturncertificatesforanyunacceptedOriginalNoteswithoutexpensetothetenderingholderaspromptlyaspracticableaftertheexpirationdate.

Expiration Date

TheExchangeOfferswillexpireat5:00p.m.,NewYorkCitytime,on,2019,unlesswe,inoursolediscretion,extendtheExchangeOffers.

IfwedeterminetoextendtheExchangeOffers,thenwewillnotifytheexchangeagentofanyextensionbyoralorwrittennoticeandgiveeachregisteredholdernoticeoftheextensionbymeansofapressreleaseorotherpublicannouncementbefore9:00a.m.,NewYorkCitytime,onthenextbusinessdayafterthepreviouslyscheduledexpirationdate.

Procedures for Tendering Original Notes

AnytenderofOriginalNotesthatisnotwithdrawnpriortotheexpirationdatewillconstituteabindingagreementbetweenthetenderingholderandusuponthetermsandsubjecttotheconditionssetforthinthisprospectusandintheaccompanyingletteroftransmittal.AholderwhowishestotenderOriginalNotesintheExchangeOffersmustdoeitherofthefollowing:

• properlycomplete,signanddatetheletteroftransmittal,includingallotherdocumentsrequiredbytheletteroftransmittal;havethesignatureontheletteroftransmittalguaranteediftheletteroftransmittalsorequires;anddeliverthatletteroftransmittalandotherrequireddocumentstotheexchangeagentattheaddresslistedbelowunder"—ExchangeAgent"onorbeforetheexpirationdate;or

• iftheOriginalNotesaretenderedunderthebook-entrytransferproceduresdescribedbelow,transmittotheexchangeagent,onorbeforetheexpirationdate,anagent'smessage.

Inaddition,oneofthefollowingmustoccur:

• theexchangeagentmustreceivecertificatesrepresentingyourOriginalNotesalongwiththeletteroftransmittalonorbeforetheexpirationdate;

• theexchangeagentmustreceiveatimelyconfirmationofbook-entrytransferoftheOriginalNotesintotheexchangeagent'saccountatDTCundertheprocedureforbook-entrytransfersdescribedbelowalongwiththeletteroftransmittaloraproperlytransmittedagent'smessage,onorbeforetheexpirationdate;or

• theholdermustcomplywiththeguaranteeddeliveryproceduresdescribedbelow.

Theterm"agent'smessage"meansamessage,transmittedbyabook-entrytransferfacilitytoandreceivedbytheexchangeagentandformingapartofthebook-entryconfirmation,whichstatesthatthebook-entrytransferfacilityhasreceivedanexpressacknowledgementfromthetenderingDTCparticipantstatingthattheparticipanthasreceivedandagreestobeboundbytheletteroftransmittalandthatwemayenforcetheletteroftransmittalagainsttheparticipant.

TableofContents

THE METHOD OF DELIVERY OF ORIGINAL NOTES, LETTERS OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDERS. IFTHE DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIMESHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. HOLDERS SHOULD NOT SEND ORIGINAL NOTES OR LETTERS OF TRANSMITTAL TO US.

Generally,aneligibleinstitutionmustguaranteesignaturesonaletteroftransmittaloranoticeofwithdrawalunlesstheOriginalNotesaretendered:

• byaregisteredholderoftheOriginalNoteswhohasnotcompletedtheboxentitled"SpecialIssuanceInstructions"or"SpecialDeliveryInstructions"ontheletteroftransmittal;or

• fortheaccountofaneligibleinstitution.

Ifsignaturesonaletteroftransmittaloranoticeofwithdrawalarerequiredtobeguaranteed,theguaranteemustbebyafirmwhichis:

• amemberofaregisterednationalsecuritiesexchange;

• acommercialbankortrustcompanyhavinganofficeorcorrespondentintheUnitedStates;or

• another"eligibleguarantorinstitution"withinthemeaningofRule17Ad-15undertheExchangeAct.

IftheletteroftransmittalissignedbyapersonotherthantheregisteredholderofanyoutstandingOriginalNotes,theOriginalNotesmustbeendorsedoraccompaniedbyappropriatepowersofattorney.Thepowerofattorneymustbesignedbytheregisteredholderexactlyastheregisteredholder(s)name(s)appear(s)ontheOriginalNotesandaneligibleinstitutionmustguaranteethesignatureonthepowerofattorney.

Iftheletteroftransmittal,oranyOriginalNotesorpowersofattorneyaresignedbytrustees,executors,administrators,guardians,attorneys-in-fact,officersofcorporationsorothersactinginafiduciaryorrepresentativecapacity,thesepersonsshouldsoindicatewhensigning.Unlesswaivedbyus,theyshouldalsosubmitevidencesatisfactorytousoftheirauthoritytosoact.

IfyoubeneficiallyowntheOriginalNotesregisteredinthenameofabroker,dealer,commercialbank,trustcompanyorothernomineeandwishtotenderyourbeneficiallyownedOriginalNotesintheexchangeoffer,youshouldcontacttheregisteredholderpromptlyandinstructittotendertheOriginalNotesonyourbehalf.ThebeneficialownermayalsoobtainandincludewiththeletteroftransmittaltheOriginalNotesproperlyendorsedfortransferbytheregisteredholderoraccompaniedbyaproperlycompletedbondpowerfromtheregisteredholder,withsignaturesontheendorsementorbondpowerguaranteedbyaneligibleinstitution.Ifthebeneficialownerwishestotenderdirectly,thebeneficialownermust,priortocompletingandexecutingtheletteroftransmittalandtenderingtheOriginalNotes,makeappropriatearrangementstoregisterownershipoftheOriginalNotesinthebeneficialowner'sname.Beneficialownersshouldbeawarethatthetransferofregisteredownershipmaytakeconsiderabletime.

Wewilldetermineinoursolediscretionallquestionsastothevalidity,form,eligibility,includingtimeofreceipt,andacceptanceofOriginalNotestenderedforexchange.Ourdeterminationwillbefinalandbindingonallparties.WereservetheabsoluterighttorejectanyandalltendersofOriginalNotesthatarenotproperlytenderedorOriginalNotes,ouracceptanceofwhichmight,inthejudgmentofourcounsel,beunlawful.Wealsoreservetheabsoluterighttowaiveanydefects,irregularitiesorconditionsoftenderastoanyparticularOriginalNotes.OurinterpretationofthetermsandconditionsoftheExchangeOffers,includingtheinstructionsintheletteroftransmittal,willbefinalandbindingonallparties.Unlesswaived,anydefectsorirregularitiesinconnectionwith

TableofContents

tendersofOriginalNotesmustbecuredwithinthetimeperiodwedetermine.NeitherwenortheexchangeagentnoranyotherpersonwillincuranyliabilityforfailuretogiveyounotificationofdefectsorirregularitieswithrespecttotendersofyourOriginalNotes.

Bytendering,eachholderofOriginalNoteswillrepresenttousthat,amongotherthings:

• anyExchangeNotesthattheholderreceiveswillbeacquiredintheordinarycourseofitsbusiness;

• theholderhasnoarrangementorunderstandingwithanypersonorentitytoparticipateinthedistribution(withinthemeaningoftheSecuritiesAct)oftheExchangeNotes;and

• theholderisnotan"affiliate"ofuswithinthemeaningofRule405oftheSecuritiesAct.

Ifanyholderoranysuchotherpersonisour"affiliate,"orisengagedinorintendstoengageinorhasanarrangementorunderstandingwithanypersontoparticipateinadistributionoftheExchangeNotestobeacquiredintheExchangeOffers,thenthatholderoranysuchotherperson:

• maynotrelyontheapplicableinterpretationsofthestaffoftheSEC;

• isnotentitledandwillnotbepermittedtotenderOriginalNotesintheExchangeOffers;and

• mustcomplywiththeregistrationandprospectusdeliveryrequirementsoftheSecuritiesActinconnectionwithanyresaletransaction.

EachbrokerdealerthatreceivesExchangeNotesforitsownaccountinexchangeforOriginalNotes,wheretheOriginalNoteswereacquiredbythebrokerdealerasaresultofmarket-makingactivitiesorothertradingactivities,mustacknowledgethatitwilldeliveraprospectusinconnectionwithanyresaleoftheExchangeNotes.Theletteroftransmittalstatesthatbysoacknowledgingandbydeliveringaprospectus,abrokerdealerwillnotbedeemedtoadmitthatitisan"underwriter"withinthemeaningoftheSecuritiesAct.

Anybroker-dealerthatacquiredOriginalNotesdirectlyfromusmaynotrelyontheapplicableinterpretationsofthestaffoftheSECandmustcomplywiththeregistrationanddeliveryrequirementsoftheSecuritiesAct(includingbeingnamedasasellingsecurityholder)inconnectionwithanyresalesoftheOriginalNotesortheExchangeNotes.

Book-Entry Transfer

WeunderstandthattheexchangeagentwillmakearequestwithintwobusinessdaysafterthedateofthisprospectustoestablishaccountsfortheOriginalNotesatDTCforthepurposeoffacilitatingtheExchangeOffers,andanyfinancialinstitutionthatisaparticipantinDTC'ssystemmaymakebook-entrydeliveryofOriginalNotesbycausingDTCtotransfertheOriginalNotesintotheexchangeagent'saccountatDTCinaccordancewithDTC'sproceduresfortransfer.AlthoughdeliveryofOriginalNotesmaybeeffectedthroughbook-entrytransferatDTC,theexchangeagentmustreceiveaproperlycompletedanddulyexecutedletteroftransmittalwithanyrequiredsignatureguarantees,oranagent'smessageinsteadofaletteroftransmittal,andallotherrequireddocumentsatitsaddresslistedbelowunder"—ExchangeAgent"onorbeforetheexpirationdate,orifyoucomplywiththeguaranteeddeliveryproceduresdescribedbelow,withinthetimeperiodprovidedunderthoseprocedures.

Guaranteed Delivery

IfyoudesiretotenderyourOriginalNotes,but:

• yourOriginalNotesarenotimmediatelyavailable;

TableofContents

• youcannotdeliveryourOriginalNotes,theletteroftransmittaloranyotherdocumentsrequiredbytheletteroftransmittaltotheexchangeagentpriortotheexpirationdate;or

• theproceduresforbook-entrytransferofyourOriginalNotescannotbecompletedpriortotheexpirationdate;

youmayeffectatenderaccordingtotheguaranteeddeliveryproceduressetforthintheletteroftransmittal.

Pursuanttosuchprocedures:

• yourtenderofOriginalNotesmustbemadebyorthroughaneligibleinstitutionandyoumustproperlycompleteanddulyexecuteanoticeofguaranteeddelivery(asdefinedintheletteroftransmittal);

• onorpriortotheexpirationdate,theexchangeagentmusthavereceivedfromyouandtheeligibleinstitutionaproperlycompletedanddulyexecutednoticeofguaranteeddelivery(byfacsimiletransmission,mailorhanddelivery)settingforththenameandaddressoftheholder,thecertificatenumberornumbersofthetenderedOriginalNotes,andtheprincipalamountoftenderedOriginalNotes,statingthatthetenderisbeingmadetherebyandguaranteeingthat,withinthree(3)businessdaysafterthedateofexecutionofthenoticeofguaranteeddelivery,thetenderedOriginalNotes,adulyexecutedletteroftransmittalandanyotherrequireddocumentswillbedepositedbytheeligibleinstitutionwiththeexchangeagent;and

• suchproperlycompletedandexecuteddocumentsrequiredbytheletteroftransmittalandthetenderedOriginalNotesinproperformfortransfer(orconfirmationofabook-entrytransferofsuchOriginalNotesintotheexchangeagent'saccountatDTC)mustbereceivedbytheexchangeagentwithinthree(3)businessdaysafterthedateofexecutionofthenoticeofguaranteeddelivery.

AnyholderwhowishestotendertheirOriginalNotespursuanttotheguaranteeddeliveryproceduresdescribedabovemustensurethattheexchangeagentreceivesthenoticeofguaranteeddeliveryrelatingtosuchOriginalNotespriorto5:00p.m.,NewYorkCitytime,ontheexpirationdate.

UnlessOriginalNotesbeingtenderedbytheabove-describedguaranteeddeliverymethodaredepositedwiththeexchangeagent,atenderwillbedeemedtohavebeenreceivedasofthedatewhenthetenderingholder'sproperlycompletedanddulysignedletteroftransmittal,oraproperlytransmittedagent'smessage,accompaniedbytheOriginalNotesoraconfirmationofbook-entrytransferoftheOriginalNotesintotheexchangeagent'saccountatthebook-entrytransferfacilityisreceivedbytheexchangeagent.

Withdrawal Rights

YoumaywithdrawyourtenderofOriginalNotesatanytimebeforetheExchangeOffersexpires.

Forawithdrawaltobeeffective,theexchangeagentmustreceiveawrittennoticeofwithdrawalatitsaddresslistedbelowunder"—ExchangeAgent."Thenoticeofwithdrawalmust:

• specifythenameofthepersonwhotenderedtheOriginalNotestobewithdrawn;

• identifytheOriginalNotestobewithdrawn,includingtheprincipalamount,or,inthecaseofOriginalNotestenderedbybook-entrytransfer,thenameandnumberoftheDTCaccounttobecredited,andotherwisecomplywiththeproceduresofDTC;

• besignedinthesamemannerastheoldsignatureontheletteroftransmittalbywhichtheOriginalNotesweretendered(includinganyrequiredsignatureguarantees)orbeaccompaniedbydocumentsoftransfersufficienttohavethetrusteewithrespecttotheOriginalNotes

TableofContents

registerthetransferoftheOriginalNotesintothenameofthepersonwithdrawingthetender;and

• ifcertificatesforOriginalNoteshavebeentransmitted,specifythenameinwhichthoseOriginalNotesareregisteredifdifferentfromthatofthewithdrawingholder.

IfcertificatesforOriginalNoteshavebeendeliveredorotherwiseidentifiedtotheexchangeagentinconnectionwiththeExchangeOffersandaretobewithdrawnthen,beforethereleaseofthesecertificatesbytheexchangeagent,theholdermustalsosubmittheserialnumbersoftheparticularcertificatestobewithdrawnandasignednoticeofwithdrawalwiththesignaturesguaranteedbyaneligibleinstitution,unlesstheholderisaneligibleinstitution.

Wewilldetermineinoursolediscretionallquestionsastothevalidity,formandeligibility,includingtimeofreceipt,ofnoticesofwithdrawal.Ourdeterminationwillbefinalandbindingonallparties.AnyOriginalNotessowithdrawnwillbedeemednottohavebeenvalidlytenderedforpurposesoftheExchangeOffers.WewillreturnanyOriginalNotesthathavebeentenderedbutthatarenotexchangedforanyreasontotheholder,withoutcost,assoonaspracticableafterwithdrawal,rejectionoftenderorterminationoftheExchangeOffers.InthecaseofOriginalNotestenderedbybook-entrytransferintotheexchangeagent'saccountatDTC,theOriginalNoteswillbecreditedtoanaccountmaintainedwithDTCfortheOriginalNotes.YoumayretenderproperlywithdrawnOriginalNotesbyfollowingoneoftheproceduresdescribedunder"—ProceduresforTenderingOriginalNotes"atanytimeonorbeforetheexpirationdate.

Conditions

NotwithstandinganyothertermoftheExchangeOffers,wewillnotberequiredtoacceptforexchange,ortoexchangeExchangeNotesfor,anyOriginalNotesif:

• theExchangeOffers,orthemakingofanyexchangebyaholderofOriginalNotes,wouldviolateanyapplicablelaworapplicableinterpretationbythestaffoftheSEC;or

• anyactionorproceedingisinstitutedorthreatenedinanycourtorbyorbeforeanygovernmentalagencywithrespecttotheExchangeOfferswhich,inourjudgment,wouldreasonablybeexpectedtoimpairourabilitytoproceedwiththeExchangeOffers.

Theconditionslistedaboveareforoursolebenefitandwemayassertthemregardlessofthecircumstancesgivingrisetoanycondition.Subjecttoapplicablelaw,wemaywaivetheseconditionsinourdiscretioninwholeorinpartatanytimeandfromtimetotime.

Weexpresslyreservetheright,atanytimeoratvarioustimes,toextendtheperiodoftimeduringwhichtheExchangeOffersareopen.Consequently,wemaydelayacceptanceofanyOriginalNotesbygivingoralorwrittennoticeofanextensiontotheirholders.Duringanextension,allOriginalNotespreviouslytenderedwillremainsubjecttotheExchangeOffers,andwemayacceptthemforexchange.

Acceptance of Original Notes for Exchange and Delivery of Exchange Notes

UponsatisfactionorwaiverofallconditionstotheExchangeOffers,wewillaccept,promptlyaftertheexpirationdate,allOriginalNotesproperlytenderedandwillissuetheExchangeNotespromptlyafteracceptanceoftheOriginalNotes.ForpurposesoftheExchangeOffers,wewillbedeemedtohaveacceptedproperlytenderedOriginalNotesforexchangewhenwehavegivenoralorwrittennoticeofthatacceptancetotheexchangeagent.ForeachOriginalNoteacceptedforexchange,youwillreceiveaNewNotehavingaprincipalamountequaltothatofthesurrenderedOriginalNote.

TableofContents

Inallcases,wewillissueExchangeNotesforOriginalNotesthatwehaveacceptedforexchangeundertheExchangeOffersonlyaftertheexchangeagenttimelyreceives:

• certificatesforyourOriginalNotesoratimelyconfirmationofbook-entrytransferofyourOriginalNotesintotheexchangeagent'saccountatDTC;and

• aproperlycompletedanddulyexecutedletteroftransmittalandallotherrequireddocumentsoraproperlytransmittedagent'smessage.

IfwedonotacceptanytenderedOriginalNotesforanyreasonsetforthinthetermsoftheExchangeOffersorifyousubmitOriginalNotesforagreaterprincipalamountthanyoudesiretoexchange,wewillreturntheunacceptedornon-exchangedOriginalNoteswithoutexpensetoyou.InthecaseofOriginalNotestenderedbybook-entrytransferintotheexchangeagent'saccountatDTCunderthebook-entryproceduresdescribedbelow,wewillcreditthenon-exchangedOriginalNotestoyouraccountmaintainedwithDTC.

Exchange Agent

DeutscheBankTrustCompanyAmericashasbeenappointedastheexchangeagentfortheExchangeOffers.YoushoulddirectanyquestionsandrequestsforassistanceregardingtheprocedureforexchangingyourOriginalNotesforExchangeNotesandrequestsforadditionalcopiesofthisprospectus,theletteroftransmittalorthenoticeofguaranteeddeliverytotheexchangeagentaddressedasfollows:

By Registered or Certified Mail, Overnight Delivery or Hand Delivery : DeutscheBankTrustCompanyAmericasc/oDBServicesAmericas,Inc.Attn:ReorgDept.5022GateParkway,Suite200Jacksonville,FL32256

By Facsimile Transmission : (ForEligibleInstitutionsOnly)615-866-3889Attention:ReorgDept.

Confirm by Telephone : 877-843-9767

DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH IN THE LETTER OF TRANSMITTAL, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THANTHE ONE SET FORTH IN THE LETTER OF TRANSMITTAL, WILL NOT CONSTITUTE A VALID DELIVERY.

Fees and Expenses

WewillbeartheexpensesofsolicitingtenderspursuanttotheExchangeOffers.TheprincipalsolicitationfortenderspursuanttotheExchangeOffersisbeingmadebymail;however,additionalsolicitationmaybemadebytelephone,telecopy,inpersonorbyothermeansbyourofficersandregularemployeesandbyofficersandemployeesofouraffiliates.

Wehavenotretainedanydealer-managerinconnectionwiththeExchangeOffersandwillnotmakeanypaymentstobrokers,dealersorotherssolicitingacceptancesoftheExchangeOffers.However,wewillpaytheexchangeagentreasonableandcustomaryfeesforitsservicesandwillreimburseitforitsreasonableout-of-pocketexpenses.Wemayalsopaybrokeragehousesandothercustodians,nomineesandfiduciariesthereasonableout-of-pocketexpensesincurredbythemin

TableofContents

forwardingcopiesofthisprospectus,lettersoftransmittalandrelateddocumentstothebeneficialownersoftheOriginalNotesandinhandlingorforwardingtendersforexchange.WewillpaytheotherexpensesincurredinconnectionwiththeExchangeOffers,includingfeesandexpensesofthetrustee,accountingandlegalfeesandprintingcosts.

Transfer Taxes

Wewillpayalltransfertaxes,ifany,applicabletotheexchangeofOriginalNotespursuanttotheExchangeOffers.If,however,certificatesrepresentingExchangeNotesorOriginalNotesforprincipalamountsnottenderedoracceptedforexchangearetobedeliveredto,oraretobeissuedinthenameof,anypersonotherthantheregisteredholderoftheOriginalNotestendered,oriftenderedOriginalNotesareregisteredinthenameofanypersonotherthanthepersonsigningtheletteroftransmittal,orifatransfertaxisimposedforanyreasonotherthantheexchangeofOriginalNotespursuanttotheExchangeOffers,thentheamountofanytransfertaxes(whetherimposedontheregisteredholderoranyotherpersons)willbepayablebythetenderingholder.Ifsatisfactoryevidenceofpaymentofanytaxesorexemptiontherefromisnotsubmittedwiththeletteroftransmittal,theamountofanytransfertaxeswillbebilleddirectlytothetenderingholder.

Accounting Treatment

WewillrecordtheExchangeNotesatthesamecarryingvaluesastheOriginalNotes,asreflectedinouraccountingrecordsonthedateofexchange.Accordingly,wewillnotrecognizeanygainorlossontheexchangeofnotes.WewillamortizetheexpensesoftheExchangeOffersoverthetermoftheExchangeNotes.

Consequences of Failure to Exchange Original Notes

AnyOriginalNotesnottenderedintheExchangeOfferswillremainoutstandingandcontinuetobesubjecttoallthetermsandconditionsspecifiedintheindenture,includingtransferrestrictions,butwillnotretainanyrightsundertheexchangeandregistrationrightsagreement(includingtherighttoearnadditionalinterestrelatingtoourregistrationobligations)aftertheconsummationoftheExchangeOffers.ExceptinlimitedcircumstanceswithrespecttospecifictypesofholdersofOriginalNotes,wewillhavenofurtherobligationtoprovidefortheregistrationundertheSecuritiesActofsuchOriginalNotes.Ingeneral,theOriginalNotesmaynotbeofferedorsold,unlessregisteredundertheSecuritiesAct,exceptpursuanttoanexemptionfrom,orinatransactionnotsubjectto,theSecuritiesActandapplicablestatesecuritieslaws.

OriginalNotesthatarenotexchangedintheExchangeOfferswillremainoutstandingandcontinuetoaccrueinterestandwillbeentitledtotherightsandbenefitstheirholdershaveundertheindenturerelatingtotheOriginalNotes.HoldersoftheExchangeNotesandanyOriginalNotesthatremainoutstandingafterconsummationoftheExchangeOfferswillvoteasasingleclassforpurposesofdeterminingwhetherholdersoftherequisitepercentageoftheclasshavetakencertainactionsorexercisedcertainrightsundertheindenture.

Resales of Exchange Notes

BasedoninterpretationsofthestaffoftheSEC,assetforthinnoactionletterstothirdparties,webelievethatExchangeNotesissuedundertheExchangeOffersinexchangeforOriginalNotesmaybeofferedforresale,resoldandotherwisetransferredbyanyOriginalNoteholderwithoutfurtherregistrationundertheSecuritiesActandwithoutdeliveryofaprospectusthatsatisfiestherequirementsofSection10oftheSecuritiesActif:

• theholderisnotour"affiliate"withinthemeaningofRule405undertheSecuritiesAct;

TableofContents

• theExchangeNotesareacquiredintheordinarycourseoftheholder'sbusiness;and

• theholderdoesnotintendtoparticipateinadistribution(withinthemeaningoftheSecuritiesAct)oftheExchangeNotes.

AnyholderwhoexchangesOriginalNotesintheExchangeOfferswiththeintentionofparticipatinginanymannerinadistributionoftheExchangeNotesmustcomplywiththeregistrationandprospectusdeliveryrequirementsoftheSecuritiesActinconnectionwithasecondaryresaletransaction.

Thisprospectusmaybeusedforanoffertoresell,resaleorotherretransferofExchangeNotes.Withregardtobrokerdealers,onlybrokerdealersthatacquiretheOriginalNotesasaresultofmarketmakingactivitiesorothertradingactivitiesmayparticipateintheExchangeOffers.EachbrokerdealerthatreceivesExchangeNotesforitsownaccountinexchangeforOriginalNotes,wheretheOriginalNoteswereacquiredbythebrokerdealerasaresultofmarketmakingactivitiesorothertradingactivities,mustacknowledgethatitwilldeliveraprospectusinconnectionwithanyresaleoftheExchangeNotes.Pleasesee"PlanofDistribution"formoredetailsregardingthetransferofExchangeNotes.

TableofContents

DESCRIPTION OF THE EXCHANGE NOTES

TheOriginalNoteswereissuedandtheExchangeNoteswillbeissuedundertheindenture(the"base indenture ")datedasofAugust28,2018betweenElancoAnimalHealthIncorporatedandDeutscheBankTrustCompanyAmericas,astrustee(the"trustee "),assupplementedbythefirstsupplementalindenture(the"first supplemental indenture "and,togetherwiththebaseindenture,the"indenture ")datedasofAugust28,2018betweenElancoAnimalHealthIncorporatedandthetrustee.Thefollowingdescriptionisasummaryofselectedportionsoftheindentureanddoesnotrestatetheindenture.Theindenture,notthisdescription,willdefineyourrightsasaholderofthenotes.Youshouldreadtheindenturecarefullyforprovisionsthatmaybeimportanttoyou.ThetermsofthenotesincludethoseexpresslysetforthintheindentureandthosemadepartoftheindenturebyreferencetotheTrustIndentureActof1939,asamended.

Werefertothe2021OriginalNotesandthe2021ExchangeNotestogetherasthe"2021Notes,"the2023OriginalNotesandthe2023ExchangeNotestogetherasthe"2023Notes,"andthe2028OriginalNotesandthe2028ExchangeNotesasthe"2028Notes."Asusedinthissection,referencesto"Elanco ,"our"Company ,""we ,""us "and"our "referonlytoElancoAnimalHealthIncorporatedandnottoanyofitscurrentorfuturesubsidiaries.

Terms of the Exchange Notes

2021 Exchange Notes

Thespecifictermsofthe2021ExchangeNoteswillbeasfollows:

• Title of the note s:3.912%SeniorNotesdue2021

• Total principal amount being issued: upto$500,000,000

• Maturity date: August27,2021

• Interest rate: 3.912%

• Denomination: $2,000andintegralmultiplesof$1,000inexcessthereof

• Date interest starts accruing: FromthemostrecentdatetowhichinterestontheOriginalNoteshasbeenpaid

• Regular interest payment dates: February27andAugust27

• Regular records dates for interest: February12andAugust12

• Redemption: See"—OptionalRedemption"

2023 Exchange Notes

TableofContents

2028 Exchange Notes

Interestonthenoteswillbecomputedonthebasisofa360-dayyearoftwelve30-daymonths.Ifanyinterestpaymentdate,statedmaturitydateorredemptiondateofaseriesofnotesisnotaBusinessDay,thepaymentotherwiserequiredtobemadeonsuchdatemaybemadeonthenextBusinessDaywiththesameforceandeffectasifmadeonsuchinterestpaymentdate,statedmaturitydateorredemptiondate,asthecasemaybe,andnointerestshallaccrueontheamountsopayablefortheperiodfromandaftersuchinterestpaymentdate,statedmaturitydateorredemptiondate,asthecasemaybe.

Thetrustee,throughitscorporatetrustofficeintheCityofNewYork(insuchcapacity,the"paying agent ")willactasourpayingagentwithrespecttothenotes.Paymentsofprincipal,interestandpremiumwillbemadebyusthroughthepayingagenttoDTCasdescribedunder"Book-EntrySettlementandClearance."

Interest Rate Adjustment

TheinterestratepayableoneachseriesofnoteswillbesubjecttoadjustmentfromtimetotimeifS&PorMoody's(or,ifapplicable,anationallyrecognizedstatisticalratingorganizationwithinthemeaningofSection3(a)(62)oftheExchangeAct,selectedbyus(ascertifiedbyaresolutionofourboardofdirectorsoracommitteethereof)asareplacementagencyforS&PorMoody's,oranyofthem,asthecasemaybe,"asubstituteratingagency")downgrades(orsubsequentlyupgrades)itsratingassignedtotherespectiveseriesofnotes,assetforthbelow.EachofS&P,Moody'sandanysubstituteratingagencyisan"InterestRateRatingAgency,"andtogethertheyare"InterestRateRatingAgencies."

IftheratingofanyseriesofnotesfromS&P(or,ifapplicable,anysubstituteratingagency)withrespecttosuchseriesofnotesisdecreasedtoaratingsetforthintheimmediatelyfollowingtable,theinterestrateonsuchseriesofnoteswillincreasefromtheinterestratepayableonsuchseriesofnotes

TableofContents

onthedateoftheirinitialissuancebyanamountequaltothepercentagesetforthoppositethatrating:

IftheratingofanyseriesofnotesfromMoody's(or,ifapplicable,anysubstituteratingagency)withrespecttosuchseriesofnotesisdecreasedtoaratingsetforthintheimmediatelyfollowingtable,theinterestrateonsuchseriesofnoteswillincreasefromtheinterestratepayableonsuchseriesofnotesonthedateoftheirinitialissuancebyanamountequaltothepercentagesetforthoppositethatrating:

Eachadjustmentrequiredbyanydecreaseorincreaseinaratingsetforthabove,whetheroccasionedbytheactionofS&PorMoody's(or,inanycase,anysubstituteratingagency),shallbemadeindependentofanyandallotheradjustments.

NoadjustmentintheinterestrateonanyseriesofnotesshallbemadesolelyasaresultofanInterestRateRatingAgencyceasingtoprovidearatingonsuchseriesofnotes.IfatanytimefewerthantwoInterestRateRatingAgenciesprovidearatingonaseriesofnotesforreasonsbeyondourcontrol,wewillusecommerciallyreasonableeffortstoobtainaratingonsuchnotesfromasubstituteratingagencyforpurposesofdetermininganyincreaseordecreaseintheperannuminterestrateonaseriesofnotespursuanttothetablesabove,(1)suchsubstituteratingagencywillbesubstitutedforthelastInterestRateRatingAgencytoprovidearatingonsuchseriesofnotesbutwhichhassinceceasedtoprovidesuchrating,(2)therelativeratingsscaleusedbysuchsubstituteratingagencytoassignratingstoseniorunsecureddebtwillbedeterminedingoodfaithbyanindependentinvestmentbankinginstitutionofnationalstandingappointedbyusand,forpurposesofdeterminingtheapplicableratingsincludedintheapplicabletableabovewithrespecttosuchsubstituteratingagency,suchratingsshallbedeemedtobetheequivalentratingsusedbyS&PorMoody's,asapplicable,insuchtable,and(3)theperannuminterestrateonsuchnoteswillincreaseordecrease,asthecasemaybe,suchthattheinterestrateequalstheinterestratepayableonsuchseriesofnotesonthedateoftheirinitialissuanceplustheappropriatepercentage,ifany,setforthoppositetheratingfromsuchsubstituteratingagencyintheapplicabletableabove(takingintoaccounttheprovisionsofclause(2)above)(plusanyapplicablepercentageresultingfromadecreasedratingbytheotherInterestRateRatingAgency).Forsolongas(a)onlyoneInterestRateRatingAgencyprovidesaratingonaseriesofnotes,anyincreaseordecreaseintheinterestrateonsuchnotesnecessitatedbyareductionorincreaseintheratingbythatInterestRateRatingAgencyshallbetwicetheapplicablepercentagesetforthintheapplicabletableaboveand(b)noInterestRateRatingAgencyprovidesaratingonsuchnotes,theinterestrateonthatseriesofnoteswillincreaseto,orremainat,asthecasemaybe,2.00%abovetheinterestratepayableonsuchseriesofnotesonthedateoftheirinitialissuance.Innoevent

S&P's Rating* Percentage BB 0.25%BB– 0.50%B+ 0.75%Borbelow 1.00%

* Includingtheequivalentratingsofanysubstituteratingagency.

Moody's Rating* Percentage Ba1 0.25%Ba2 0.50%Ba3 0.75%B1orbelow 1.00%

* Includingtheequivalentratingsofanysubstituteratingagency.

TableofContents

shall(x)theinterestrateforaseriesofnotesbereducedtobelowtheinterestratepayableonsuchseriesofnotesonthedateoftheirinitialissuanceor(y)thetotalincreaseintheinterestrateonaseriesofnotesexceed2.00%abovetheinterestratepayableonsuchseriesofnotesonthedateoftheirinitialissuance.IfS&PorMoody'sceasestorateaseriesofnotesormakearatingofsuchnotespubliclyavailableforreasonswithinourcontrol,wewillnotbeentitledtoobtainaratingfromasubstituteratingagencyandtheincreaseordecreaseintheperannuminterestrateonthenotesofsuchseriesshallbedeterminedinthemannerdescribedaboveasifeitheronlyoneornoInterestRateRatingAgencyprovidesaratingonsuchnotes,asthecasemaybe.

IfatanytimetheinterestrateonanyseriesofnoteshasbeenadjustedupwardandanyoftheInterestRateRatingAgenciessubsequentlyincreasesitsratingofsuchnotes,theinterestrateonthenotesofthatserieswillbedecreasedsuchthattheinterestrateonsuchnotesequalstheinterestratepayableonsuchseriesofnotesonthedateoftheirinitialissuanceplustheapplicablepercentagessetforthoppositetheratingsineffectimmediatelyfollowingtheincreaseinthetablesabove;providedthatifS&P'soranysubstituteratingagencysubsequentlyincreasesitsratingonanyseriesofnotesto"BB+"(oritsequivalentifwithrespecttoanysubstituteratingagency)orhigher,andMoody'soranysubstituteratingagencysubsequentlyincreasesitsratingonsuchseriesofnotesto"Baa3"(oritsequivalentifwithrespecttoanysubstituteratingagency)orhigher,theperannuminterestrateonsuchnoteswillbedecreasedtotheinterestratepayableonsuchseriesofnotesonthedateoftheirinitialissuance.

Anyinterestrateincreaseordecreasedescribedabovewilltakeeffectfromthefirstdayofthefirstinterestpaymentperiodfollowingtheinterestpaymentperiodduringwhicharatingchangeoccursthatrequiresanadjustmentintheinterestrate.Assuch,interestwillnotaccrueatsuchincreasedordecreasedrateuntilthenextinterestpaymentdatefollowingthedateonwhicharatingchangeoccurs.

IfanyInterestRateRatingAgencychangesitsratingofanyseriesofnotesmorethanonceduringanyparticularinterestperiod,thelastsuchchangebysuchagencytooccurwillcontrolintheeventofaconflictforpurposesofanyinterestrateincreaseordecreasewithrespecttosuchseriesofnotesdescribedabove.

Theinterestratesonanyseriesofnoteswillpermanentlyceasetobesubjecttoanyadjustmentdescribedabove(notwithstandinganysubsequentdecreaseintheratingsbyanyInterestRateRatingAgency)ifsuchnotesbecomerated"BBB+"(oritsequivalent)orhigherbyS&P(oranysubstituteratingagency)and"Baa1"(oritsequivalent)orhigherbyMoody's(oranysubstituteratingagency),oroneofthoseratingsifratedbyonlyoneInterestRateRatingAgency,ineachcasewithastableorpositiveoutlook.

Iftheinterestratepayableonanyseriesofnotesisincreasedasdescribedabove,theterm"interest",asusedwithrespecttosuchseriesofnotes,willbedeemedtoincludeanysuchadditionalinterestunlessthecontextotherwiserequires.

Elancoissolelyresponsibleforcalculatinganyadjustmentoftheinterestrate.Elancoshalldeliverwrittennoticetothetrusteeandtheholdersofanychangetotheinterestrate.Inthecaseofglobalnotes,anychangetotheinterestrateshallbemadeinaccordancewiththeapplicableprovisionsofDTC.Neitherthetrusteenorthepayingagentshallhaveanydutytodeterminewhethertheinterestrateshouldbeadjustedortheamountofanysuchadjustment.

Ranking

Thenoteswillbeourseniorunsecuredobligationsandwillrankequallywithallofourexistingandfutureseniorunsecuredindebtedness.

TableofContents

No Listing

Thenoteswillnotbelistedonanynationalsecuritiesexchangeorbequotedonanyautomateddealerquotationsystem.

Reports

Whilethenotesremainoutstanding,andifwearenotrequiredtofilereportsundertheExchangeAct,wewillfurnishtoyouoranyprospectivepurchaserdesignatedbyyou,uponrequest,theinformationrequiredtobedeliveredpursuanttoRule144A(d)(4)undertheSecuritiesActtoallowyoutocomplywithRule144Ainconnectionwithresalesofthenotes.

Transfer and Exchange

Aholderofthenotesmaytransferorexchangenotesinaccordancewiththeindenture.Uponwrittendirectionfromus,oraccordingtotheircustomaryprocedures,theregistrarandthetrusteemayrequireaholdertofurnishappropriateendorsementsandtransferdocumentsinconnectionwithatransferofnotes.Holderswillberequiredtopayalltaxesdueontransfer.Wearenotrequiredtotransferorexchangeanynotesselectedforredemption.Also,wearenotrequiredtotransferorexchangeanynotesforaperiodof15daysbeforeaselectionofnotestoberedeemed.

Optional Redemption

Atouroption,wemayredeemthenotesofanyseries,inwholeorinpart,atanytimeandfromtimetotime.Theredemptionpricewillbeequaltothegreaterofthefollowingamounts:

• 100%oftheprincipalamountofthenotesbeingredeemedontheredemptiondate;and

• thesumofthepresentvaluesoftheremainingscheduledpaymentsofprincipalandinterestonthenotesbeingredeemed(assumingforthesepurposesthatthematuritydateforthe2023Notesandthe2028NotesistheapplicableParCallDate(asdefinedbelow))onthatredemptiondate(notincludingtheamountofaccruedandunpaidinterestto,butexcluding,theredemptiondate)discountedtotheredemptiondateonasemi-annualbasisattheTreasuryRate,asdeterminedbytheReferenceTreasuryDealer,plus 20basispointsinthecaseofthe2021Notes,25basispointsinthecaseofthe2023Notesand30basispointsinthecaseofthe2028Notes;

plus ,ineachcase,accruedandunpaidinterestonthenotesbeingredeemedto,butexcluding,theredemptiondate;provided ,however ,thatifweredeemthe2023NotesonorafterJuly28,2023(the"2023 Par Call Date"),theredemptionpricewillequal100%oftheprincipalamountofthe2023Notestoberedeemedplusaccruedandunpaidinterestontheamountbeingredeemedto,butexcluding,thedateofredemption;provided further ,however ,thatifweredeemthe2028NotesonorafterMay28,2028(the"2028 Par Call Date "andeachofthe2023ParCallDateandthe2028ParCallDate,a"Par Call Date "),theredemptionpricewillequal100%oftheprincipalamountofthe2028Notestoberedeemedplusaccruedandunpaidinterestontheamountbeingredeemedto,butexcluding,thedateofredemption.

Notwithstandingtheforegoing,installmentsofinterestonapplicablenotesthataredueandpayableoninterestpaymentdatesfallingonorpriortoaredemptiondatewillbepayableontheinterestpaymentdatetotheregisteredholdersasofthecloseofbusinessontherelevantrecorddateaccordingtotheapplicablenotesandtheindenture.Theredemptionpricewillbecalculatedonthebasisofa360-dayyearconsistingoftwelve30-daymonths.

Wewilldelivernoticeofanyredemptionatleast30daysbutnotmorethan60daysbeforetheredemptiondatetoeachregisteredholderofthenotestoberedeemed.Oncenoticeofredemptionis

TableofContents

mailed,thenotescalledforredemptionwillbecomedueandpayableontheredemptiondateattheapplicableredemptionprice,plusaccruedandunpaidinterestapplicabletosuchnotesto,butexcluding,theredemptiondate.

Setforthbelowarecertainofthedefinedtermsusedinthissection.

"Comparable Treasury Issue "means,foranyseriesofnotes,theUnitedStatesTreasurysecurityselectedbytheQuotationAgentashavinganactualorinterpolatedmaturitycomparabletotheremainingtermofthenotesofsuchseriestoberedeemedthatwouldbeutilized,atthetimeofselectionandinaccordancewithcustomaryfinancialpractice,inpricingnewissuesofcorporatedebtsecuritiesofcomparablematuritytotheremainingtermofthenotesofsuchseries.

"Comparable Treasury Price "means,withrespecttoanyredemptiondateandseriesofnotestoberedeemed,(A)theaverageoftheReferenceTreasuryDealerQuotationsforsuchredemptiondateandseries,afterexcludingthehighestandlowestofsuchReferenceTreasuryDealerQuotations,or(B)ifweobtainfewerthanfoursuchReferenceTreasuryDealerQuotations,theaverageofsuchquotations,or(C)ifonlyoneReferenceTreasuryDealerQuotationisreceived,suchquotation.

"Quotation Agent "meansoneoftheReferenceTreasuryDealersappointedbyustoactasthe"Quotation Agent ."

"Reference Treasury Dealer "means(A)anyofGoldmanSachs&Co.LLC,J.P.MorganSecuritiesLLCandCitigroupGlobalMarketsInc.(ortheirrespectiveaffiliatesthatarePrimaryTreasuryDealers),andtheirrespectivesuccessors;provided ,however ,thatifanyoftheforegoingshallceasetobeaprimaryU.S.GovernmentsecuritiesdealerintheUnitedStates(a"Primary Treasury Dealer "),wewillsubstitutethereforanotherPrimaryTreasuryDealer;and(B)anyotherPrimaryTreasuryDealer(s)selectedbyus.

"Reference Treasury Dealer Quotation "means,withrespecttoeachReferenceTreasuryDealerandanyredemptiondateandseriesofnotestoberedeemed,theaverage,asdeterminedbyus,ofthebidandaskedpricesfortheComparableTreasuryIssueforsuchseries(expressedineachcaseasapercentageofitsprincipalamount)quotedinwritingtousbysuchReferenceTreasuryDealerat5:00p.m.(NewYorkCitytime)onthethirdBusinessDayprecedingsuchredemptiondate.

"Treasury Rate "means,withrespecttoanyredemptiondateforanyseriesofnotes,therateperannumequaltothesemi-annualequivalentyieldtomaturity(orinterpolatedyieldtomaturityonadaycountbasis)oftheapplicableComparableTreasuryIssue,assumingapriceforsuchComparableTreasuryIssue(expressedasapercentageofitsprincipalamount)equaltotheapplicableComparableTreasuryPriceforsuchredemptiondate.

Onandaftertheredemptiondate,interestwillceasetoaccrueonthenotesoranyportionofthenotescalledforredemption(unlesswedefaultinthepaymentoftheredemptionpriceandaccruedandunpaidinterest).Onorbeforetheredemptiondate,wewilldepositwithapayingagent(orthetrustee)moneysufficienttopaytheredemptionpriceofandaccruedandunpaidinterestonthenotestoberedeemedonthatdate.Iffewerthanallofthenotesofanyseriesaretoberedeemed,thenotestoberedeemedshallbeselectedinaccordancewithDTC'sapplicableprocedures,inthecaseofnotesrepresentedbyaglobalsecurity,orbythetrusteebyamethodthetrusteedeemstobefairandappropriate,inthecaseofnotesthatarenotrepresentedbyaglobalsecurity.

Change of Control

IfaChangeofControlTriggeringEventoccurs,unlesswehaveredeemedthenotesinfullasdescribedabove,wewillmakeanoffertoeachholder(the"Change of Control Offer ")torepurchaseanyandall(equalto$2,000oranintegralmultipleof$1,000inexcessthereof)ofsuchholder'snotesatarepurchasepriceincashequalto101%oftheprincipalamountofthenotestoberepurchased

TableofContents

plusaccruedandunpaidinterestto,butexcluding,thedateofrepurchase(the"Change of Control Payment ").Within30daysfollowinganyChangeofControlTriggeringEvent,wewillberequiredtomailawrittennotice,withacopytothetrustee,toeachholderofnotesatitsregisteredaddressdescribingthetransactionortransactionsthatconstitutetheChangeofControlTriggeringEventandofferingtorepurchasethenotesonthedatespecifiedinthenotice,whichdatewillbenoearlierthan30daysandnolaterthan60daysfromthedatesuchnoticeismailed(the"Change of Control Payment Date "),pursuanttotheproceduresrequiredbythenotesanddescribedinsuchnotice.

WemustcomplywiththerequirementsofRule14e-1undertheExchangeActandanyothersecuritieslawsandregulationsthereundertotheextentthoselawsandregulationsareapplicableinconnectionwiththerepurchaseofthenotesasaresultofaChangeofControlTriggeringEvent.TotheextentthattheprovisionsofanysecuritieslawsorregulationsconflictwiththeChangeofControlrepurchaseprovisionsofthenotes,wewillberequiredtocomplywiththeapplicablesecuritieslawsandregulationsandwillnotbedeemedtohavebreachedourobligationsundertheChangeofControlrepurchaseprovisionsofthenotesbyvirtueofsuchconflicts.

OntheChangeofControlPaymentDate,wewillberequired,totheextentlawful,to:

• acceptforpaymentallnotesorportionsofnotesproperlytenderedpursuanttotheChangeofControlOffer;

• depositwiththepayingagentanamountequaltotheChangeofControlPaymentinrespectofallnotesorportionsofnotesproperlytendered;and

• deliverorcausetobedeliveredtothetrusteethenotesproperlyaccepted,togetherwithanofficers'certificatestatingtheprincipalamountofnotesorportionsofnotesbeingpurchased.

Setforthbelowarecertainofthedefinedtermsusedinthissection.

"Below Investment Grade Rating Event "meanstheratingsonthenotesarelowered,andthenotesareratedbelowInvestmentGradeRatingbytwoormoreoftheRatingAgencies(orifthereisoneRatingAgency,bysuchRatingAgency)onanydatecommencinguponthefirstpublicnoticebyusoftheoccurrenceofaChangeofControlandending60daysfollowingconsummationofsuchChangeofControl(whichperiodshallbeextendeduptoanadditional60days,solongastheratingofthenotesisunderpubliclyannouncedconsiderationforpossibledowngradebyanyoftheRatingAgencies);provided thataBelowInvestmentGradeRatingEventwillnotbedeemedtohaveoccurredinrespectofaparticularChangeofControl(andthuswillnotbedeemedaBelowInvestmentGradeRatingEventforpurposesofthedefinitionofChangeofControlTriggeringEvent)ifeachRatingAgencymakingthereductioninratingdoesnotpubliclyannounceorconfirmorinformusinwritingatourrequestthatthereductionwastheresult,inwholeorinpart,ofanyeventorcircumstancecomprisedoforarisingasaresultof,orinrespectof,theChangeofControl.

"Change of Control "meanstheoccurrenceofanyofthefollowing:

(i)directorindirectsale,transfer,conveyanceorotherdisposition(otherthanbywayofmergerorconsolidation),inoneoraseriesofrelatedtransactions,ofallorsubstantiallyallofthepropertiesorassetsofusandoursubsidiariestakenasawholetoany"person"(asthattermisusedinSection13(d)(3)oftheExchangeAct)otherthanLillyanditsaffiliates,usoroneofoursubsidiaries;

(ii)theconsummationofanytransaction(including,withoutlimitation,anymergerorconsolidation,butexcludingtransactionsinconnectionwiththeDistribution)asaresultofwhichany"person"(asthattermisusedinSection13(d)(3)oftheExchangeAct),otherthanLillyanditsaffiliates,becomesthe"beneficialowner"(asdefinedinRules13d-3and13d-5undertheExchangeAct),directlyorindirectly,ofmorethan50%ofouroutstandingvotingstockorothervotingstockintowhichourvotingstockisreclassified,consolidated,exchangedorchanged,

TableofContents

measuredbyvotingpowerratherthannumberofshares;provided,however,thatatransactionwillnotbedeemedtoinvolveaChangeofControlif(a)webecomeadirectorindirectwhollyownedsubsidiaryofaholdingcompanyand(b)(i)theholdersofthevotingstockofsuchholdingcompanyimmediatelyfollowingthattransactionaresubstantiallythesameastheholdersofourvotingstockimmediatelypriortothattransactionor(ii)no"person"(asthattermisusedinSection13(d)(3)oftheExchangeAct)becomesthe"beneficialowner"(asdefinedinRules13d-3and13d-5undertheExchangeAct),directlyorindirectly,ofmorethan50%ofthevotingpowerofthevotingstockofsuchholdingcompanyimmediatelyfollowingsuchtransaction;

(iii)weconsolidatewith,ormergewithorinto,any"person"or"group"(asthattermisusedinSection13(d)(3)oftheExchangeAct),otherthanLillyanditsaffiliates,orany"person"or"group",otherthanLillyanditsaffiliates,consolidateswith,ormergeswithorinto,us,inanysucheventpursuanttoatransactioninwhichanyofourvotingstockorthevotingstockofsuchotherpersonisconvertedintoorexchangedforcash,securitiesorotherproperty,otherthananysuchtransactionwherethesharesofourvotingstockoutstandingimmediatelypriortosuchtransactionconstitute,orareconvertedintoorexchangedfor,amajorityofthevotingstockofthesurvivingpersonoranydirectorindirectparentcompanyofthesurvivingpersonimmediatelyaftergivingeffecttosuchtransaction;

(iv)thefirstdayonwhichamajorityofthemembersofourboardofdirectorsarenotContinuingDirectors;or

(v)theadoptionofaplanrelatingtoourliquidationordissolution.

Forpurposesofthisdefinition,"voting stock "meanswithrespecttoanyspecifiedperson(asthattermisusedinSection13(d)(3)oftheExchangeAct)capitalstockofanyclassorkindtheholdersofwhichareordinarily,intheabsenceofcontingencies,entitledtovotefortheelectionofdirectors(orpersonsperformingsimilarfunctions)ofsuchperson,eveniftherighttovotehasbeensuspendedbythehappeningofsuchacontingency.

ThedefinitionofChangeofControlincludesaphraserelatingtothedirectorindirectsale,lease,transfer,conveyanceorotherdispositionof"allorsubstantiallyall"ofthepropertiesorassetsofusandoursubsidiariestakenasawhole.Althoughthereisalimitedbodyofcaselawinterpretingthephrase"substantiallyall,"thereisnopreciseestablisheddefinitionofthephraseunderapplicablelaw.Accordingly,theapplicabilityoftherequirementthatweoffertorepurchasethenotesasaresultofasale,lease,transfer,conveyanceorotherdispositionoflessthanalloftheassetsofusandoursubsidiariestakenasawholetoanotherpersonorgroupmaybeuncertain.

"Change of Control Triggering Event "meanstheoccurrenceofbothaChangeofControlandaBelowInvestmentGradeRatingEvent.

"Continuing Director "means,asofanydateofdetermination,anymemberofourboardofdirectorswho(1)wasamemberofourboardofdirectorsonthedateoftheissuanceofthenotes;or(2)wasnominatedforelectionorelectedtoourboardofdirectorswiththeapprovalofamajorityoftheContinuingDirectorswhoweremembersofsuchboardofdirectorsatthetimeofsuchnominationorelection(eitherbyspecificvoteorbyapprovalofourproxystatementinwhichsuchmemberwasnamedasanomineeforelectionasadirector).

"Fitch "meansFitchRatingsInc.,andanysuccessortoitsratingagencybusiness."Investment Grade Rating "meansaratingbyMoody'sequaltoorhigherthanBaa3(ortheequivalentunderasuccessorratingcategoryofMoody's),aratingbyS&PequaltoorhigherthanBBB–(ortheequivalentunderanysuccessorratingcategoryofS&P)oraratingbyFitchequaltoorhigherthanBBB–(ortheequivalentunderanysuccessorratingcategoryofFitch).

"Moody's "meansMoody'sInvestorsService,Inc.,andanysuccessortoitsratingsagencybusiness.

TableofContents

"Rating Agencies "means(1)eachofFitch,Moody'sandS&P;and(2)ifanyofFitch,Moody'sorS&Pceasestoratethenotesorfailstomakearatingofthenotespubliclyavailableforreasonsoutsideofourcontrol,a"nationallyrecognizedstatisticalratingorganization"withinthemeaningofSection3(a)(62)undertheExchangeAct,selectedbyus(ascertifiedbyaresolutionofourboardofdirectors)asareplacementagency,ifany,foranyofFitch,Moody's,S&P,oreachofthem,asthecasemaybe.

"S&P "meansStandard&Poor'sRatingsServices,aStandard&Poor'sFinancialServicesLLCbusinessandanysuccessortoitsratingagencybusiness.

Certain Covenants

Thefollowingrestrictivecovenantswillapplytoeachseriesofthenotesbeingofferedinthisoffering.Wemayalsoelecttohavethesecovenantsapplytoanyotherseriesofdebtsecuritiesissuedpursuanttotheindenture.

Limitations on liens

Weshallnot,andshallnotpermitanyRestrictedSubsidiaryto,create,assumeorsuffertoexistanyLien(an"Initial Lien "),otherthanPermittedLiens,onanyPrincipalPropertytosecureanyDebtofElancooranyRestrictedSubsidiaryunlessithasmadeorwillmakeeffectiveprovisionwherebythenotesandanyotherdebtsecuritiesofanyseriesissuedpursuanttotheindentureandhavingthebenefitofthiscovenantwillbesecuredbysuchLienequallyandratablywith(orpriorto)allotherDebtsecuredbysuchLien.AnyLiencreatedforthebenefitoftheholdersofthenotesandanyotherdebtsecuritiesofanyseriesissuedpursuanttotheindentureandhavingthebenefitofthiscovenantshallprovidebyitstermsthatsuchLienwillbeautomaticallyreleasedanddischargeduponthereleaseanddischargeoftheapplicableInitialLien.

Limitations on sale leaseback transactions

Elancoshallnot,andshallnotpermitanyRestrictedSubsidiaryto,enterintoanySaleandLeasebackTransactioncoveringanyPrincipalPropertyunless:

(a)pursuanttothecovenantdescribedunder"—LimitationsonLiens"above,itwouldbeentitledtoincurDebtsecuredbyaLienonsuchPrincipalPropertyinaprincipalamountequaltotheValueofsuchSaleandLeasebackTransactionwithoutequallyandratablysecuringthenotesandanyotherdebtsecuritiesofanyseriesissuedpursuanttotheindentureandhavingthebenefitofthiscovenant;or

(b)ElancooranyRestrictedSubsidiary,duringthe270daysfollowingtheeffectivedateoftheSaleandLeasebackTransaction,appliesanamountequaltotheValueofsuchSaleandLeasebackTransactiontothevoluntaryretirementoflong-termDebtofElancooranyRestrictedSubsidiaryofElancoortotheacquisitionofoneormorePrincipalProperties.

BecausethedefinitionofPrincipalPropertycoversonlybuildings,structuresorotherfacilitiestogetherwiththeunderlyinglandandfixturesusedprimarilyformanufacturing,processingorproductionthatweownintheUnitedStates,ourmanufacturingfacilitieselsewhereintheworldareexcludedfromtheoperationofthecovenantsdescribedabove.UponcompletionoftheSeparation,therewouldbenoLienson,oranySaleandLeasebackTransactionscovering,anypropertythatwouldpotentiallyqualifyasPrincipalPropertythatwouldrequirethenotestobesecuredequallyandratablywith(orpriorto)DebtsecuredbysuchLien(disregarding,forsuchdetermination,clause(a)ofthedefinitionof"PermittedLiens").Wedonotkeepongoingrecordsidentifyingwhichofourproperties,ifany,wouldqualifyasPrincipalProperty.TherecanbenoguaranteesthatwewillmaintainanypropertythatconstitutesaPrincipalProperty.

TableofContents

Definitions

Setforthbelowarecertainofthedefinedtermsusedintheindenture.

"Consolidated Net Tangible Assets "meanstheaggregateamountofassetsafterdeducting(a)allcurrentliabilities(excludinganyindebtednessmaturingwithin12monthsoftheendofthemostrecentquarterforwhichfinancialstatementsareavailable)and(b)allgoodwill,tradenames,patents,unamortizeddebtdiscountandexpenseandanyotherlikeintangibles.

"Debt "ofanyPersonmeans(a)allobligationsofsuchPersonforborrowedmoney,orevidencedbybonds,debentures,notesorothersimilarinstruments(otherthananysuchobligationstotheextentthat(i)theliabilityofsuchPersonislimitedsolelytothepropertyorassetfinancedbysuchobligationsor(ii)suchobligationsresultfromtherequirementtoreturncollateralpostedtosuchPersonbyacounterpartypursuanttooneormorehedgingcontractsorothersimilarriskmanagementcontracts)and(b)allDebtofothersguaranteedbysuchPerson.

"Equity Interests "meanssharesofcapitalstock,partnershipinterests,membershipinterestsinalimitedliabilitycompany,beneficialinterestsinatrustorotherequityownershipinterestsinaPerson,andanywarrants,optionsorotherrightsentitlingtheholderthereoftopurchaseoracquireanysuchequityinterests.

"Lien "means,withrespecttoanypropertyofanyPerson,anymortgageordeedoftrust,pledge,hypothecation,assignment,depositarrangement,securityinterest,lien,charge,easement(otherthananyeasementnotmateriallyimpairingusefulnessormarketability),encumbrance,preference,priorityorothersecurityagreementorpreferentialarrangementofanykindornaturewhatsoeveronorwithrespecttosuchproperty.

"Lilly "meansEliLillyandCompany.

"Permitted Liens "means

(a)LiensexistingonthedateofthefirstsupplementalindentureorLiensexistingonpropertyofanyPersonatthetimeitbecomesaSubsidiaryofElanco;

(b)LiensonpropertyownedbyaPersonexistingatthetimesuchPersonismergedwithorintoorconsolidatedwithusoranyofourSubsidiaries;provided thatsuchLienswerenotincurredinthecontemplationofsuchmergerorconsolidationanddonotextendtoanyassetsotherthanthoseofthePersonmergedintoorconsolidatedwithusorsuchSubsidiary;

(c)LiensonpropertyexistingatthetimeofacquisitionthereofbyusoranyofourSubsidiaries;provided thatsuchLienswerenotincurredinthecontemplationofsuchacquisitionanddonotextendtoanypropertyotherthanthepropertysoacquiredbyusorsuchSubsidiary;

(d)aLienonanyassetorimprovementtoanyassetsecuringDebtincurredorassumedforthepurposeoffinancingalloranypartofthecostofacquiringorimproving(includingconstructing)suchasset,ifsuchLienattachestosuchassetconcurrentlywithorwithin12monthsafteritsacquisitionorimprovement(includingthecompletionofconstruction)andtheprincipalamountoftheDebtsecuredbysuchLien,togetherwithallotherdebtsecuredbyaLienonsuchproperty,doesnotexceedthepurchasepriceofsuchpropertyorthecostofsuchimprovement;

(e)anyLienarisingbyreasonofdepositswith,orthegivingofanyformofsecurityto,anygovernmentalagencyoranybodycreatedorapprovedbylaworgovernmentalregulation;

(f)LienssecuringDebtofaRestrictedSubsidiaryofElancoowedtoElancooranotherRestrictedSubsidiaryofElanco;

TableofContents

(g)anyextension,renewalorreplacement(orsuccessiveextensions,renewalsorreplacements)inwholeorinpartofanyLienreferredtoinclauses(a)through(f)above,inclusive,solongas(i)theprincipalamountoftheDebtsecuredtherebydoesnotexceedtheprincipalamountofDebtsosecuredatthetimeoftheextension,renewalorreplacement(exceptthat,whereanadditionalprincipalamountofDebtisincurredtoprovidefundsforthecompletionofaspecificproject,theadditionalprincipalamount,andanyrelatedfinancingcosts,maybesecuredbytheLienaswell)and(ii)theLienislimitedtothesamepropertysubjecttotheLiensoextended,renewedorreplaced(andimprovementsontheproperty);and

(h)LiensonanyPrincipalPropertynotdescribedinclauses(a)through(g)abovesecuringDebtthat,togetherwith(i)theaggregateamountofallotheroutstandingDebtsecuredbyallotherLiensonPrincipalPropertynotdescribedinclauses(a)through(g)aboveand(ii)theaggregateamountofValueinrespectofallSaleandLeasebackTransactionsthatwouldotherwisebeprohibitedbythecovenantdescribedunder"—LimitationonSaleandLeasebackTransactions,"donotexceed15%ofourConsolidatedNetTangibleAssetsmeasuredasoftheendofthemostrecentquarterforwhichfinancialstatementsareavailable.

"Person "meansanindividual,acorporation,acompany,avoluntaryassociation,apartnership,atrust,ajointventure,alimitedliabilitycompanyorotherbusinessentity,anunincorporatedorganization,oragovernmentoranyagency,instrumentalityorpoliticalsubdivisionthereof.

"Principal Property "meansanybuilding,structureorotherfacilitytogetherwiththeunderlyinglandanditsfixtures,usedprimarilyformanufacturing,processingorproduction,ownedintheUnitedStatesandthenetbookvalueofsuchbuilding,structureorotherfacilityexceeds2%ofourConsolidatedNetTangibleAssetsmeasuredasoftheendofthemostrecentquarterforwhichfinancialstatementsareavailable;providedthatnobuilding,structureorotherfacilitywillbeaPrincipalPropertyif,inthegoodfaithopinionofourboardofdirectors(oracommitteethereof),suchbuilding,structureorotherfacilityisnotofmaterialimportancetoourbusinesstakenasawhole.

"Restricted Subsidiary "meansanyofourSubsidiariesthatownsaPrincipalProperty.

"Sale and Leaseback Transaction "meansanydirectorindirectarrangementrelatingtopropertynowownedorhereafteracquiredwherebyweoraRestrictedSubsidiarytransferssuchpropertytoanotherPersonandweoraRestrictedSubsidiaryleasesorrentsitfromsuchPerson(otherthan(i)leasesbetweenusandaRestrictedSubsidiaryorbetweenRestrictedSubsidiaries,(ii)temporaryleasesforaterm,includingrenewalsattheoptionofthelessee,ofnotmorethanthreeyearsand(iii)leasesofapropertyexecutedbythetimeof,orwithin90daysafterthelatestof,theacquisition,thecompletionofconstructionorimprovement,orthecommencementofcommercialoperationoftheproperty).

"Subsidiary "means,withrespecttoanyPerson,anycorporation,partnership,limitedliabilitycompanyorotherbusinessentityofwhichatleastamajorityoftheoutstandingsharesofVotingStockisatthetimedirectlyorindirectlyownedorcontrolledbysuchPersonoroneormoreoftheSubsidiariesofsuchPerson.

"Value "means,withrespecttoaSaleandLeasebackTransaction,anamountequaltothepresentvalueoftheleasepaymentswithrespecttothetermoftheleaseremainingonthedateasofwhichtheamountisbeingdetermined,withoutregardtoanyrenewalorextensionoptionscontainedinthelease,discountedattheweightedaverageinterestrateofallseriesofdebtsecuritiesissuedpursuanttotheindentureandhavingthebenefitofthecovenantsdescribedaboveunder"—LimitationonLiens"and"—LimitationonSaleandLeasebackTransactions"(includingtheeffectiveinterestrateofanyoriginalissuediscountdebtsecurities)whichareoutstandingonthedateofsuchSaleandLeasebackTransaction.

TableofContents

"Voting Stock "meansEquityInterestsofanyPersonhavingordinarypowertovoteintheelectionofmembersoftheboardofdirectors,managers,trusteesorothercontrollingPersonsofsuchPerson(irrespectiveofwhether,atthetime,EquityInterestsofanyotherclassorclassesofsuchentityshallhaveormighthavevotingpowerbyreasonofthehappeningofacontingency).

Theindenturecontainsnootherrestrictivecovenants,includingthosethatwouldaffordholdersofthenotesprotectionintheeventofahighly-leveragedtransactioninvolvingElancooranyofitsaffiliates,oranycovenantsrelatingtototalindebtedness,interestcoverage,stockrepurchases,recapitalizations,dividendsanddistributionstoshareholders,currentratiosoracquisitionsanddivestitures.

Further Issues

Wemay,withouttheconsentoftheholdersofnotesofanyseries,issueadditionalnoteshavingthesamerankingandthesameinterestrate,maturityandothertermsasthenotesofanyseries.Anyadditionalnoteshavingsuchsimilarterms,togetherwiththenotesoftheapplicableseries,willconstituteasingleseriesofdebtsecuritiesundertheindenture.Noadditionalnotesofanyseriesmaybeissuedifaneventofdefaulthasoccurredwithrespecttothenotesofthatseries.WewillnotissueanyadditionalnotesintendedtoformasingleserieswiththenotesofanyseriesunlesssuchfurthernoteswillbefungiblewithallnotesofthesameseriesforU.S.federalincometaxpurposes.

Consolidation, Merger or Sale

Wewillnotconsolidatewith,mergewithorinto,orsell,convey,transfer,leaseorotherwisedisposeofallorsubstantiallyallofourandoursubsidiaries'propertyandassetstakenasawhole(inonetransactionoraseriesofrelatedtransactions)to,anyperson,orpermitanypersontomergewithorintous,unless:

(a)weshallbethecontinuingperson,ortheperson(ifotherthanus)formedbysuchconsolidationorintowhichwearemergedorthatacquiredorleasedsuchpropertyandassets(the"Surviving Person "),shallbeanentityorganizedandvalidlyexistingunderthelawsoftheUnitedStatesofAmericaoranyjurisdictionthereof,andshallexpresslyassume,byasupplementalindenture,executedanddeliveredtothetrustee,allofourobligationsundertheindentureandthenotes;

(b)immediatelyaftergivingeffecttosuchtransaction,nodefaultoreventofdefault(eachasdefinedintheindenture)shallhaveoccurredandbecontinuing;and

(c)wedelivertothetrusteeanofficer'scertificateandopinionofcounsel,ineachcasestatingthatsuchconsolidation,mergerortransferandsuchsupplementalindenturecomplieswiththisprovisionandthatallconditionsprecedentprovidedforhereinrelatingtosuchtransactionhavebeencompliedwith.

TheSurvivingPersonwillsucceedto,andexceptinthecaseofalease,besubstitutedfor,usundertheindentureandthenotes.

Modification of Indenture

Undertheindenture,ifthetrusteeandweagree,wecanmodifytheindenturewithoutnotifyinganyholdersorseekingtheirconsentincertainspecifiedcircumstances,includingiftheamendmentdoesnotmateriallyadverselyaffectanyholder.Inothercircumstances,ourrightsandobligationsandtherightsoftheholdersmaybemodifiediftheholdersofamajorityinaggregateprincipalamountoftheoutstandingnotesofeachseriesaffected(votingtogetherasasingleclass)bythemodificationconsenttoit.Nomodificationofthematuritydateorprincipalorinterestpaymentterms,nomodificationofthecurrencyforpayment,noimpairmentoftherighttosuefortheenforcementof

TableofContents

paymentatthematurityofthenotes,nomodificationofanyconversionrightsandnomodificationreducingthepercentagerequiredformodificationsormodifyingtheforegoingrequirementsorredoingthepercentagerequiredtowaivecertainspecifiedcovenants,iseffectiveagainstanyholderwithoutitsconsent.Inconnectionwithanymodificationoftheindenture,wewilldelivertothetrusteeanopinionofcounselandanofficer'scertificate,uponwhichthetrusteemayrely,eachstatingthatsuchmodificationcomplieswiththeapplicableprovisionsoftheindenture,andallconditionsprecedentidentifiedtherein.

Events of Default

Whenweusetheterm"event of default "intheindenture,herearesomeexamplesofwhatwemean.Aneventofdefaultoccursif:

• wefailtomaketheprincipaloranypremiumpaymentonthenoteswhendue;

• wefailtopayinterestonthenotesfor30daysafterpaymentwasdue;

• wefailtoperformanyothercovenantintheindentureandthisfailurecontinuesfor90daysafterwereceivewrittennoticeofit;or

• weoracourttakecertainactionsrelatingtothebankruptcy,insolvencyorreorganizationofourcompany.

Adefaultunderoneseriesofnoteswillnotnecessarilybeadefaultunderanotherseries.Thetrusteemaywithholdnoticetotheholdersofnotesofanydefault(exceptfordefaultsthatinvolveourfailuretopayprincipalorinterest)ifitconsiderssuchwithholdingofnoticetobeinthebestinterestsoftheholders.Thetrusteeshallnotbedeemedtohavenoticeofanydefaultoreventofdefault(otherthandefaultsthatinvolveourfailuretopayprincipalorinterest)unlessanofficerofthetrusteehavingresponsibilityforadministrationoftheindenturehasreceivedwrittennoticeofsuchdefaultoreventofdefault,andsuchnoticereferencesthenotesandtheindenture.

Ifaneventofdefaultwithrespecttooutstandingnotesofanyseriesoccursandiscontinuing,thenthetrusteeortheholdersofatleast33%inprincipalamountofnotesofthatseriesmaydeclare,inawrittennotice,theprincipalamount(orspecifiedamount)plusaccruedandunpaidinterestonnotesofthatseriestobeimmediatelydueandpayable.Atanytimeafteradeclarationofaccelerationwithrespecttonotesofanyserieshasbeenmade,theholdersofamajorityinprincipalamountoftheoutstandingnotesofsuchseriesmayrescindandannultheaccelerationif:

• theholdersactbeforethetrusteehasobtainedajudgmentordecreeforpaymentofthemoneydue;

• wehavepaidordepositedwiththetrusteeasumsufficienttopayoverdueinterestandoverdueprincipalotherthantheacceleratedinterestandprincipal;and

• wehavecuredortheholdershavewaivedallEventsofDefault,otherthanthenon-paymentofacceleratedprincipalandinterestwithrespecttodebtsecuritiesofthatseries,asprovidedintheindenture.

Ifadefaultintheperformanceorbreachoftheindentureshallhaveoccurredandbecontinuing,theholdersofnotlessthanamajorityinprincipalamountoftheoutstandingsecuritiesofallseries,bywrittennoticetothetrustee,maywaiveanypasteventofdefaultoritsconsequencesundertheindenturewithrespecttosuchseriessolongascertainconditionsaremet(including,butnotlimitedto,thedepositwiththetrusteeofasumsufficienttopayallsumspaidoradvancedbythetrusteeandthereasonablecompensation,expenses,disbursementsandadvancesofthetrustee,itsagentsand

TableofContents

counsel).However,aneventofdefaultcannotbewaivedwithrespecttoanyseriesofsecuritiesinthefollowingtwocircumstances:

• afailuretopaytheprincipalof,andpremiumorinterestonanysecurityorinthepaymentofanysinkingfundinstallment;or

• acovenantorprovisionthatcannotbemodifiedoramendedwithouttheconsentofeachholderofoutstandingsecuritiesofthatseries.

Otherthanitsdutiesincaseofadefault,thetrusteeisnotobligatedtoexerciseanyofitsrightsorpowersundertheindentureattherequest,orderordirectionofanyholders,unlesstheholdersofferthetrusteereasonableindemnityand/orsecuritytothesatisfactionofthetrustee.Iftheyprovidethisreasonableindemnityand/orsecuritytothesatisfactionofthetrustee,theholdersofamajorityinprincipalamountoutstandingofanyseriesofnotesmay,subjecttocertainlimitations,directthetime,methodandplaceofconductinganyproceedingoranyremedyavailabletothetrustee,orexercisinganypowerconferreduponthetrustee,foranyseriesofdebtsecurities.

Wearerequiredtodelivertothetrusteeanannualstatementastoourfulfillmentofallofourobligationsundertheindenture.

No Sinking Fund

Thenotesarenotentitledtothebenefitofasinkingfund.

Defeasance

Whenweusethetermdefeasance,wemeandischargefromsomeorallofourobligationsundertheindenture.Ifwedepositwiththetrusteesufficientcashorgovernmentsecuritiestopaytheprincipal,interest,anypremiumandanyothersumsduetothestatedmaturitydateoraredemptiondateofthenotesinaparticularseries,thenatouroption:

• wewillbedischargedfromourobligationswithrespecttothenotesinsuchseries;or

• wewillnolongerbeunderanyobligationtocomplywithcertainrestrictivecovenantsundertheindenture,andcertainEventsofDefaultwillnolongerapplytous.

Ifthishappens,theholdersofthenotesoftheaffectedserieswillnotbeentitledtothebenefitsoftheindentureexceptforregistrationoftransferandexchangeofthenotesandreplacementoflost,stolenormutilatednotes.Suchholdersmaylookonlytosuchdepositedfundsorobligationsforpayment.

Toexerciseourdefeasanceoption,wemustdelivertothetrusteeanopinionofcounseltotheeffectthat,amongotherthings,thedepositandrelateddefeasancewouldnotcausetheholdersofthenotestorecognizeincome,gainorlossforU.S.federalincometaxpurposes.Weshallalsodelivertothetrusteeanofficer'scertificateandopinionofcounselstatingthatallconditionsprecedentinconnectionwiththedefeasancehavebeencompliedwith.

Governing law

TheindentureandExchangeNotesaregovernedbythelawsoftheStateofNewYork.

Regarding the Trustee

DeutscheBankTrustCompanyAmericasisthetrusteeundertheindenture.Thetrusteeoritsaffiliatesmayfromtimetotimeinthefutureprovidebankingandotherservicestousintheordinarycourseoftheirbusiness.

Paying Agent and Registrar

Thetrusteeundertheindentureinitiallyactsasthepayingagentandregistrarforthenotes.Wemaychangethepayingagentorregistrarundertheindenturewithoutpriornoticetotheholdersofthenotes,andweoranyofoursubsidiariesmayactaspayingagentorregistrarundertheindenture.

TableofContents

BOOK-ENTRY SETTLEMENT AND CLEARANCE

TheExchangeNotesinitiallywillberepresentedbyoneormorenotesinregistered,globalformwithoutinterestcoupons(collectively,the"GlobalNotes").TheGlobalNoteswillbedepositeduponissuancewiththetrusteeascustodianforDTC,andregisteredinthenameofDTCoritsnominee,ineachcase,forcredittoanaccountofadirectorindirectparticipantinDTCasdescribedbelow.Exceptassetforthbelow,theGlobalNotesmaybetransferred,inwholeandnotinpart,onlytoanothernomineeofDTCortoasuccessorofDTCoritsnominee.BeneficialinterestsintheGlobalNotesmaynotbeexchangedfordefinitivenotesinregisteredcertificatedform("CertificatedNotes")exceptinthelimitedcircumstancesdescribedbelow.See"—ExchangeofGlobalNotesforCertificatedNotes."Exceptinthelimitedcircumstancesdescribedbelow,ownersofbeneficialinterestsintheGlobalNoteswillnotbeentitledtoreceivephysicaldeliveryofnotesincertificatedform.TransfersofbeneficialinterestsintheGlobalNoteswillbesubjecttotheapplicablerulesandproceduresofDTCanditsdirectorindirectparticipants(including,ifapplicable,thoseofEuroclearandClearstream),whichmaychangefromtimetotime.

Depository Procedures

ThefollowingdescriptionoftheoperationsandproceduresofDTC,EuroclearandClearstreamareprovidedsolelyasamatterofconvenience.Theseoperationsandproceduresaresolelywithinthecontroloftherespectivesettlementsystemsandaresubjecttochangesbythem.Elancotakesnoresponsibilityfortheseoperationsandproceduresandurgesinvestorstocontactthesystemortheirparticipantsdirectlytodiscussthesematters.

DTChasadvisedElancothatDTCisalimited-purposetrustcompanycreatedtoholdsecuritiesforitsparticipatingorganizations(collectively,the"Participants")andtofacilitatetheclearanceandsettlementoftransactionsinthosesecuritiesbetweentheParticipantsthroughelectronicbook-entrychangesinaccountsofitsParticipants.TheParticipantsincludesecuritiesbrokersanddealers(includingtheinitialpurchasers),banks,trustcompanies,clearingcorporationsandcertainotherorganizations.AccesstoDTC'ssystemisalsoavailabletootherentitiessuchasbanks,brokers,dealersandtrustcompaniesthatclearthroughormaintainacustodialrelationshipwithaParticipant,eitherdirectlyorindirectly(collectively,the"IndirectParticipants").PersonswhoarenotParticipantsmaybeneficiallyownsecuritiesheldbyoronbehalfofDTConlythroughtheParticipantsortheIndirectParticipants.Theownershipinterestsin,andtransfersofownershipinterestsin,eachsecurityheldbyoronbehalfofDTCarerecordedontherecordsoftheParticipantsandIndirectParticipants.

DTChasalsoadvisedElancothat,pursuanttoproceduresestablishedbyit:

(1)upondepositoftheGlobalNotes,DTCwillcredittheaccountsoftheParticipantsdesignatedbytheinitialpurchaserswithportionsoftheprincipalamountoftheGlobalNotes;and

(2)ownershipoftheseinterestsintheGlobalNoteswillbeshownon,andthetransferofownershipoftheseinterestswillbeeffectedonlythrough,recordsmaintainedbyDTC(withrespecttotheParticipants)orbytheParticipantsandtheIndirectParticipants(withrespecttootherownersofbeneficialinterestsintheGlobalNotes).

AllinterestsinaGlobalNote,includingthoseheldthroughEuroclearorClearstream,maybesubjecttotheproceduresandrequirementsofDTC.ThoseinterestsheldthroughEuroclearorClearstreammayalsobesubjecttotheproceduresandrequirementsofsuchsystems.ThelawsofsomejurisdictionsmayrequirethatcertainPersonstakephysicaldeliveryindefinitiveformofsecuritiesthattheyown.Consequently,theabilitytotransferbeneficialinterestsinaGlobalNotetosuchPersonswillbelimitedtothatextent.BecauseDTCcanactonlyonbehalfoftheParticipants,whichinturnactonbehalfoftheIndirectParticipants,theabilityofaPersonhavingbeneficialinterestsinaGlobalNotetopledgesuchintereststoPersonsthatdonotparticipateintheDTCsystem,orotherwisetakeactions

TableofContents

inrespectofsuchinterests,maybeaffectedbythelackofaphysicalcertificateevidencingsuchinterests.

Exceptasdescribedbelow,ownersofinterestsintheGlobalNoteswillnothavenotesregisteredintheirnames,willnotreceivephysicaldeliveryofCertificatedNotesandwillnotbeconsideredtheregisteredownersor"holders"thereofundertheindentureforanypurpose.Paymentsinrespectoftheprincipalof,premiumon,ifany,andinterest,ifany,on,aGlobalNoteregisteredinthenameofDTCoritsnomineewillbepayabletoDTCinitscapacityastheregisteredholderundertheindenture.Underthetermsoftheindenture,Elancoandthetrusteewilltreatthepersonsinwhosenamesthenotes,includingtheGlobalNotes,areregisteredastheownersofthenotesforthepurposeofreceivingpaymentsandforallotherpurposes.

Consequently,noneofElanco,thetrusteeoranyagentofElancoorthetrusteehasorwillhaveanyresponsibilityorliabilityfor:

(1)anyaspectofDTC'srecordsoranyParticipant'sorIndirectParticipant'srecordsrelatingtoorpaymentsmadeonaccountofbeneficialownershipinterestsintheGlobalNotesorformaintaining,supervisingorreviewinganyofDTC'srecordsoranyParticipant'sorIndirectParticipant'srecordsrelatingtothebeneficialownershipinterestsintheGlobalNotes;or

(2)anyothermatterrelatingtotheactionsandpracticesofDTCoranyofitsParticipantsorIndirectParticipants.

DTChasadvisedElancothatitscurrentpractice,uponreceiptofanypaymentinrespectofsecuritiessuchasthenotes(includingprincipalandinterest),istocredittheaccountsoftherelevantParticipantswiththepaymentonthepaymentdateunlessDTChasreasontobelievethatitwillnotreceivepaymentonsuchpaymentdate.EachrelevantParticipantiscreditedwithanamountproportionatetoitsbeneficialownershipofaninterestintheprincipalamountoftherelevantsecurityasshownontherecordsofDTC.PaymentsbytheParticipantsandtheIndirectParticipantstothebeneficialownersofnoteswillbegovernedbystandinginstructionsandcustomarypracticesandwillbetheresponsibilityoftheParticipantsortheIndirectParticipantsandwillnotbetheresponsibilityofDTC,thetrustee,orElanco.NeitherElanconorthetrusteewillbeliableforanydelaybyDTCoranyoftheParticipantsortheIndirectParticipantsinidentifyingthebeneficialownersofthenotes,andElancoandthetrusteemayconclusivelyrelyonandwillbeprotectedinrelyingoninstructionsfromDTCoritsnomineeforallpurposes.

Subjecttothetransferrestrictionssetforthunder"NoticetoInvestors,"transfersbetweentheParticipantswillbeeffectedinaccordancewithDTC'sprocedures,andwillbesettledinsame-dayfunds,andtransfersbetweenparticipantsinEuroclearandClearstreamwillbeeffectedinaccordancewiththeirrespectiverulesandoperatingprocedures.

Subjecttocompliancewiththetransferrestrictionsapplicabletothenotesdescribedherein,cross-markettransfersbetweentheParticipants,ontheonehand,andEuroclearorClearstreamparticipants,ontheotherhand,willbeeffectedthroughDTCinaccordancewithDTC'srulesonbehalfofEuroclearorClearstream,asthecasemaybe,bytheirrespectivedepositaries;however,suchcross-markettransactionswillrequiredeliveryofinstructionstoEuroclearorClearstream,asthecasemaybe,bythecounterpartyinsuchsysteminaccordancewiththerulesandproceduresandwithintheestablisheddeadlines(Brusselstime)ofsuchsystem.EuroclearorClearstream,asthecasemaybe,will,ifthetransactionmeetsitssettlementrequirements,deliverinstructionstoitsrespectivedepositarytotakeactiontoeffectfinalsettlementonitsbehalfbydeliveringorreceivinginterestsintherelevantGlobalNoteinDTC,andmakingorreceivingpaymentinaccordancewithnormalproceduresforsame-dayfundssettlementapplicabletoDTC.EuroclearparticipantsandClearstreamparticipantsmaynotdeliverinstructionsdirectlytothedepositoriesforEuroclearorClearstream.

TableofContents

DTChasadvisedElancothatitwilltakeanyactionpermittedtobetakenbyaholderofnotesonlyatthedirectionofoneormoreParticipantstowhoseaccountDTChascreditedtheinterestsintheGlobalNotesandonlyinrespectofsuchportionoftheaggregateprincipalamountofthenotesastowhichsuchParticipantorParticipantshasorhavegivensuchdirection.However,ifthereisanEventofDefaultunderthenotes,DTCreservestherighttoexchangetheGlobalNotesforCertificatedNotes,andtodistributesuchnotestoitsParticipants.

AlthoughDTC,EuroclearandClearstreamhaveagreedtotheforegoingprocedurestofacilitatetransfersofinterestsintheGlobalNotesamongparticipantsinDTC,EuroclearandClearstream,theyareundernoobligationtoperformortocontinuetoperformsuchprocedures,andmaydiscontinuesuchproceduresatanytime.NoneofElanco,thetrusteeoranyoftheirrespectiveagentswillhaveanyresponsibilityfortheperformancebyDTC,EuroclearorClearstreamortheirrespectiveparticipantsorindirectparticipantsoftheirrespectiveobligationsundertherulesandproceduresgoverningtheiroperations.

Exchange of Global Notes for Certificated Notes

AGlobalNoteisexchangeableforCertificatedNotesif:

(1)DTC(a)notifiesElancothatitisunwillingorunabletocontinueasdepositaryfortheGlobalNoteor(b)hasceasedtobeaclearingagencyregisteredundertheExchangeActand,ineithercase,Elancofailstoappointasuccessordepositarywithin90days;

(2)Elanco,atitsoptionbutsubjecttoDTC'srequirements,notifiesthetrusteeinwritingthatitelectstocausetheissuanceoftheCertificatedNotes;or

(3)therehasoccurredandiscontinuinganEventofDefault,andDTCnotifiesthetrusteeofitsdecisiontoexchangesuchGlobalNoteforCertificatedNotes.

Inaddition,beneficialinterestsinaGlobalNotemaybeexchangedforCertificatedNotesuponpriorwrittennoticegiventothetrusteebyoronbehalfofDTCinaccordancewiththeindenture.Inallcases,CertificatedNotesdeliveredinexchangeforanyGlobalNoteorbeneficialinterestsinGlobalNoteswillberegisteredinthenames,andissuedinanyapproveddenominations,requestedbyoronbehalfofthedepositary(inaccordancewithitscustomaryprocedures).

Same Day Settlement and Payment

ElancowillmakepaymentsinrespectofthenotesrepresentedbytheGlobalNotesincludingprincipal,premium,ifany,andinterest,ifany,bywiretransferofimmediatelyavailablefundstotheaccountsspecifiedbyDTCoritsnominee.ThenotesrepresentedbytheGlobalNotesareexpectedtobeeligibletotradeinDTC'sSame-DayFundsSettlementSystem,andanypermittedsecondarymarkettradingactivityinsuchnoteswill,therefore,berequiredbyDTCtobesettledinimmediatelyavailablefunds.ElancoexpectsthatsecondarytradinginanyCertificatedNoteswillalsobesettledinimmediatelyavailablefunds.

Becauseoftimezonedifferences,thesecuritiesaccountofaEuroclearorClearstreamparticipantpurchasinganinterestinaGlobalNotefromaParticipantwillbecredited,andanysuchcreditingwillbereportedtotherelevantEuroclearorClearstreamparticipant,duringthesecuritiessettlementprocessingday(whichmustbeabusinessdayforEuroclearandClearstream)immediatelyfollowingthesettlementdateofDTC.DTChasadvisedElancothatcashreceivedinEuroclearorClearstreamasaresultofsalesofinterestsinaGlobalNotebyorthroughaEuroclearorClearstreamparticipanttoaParticipantwillbereceivedwithvalueonthesettlementdateofDTCbutwillbeavailableintherelevantEuroclearorClearstreamcashaccountonlyasofthebusinessdayforEuroclearorClearstreamfollowingDTC'ssettlementdate.

TableofContents

DESCRIPTION OF CERTAIN OTHER INDEBTEDNESS

We summarize below the principal terms of the Credit Facilities. This summary is not a complete description of all of the terms of the Credit Facilities.

Credit Facilities

OnSeptember5,2018,Elancoenteredintoarevolvingcreditfacilitywithasyndicateofbanksprovidingforafive-year$750millionseniorunsecuredrevolvingcreditfacility,withtheability(subjecttocertainconditions)toincuradditionalincrementalcommitmentsofupto$250million(the"RevolvingFacility"),andatermcreditagreementwithasyndicateofbanksprovidingforathree-yearseniorunsecuredtermcreditfacilityinanamountof$500million(the"TermFacility"and,togetherwiththeRevolvingFacility,the"CreditFacilities").TheCreditFacilitiesbecameavailableforborrowingsuponthecompletionoftheIPOand,concurrentlywiththecompletionoftheIPO,ElancoborrowedthefullamountavailableundertheTermFacility.TherearenodrawingsundertheRevolvingFacility.TheCreditFacilitiesarenotguaranteedbyElanco'ssubsidiaries.

Additionally,ElancowillpayatickingfeeonthecommitmentsofeachlenderwithrespecttotheTermFacilityduringtheperiodfromandincludingthedateofexecutionofthespecificdocumentationrelatingtotheTermFacilitybutexcludingthedateonwhichsuchcommitmentswithrespecttotheTermFacilityterminate.WithrespecttotheRevolvingFacility,ElancowillpayafacilityfeeontheaggregateamountoftheRevolvingFacility(whetherdrawnorundrawn)duringtheperiodfromandincludingthedateofexecutionofthespecificdocumentationrelatingtotheRevolvingFacilitybutexcludingthedateonwhichcommitmentsundertheRevolvingFacilityterminate.Theapplicablemargins,thetickingfeeandthefacilityfeearedeterminedbasedonpublicratingsofElanco'sseniorunsecurednon-creditenhancedcreditrating.BasedonthepublicratingsasoftheclosingdateoftheCreditFacilities,(A)theinterestrateforrevolvingloans(i)comprisingeachABRBorrowing(asdefinedintheRevolvingFacility)shallbearinterestattheAlternateBaseRate(asdefinedintheRevolvingFacility)plus0.10%and(ii)comprisingeachEurocurrencyBorrowing(asdefinedintheRevolvingFacility)shallbearinterestattheAdjustedEurocurrencyRate(asdefinedintheRevolvingFacility)fortheapplicableinterestperiodineffectforsuchborrowingplus1.10%and(B)theinterestratefortermloans(i)comprisingeachABRBorrowing(asdefinedintheTermFacility)shallbearinterestattheAlternateBaseRate(asdefinedintheTermFacility)plus0.25%and(ii)comprisingeachEurocurrencyBorrowing(asdefinedintheTermFacility)shallbearinterestattheAdjustedEurocurrencyRate(asdefinedintheTermFacility)fortheapplicableinterestperiodineffectforsuchborrowingplus1.25%.Interestonbaserateborrowings,thetickingfeeandthefacilityfeearegenerallypayablequarterlyinarrears;however,forloansbearinginterestbasedonaEurocurrencyRate,interestispayableonthelastdayoftheapplicableinterestperiodand,inthecaseofanyinterestperiodofmorethanthreemonths'duration,eachdaypriortothelastdayofsuchinterestperiodthatoccursatintervalsofthreemonths'durationafterthefirstdayofsuchinterestperiod.

Elancomayvoluntarilyprepayloansand/orreducethecommitmentundertheCreditFacilities,inwholeorinpart,withoutpenaltyorpremium,subjecttocertainminimumamountsandincrementsandthepaymentofcustomarybreakagecosts.NomandatoryprepaymentisrequiredundertheCreditFacilities.TheTermFacilityissubjecttoamortizationpayments,payableonthelastdayofeachquarter.

TheCreditFacilitiescontainafinancialcovenantrequiringElanconottoexceedamaximumconsolidatedleverageratioandafinancialcovenanttomaintainaminimuminterestcoverageratio.Inaddition,theCreditFacilitiescontaincustomaryaffirmativeandnegativecovenantsthat,amongotherthings,limitorrestrictElanco'sand/oritssubsidiaries'ability,subjecttocertainexceptions,toincurliens,merge,consolidateorsellorotherwisetransferassets,toenterintotransactionswithElanco'saffiliatesandincursubsidiaryindebtedness.TheCreditFacilitiesalsocontaincustomaryeventsofdefault.

TableofContents

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

ThefollowingdiscussionisasummaryofcertainmaterialU.S.federalincometaxconsequencesrelatingtotheexchangeofOriginalNotesforExchangeNotespursuanttotheExchangeOffers,butisnotacompleteanalysisofallpotentialtaxeffects.ThesummarybelowisbasedupontheInternalRevenueCodeof1986,asamended(the"Code"),regulationsoftheTreasuryDepartment,administrativerulingsandpronouncementsoftheInternalRevenueServiceandjudicialdecisions,allofwhicharesubjecttochange,possiblywithretroactiveeffect.ThissummaryappliesonlytoaholderthatacquiredtheOriginalNotesatoriginalissueforcashandholdssuchOriginalNotesasacapitalassetwithinthemeaningofSection1221oftheCode.

ThissummarydoesnotaddressalloftheU.S.federalincometaxconsequencesthatmayberelevanttoaholderinlightofsuchholder'sparticularcircumstances.ThissummaryalsodoesnotaddresstheU.S.federalincometaxconsequencestoholderssubjecttospecialtreatmentunderU.S.federalincometaxlaws,suchastax-exemptorganizations,holderssubjecttotheU.S.federalalternativeminimumtax,dealersortradersinsecuritiesorcurrencies,financialinstitutions,insurancecompanies,regulatedinvestmentcompanies,realestateinvestmenttrusts,certainformercitizensorresidentsoftheUnitedStates,controlledforeigncorporations,passiveforeigninvestmentcompanies,partnerships,Scorporationsorotherpass-throughentities,personswhosefunctionalcurrencyisnottheU.S.dollar,foreignpersonsandentities,andpersonsholdingnotesinconnectionwithastraddle,hedging,conversionorotherrisk-reductiontransaction.Thissummarydoesnotconsidertheeffectofanyforeign,state,local,gift,estateorothertaxlawsthatmaybeapplicabletoaparticularholder.

The Exchange Offers

TheexchangeofyourOriginalNotesforExchangeNotespursuanttotheExchangeOffersshouldnotconstituteanexchangeforU.S.federalincometaxpurposesbecausetheExchangeNotesshouldnotbeconsideredtodiffermateriallyinkindorextentfromtheOriginalNotes.Accordingly,therewillbenoU.S.federalincometaxconsequencestoholderswhoexchangetheirOriginalNotesforExchangeNotesinconnectionwiththeExchangeOffersandanysuchholderwillhavethesameadjustedtaxbasisandholdingperiodintheExchangeNotesasithadintheOriginalNotesimmediatelybeforetheexchange.

The foregoing discussion of certain material U.S. federal income tax consequences does not consider the facts and circumstances of any particular holder's situation or status. Accordingly, each holder ofOriginal Notes considering the Exchange Offers should consult its own tax advisor regarding the tax consequences of the Exchange Offers to it, including those under state, foreign and other tax laws, includinggift and estate tax laws, and any treaties.

TableofContents

PLAN OF DISTRIBUTION

ThedistributionofthisprospectusandtheofferandsaleoftheExchangeNotesmayberestrictedbylawincertainjurisdictions.PersonswhocomeintopossessionofthisprospectusoranyoftheExchangeNotesmustinformthemselvesaboutandobserveanysuchrestrictions.Youmustcomplywithallapplicablelawsandregulationsinforceinanyjurisdictioninwhichyoupurchase,offerorselltheExchangeNotesorpossessordistributethisprospectusand,inconnectionwithanypurchase,offerorsalebyyouoftheExchangeNotes,mustobtainanyconsent,approvalorpermissionrequiredunderthelawsandregulationsinforceinanyjurisdictiontowhichyouaresubjectorinwhichyoumakesuchpurchase,offerorsale.

InrelianceoninterpretationsofthestaffoftheSECsetforthinno-actionlettersissuedtothirdpartiesinsimilartransactions,webelievethattheExchangeNotesissuedintheExchangeOffersinexchangefortheOriginalNotesmaybeofferedforresale,resoldandotherwisetransferredbyholderswithoutcompliancewiththeregistrationandprospectusdeliveryprovisionsoftheSecuritiesAct,providedthattheExchangeNotesareacquiredintheordinarycourseofsuchholders'businessandtheholdersarenotengagedinanddonotintendtoengageinandhavenoarrangementorunderstandingwithanypersontoparticipateinadistribution(withinthemeaningoftheSecuritiesAct)ofExchangeNotes.Thispositiondoesnotapplytoanyholderthatis:

• an"affiliate"ofElancowithinthemeaningofRule405undertheSecuritiesAct;or

• abroker-dealer.

Allbroker-dealersreceivingExchangeNotesintheExchangeOffersaresubjecttoaprospectusdeliveryrequirementwithrespecttoresalesoftheExchangeNotes.Eachbroker-dealerreceivingExchangeNotesforitsownaccountintheExchangeOffersmustrepresentthattheOriginalNotestobeexchangedfortheExchangeNoteswereacquiredbyitasaresultofmarket-makingactivitiesorothertradingactivitiesandacknowledgethatitwilldeliveraprospectusmeetingtherequirementsoftheSecuritiesActinconnectionwithanyoffertoresell,resaleorotherretransferoftheExchangeNotespursuanttotheExchangeOffers.However,bysoacknowledgingandbydeliveringaprospectus,theparticipatingbroker-dealerwillnotbedeemedtoadmitthatitisan"underwriter"withinthemeaningoftheSecuritiesAct.Wehaveagreedthat,foraperiodendingupontheearlierof(i)180daysaftertheconsummationoftheExchangeOffersor(ii)orwhenallExchangeNoteshavebeensold,wewilluseallcommerciallyreasonableeffortstokeeptheexchangeofferregistrationstatementeffectiveandmakethisprospectus,asamendedorsupplemented,availabletoanybroker-dealerforuseinconnectionwithsuchresales.Todate,theSEChastakenthepositionthatbroker-dealersmayuseaprospectussuchasthisonetofulfilltheirprospectusdeliveryrequirementswithrespecttoresalesofExchangeNotesreceivedinanexchangesuchastheexchangepursuanttotheExchangeOffers,iftheOriginalNotesforwhichtheExchangeNoteswerereceivedintheexchangewereacquiredfortheirownaccountsasaresultofmarket-makingorothertradingactivities.

WewillnotreceiveanyproceedsfromanysaleoftheExchangeNotesbybroker-dealers.Broker-dealersacquiringExchangeNotesfortheirownaccountsmaysellthenotesinoneormoretransactionsintheover-the-countermarket,innegotiatedtransactions,throughwritingoptionsontheExchangeNotesoracombinationofsuchmethodsofresale,atmarketpricesprevailingatthetimeofresale,atpricesrelatedtosuchprevailingmarketpricesoratnegotiatedprices.Anysuchresalemaybemadedirectlytopurchasersortoorthroughbrokersordealerswhomayreceivecompensationintheformofcommissionsorconcessionsfromanysuchbroker-dealerand/orthepurchasersofsuchExchangeNotes.

Anybroker-dealerthatheldOriginalNotesacquiredforitsownaccountasaresultofmarket-makingactivitiesorothertradingactivities,thatreceivedExchangeNotesintheExchangeOffers,andthatparticipatesinadistributionofExchangeNotesmaybedeemedtobean"underwriter"withinthe

TableofContents

meaningoftheSecuritiesActandmustdeliveraprospectusmeetingtherequirementsoftheSecuritiesActinconnectionwithanyresaleoftheExchangeNotes.AnyprofitontheseresalesofExchangeNotesandanycommissionsorconcessionsreceivedbyabroker-dealerinconnectionwiththeseresalesmaybedeemedtobeunderwritingcompensationundertheSecuritiesAct.Theletteroftransmittalstatesthatbyacknowledgingthatitwilldeliverandbydeliveringaprospectus,abroker-dealerwillnotadmitthatitisan"underwriter"withinthemeaningoftheSecuritiesAct.

WehaveagreedtopayallexpensesincidentaltoourparticipationintheExchangeOffers,includingthereasonablefeesandexpensesofonecounselfortheholdersofOriginalNotesandtheinitialpurchasers,otherthancommissionsorconcessionsofanybroker-dealersandwillindemnifyholdersoftheOriginalNotes,includinganybroker-dealers,againstspecifiedtypesofliabilities,includingliabilitiesundertheSecuritiesAct.Wenote,however,thatintheopinionoftheSEC,indemnificationagainstliabilitiesunderfederalsecuritieslawsisagainstpublicpolicyandmaybeunenforceable.

TableofContents

LEGAL MATTERS

BryanCaveLeightonPaisnerLLP,St.Louis,Missouri,willpassuponthevalidityoftheexchangenotes.BryanCaveLeightonPaisnerLLPisrelyingupontheopinionofBarnes&ThornburgLLP,Indianapolis,Indiana,astocertainmattersofIndianalaw.

EXPERTS

Ernst&YoungLLP,independentregisteredpublicaccountingfirm,hasauditedElanco'sconsolidatedandcombinedfinancialstatementsasofDecember31,2018and2017,andforeachofthethreeyearsintheperiodendedDecember31,2018,assetforthinitsreport.Elanco'sfinancialstatementsareincludedinthisprospectusandelsewhereintheregistrationstatementinrelianceonErnst&YoungLLP'sreport,givenonsaidfirm'sauthorityasexpertsinaccountingandauditing.

SEC POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

InsofarasindemnificationforliabilitiesarisingundertheSecuritiesActmaybepermittedtodirectors,officersorpersonscontrollingtheregistrantpursuanttotheforegoingprovisions,theregistranthasbeeninformedthatintheopinionoftheSECsuchindemnificationisagainstpublicpolicyasexpressedintheSecuritiesActandisthereforeunenforceable.

TableofContents

INDEX TO FINANCIAL STATEMENTS

PageAudited Consolidated and Combined Financial Statements of Elanco Animal Health Incorporated: ReportofIndependentRegisteredPublicAccountingFirm F-2ConsolidatedandCombinedStatementsofOperationsfortheYearsEndedDecember31,2018,2017and2016 F-3ConsolidatedandCombinedStatementsofComprehensiveIncome(Loss)fortheYearsEndedDecember31,2018,2017and2016 F-4ConsolidatedandCombinedBalanceSheetsasofDecember31,2018and2017 F-5ConsolidatedandCombinedStatementsofEquityfortheYearsEndedDecember31,2018,2017and2016 F-6ConsolidatedandCombinedStatementofCashFlowsfortheYearsEndedDecember31,2018,2017and2016 F-7NotestoConsolidatedandCombinedFinancialStatements F-8

Unaudited Condensed Combined Financial Statements of Elanco Animal Health Incorporated:

UnauditedCondensedConsolidatedandCombinedStatementsofOperationsfortheThreeMonthsEndedMarch31,2019and2018 F-50UnauditedCondensedConsolidatedandCombinedStatementsofComprehensiveIncomefortheThreeMonthsEndedMarch31,2019and2018 F-51UnauditedCondensedConsolidatedandCombinedBalanceSheetsasofMarch31,2019andDecember31,2018 F-52UnauditedCondensedConsolidatedandCombinedStatementsofEquityfortheThreeMonthsEndedMarch31,2019and2018 F-53UnauditedCondensedConsolidatedandCombinedStatementsofCashFlowsfortheThreeMonthsEndedMarch31,2019and2018 F-54NotestoUnauditedCondensedConsolidatedandCombinedFinancialStatements F-55

TableofContents

Report of Independent Registered Public Accounting Firm

TotheShareholdersandtheBoardofDirectorsofElancoAnimalHealthIncorporated

Opinion on the Financial Statements

WehaveauditedtheaccompanyingconsolidatedandcombinedbalancesheetsofElancoAnimalHealthIncorporated(theCompany)asofDecember31,2018and2017,therelatedconsolidatedandcombinedstatementsofoperations,comprehensiveincome(loss),equity,andcashflowsforeachofthethreeyearsintheperiodendedDecember31,2018,andtherelatednotes(collectivelyreferredtoasthe"consolidatedandcombinedfinancialstatements").Inouropinion,theconsolidatedandcombinedfinancialstatementspresentfairly,inallmaterialrespects,thefinancialpositionoftheCompanyatDecember31,2018and2017,andtheresultsofitsoperationsanditscashflowsforeachofthethreeyearsintheperiodendedDecember31,2018,inconformitywithU.S.generallyacceptedaccountingprinciples.

Basis for Opinion

ThesefinancialstatementsaretheresponsibilityoftheCompany'smanagement.OurresponsibilityistoexpressanopinionontheCompany'sfinancialstatementsbasedonouraudits.WeareapublicaccountingfirmregisteredwiththePublicCompanyAccountingOversightBoard(UnitedStates)(PCAOB)andarerequiredtobeindependentwithrespecttotheCompanyinaccordancewiththeU.S.federalsecuritieslawsandtheapplicablerulesandregulationsoftheSecuritiesandExchangeCommissionandthePCAOB.

WeconductedourauditsinaccordancewiththestandardsofthePCAOB.Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement,whetherduetoerrororfraud.TheCompanyisnotrequiredtohave,norwereweengagedtoperform,anauditofitsinternalcontroloverfinancialreporting.AspartofourauditswearerequiredtoobtainanunderstandingofinternalcontroloverfinancialreportingbutnotforthepurposeofexpressinganopinionontheeffectivenessoftheCompany'sinternalcontroloverfinancialreporting.Accordingly,weexpressnosuchopinion.

Ourauditsincludedperformingprocedurestoassesstherisksofmaterialmisstatementofthefinancialstatements,whetherduetoerrororfraud,andperformingproceduresthatrespondtothoserisks.Suchproceduresincludedexamining,onatestbasis,evidenceregardingtheamountsanddisclosuresinthefinancialstatements.Ourauditsalsoincludedevaluatingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationofthefinancialstatements.Webelievethatourauditsprovideareasonablebasisforouropinion.

/s/Ernst&YoungLLP

WehaveservedastheCompany'sauditorsince2017.

Indianapolis,IndianaFebruary20,2019

TableofContents

Consolidated and Combined Statements of Operations

(in millions, except per-share data)

Seenotestoconsolidatedandcombinedfinancialstatements.

Year Ended December 31, 2018 2017 2016 Revenue $ 3,066.8 $ 2,889.0 $ 2,913.5Costs,expensesandother: Costofsales 1,573.8 1,493.9 1,409.0Researchanddevelopment 246.6 251.7 265.8Marketing,sellingandadministrative 735.2 779.8 784.8Amortizationofintangibleassets 197.4 221.2 170.7Assetimpairments,restructuringandotherspecialcharges(Note7) 128.8 375.1 308.4Interestexpense,netofcapitalizedinterest 29.6 — —Other(income)expense,net 41.3 (0.1) (2.8)

2,952.7 3,121.6 2,935.9Income(loss)beforeincometaxes 114.1 (232.6) (22.4)Incometaxexpense 27.6 78.1 25.5

Netincome(loss) $ 86.5 $ (310.7) $ (47.9)Earnings(loss)pershare: Basicanddiluted $ 0.28 $ (1.06) $ (0.16)

Weightedaveragesharesoutstanding: Basicanddiluted 313.7 293.3 293.3

TableofContents

Consolidated and Combined Statements of Comprehensive Income (Loss)

(in millions)

Year Ended December 31, 2018 2017 2016 Netincome(loss) $ 86.5 $ (310.7) $ (47.9)Othercomprehensiveincome(loss): Changeinforeigncurrencytranslationgains(losses) (47.1) 210.1 (230.7)Changeindefinedbenefitpensionandretireehealthbenefitplans,netoftaxes 25.4 (9.8) (4.3)

Othercomprehensiveincome(loss),netoftaxes (21.7) 200.3 (235.0)Comprehensiveincome(loss) $ 64.8 $ (110.4) $ (282.9)

TableofContents

Consolidated and Combined Balance Sheets

(in millions)

December 31,

2018 December 31,

2017 Assets Current Assets Cashandcashequivalents $ 474.8 $ 323.4Accountsreceivable,netofallowancesof$8.4(2018)and$9.8(2017) 651.8 567.4Otherreceivables 57.6 34.5Inventories(Note8) 1,004.1 1,062.3Prepaidexpensesandother 113.9 136.1Restrictedcash(Note19) 202.7 —

Totalcurrentassets 2,504.9 2,123.7Noncurrent Assets Investments(Note10) 15.3 12.3Goodwill(Note11) 2,958.0 2,969.2Otherintangibles,net(Note11) 2,453.0 2,672.8Othernoncurrentassets 103.1 242.0Propertyandequipment,net(Note12) 922.4 920.3

Totalassets $ 8,956.7 $ 8,940.3Liabilities and Equity Current Liabilities Accountspayable $ 205.2 $ 203.8Employeecompensation 98.9 89.3Salesrebatesanddiscounts 169.9 165.5Currentportionoflongtermdebt 29.0 —Othercurrentliabilities 199.0 184.5PayabletoLilly(Note19) 268.7 —

Totalcurrentliabilities 970.7 643.1Noncurrent Liabilities Long-termdebt(Note9) 2,443.3 —Accruedretirementbenefits(Note17) 109.1 139.0Deferredtaxes(Note14) 114.6 251.9Othernoncurrentliabilities 121.5 126.0

Totalliabilities 3,759.2 1,160.0Commitments and Contingencies (Note 15) Equity Netparentcompanyinvestment — 8,036.9Commonstock,noparvalue,5,000,000,000sharesauthorized365,643,911sharesissuedandoutstandingasofDecember31,2018 — —Additionalpaid-incapital 5,403.3 —Retainedearnings 16.4 —Accumulatedothercomprehensiveloss (222.2) (256.6)

Totalequity 5,197.5 7,780.3Totalliabilitiesandequity $ 8,956.7 $ 8,940.3

TableofContents

Consolidated and Combined Statements of Equity

(in millions)

Accumulated Other Comprehensive

Income (Loss)

Common Stock

Defined Benefit Pension and

Retiree Health Benefit Plans

Additional Paid-in Capital

Net Parent Company Investment

Retained Earnings

Foreign Currency

Translation

Total Equity

Shares Amount Total January1,2016 293.3 $ — $ — $ 7,651.4 $ — $ (206.6) $ (15.3) $ (221.9) $ 7,429.5Netloss — — — (47.9) — — — — (47.9)Othercomprehensiveincome,netoftax — — — — — (230.7) (4.3) (235.0) (235.0)Transfers(to)/fromLilly,net — — — (129.2) — — — — (129.2)

December31,2016 293.3 — — 7,474.3 — (437.3) (19.6) (456.9) 7,017.4Net(loss) — — — (310.7) — — — — (310.7)Othercomprehensiveincome(loss),netoftax — — — — — 210.1 (9.8) 200.3 200.3Transfers(to)/fromLilly,net — — — 873.3 — — — — 873.3

December31,2017 293.3 — — 8,036.9 — (227.2) (29.4) (256.6) 7,780.3AdoptionofAccountingStandardsUpdate2016-16 — — — (0.3) — — — — (0.3)Netincome — — — 70.1 16.4 — — 86.5Othercomprehensiveincome(loss),netoftax — — — — — (47.1) 25.4 (21.7) (21.7)Transfers(to)/fromLilly,net — — — (226.3) — — — — (226.3)Separationadjustments — — — 43.5 — 56.1 — 56.1 99.6Issuanceofcommonstock 72.3 — 1,659.7 — — — — — 1,659.7ConsiderationtoLillyinconnectionwiththeSeparation — — (4,194.9) — — — — — (4,194.9)Reclassificationofnetparentcompanyinvestment — — 7,923.9 (7,923.9) — — — — —Sharedbasecompensation — — 1.8 — — — — — 1.8CapitalcontributionfromLilly — — 12.8 — — — — — 12.8December31,2018 365.6 $ — $ 5,403.3 $ — $ 16.4 $ (218.2) $ (4.0) $ (222.2) $ 5,197.5

TableofContents

Consolidated and Combined Statement of Cash Flows

(in millions)

Year Ended December 31, 2018 2017 2016 Cash Flows from Operating Activities Netincome(loss) $ 86.5 $ (310.7) $ (47.9)Adjustmentstoreconcilenetincome(loss)tocashflowsfromoperatingactivities: Depreciationandamortization 296.0 318.4 254.4Changeindeferredincometaxes (60.7) (13.4) (5.9)Stock-basedcompensationexpense 26.0 25.0 20.4Assetimpairmentcharges 120.5 110.6 98.3Gainonsaleofassets (0.8) (19.6) —Othernon-cashoperatingactivities,net 49.0 10.0 6.0Otherchangesinoperatingassetsandliabilities,netofacquisitionsanddivestitures: Receivables (122.0) 48.4 (80.7)Inventories (20.1) (39.0) (89.1)Otherassets (3.2) 52.5 (36.7)Accountspayableandotherliabilities 116.1 (8.4) 37.1

Net Cash Provided by Operating Activities 487.3 173.8 155.9Cash Flows from Investing Activities

Purchasesofpropertyandequipment (134.5) (98.6) (110.3)Disposalsofpropertyandequipment 9.4 37.6 7.4Cashpaidforacquisitions,netofcashacquired — (882.1) (45.0)Otherinvestingactivities,net (1.9) (21.5) (34.2)

Net Cash Used for Investing Activities (127.0) (964.6) (182.1)Cash Flows from Financing Activities

Proceedsfromissuanceoflong-termdebt(Note9) 2,500.0 — —Repaymentsofborrowings (7.5) — —Proceedsfromissuanceofcommonstock(Note1) 1,659.7 — —Debtissuancecosts (24.5) — —ConsiderationpaidtoLillyinconnectionwiththeSeparation(Note1) (3,991.3) — —Otherfinancingactivities,net (17.2) (0.8) —OthernettransactionswithLilly (154.4) 848.3 (149.6)

Net Cash Provided by (Used for) Financing Activities (35.2) 847.5 (149.6)Effectofexchangeratechangesoncashandcashequivalents 29.0 7.9 (26.0)Netincreaseincash,cashequivalentsandrestrictedcash 354.1 64.6 (201.8)Cash,cashequivalentsandrestrictedcashatJanuary1 323.4 258.8 460.6Cash, cash equivalents and restricted cash at December 31 $ 677.5 $ 323.4 $ 258.8

December 31, 2018 2017 Cash and cash equivalents $ 474.8 $ 323.4Restricted cash (Note 19) 202.7 —Cash, cash equivalents and restricted cash at December 31 $ 677.5 $ 323.4

TableofContents

Notes to Consolidated and Combined Financial Statements

(Tables present dollars in millions, except per-share data)

Note 1. Nature of Business and Organization

Nature of Business

ElancoAnimalHealthIncorporated(ElancoParent)anditssubsidiaries(collectively,Elanco,theCompany,we,usorour)wasformedasawholly-ownedsubsidiaryofEliLillyandCompany(Lilly).Elancoisaglobalanimalhealthcompanythatinnovates,develops,manufacturesandmarketsproductsforcompanionandfoodanimals.Weofferadiverseportfolioofmorethan125brandstoveterinariansandfoodanimalproducersinmorethan90countries.

Organization

ElancoParentwasformedin2018,asawholly-ownedsubsidiaryofLilly,toserveastheultimateparentcompanyofsubstantiallyalloftheanimalhealthbusinessesofLilly.

OnSeptember24,2018,ElancoParentcompletedaninitialpublicofferingresultingintheissuanceof72.3millionsharesofitscommonstock(includingsharesissuedpursuanttotheunderwriters'optiontopurchaseadditionalshares),whichrepresents19.8%oftheoutstandingshares,at$24pershare(IPO)foratotalnetproceeds,afterunderwritingdiscountsandcommissions,of$1.7billion.InconnectionwiththecompletionoftheIPO,throughaseriesofequityandothertransactions,LillytransferredtoElancoParenttheanimalhealthbusinessesthatformitsbusinessgoingforward.InexchangeElancoParenthaspaid,orwillpay,toLillyapproximately$4.2billion,whichincludesthenetproceedsfromtheIPO,thenetproceedsfromthedebtofferingcompletedbyElancoParentinAugust2018andthetermloanfacilityenteredintobyElancoParentinSeptember2018(seeNote9).AsofDecember31,2018,ElancoParenthaspaidLilly$4.0billionwiththeremainingpurchasepricereflectedinPayabletoLillyonthebalancesheet.ThesetransactionsarecollectivelyreferredtohereinastheSeparation.

Note 2. Basis of Presentation

TheaccompanyingconsolidatedandcombinedfinancialstatementshavebeenpreparedinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStates(GAAP).Theaccountsofallwholly-ownedandmajority-ownedsubsidiariesareincludedintheconsolidatedfinancialstatements.Allintercompanybalancesandtransactionshavebeeneliminated.

ThepreparationoffinancialstatementsinconformitywithGAAPrequiresmanagementtomakeestimatesandassumptionsthataffectthereportedamountsofassets,liabilities,revenues,expenses,andrelateddisclosuresatthedateofthefinancialstatementsandduringthereportingperiod.Actualresultscoulddifferfromthoseestimates.WeissuedourfinancialstatementsbyfilingwiththeSecuritiesandExchangeCommissionandhaveevaluatedsubsequenteventsuptothetimeofthefiling.

DuringtheperiodendedDecember31,2018,certaincombinedbalancesheetamountsrelatedtotheprioryearhavebeenrevisedtocorrectthesalesrebatesanddiscountsliability,whichdidnotcorrectlyreflectanaccrualforrebatesrelatedtoproductheldinthewholesalers'pipeline.InaccordancewithSecuritiesandExchangeCommissionStaffAccountingBulletinNo.99,Materiality ,andAccountingStandardsCodification(ASC)250,Presentation of Financial Statements ,weassessedthematerialityofthiscorrectionandconcludedthattheaccrualfortherebaterelatedtoproductheldinthewholesalers'pipelinewasnotmaterialtopriorperiods,andtherefore,amendmentsofpreviouslyfiledreportsarenotrequired.

TableofContents

Notes to Consolidated and Combined Financial Statements (Continued)

Note 2. Basis of Presentation (Continued)

Assuch,inaccordancewithASC250,werevisedthepreviouslyreportedcombinedbalancesheetandcombinedstatementsofequity.Theadjustment,whichoriginatesinperiodspriortothosepresented,resultedina$10.5millionincreaseasofDecember31,2017intheaccrualforsalesrebatesanddiscountsof$155.0million,totalcurrentliabilitiesof$632.6millionandtotalliabilitiesof$1,149.5million.Inaddition,previouslyreportedamountsatDecember31,2017andDecember31,2016ofnetparentcompanyinvestmentof$8,047.4millionand$7,484.8million,respectively,andtotalequityof$7,790.8millionand$7,027.9million,respectively,havebeenreducedby$10.5milliontoreflectthecorrectionabove.

Fortheperiodsafterseparation,thefinancialstatementsarepreparedonaconsolidatedbasisandreflecttheresultsofoperations,comprehensiveincome,financialposition,equityandcashflowsresultingfromouroperationsasanindependentcompany.ForperiodspriortotheSeparation,ourfinancialstatementsarecombined,havebeenpreparedonastandalonebasis,andarederivedfromLilly'sconsolidatedfinancialstatementsandaccountingrecords.Theconsolidatedandcombinedfinancialstatementsreflectthefinancialposition,resultsofoperationsandcashflowsrelatedtotheanimalhealthbusinessesthatweretransferredtoElancoParentandarepreparedinconformitywithGAAP.

ThecombinedfinancialstatementsincludetheattributionofcertainassetsandliabilitiesthathistoricallyhavebeenheldattheLillycorporatelevelbutwhicharespecificallyidentifiableorattributabletothebusinessesthathavebeentransferredtoElancoParent.AllintercompanytransactionsandaccountswithinElancohavebeeneliminated.AlltransactionsbetweenusandLillyareconsideredtobeeffectivelysettledinthecombinedfinancialstatementsatthetimetheintercompanytransactionisrecorded.Thetotalneteffectofthesettlementoftheseintercompanytransactionsisreflectedinthecombinedstatementsofcashflowsasafinancingactivityandinthecombinedbalancesheetsasnetparentcompanyinvestment.

Priortotheseparation,thesecombinedfinancialstatementsincludeanallocationofexpensesrelatedtocertainLillycorporatefunctions,includingexecutiveoversight,treasury,legal,finance,humanresources,tax,internalaudit,financialreporting,informationtechnologyandinvestorrelations,priortoIPO.Theseexpenseshavebeenallocatedtousbasedondirectusageorbenefitwherespecificallyidentifiable,withtheremainderallocatedprimarilyonaproratabasisofrevenue,headcountandothermeasures.Weconsidertheexpensesmethodologyandresultstobereasonableforallperiodspresented.However,theallocationsmaynotbeindicativeoftheactualexpensethatwouldhavebeenincurredhadweoperatedasanindependent,publiclytradedcompanyfortheperiodspresented.ItisimpracticaltoestimatewhatthestandalonecostsofElancowouldhavebeeninthehistoricalperiods.Aftertheseparation,aTSAbetweenLillyandElancowentintoeffect.UnderthetermsoftheTSA,wewillbeabletouseLillyServicesforafixedtermestablishedonaservice-by-servicebasis.WearepayingLillymutuallyagreeduponfeesfortheLillyServicesprovidedundertheTSA.OurconsolidatedandcombinedfinancialstatementsreflectthechargesforLillyServicesaftertheIPO.SeeNote19foradditionaldetails.

Theincometaxamountsinthecombinedfinancialstatementshavebeencalculatedbasedonaseparatereturnmethodologyandpresentedasifouroperationswereseparatetaxpayersintherespectivejurisdictions.WefileincometaxreturnsintheUnitedStates(U.S.)federaljurisdictionand

TableofContents

variousstate,localandnon-U.S.jurisdictions.CertainoftheseincometaxreturnsarefiledonaconsolidatedorcombinedbasiswithEliLillyandCompanyand/oritssubsidiaries.

Lillymaintainsvariousbenefitandcombinedstock-basedcompensationplansatacorporatelevelandotherbenefitplansatacountrylevel.Ouremployeesparticipateinsuchprogramsandtheportionofthecostofthoseplansrelatedtoouremployeesisincludedinourfinancialstatements.However,theconsolidatedandcombinedbalancesheetsdonotincludeanyequityissuedrelatedtostock-basedcompensationplansoranynetbenefitplanobligationsunlessthebenefitplancoversonlyourdedicatedemployeesorwherethelegalobligationassociatedwiththebenefitplanwilltransfertoElanco.

PriortoSeparation,theequitybalanceinthecombinedfinancialstatementsrepresentstheexcessoftotalassetsoverliabilities,includingintercompanybalancesbetweenusandLilly(netparentcompanyinvestment)andaccumulatedothercomprehensiveloss.NetparentcompanyinvestmentisprimarilyimpactedbycontributionsfromLillywhicharetheresultoftreasuryactivitiesandnetfundingprovidedbyordistributedtoLilly.SeeNote19forfurtherinformation.

Note 3. Impact of Separation

InconnectionwiththeSeparation,weissued$2.0billionaggregateprincipalamountofseniornotesinaprivateplacement,andwealsoenteredintoa$750.0millionseniorunsecuredrevolvingcreditfacilityand$500.0millionseniorunsecuredtermcreditfacility.SeeNote9forfurtherinformation.

InconnectionwiththeSeparation,weenteredintovariousagreementswithLilly,includingamasterseparationagreement.InconnectionwiththetermsoftheSeparation,therewerecertainassetsandliabilitiesincludedinthepre-SeparationbalancesheetthatwereretainedbyLillyandtherewerecertainassetsnotincludedinthepre-Separationbalancesheetthatweretransferredtous.Thecumulativeadjustmenttothehistoricalbalancesheetincreasednetassetsandtotalequitybyapproximately$99.6million.Theimpactonnetassetsprimarilyrepresenttheeliminationofcertainincometaxassetsandliabilitiesandthecontributionofadditionalassets.

OnFebruary8,2019,wefiledaRegistrationStatementonFormS-4withtheSECinconnectionwithLilly'sproposedexchangeoffer,wherebyLillyshareholderscanexchangesharesofLillycommonstockforsharesofourcommonstockownedbyLilly(exchangeoffer).Immediatelybeforethecommencementoftheexchangeoffer,Lillyowned293,290,000sharesofourcommonstock,representing80.2%ofouroutstandingcommonstock.Iftheexchangeofferisnotfullysubscribed,Lillyintends,fromtimetotime,tocompletesubsequentexchangeoffersand/oraprorataspin-offofitsremaininginterestinElancoParent.

Note 4. Summary of Significant Accounting Policies

Revenue recognition

Werecognizerevenuefromsalesofproductsatthetimetitleofgoodspassestothebuyerandthebuyerassumestherisksandrewardsofownership.Provisionsforreturns,discountsandrebatesareestablishedinthesameperiodtherelatedsalesarerecognized.Forarrangementswithcontract

TableofContents

Note 4. Summary of Significant Accounting Policies (Continued)

manufacturingorganizations(CMO),werecognizerevenueovertimeoratapointintimedependingonitsevaluationofwhenthecustomerobtainscontrolofthepromisedgoodsorservice.Revenueisrecognizedovertimewhenwearecreatingorenhancinganassetthatthecustomercontrolsastheassetiscreatedorenhancedorourperformancedoesnotcreateanassetwithanalternativeuseandwehaveanenforceablerighttopaymentforperformancecompleted.

Research and development expenses and acquired in-process research and development

Researchanddevelopmentexpensesincludethefollowing:

• Researchanddevelopmentcosts,whichareexpensedasincurred.

• Milestonepaymentobligationsincurredpriortoregulatoryapprovaloftheproduct,whichareaccruedwhentheeventrequiringpaymentofthemilestoneoccurs.

• Acquiredin-processresearchanddevelopment(IPR&D)expense,whichincludestheinitialcostsofIPR&Dprojects,acquireddirectlyinatransactionotherthanabusinesscombinationthatdonothaveanalternativefutureuse.

Foreign Currency Translation

OperationsinoursubsidiariesoutsidetheUnitedStates(U.S.)arerecordedinthefunctionalcurrencyofeachsubsidiarywhichisdeterminedbyareviewoftheenvironmentwhereeachsubsidiaryprimarilygeneratesandexpendscash.TheresultsofoperationsforoursubsidiariesoutsidetheU.S.aretranslatedfromfunctionalcurrenciesintoU.S.dollarsusingtheweightedaveragecurrencyratefortheperiod.Assetsandliabilitiesaretranslatedusingtheperiodendexchangerates.TheU.S.dollareffectsthatarisefromtranslatingthenetassetsofthesesubsidiariesarerecordedinothercomprehensiveincome(loss).

Other significant accounting policies

Ourothersignificantaccountingpoliciesaredescribedintheremainingappropriatenotestothecombinedfinancialstatements.

TableofContents

Implementation of New Financial Accounting Pronouncements

ThefollowingtableprovidesabriefdescriptionofaccountingstandardsthatwereeffectiveJanuary1,2018andwereadoptedonthatdate:

Standard Description Effect on the financial statements

or other significant mattersAccountingStandardsUpdate2014-09andvariousotherrelatedupdates,Revenue from Contracts with Customers

Thisstandardreplacedexistingrevenuerecognitionstandardsandrequiresentitiestorecognizerevenuetodepictthetransferofpromisedgoodsorservicestocustomersinanamountthatreflectstheconsiderationtowhichtheentityexpectstobeentitledinexchangeforthosegoodsorservices.Anentitycanapplythenewrevenuestandardretrospectivelytoeachpriorreportingperiodpresentedorwiththecumulativeeffectofinitiallyapplyingthestandardrecognizedatthedateofinitialapplicationinretainedearnings.Weappliedthelatterapproach.

ApplicationofthenewstandardtoapplicablecontractshadnoimpacttonetparentcompanyinvestmentasofJanuary1,2018.DisclosuresrequiredbythenewstandardareincludedinNote5.

AccountingStandardsUpdate2016-16,Income Taxes: Intra-EntityTransfers of Assets Other Than Inventory

Thisstandardrequiresentitiestorecognizetheincometaxconsequencesofintra-entitytransfersofassetsotherthaninventoryatthetimeoftransfer.Thisstandardrequiresamodifiedretrospectiveapproachtoadoption.

Uponadoption,thecumulativeeffectofapplyingthestandardresultedinadecreasetonetparentcompanyinvestmentofapproximately$0.3million.AdoptionofthisstandarddidnotresultinamaterialchangeinnetincomeforthetwelvemonthsendedDecember31,2018.

TableofContents

or other significant mattersAccountingStandardsUpdate2017-07,Compensation-Retirement

Benefits: Improving the Presentation of Net Periodic Pension Costand Net Periodic Postretirement Benefit Cost

Thisstandardwasissuedtoimprovethetransparencyandcomparabilityamongorganizationsbyrequiringentitiestoseparatetheirnetperiodicpensioncostandnetperiodicpostretirementbenefitcostintoaservicecostcomponentandothercomponents.Previously,thecostsoftheothercomponentsalongwiththeservicecostcomponentwereclassifiedbaseduponthefunctionoftheemployee.Thisstandardrequiresentitiestoclassifytheservicecostcomponentinthesamefinancialstatementlineitemoritemsasothercompensationcostsarisingfromservicesrenderedbypertinentemployees.Theothercomponentsofnetbenefitcostarenowpresentedseparatelyfromthelineitemsthatincludetheservicecostcomponent.Whenapplicable,theservicecostcomponentisnowtheonlycomponenteligibleforcapitalization.Anentityshouldapplythenewstandardretrospectivelyfortheclassificationoftheservicecostandothercomponentsandprospectivelyforthecapitalizationoftheservicecostcomponent.

Uponadoptionofthisstandard,pensionandpostretirementbenefitcostcomponentsotherthanservicecostsarepresentedinother(income)expense,net.RetrospectiveapplicationwasnotmaterialtothecombinedstatementofoperationsforthetwelvemonthsendedDecember31,2017.Wedonotexpectapplicationofthenewstandardtohaveamaterialimpactonanongoingbasis.

TableofContents

or other significant mattersAccountingStandardsUpdate2017-12,Derivatives and Hedging Thisstandardamendsthehedgeaccountingrecognitionand

presentationrequirementsandisintendedtobetteralignhedgeaccountingwithcompanies'riskmanagementstrategies.Thisstandardeliminatestherequirementstoseparatelymeasureandreporthedgeineffectivenessandgenerallyrequiresthattheentirechangeinfairvalueofahedginginstrumentbepresentedinthesameincomestatementlineitemastherespectivehedgeditem.Thestandardalsomodifiescertaindisclosurerequirements.

WeelectedtoearlyadoptthisguidanceasofJanuary1,2018.Therewerenohedgingcontractsineffectasofthedateofadoption.Wedonotexpectapplicationofthenewstandardtohaveamaterialimpactonanongoingbasis.

TableofContents

Thefollowingtableprovidesabriefdescriptionoftheaccountingstandardthathasnotyetbeenadoptedandcouldhaveamaterialeffectontheconsolidatedfinancialstatements:

Note 5. Revenue

EffectiveJanuary1,2018,weadoptedAccountingStandardsUpdate2014-09,Revenue from Contracts with Customers (ASU2014-09)andotherrelatedupdates.Thenewstandardhasbeenappliedtocontractsforwhichperformancehadnotbeencompletedasofthedateofadoption.Revenuepresentedforperiodspriorto2018wereaccountedforunderpreviousstandardsandhasnotbeenadjusted.RevenueandnetincomefortheyearendedDecember31,2018doesnotdiffermateriallyfromamountsthatwouldhaveresultedfromapplicationofthepreviousstandards.

Standard Description Effective Date

Effect on the financial statements or other significant matters

AccountingStandardsUpdate2016-02,Leases Thisstandardwasissuedtoincreasetransparencyandcomparabilityamongorganizationsbyrecognizingleaseassetsandleaseliabilities,includingleasesclassifiedasoperatingleasesundercurrentGAAP,onthebalancesheetandrequiringadditionaldisclosuresaboutleasingarrangements.Anentitycanapplythenewleasesstandardretrospectivelytoeachpriorreportingperiodpresentedorwiththecumulativeeffectofinitiallyapplyingthestandardrecognizedatthedateofinitialapplicationinretainedearnings.Weplantousethelatterapproach.

ThisstandardiseffectiveJanuary1,2019,withearlyadoptionpermitted.Weintendtoadoptthisstandardonthatdate.

Weexpecttorecordaright-of-useassetandleaseliabilityforoperatingleasesofapproximately$75-95milliononourconsolidatedbalancesheetonJanuary1,2019.Ouraccountingforcapitalleaseswillremainsubstantiallyunchanged.Thisstandardwillnothaveamaterialimpactonourconsolidatedstatementofoperations.

TableofContents

Note 5. Revenue (Continued)

Product Sales

Werecognizerevenueprimarilyfromproductsalestocustomers.Revenuefromsalesofproductsisrecognizedatthepointwherethecustomerobtainscontrolofthegoodsandwesatisfyourperformanceobligation,whichgenerallyisatthetimeweshiptheproducttothecustomer.Paymenttermsdifferbyjurisdictionandcustomer,butpaymenttermsinmostofourmajorjurisdictionstypicallyrangefrom30to100daysfromdateofshipment.Revenueforourproductsaleshasnotbeenadjustedfortheeffectsofafinancingcomponentasweexpect,atcontractinception,thattheperiodbetweenwhenwetransfercontroloftheproductandwhenwereceivepaymentwillbeoneyearorless.Anyexceptionsareeithernotmaterialorwecollectinterestforpaymentsmadeaftertheduedate.Provisionsforrebatesanddiscounts,andreturnsareestablishedinthesameperiodtherelatedsalesarerecognized.Wegenerally,shipproductshortlyafterordersarereceived;therefore,wegenerallyonlyhaveafewdaysofordersreceivedbutnotyetshippedattheendofanyreportingperiod.Shippingandhandlingactivitiesareconsideredtobefulfillmentactivitiesandarenotconsideredtobeaseparateperformanceobligation.Weexcludefromthemeasurementofthetransactionpricealltaxesassessedbyagovernmentalauthoritythatareimposedonoursalesofproductandcollectedfromacustomer.

Significantjudgmentsmustbemadeindeterminingthetransactionpriceforsalesofproductsrelatedtoanticipatedrebatesanddiscounts,andreturns.Thefollowingdescribethemostsignificantofthesejudgments:

Sales Rebates and Discounts—Background and Uncertainties

• Mostofourproductsaresoldtowholesaledistributors.Weinitiallyinvoiceourcustomerscontractuallistprices.Contractswithdirectandindirectcustomersmayprovideforvariousrebatesanddiscountsthatmaydifferineachcontract.Asaconsequence,todeterminetheappropriatetransactionpriceforourproductsalesatthetimewerecognizeasaletoadirectcustomer,wemustestimateanyrebatesordiscountsthatultimatelywillbeduetothedirectcustomerandothercustomersinthedistributionchainunderthetermsofourcontracts.Significantjudgmentsarerequiredinmakingtheseestimates.

• Therebateanddiscountamountsarerecordedasadeductiontoarriveatournetproductsales.Weestimatetheseaccrualsusinganexpectedvalueapproach.

• Indeterminingtheappropriateaccrualamount,weconsiderourhistoricalexperiencewithsimilarincentivesprogramsandcurrentsalesdatatoestimatetheimpactofsuchprogramsonrevenueandcontinuallymonitortheimpactofthisexperienceandadjustasnecessary.Althoughweaccruealiabilityforrebatesrelatedtotheseprogramsatthetimethesaleisrecorded,therebaterelatedtothatsaleistypicallypaiduptosixmonthsafterrebateorincentiveperiodexpires.Becauseofthistimelag,inanyparticularperiodrebateadjustmentsmayincorporaterevisionsofaccrualsforseveralperiods.

OursalesrebatesanddiscountsarebasedonspecificagreementsandthemajorityrelatetosalesintheU.S.AsofDecember31,2018and2017,liabilityforsalesrebatesanddiscountsintheU.S.representsapproximately70%and69%,respectively,ofourtotalliabilitywiththenextlargestcountryrepresentingapproximately8%ofourtotalliabilityfor2018and2017.

TableofContents

ThefollowingtablesummarizestheactivityinthesalesrebatesanddiscountsliabilityintheU.S.:

AdjustmentstorevenuerecognizedasaresultofchangesinestimatesforthejudgmentsdescribedaboveduringtheyearendedDecember31,2018forproductshippedinpreviousperiodswerenotmaterial.

Sales Returns—Background and Uncertainties

• Weestimateareserveforfutureproductreturnsrelatedtoproductsalesusinganexpectedvalueapproach.Thisestimateisbasedonseveralfactors,including:localreturnspoliciesandpractices;returnsasapercentageofrevenue;anunderstandingofthereasonsforpastreturns;estimatedshelflifebyproduct;andestimateoftheamountoftimebetweenshipmentandreturn.Adjustmentstothereturnsreservehavebeenandmayinthefutureberequiredbasedonrevisedestimatestoourassumptions,whichwouldhaveanimpactonourconsolidatedresultsofoperations.Werecordthereturnamountsasadeductiontoarriveatournetproductsales.

• Actualproductreturnshavebeenapproximately1%ofnetrevenuefortheyearendedDecember31,2018and2017andhavenotfluctuatedsignificantlyasapercentageofrevenue.

Disaggregation of Revenue

ThefollowingtablesummarizesourrevenuedisaggregatedbyproductcategoryfortheyearsendedDecember31:

Note 6. Acquisitions

During2017and2016,wecompletedtheacquisitionsofBIVIVPandcertainrightstoAratanaTherapeutics,Inc.'s(Aratana)Galliprant®,respectively.Thesetransactionswereaccountedforas

Year Ended December 31,

2018 2017 Beginningbalance $ 114.8 $ 116.1Reductionofrevenue 221.0 236.1Payments (217.3) (237.4)

Endingbalance $ 118.5 $ 114.8

2018 2017 2016 CompanionAnimalDiseasePrevention $ 804.6 $ 660.2 $ 628.4CompanionAnimalTherapeutics 283.1 260.8 255.6FoodAnimalFutureProtein&Health 711.2 649.2 630.8FoodAnimalRuminants&Swine 1,174.0 1,175.0 1,309.2Other 93.9 143.8 89.5

TotalRevenue $ 3,066.8 $ 2,889.0 $ 2,913.5

TableofContents

Note 6. Acquisitions (Continued)

businesscombinationsundertheacquisitionmethodofaccounting.Underthismethod,theassetsacquiredandliabilitiesassumedwererecordedattheirrespectivefairvaluesasoftheacquisitiondateinourcombinedfinancialstatements.Thedeterminationofestimatedfairvaluerequiredmanagementtomakesignificantestimatesandassumptions.Theexcessofthepurchasepriceoverthefairvalueoftheacquirednetassets,whereapplicable,hasbeenrecordedasgoodwill.Theresultsofoperationsoftheseacquisitionsareincludedinourconsolidatedandcombinedfinancialstatementsfromthedatesofacquisition.

Boehringer Ingelheim Vetmedica, Inc. Vaccine Portfolio Acquisition

OnJanuary3,2017,weacquiredBIVIVPinacashtransactionfor$882.1million.Underthetermsoftheagreement,weacquiredamanufacturingandresearchanddevelopmentsite,aU.S.vaccineportfolioincludingvaccinesusedforthetreatmentofbordetella,Lymedisease,rabiesandparvovirus,amongothers.

Thefollowingtablesummarizestheamountsrecognizedforassetsacquiredandliabilitiesassumedasoftheacquisitiondate:

OurcombinedstatementofoperationsfortheyearendedDecember31,2017includedBIVIVPrevenuesof$216.7million.WeareunabletoprovidetheresultsofoperationsattributabletoBIVIVPasthoseoperationsweresubstantiallyintegratedintoourlegacybusiness.

Estimated Fair Value at January 3, 2017 Inventories(1) $ 108.6Marketedproducts(2) 297.0Propertyandequipment 148.2Otherassetsandliabilities—net 8.2Totalidentifiablenetassets 562.0Goodwill(3) 320.1Totalconsiderationtransferred—netofcashacquired $ 882.1

(1) Thefairvalueforinventoriesincludeapurchaseaccountingadjustmenttowriteuptheinventoryvalue,whichresultedinincrementalcostofsalesof$42.7millionin2017.Thefairvaluewasdeterminedbyestimatingtheexpectedsalespriceoftheinventories,reducedforallcostsexpectedtotheincurredandaprofitonthosecosts.

(2) Theseintangibleassets,whicharebeingamortizedonastraight-linebasisovertheirestimatedusefullives,wereexpectedtohaveaweightedaverageusefullifeof10years.

(3) ThegoodwillrecognizedfromthisacquisitionisattributableprimarilytoexpectedsynergiesfromcombiningtheoperationsofBIVIVPwithourlegacybusiness,futureunidentifiedprojectsandproducts,andtheassembledworkforceofBIVIVP.Thegoodwillassociatedwiththisacquisitionisdeductiblefortaxpurposes.

TableofContents

Note 6. Acquisitions (Continued)

HadBIVIVPbeenacquiredonJanuary1,2016,theunauditedproformacombinedrevenuesofElancoandBIVIVPwouldhavebeen$2.89billionand$3.14billionfortheyearsendedDecember31,2017and2016,respectively.ItisimpracticaltodeterminetheproformaimpactonlossbeforetaxattributabletoBIVIVPfor2017and2016.

Galliprant Acquisition

OnApril22,2016,weacquiredfromAratana,certainrightstoGalliprant,acaninepaintreatmentforosteoarthritisforatotalpurchasepriceof$88.6million,whichconsistedofanupfrontpaymentof$45.0millionandcontingentconsiderationof$43.6million.ThecontingentconsiderationrepresentedthefairvalueofpotentialfuturepaymentstoAratanabasedontheprobabilityofachievingcontingentmilestonesandroyalties.Atthetimeoftheacquisition,GalliprantwasapprovedintheU.S.andwasstillunderdevelopmentoutsidetheU.S.

Underthetermsoftheagreement,weweregrantedco-promotionrightsintheU.S.throughDecember31,2018,atwhichtimewewillcontrolcommercializationintheU.S.WereceivedfullcommercializationrightsoutsidetheU.S.TheagreementrequirespaymentsbyustoAratanaassociatedwithcertaindevelopment,success-basedregulatoryandsales-basedmilestonesandroyalties.AsofDecember31,2018,Aratanaiseligibletoreceiveupto$8.0millionofpotentialdevelopmentandsuccess-basedregulatorymilestones.Aratanaisalsoeligibletoreceiveupto$60.0millionofpotentialsales-basedmilestones.AratanaiseligibletoreceiveroyaltiesbasedonapercentageofnetsalesofGalliprant,dependentonthetimingandgeographyofthenetsales.Thereisnocapontheamountofroyaltiesthatmaybepaidpursuanttothisarrangement.AsofDecember31,2018,wepaidAratana$15millionrelatedtoasales-basedmilestone.

Thefollowingtablesummarizestheamountsrecognizedforassetsacquiredandliabilitiesassumedasoftheacquisitiondate:

Estimated Fair Value at April 22, 2016 Deferredtaxassets $ 15.3Acquiredin-processresearchanddevelopment 31.6Marketedproducts(1) 57.0Deferredtaxliabilities (15.3)Totalconsideration 88.6Less:Contingentconsideration (43.6)Totalcashpaid $ 45.0

(1) Theseintangibleassets,whicharebeingamortizedonastraight-linebasisovertheirestimatedusefullives,wereexpectedtohaveaweightedaverageusefullifeof20years.

TableofContents

Note 7. Asset Impairment, Restructuring and Other Special Charges

TheCompany'stotalchargesrelatedtoassetimpairment,restructuringandotherspecialcharges,includingintegrationofacquiredbusinesses,inourconsolidatedandcombinedstatementsofoperationsconsistedofthefollowingfortheyearsendedDecember31:

Restructuring

WehistoricallyparticipatedinLilly'scost-reductioninitiatives,whichresultedinrestructuringchargesintheperiodpriortoourIPO.Therestructuringchargesincludeseveranceandothercostsassociatedwiththereductionofourworkforce,includingspecialterminationbenefitsrecognizedin2017associatedwiththeU.S.voluntaryearlyretirementprogramofferedbyLilly,relatedtoouremployeesandpensioncurtailmentcostsandfacilityexitcosts.Wealsorecordedcertainimpairmentchargesrelatedtotheactivitiesasdescribedbelow.

DuringDecember2018,weinitiatedarestructuringprogramtostreamlineourinternationaloperations,includingshiftingfocusandresourcestopriorityareas.Amongotheractions,therestructuringreflectsachangefromhavingaphysicallocationtoadistributionmodelincertaincountriesinconnectionwithourseparationfromLillyandresultedintherecognitionofseverancecosts.Inaddition,aspartofourongoingactivitiestoseparatefullyfromLilly,wewroteoffcertainassetsthatwehavedeterminedwillnotbeutilizedinthebusinessonanongoingbasis.WeexpecttosubstantiallycompletetherestructuringactivitiesbyDecember2019.

Integration costs

IntegrationcostsrecognizedduringtheyearsendedDecember31,2018,2017and2016wererelatedtoourintegrationeffortsasaresultofouracquiredbusinessesandcoststostandourorganizationuptobeanindependentcompany.

Asset impairment

AssetimpairmentrecognizedduringtheyearendedDecember31,2018includes$22.5millionofintangibleassetimpairmentsand$59.4millionofotherassetimpairments.Theintangibleasset

2018 2017 2016 Cash expense: Severanceandother $ 15.5 $ 162.0 $ 42.1Integration 26.5 90.3 154.8Facilityexitcosts 5.7 31.8 13.2

Total cash expense 47.7 284.1 210.1Non-cash expense: Assetimpairment 81.9 110.6 98.3

Total non-cash expense 81.9 110.6 98.3Gainonsaleoffixedassets (0.8) (19.6) —

Total expense $ 128.8 $ 375.1 $ 308.4

TableofContents

Note 7. Asset Impairment, Restructuring and Other Special Charges (Continued)

impairmentsprimarilyrelatedtorevisedprojectionsoffairvalueduetoproductrationalization.ThefixedassetimpairmentswereprimarilyduetothedecisiontodisposeofamanufacturingfacilityintheU.S.,thesuspensionofcommercialactivitiesforImrestor®andthewrite-offofcertainidleassetsinaU.S.manufacturingfacility.SeeNote11forfurtherdetailrelatingtointangibleassetimpairments.

AssetimpairmentrecognizedduringtheyearendedDecember31,2017resultedprimarilyfromintangibleassetimpairmentsrelatedtorevisedprojectionsoffairvalueduetoproductrationalizationandtoalesserextentcompetitivepressures.

AssetimpairmentrecognizedduringtheyearendedDecember31,2016resultedfromintangibleassetimpairmentsduetoproductrationalizationandtochargesrelatedtositeclosuresresultingfromouracquisitionandintegrationofNovartisAH,includingtheclosureofamanufacturingfacilityinIrelandin2016.

Gain on sale

ThegainonsaleoffixedassetsfortheyearendedDecember31,2017representsagainonthedisposalofasitethatwaspreviouslyclosedaspartoftheacquisitionandintegrationofNovartisAnimalHealthbeginningonJanuary1,2015.

Thefollowingtablesummarizestheactivityinourreservesestablishedinconnectionwiththeserestructuringactivities:

Substantiallyallofthereservesareexpectedtobepaidinthenexttwelvemonths.Webelievethatthereservesareadequate.

Note 8. Inventories

Westateallinventoriesatthelowerofcostormarket.Weusethelast-in,first-out(LIFO)methodforaportionofourinventorieslocatedinthecontinentalU.S.Otherinventoriesarevaluedbythefirst-in,first-out(FIFO)method.FIFOcostapproximatescurrentreplacementcost.

Exit costs Severance Total BalanceatDecember31,2016 $ 11.5 $ 26.6 $ 38.1Charges 31.8 162.0 193.8Reserveadjustment 1.4 (3.9) (2.5)Cashpaid (9.8) (141.6) (151.4)

BalanceatDecember31,2017 34.9 43.1 78.0Charges 11.7 15.5 27.2Separationadjustment (5.9) — (5.9)Reserveadjustment (6.0) — (6.0)Cashpaid (25.4) (23.5) (48.9)

BalanceatDecember31,2018 $ 9.3 $ 35.1 $ 44.4

TableofContents

Note 8. Inventories (Continued)

InventoriesatDecember31consistedofthefollowing:

InventoriesvaluedundertheLIFOmethodcomprised$194.8millionand$231.4millionoftotalinventoriesatDecember31,2018and2017,respectively.

DuringtheyearendedDecember31,2018,werecognized$38.6millionofinventorywrite-offsincostofsalesprimarilyrelatedtothesuspensionofcommercialactivitiesforImrestor.

Note 9. Debt

Long-termdebtasofDecember31,2018consistedofthefollowing:

Long-termdebtasofDecember31,2017wasnotmaterial.

Revolving and Term Credit Facilities

OnSeptember5,2018,weenteredintoarevolvingcreditagreementwithasyndicateofbanksprovidingforafive-year$750.0millionseniorunsecuredrevolvingcreditfacility(RevolvingFacility).TheRevolvingFacilitybearsinterestatavariablerateplusspecifiedmarginasdefinedintheagreementandispayablequarterly.TherewerenoborrowingsoutstandingundertheRevolvingFacilityatDecember31,2018.TheRevolvingFacilityispayableinfullattheendoftheterm.

OnSeptember5,2018wealsoenteredintoa$500.0millionthree-yeartermloanunderatermcreditfacilitywithasyndicateofbanks(theTermFacilityandcollectivelywiththeRevolvingFacility,theCreditFacilities.)TheTermFacilitybearsinterestatavariablerateplusmarginasdefinedinTerm

2018 2017 Finishedproducts $ 400.7 $ 452.0Workinprocess 570.4 580.0Rawmaterialsandsupplies 80.4 70.4Total(approximatesreplacementcost) 1,051.5 1,102.4DecreasetoLIFOcost (47.4) (40.1)Inventories $ 1,004.1 $ 1,062.3

December 31,

2018 Termcreditfacility $ 492.53.912%SeniorNotesdue2021 500.04.272%SeniorNotesdue2023 750.04.900%SeniorNotesdue2028 750.0Otherobligations 0.5Unamortizeddebtissuancecosts (20.7)

2,472.3Lesscurrentportionoflong-termdebt (29.0)Totallong-termdebt $ 2,443.3

TableofContents

Note 9. Debt (Continued)

Facility(3.77%atDecember31,2018)andispayablequarterly.TheTermFacilityalsorequiresaquarterlyprincipalpaymentequalto1.5%oftheaggregateinitialprincipallessanyprepayment.TheTermFacilityispayableinfullattheendoftheterm.

TheCreditFacilitiesaresubjecttovariousfinancialandothercovenantsincludingrestrictionsonthelevelofborrowingsbasedonaconsolidatedleverageratioandaconsolidatedinterestcoverageratio.WewereincompliancewithallsuchcovenantsasofDecember31,2018.

Senior Notes

OnAugust28,2018,weissued$2.0billionofseniornotes(SeniorNotes)inaprivateplacement.TheSeniorNotescomprisedof$500.0millionof3.912%SeniorNotesdueAugust27,2021,$750.0millionof4.272%SeniorNotesdueAugust28,2023,and$750.0millionof4.900%SeniorNotesdueAugust28,2028.TheinterestratepayableoneachseriesofSeniorNotesissubjecttoadjustmentifMoody'sInvestorServices,Inc.orStandard&Poor'sFinancialServicesLLCdowngrades,orsubsequentlyupgrades,itsratingsontherespectiveseriesofSeniorNotes.

TheindenturethatgovernstheSeniorNotescontainscovenants,includinglimitationsonourability,andcertainofoursubsidiaries,toincurliensorengageinsale-leasebacktransactions.Theindenturealsocontainsrestrictionsonourabilitytoconsolidate,mergeorsellsubstantiallyallofourassets,inadditiontoothercustomaryterms.WewereincompliancewithallsuchcovenantsundertheindenturegoverningtheSeniorNotesasofDecember31,2018.

WehaveenteredintoanagreementthatrequiresustousecommerciallyreasonableeffortstocausearegistrationstatementtobecomeeffectivewiththeSECbyAugust28,2019,relatingtoanoffertoexchangetheSeniorNotesforregisteredSeniorNoteshavingsubstantiallyidenticalterms,or,incertaincases,toregistertheSeniorNotesforresale.IfwedonotregisterorexchangetheSeniorNotespursuanttothetermsoftheregistrationrightsagreement,wewillberequiredtopayadditionalinteresttotheholdersoftheSeniorNotesundercertaincircumstances.

Note 10. Financial Instruments and Fair Value

Financialinstrumentsthatarepotentiallysubjecttocreditriskconsistprincipallyoftradereceivables.Collateralisgenerallynotrequired.Theriskassociatedwiththisconcentrationismitigatedbyourongoingcredit-reviewproceduresandinsurance.

Alargeportionofourcashisheldbyafewmajorfinancialinstitutions.Wemonitortheexposurewiththeseinstitutionsanddonotexpectanyoftheseinstitutionstofailtomeettheirobligations.Allhighlyliquidinvestmentswithamaturityofthreemonthsorlessfromthedateofpurchaseareconsideredtobecashequivalents.Thecostoftheseinvestmentsapproximatesfairvalue.Wealsoconsiderthecarryingvalueofrestrictedcashbalancestoberepresentativeofitsfairvalue.

AsofDecember31,2018and2017,wehad$15.3millionand$12.3million,respectively,primarilyrelatedtoequitymethodinvestments.

TableofContents

Note 10. Financial Instruments and Fair Value (Continued)

ThefollowingtablesummarizesthefairvalueinformationatDecember31,2018and2017forcontingentconsiderationliabilitiesandnetinvestmenthedgeliabilitymeasuredatfairvalueonarecurringbasisintherespectivebalancesheetlineitems:

WedetermineourLevel1andLevel2fairvaluemeasurementsbasedonamarketapproachusingquotedmarketvalues,significantotherobservableinputsforidenticalorcomparableassetsorliabilities,ordiscountedcashflowanalysis.Level3fairvaluemeasurementsforotherinvestmentsecuritiesaredeterminedusingunobservableinputs,includingtheinvestments'costadjustedforimpairmentsandpricechangesfromorderlytransactions.Thefairvaluesofcostandequitymethodinvestmentsarenotreadilyavailable.

ContingentconsiderationliabilitiesrelatetoGalliprant forwhichthefairvaluewasestimatedusingadiscountedcashflowanalysisandLevel3inputs,includingprojectionsrepresentativeofamarketparticipantviewfortheprobabilityofachievingpotentialfuturepaymentstoAratanaTherapeutics,Inc.andanestimateddiscountrate.Theamounttobepaidisdependentuponcertaindevelopment,success-basedregulatory,andsales-basedmilestones.Inaddition,theamountofroyaltiestobepaidiscalculatedasapercentageofnetsalesdependentuponthetimingandgeographyandwill,therefore,varydirectlywithincreasesanddecreasesinnetsalesofGalliprant .Thereisnocapontheamountthatmaybepaidpursuanttothisarrangement.During2018,asaresultofanincreaseintheprojectedcashflowsrelatedtoGalliprant, weincreasedthefairvalueofthecontingentconsiderationliabilitiesby$37.6million,offsetbya$15.0millionsales-basedmilestonepayment.Theadditionalexpensewasrecognizedinother(income)expense,net.

Wehavelongtermdebtof$2.5billionthatisrecordedatamortizedcostinourconsolidatedandcombinedbalancesheetasofDecember31,2018.Weconsiderthecarryingvalueofthelongtermdebt

Fair Value Measurements Using

Financial statement line item Carrying Amount

Quoted Prices

in Active Markets for

Identical Assets

(Level 1)

Significant Other

Observable Inputs

(Level 2)

Significant Unobservable

Inputs (Level 3)

Fair Value

December31,2018 Othercurrentliabilities—contingentconsideration $ 5.1 $ — $ — $ 5.1 $ 5.1Othernoncurrentliabilities—contingentconsideration 69.0 — — 69.0 69.0Othernoncurrentliabilities—crosscurrencyinterestratecontractsdesignatedasnetinvestmenthedges 7.4 — 7.4 — 7.4

December31,2017 Othercurrentliabilities—contingentconsideration 1.3 — — 1.3 1.3Othernoncurrentliabilities—contingentconsideration 45.2 — — 45.2 45.2

TableofContents

toberepresentativeofitsfairvalueasofDecember31,2018.ThefairvalueofthislongtermdebtisestimatedbasedonquotedmarketpricesofsimilarliabilitiesandisclassifiedasLevel2.AsofDecember31,2017,longtermdebtwasnotmaterial.

InOctober2018,weenteredintoacross-currencyfixedinterestrateswap,5-year,750millionSwissFranc(CHF),whichisdesignatedasaNIHagainstCHFdenominatedassetsforwhichthefairvaluewasestimatedbasedonquotedmarketvaluesofsimilarhedgesandisclassifiedasLevel2.TheNIHisexpectedtogenerateapproximately$25millionincashandanoffsettointerestexpenseonanannualbasis.DuringtheyearendedDecember31,2018,ourinterestexpensewasoffsetby$5.6millionasaresultoftheNIH.Overthelifeofthederivative,gainsorlossesduetospotratefluctuationsarerecordedincumulativetranslationadjustment.DuringtheyearendedDecember31,2018,werecordeda$5.9millionloss,netoftax,ontheNIH,whichisincludedinthechangeinthecumulativetranslationadjustmentinothercomprehensiveincome.Thereisapotentialforsignificant2023settlementexposureastheU.S.dollarfluctuatesagainsttheSwissFranc.TheriskmanagementobjectiveistomanageforeigncurrencyriskrelatingtonetinvestmentsincertainCHFdenominatedassets.ChangesinfairvalueofthederivativeinstrumentsarerecognizedinacomponentofAccumulatedOtherComprehensiveLosstooffsetthechangesinthevaluesofthenetinvestmentsbeinghedged.

Note 11. Goodwill and Intangibles

Goodwill

Goodwillwas$3.0billionasofDecember31,2018and2017.Goodwillresultsfromexcessconsiderationinabusinesscombinationoverthefairvalueofidentifiablenetassetsacquired.Goodwillisnotamortizedbutisreviewedforimpairmentatleastannuallyandwhenimpairmentindicatorsarepresent.Goodwillmaybeimpairedifthecarryingamountofareportingunitexceedsthefairvalueofthatreportingunit,calculatedasbasedondiscountedcashflows.Theimpliedfairvalueofgoodwillisthendeterminedbysubtractingthefairvalueofallidentifiablenetassetsotherthangoodwillfromthefairvalueofthereportingunit.Animpairmentchargewouldberecordedfortheexcess,ifany,ofcarryingamountofgoodwillovertheimpliedfairvalue.Theestimatedfairvalueisbasedonanumberofassumptions,includingcurrentmarketcapitalizationascorroborationoffairvalue.SeeNote6forfurtherdiscussionofgoodwillresultingfromrecentbusinesscombinations.Theremainingchangeingoodwillisprimarilytheresultofforeignexchangetranslationadjustments.

NoimpairmentsoccurredwithrespecttothecarryingvalueofgoodwillfortheyearsendedDecember31,2018,2017and2016.

TableofContents

Note 11. Goodwill and Intangibles (Continued)

Other Intangibles

ThecomponentsofintangibleassetsotherthangoodwillatDecember31wereasfollows:

Marketedproductsconsistoftheamortizedcostoftherightstoassetsacquiredinbusinesscombinationsandapprovedformarketinginasignificantglobaljurisdiction.Fortransactionsotherthanabusinesscombination,wecapitalizemilestonepaymentsincurredatoraftertheproducthasobtainedregulatoryapprovalformarketing.

Otherfinite-livedintangiblesconsistprimarilyoftheamortizedcostoflicensedplatformtechnologiesthathavealternativefutureusesinresearchanddevelopment,manufacturingtechnologiesandcustomerrelationshipsfrombusinesscombinations.AcquiredIPR&Dconsistsoftherelatedcostscapitalized,adjustedforsubsequentimpairments,ifany.ThecostsofacquiredIPR&Dprojectsacquireddirectlyinatransactionotherthanabusinesscombinationarecapitalizediftheprojectshaveanalternativefutureuse;otherwise,theyareexpensedimmediately.ThefairvaluesofacquiredIPR&Dprojectsacquiredinbusinesscombinationsarecapitalizedasotherintangibleassets.

Severalmethodsmaybeusedtodeterminetheestimatedfairvalueofotherintangiblesacquiredinabusinesscombination.Weutilizethe"incomemethod"forotherintangibles.ThismethodisaLevel3fairvaluemeasurementandappliesaprobabilityweightingthatconsiderstheriskofdevelopmentandcommercializationtotheestimatedfuturenetcashflowsthatarederivedfromprojectedrevenuesandestimatedcosts.Theseprojectionsarebasedonfactorssuchasrelevantmarketsize,patentprotection,historicalpricingofsimilarproductsandexpectedindustrytrends.Theestimatedfuturenetcashflowsarethendiscountedtothepresentvalueusinganappropriatediscountrate.Thisanalysisisperformedforeachgroupofassetsindependently.TheacquiredIPR&Dassetsaretreatedasindefinite-livedintangibleassetsuntilcompletionorabandonmentoftheprojects,atwhichtimetheassetsaretestedforimpairmentandamortizedovertheremainingusefullifeorwrittenoff,asappropriate.

SeeNote6forfurtherdiscussionofintangibleassetsacquiredinrecentbusinesscombinations.

2018 2017

Description

Carrying Amount,

Gross Accumulated Amortization

Carrying Amount,

Gross Accumulated Amortization

Carrying Amount,

Net Finite-livedintangibleassets: Marketedproducts $ 3,193.5 $ (779.2) $ 2,414.3 $ 3,151.2 $ (599.8) $ 2,551.4Other 53.1 (34.0) 19.1 54.1 (29.9) 24.2Totalfinite-livedintangibleassets 3,246.6 (813.2) 2,433.4 3,205.3 (629.7) 2,575.6

Indefinite-livedintangibleassets: Acquiredin-processresearchanddevelopment 19.6 — 19.6 97.2 — 97.2

Otherintangibles $ 3,266.2 $ (813.2) $ 2,453.0 $ 3,302.5 $ (629.7) $ 2,672.8

TableofContents

Note 11. Goodwill and Intangibles (Continued)

Otherindefinite-livedintangibleassetsarereviewedforimpairmentatleastannuallyandwhenimpairmentindicatorsarepresent.Thefairvalueoftheindefinitelivedintangibleassets(acquiredIPR&D)isestimatedusingthesameassumptionsasusedforgoodwillandbyapplyingaprobabilityweightingthatreflectstheriskofdevelopmentandcommercializationtotheestimatedfuturenetcashflowsthatarederivedfromprojectedrevenuesandestimatedcosts.Finite-livedintangibleassetsarereviewedforimpairmentwhenanindicatorofimpairmentispresent.Wecomparethecarryingamountsoftheassetswiththeestimatedundiscountedfuturecashflows.Intheeventthecarryingamountexceedstheundiscountedcashflows,animpairmentchargeisrecordedfortheamountbywhichthecarryingamountoftheassetexceedstheestimatedfairvalue,whichisdeterminedbasedondiscountedfuturecashflows.

During2018,werecordedimpairmentchargesof$22.5million(comprisedof$9.5millionimpairmentoffinite-livedintangibleassetsand$13.0millionimpairmentofindefinite-livedintangibleassets)whichareincludedinassetimpairment,restructuringandotherspecialchargesonthecombinedstatementsofoperations.Theimpairmentoffinite-livedintangibleassetsprimarilyrelatedtocompetitivepressuresforacertainmarketedproductresultinginareductionofprojectedcashflows.Theimpairmentofindefinite-livedintangibleassetsprimarilyrelatedtorevisedprojectionsoffairvalueduetocompetitivepressuresandtoalesserextentproductrationalization.TheincreaseinthecarryingamountoffiniteintangiblesisprimarilyduetothereceiptoffullcommercializationrightsoutsidetheU.S.forGalliprant.During2017,wehadimpairmentchargesof$94.5million(comprisedof$56.5millionimpairmentoffinite-livedintangibleassetsand$38.0millionimpairmentofindefinite-livedintangibleassets)whichareincludedinassetimpairment,restructuringandotherspecialchargesonthecombinedstatementsofoperations.Theimpairmentoffinite-livedintangibleassetsprimarilyrelatedtocompetitivepressuresforacertainmarketedproductresultinginareductionofprojectedcashflows.Theimpairmentofindefinite-livedintangibleassetsprimarilyrelatedtorevisedprojectionsoffairvalueduetocompetitivepressuresandtoalesserextentproductrationalization.During2016,werecordedimpairmentchargesof$14.0millionprimarilyrelatedtoindefinite-livedintangibleassetschargedtoassetimpairment,restructuringandotherspecialchargesonthecombinedstatementsofoperations.Theimpairmentsin2016wererelatedtoproductrationalization.

Intangibleassetswithfinitelivesarecapitalizedandareamortizedovertheirestimatedusefullives,rangingfrom3to20years.AsofDecember31,2018,theremainingweighted-averageamortizationperiodforfinite-livedintangibleassetsisapproximately14years.

Theestimatedamortizationexpenseforeachofthenextfiveyearsassociatedwithourfinite-livedintangibleassetsasofDecember31,2018isasfollows:

Note 12. Property and Equipment

Propertyandequipmentisstatedonthebasisofcost.Provisionsfordepreciationofbuildingsandequipmentarecomputedgenerallybythestraight-linemethodatratesbasedontheirestimatedusefullives(12to50yearsforbuildingsand3to25yearsforequipment).Wereviewthecarryingvalueoflong-livedassetsforpotentialimpairmentonaperiodicbasisandwhenevereventsorchangesin

2019 2020 2021 2022 2023 Estimatedamortizationexpense $ 197.9 $ 198.3 $ 198.0 $ 196.0 $ 195.8

TableofContents

Note 12. Property and Equipment (Continued)

circumstancesindicatethecarryingvalueofanassetmaynotberecoverable.Impairmentisdeterminedbycomparingprojectedundiscountedcashflowstobegeneratedbytheassettoitscarryingvalue.Ifanimpairmentisidentified,alossisrecordedequaltotheexcessoftheasset'snetbookvalueoveritsfairvalueutilizingadiscountedcashflowanalysis,andthecostbasisisadjusted.

AtDecember31,propertyandequipmentconsistedofthefollowing:

Depreciationexpenserelatedtopropertyandequipmentandrentalexpenseforallleaseswasasfollows:

Thefutureminimumrentalcommitmentsundernon-cancelableoperatingleasesareasfollows:

Note 13. Stock-Based Compensation

Lilly Stock Compensation Plans

ForperiodspriortoIPO,webenefitedfromLilly'sstock-basedcompensationprogram.Lillymaintainsvariousstock-basedcompensationprogramsforthebenefitofitsofficers,directorsandcertainemployeesincludingemployeesoftheCompany.AswereceivetheemployeeservicesinconsiderationfortheparticipationoftheCompany'semployeesintheseplans,stock-basedcompensationexpensefortheawardsgrantedtoouremployeeshasbeenreflectedintheconsolidatedandcombinedstatementsofoperations.

Lilly'sstock-basedcompensationgrantedtoouremployeesconsistsofperformanceawards(PAs),shareholdervalueawards(SVAs)andRSUs.Thestock-basedcompensationexpensehasbeenderivedfromtheequityawardsgrantedbyLillytoouremployees.Thecompensationexpenseisbasedonthefairvalueofstock-basedawardswhichisrecognizedascompensationexpenseovertherequisiteserviceperiodoftheindividualgrantees,whichgenerallyequalsthevestingperiod.TheawardsaresettledbyLilly.

2018 2017 Land $ 27.6 $ 25.1Buildings 567.2 557.7Equipment 1,025.1 994.5Constructioninprogress 181.1 177.1

1,801 1,754.4Lessaccumulateddepreciation (878.6) (834.1)Propertyandequipment,net $ 922.4 $ 920.3

2018 2017 2016 Depreciationexpense $ 81.3 $ 79.8 $ 75.7Rentalexpense 47.5 47.1 41.8

2019 2020 2021 2022 2023 After 2023 Leasecommitments $ 25.2 $ 20.1 $ 13.5 $ 10.0 $ 8.3 $ 18.5

TableofContents

Note 13. Stock-Based Compensation (Continued)

FortheperiodspriortoIPO,asthestock-basedcompensationplanswereLilly'splansandtheawardsweresettledbyLilly,theoffsettotheexpensewasrecognizedthroughnetparentcompanyinvestmentonthecombinedbalancesheet.

Stock-basedcompensationexpenserelatedtoouremployeesforyearsendedDecember31,2018,2017and2016was$26.0million,$25.0millionand$20.4million,respectively.

FollowingIPOanduntilthecompletionoftheexchangeoffer,theequityawardspreviouslygrantedtoouremployeesbyLillywillcontinuetovest,andservicewithElancocountstowardtheLillyaward'svestingprovisions.Uponcompletionoftheexchangeoffer,weexpectthatouremployees'unvestedLillyRSUs,PAs,andSVAswillbeforfeitedandreplacedwithElancoRSUsvaluedattheexchangeratewiththesameservicevestingperiodastheforfeitedLillyawards.

Performance Award Program

PAshavebeengrantedtocertainofourofficersandmanagementandaresettledinsharesofLilly'scommonstock.ThenumberofPAsharesactuallyissued,ifany,variesdependingontheachievementofcertainpre-establishedearnings-per-sharetargetsoveratwo-yearperiod.PAsharesareaccountedforatfairvaluebasedupontheclosingstockpriceonthedateofgrantandfullyvestattheendofthemeasurementperiod.ThefairvaluesofPAsgrantedfortheyearsendedDecember31,2018,2017and2016were$71.63,$73.54,and$72.00,respectively.ThenumberofPAsharesthatwillvestforthePAprogramisdependentuponLilly'searningsachievedduringthevestingperiod.Pursuanttothisprogram,approximately39,771shares,69,144sharesand20,329shareswereissuedbyLillytoouremployeesduringtheyearsendedDecember31,2018,2017and2016,respectively.AsofDecember31,2018,thetotalremainingunrecognizedcompensationcostrelatedtononvestedPAswas$5.8million,whichwillbeamortizedovertheweighted-averageremainingrequisiteserviceperiodof12months.

Shareholder Value Award Program

SVAshavebeengrantedtocertainofourofficersandmanagementandaresettledinsharesofLilly'scommonstock.Thenumberofsharesactuallyissued,ifany,variesdependingonLilly'sstockpriceattheendofthethree-yearvestingperiodcomparedtopre-establishedtargetstockprices.WemeasurethefairvalueoftheSVAunitonthegrantdateusingaMonteCarlosimulationmodel.Themodelutilizesmultipleinputvariablesthatdeterminetheprobabilityofsatisfyingthemarketconditionstipulatedintheawardgrantandcalculatesthefairvalueoftheaward.ExpectedvolatilitiesutilizedinthemodelarebasedonimpliedvolatilitiesfromtradedoptionsonLilly'sstock,historicalvolatilityofLilly'sstockpriceandotherfactors.Similarly,thedividendyieldisbasedonhistoricalexperienceandLilly'sestimateoffuturedividendyields.Therisk-freeinterestrateisderivedfromtheU.S.Treasuryyieldcurveineffectatthetimeofgrant.Theweighted-averagefairvaluesoftheSVAunitsgranted

TableofContents

duringtheyearsendedDecember31,2018,2017and2016were$49.38,$66.25and$48.68,respectively,determinedusingthefollowingassumptions:

Pursuanttothisprogram,Lillyissuedapproximately30,195shares,35,063sharesand36,071sharestoouremployeesduringtheyearsendedDecember31,2018,2017and2016,respectively.AsofDecember31,2018,thetotalremainingunrecognizedcompensationcostrelatedtononvestedSVAswas$3.5million,whichwillbeamortizedovertheweighted-averageremainingrequisiteserviceperiodof20months.

Restricted Stock Units

RSUshavebeengrantedtocertainofouremployeesandarepayableinsharesofLilly'scommonstock.RSUsharesareaccountedforatfairvaluebaseduponLilly'sclosingstockpriceonthedateofgrant.Thecorrespondingexpenseisamortizedoverthevestingperiod,typicallythreeyears.ThefairvaluesofRSUawardsgrantedduringtheyearsendedDecember31,2018,2017and2016were$70.95,$72.47and$71.46,respectively.ThenumberofsharesultimatelyissuedbyLillyfortheRSUprogramremainsconstantwiththeexceptionofforfeitures.Pursuanttothisprogram,82,025shares,57,224sharesand26,468sharesweresettledbyLillywithitsRSUstoouremployeesduringtheyearsendedDecember31,2018,2017and2016,respectively.AsofDecember31,2018,thetotalremainingunrecognizedcompensationcostrelatedtononvestedRSUswas$12.5millionwhichwillbeamortizedovertheweighted-averageremainingrequisiteserviceperiodof20months.

Elanco Stock Compensation Plans

InconnectionwithIPO,weadoptedourownstockbasedcompensationplans,includingRSUsandstockoptions.Ourstock-basedcompensationexpenseandtherelatedtaxundertheseplansfortheyearendedDecember31,2018was$1.8millionand$0.4million.

Restricted Stock Units

RSUsaregrantedtocertainemployeesandaresettledinsharesofourcommonstock.RSUsharesareaccountedforatfairvaluebasedupontheclosingstockpriceonthedateofthegrant.Thecorrespondingexpenseisamortizedoverthevestingperiod,typicallythreeyears.ThefairvalueoftheRSUawardsgrantedduringtheyearendedDecember31,2018was$31.09.ThenumberofsharesultimatelyissuedfortheRSUprogramremainsconstantwiththeexceptionofforfeitures.Pursuanttothisprogram,158,007sharesweregrantedand18,991shareswereissuedduringtheyearendedDecember31,2018.AsofDecember31,2018,thetotalremainingunrecognizedcompensationcostrelatedtononvestedRSUswas$3.9million,whichwillamortizeovertheweighted-averageremainingrequisiteserviceperiodof33months.

(Percents) 2018 2017 2016 Expecteddividendyield 2.50% 2.50% 2.00%Risk-freeinterestrate 2.31 1.38 0.92Volatility 22.26 22.91 21.68

TableofContents

Stock Option Program

Stockoptionsrepresenttherighttopurchasesharesofourcommonstockwithinaspecifiedperiodoftimeataspecifiedprice.Theexercisepriceforastockoptionwillbenotlessthan100%ofthefairmarketvalueofthecommonstockonthedateofthegrant.

Stockoptionsareaccountedforusingafair-valuebasedmethodatthedateofthegrantintheconsolidatedstatementofoperations.Thevaluesdeterminedthroughthisfair-value-basedmethodgenerallyareamortizedonastraight-linebasisoverthevestingterm.

Stockoptionsweregrantedin2018toourofficers,managementandboardmembersatexercisepricesequaltothefairmarketvalueofourstockatthedateofthegrant.Optionsfullyvest3yearsfromthegrantdateandhaveatermof10years.

Thefair-value-basedmethodforvaluingeachElancostockoptiongrantonthegrantdateusestheBlack-Scholes-Mertonoption-pricingmodel,whichincorporatesanumberofvaluationassumptionsnotedinthefollowingtable,shownattheirweighted-averagevaluesfortheyearendedDecember31:

StockoptionactivityduringtheyearendedDecember31,2018issummarizedbelow:

AsofDecember31,2018,theweighted-averageremainingcontractualtermoftheexercisableoptionswas9.8yearsandtheaggregateintrinsicvaluewas$0.08.

2018 Expecteddividendyield(1) 0.70%Risk-freeinterestrate(2) 3.07%Expectedstockpricevolatility(3) 28.25%Expectedterm(4)(years) 6.5

(1) Determinedusingtheexpectedquarterlydividenddividedbytheavailablethree-monthaveragestockpriceasofthevaluationdate,annualizedandcontinuouslycompounded.

(2) Determinedusingtheterm-matched,zero-couponrisk-freeratefromtheTreasuryConstantMaturityyieldcurve,continuouslycompounded

(3) Determinedusingaleverage-adjustedhistoricalvolatilityofpeercompanies

(4) DeterminedusingSECsafeharborapproach,basedona3-yearcliffvestingscheduleand10-yearcontractualterm.

Shares of Common

Stock Attributable to Options

Weighted-Average Exercise Price

of Options OutstandingatJanuary1,2018 — $ —Granted 421,297 31.61Exercised — —Forfeitedorexpired — —OutstandingatDecember31,2018 421,297 31.61ExercisableatDecember31,2018 58,766 31.61

TableofContents

Note 14. Income Taxes

Duringtheperiodspresentedintheconsolidatedandcombinedfinancialstatements,ElancowasgenerallyincludedinthetaxgroupingofotherLillyentitieswithintherespectiveentity'staxjurisdiction;however,incertainjurisdictions,Elancofiledseparatetaxreturns.Theincometax(benefit)/expenseincludedintheseconsolidatedandcombinedfinancialstatementshasbeencalculatedusingtheseparatereturnbasis,asifElancofiledseparatetaxreturns.

2017 Tax Act

InDecember2017,thePresidentoftheU.S.signedintolawtheTaxCutsandJobsAct(2017TaxAct).The2017TaxActincludessignificantchangestotheU.S.corporateincometaxsystem,suchasthereductioninthecorporateincometaxratefrom35percentto21percent,transitiontoaterritorialtaxsystem,changestobusinessrelatedexclusions,deductionsandcredits,andmodificationstointernationaltaxprovisions,includingaone-timerepatriationtransitiontax(alsoknownasthe'TollTax')onunremittedforeignearnings.

GAAPrequiresthattheincometaxaccountingeffectsfromachangeintaxlawsortaxratesberecognizedincontinuingoperationsinthereportingperiodthatincludestheenactmentdateofthechange.Theseeffectsinclude,amongotherthings,re-measuringdeferredtaxassetsandliabilities,evaluatingdeferredtaxassetsforvaluationallowancesandassessingtheimpactoftheTollTaxandcertainotherprovisionsofthe2017TaxAct.Ouraccountingforthetaxeffectsoftheenactmentofthe2017TaxActwasnotcompleteasofDecember31,2017;however,incertaincases,wemadeareasonableestimate.Inothercases,wewereunabletomakeareasonableestimateandcontinuedtoaccountforthoseitemsbasedonourexistingaccountingmodelunderASC740,IncomeTaxesandtheprovisionsofthetaxlawsthatwereineffectimmediatelypriortoenactment.Fortheitemsforwhichwewereabletomakeareasonableestimate,werecordedaprovisionaltaxbenefitof$33.1millionin2017relatedtotheimpactsofthe2017TaxAct.

Wefinalizedouraccountingforthetaxeffectsofthe2017TaxActduring2018.Nomaterialadjustmentstoincometaxexpense(benefit)wererecorded.Weexpectthatfurtherguidancewillcontinuetobeissuedin2019whichmayimpactourinterpretationsofthe2017TaxActandcouldmateriallyaffecttheestimatesused.The2017TaxActalsoincludesanewU.S.minimumtax,globalintangiblelow-taxedincome(GILTI),ontheearningsofourforeignsubsidiaries.WehaveelectedtoaccountforthetaxrelatedtoGILTIasaperiodcostintheyearthetaxisincurred.

Deferredtaxesarerecognizedforthefuturetaxeffectsoftemporarydifferencesbetweenfinancialandincometaxreportingbasedonenactedtaxlawsandrates.Werecognizethetaxbenefitfromanuncertaintaxpositiononlyifitismorelikelythannotthatthetaxpositionwillbesustainedonexaminationbythetaxingauthorities,basedonthetechnicalmeritsoftheposition.Thetaxbenefitsrecognizedinthefinancialstatementsfromsuchapositionaremeasuredbasedonthelargestbenefitthathasagreaterthan50percentlikelihoodofbeingrealizeduponultimateresolution.

TableofContents

Note 14. Income Taxes (Continued)

Followingisthecompositionofincome(loss)beforeincometaxexpense(benefit):

Followingisthecompositionofincometaxexpense(benefit):

2018 2017 2016 Federal $ 12.2 $ (133.2) $ (12.5)Foreign 101.9 (99.4) (9.9)

Income(loss)beforeincometaxes $ 114.1 $ (232.6) $ (22.4)

2018 2017 2016 Current: Federal $ 45.1 $ — $ —Foreign 45.5 91.6 31.1State (2.3) (0.1) 0.3Totalcurrenttaxexpense 88.3 91.5 31.4

Deferred: Federal (56.8) 42.6 18.4Foreign (5.6) (16.6) (26.8)State 1.7 (6.3) 2.52017TaxAct — (33.1) —Totaldeferredtaxbenefit (60.7) (13.4) (5.9)

Incometaxes $ 27.6 $ 78.1 $ 25.5

TableofContents

SignificantcomponentsofourdeferredtaxassetsandliabilitiesasofDecember31areasfollows:

Deferredtaxassetsandliabilitiesreflecttheimpactofre-measurementresultingfromthe2017TaxAct.

ThedeferredtaxassetsandrelatedvaluationallowanceamountsforU.S.federalandstatenetoperatinglossesandtaxcreditsshownabovehavebeenreducedfordifferencesbetweenfinancialreportingandtaxreturnfilings.

AtDecember31,2018,wehavetaxcreditcarryoversof$6.5millionavailabletoreducefutureincometaxes.Theamountiscomprisedofforeignandstatecredits.Foreigncreditstotal$4.1millionandifunused,willexpirebeginningin2032.Statetaxcreditsof$2.4millionarefullyreserved.

AtDecember31,2018,wehadnetoperatinglosscarryoversandothercarryoversforinternationalandU.S.stateincometaxpurposesof$156.2million:$84.6millionwillexpireby2023;$65.0millionwillexpireby2025;and$1.6millionofthecarryoverswillneverexpire.NetoperatinglossesandothercarryoversforinternationalandU.S.stateincometaxpurposesarepartiallyreserved.Deferredtaxassetsrelatedtostatenetoperatinglossesof$4.9millionarefullyreserved.

2018 2017 Deferredtaxassets: Compensationandbenefits $ 32.2 $ 34.8Accrualsandreserves 47.8 12.0Taxcreditcarryovers 1.9 19.2Taxlosscarryovers 21.7 144.9Other 23.5 26.6Totalgrossdeferredtaxassets 127.1 237.5

Valuationallowances (21.4) (127.7)Totaldeferredtaxassets 105.7 109.8

Deferredtaxliabilities: Intangibles (130.8) (165.2)Propertyandequipment (50.8) (43.1)Other (2.7) (7.4)Totaldeferredtaxliabilities (184.3) (215.7)

Deferredtaxliabilities—net $ (78.6) $ (105.9)

TableofContents

Themovementsinthevaluationallowanceareasfollows:

PriortotheIPO,wepreparedtheincometaxamountsandbalancesbaseduponaseparatereturnmethodology,asifwewereseparatetaxpayersfromLilly.Asaresult,certaintaxcreditandnetoperatinglosscarryoversarenotavailableforuseinfutureperiodsastheywereusedinLillyconsolidatedorcombinedtaxreturnfilings.Accordingly,asaresultoftheSeparation,thetaxcreditandnetoperatinglosscarryoversandrelatedvaluationallowancehavebeenadjustedtoreflectthebalanceafterSeparation.Theseadjustmentshadnoimpactonincometaxexpenseintheconsolidatedandcombinedfinancialstatements.Theseparationentriesrelatedtothevaluationallowancewereoffsetby$133.7million,priortotaxeffect,ofseparationentriesrelatedtotheremovalofthenetoperatinglosses.

The2017TaxActintroducedinternationaltaxprovisionsthatsignificantlychangetheU.S.taxationofforeignearnings.AtDecember31,2018,noU.S.taxesorforeignwithholdingtaxeshavebeenaccruedwithrespecttothe$464.5millioninunremittedearningsofourforeignsubsidiariesastheyareconsideredindefinitelyreinvestedforcontinueduseinourforeignoperations.Itisnotpracticabletodeterminetheunrecognizeddeferredtaxliabilityrelatedtotheseearnings.

Cashpaymentsofincometaxeswereasfollows:

2018 2017 January1 $ (127.7) $ (39.1)AdjustmentrelatedtoSeparation 110.4 —January1 (17.3) (39.1)Increase (5.8) (97.4)Release 1.7 8.8December31 $ (21.4) $ (127.7)

2018 2017 2016 Cashpaymentsofincometaxes $ 26.9 $ 35.7 $ 53.6

TableofContents

Thefollowingisareconciliationoftheincometaxexpense(benefit)applyingtheU.S.federalstatutoryratetoincomebeforeincometaxestoreportedincometaxexpense:

Areconciliationofthebeginningandendingamountofgrossunrecognizedtaxbenefitsisasfollows:

Thetotalamountofunrecognizedtaxbenefitsthat,ifrecognized,wouldaffecttaxexpenseby$12.8millionand$29.6millionatDecember31,2018and2017,respectively.Thereare$1.9millionof2018unrecognizedtaxbenefitswhichrelatedtotemporarydifferenceswhichwouldnot,ifrecognized,impacttheeffectivetaxrate.AdjustmentsrelatedtotheSeparationrepresentunrecognizedtaxbenefitsassumedbyLillyintheSeparationandhavenoimpactonincometaxexpenseintheconsolidatedandcombinedfinancialstatements.

WefileincometaxreturnsintheU.S.federaljurisdictionandvariousstate,localandnon-U.S.jurisdictions.CertainoftheseincometaxreturnsarefiledonaconsolidatedorcombinedbasiswithEliLillyandCompanyand/oritssubsidiaries.

WeareincludedinLilly'sU.S.taxexaminationsbytheInternalRevenueService.PursuanttotheTaxMattersAgreementweexecutedwithLillyinconnectionwiththeIPO,theliabilitiesorpotential

2018 2017 2016 IncometaxattheU.S.federalstatutorytaxrate $ 24.0 $ (81.4) $ (7.8)Add(deduct): Internationaloperationsandchangeinforeigntaxrates 11.5 55.6 8.4Statetaxes 4.4 5.4 2.8Incometaxcredits (17.3) (1.8) (1.7)Foreigninclusionitems 9.0 4.2 2.4IPOandseparationcosts 2.3 — —Otherpermanentadjustments 0.9 1.6 0.2Changeinuncertaintaxpositions (1.7) 6.2 5.2Changeinvaluationallowance (1.7) 122.2 18.12017TaxAct — (33.1) —Other (3.8) (0.8) (2.1)

Incometaxes $ 27.6 $ 78.1 $ 25.5

2018 2017 2016 BeginningbalanceatJanuary1 $ 29.6 $ 25.7 $ 25.5AdjustmentsrelatedtoSeparation (17.6) — —

BeginningbalanceatJanuary1 12.0 25.7 25.5Additionsbasedontaxpositionsrelatedtothecurrentyear 2.2 7.9 7.4Additionsfortaxpositionsofprioryears 4.0 — —Settlements (3.0) (4.0) (7.1)Changesrelatedtotheimpactofforeigncurrencytranslation (0.5) — (0.1)EndingbalanceatDecember31 $ 14.7 $ 29.6 $ 25.7

TableofContents

refundsattributabletopre-IPOperiodsinwhichElancowasincludedinaLillyconsolidatedorcombinedtaxreturnremainwithLilly.Consequently,althoughaU.S.examinationoftaxyears2013-2015iscurrentlyinprogress,theresultingadjustments,ifany,willnotrequireanycashtaxpaymentsbyElanco.WearenototherwisesubjecttoU.S.federal,stateandlocal,ornon-U.S.incometaxexaminationsinmostmajortaxingjurisdictionsforyearsbefore2013.

Werecognizebothaccruedinterestandpenaltiesrelatedtounrecognizedtaxbenefitsinincometaxexpense(benefit).Werecognizedincometaxexpense(benefit)relatedtointerestandpenaltiesasfollows:

AtDecember31,2018and2017,ouraccrualsforthepaymentofinterestandpenaltiestotaled$13.3millionand$15.7million,respectively.

Note 15. Contingencies

Wearepartytovariouslegalactionsinthenormalcourseofbusiness.Indeterminingwhetherapendingmatterissignificantforfinancialreportinganddisclosurepurposes,weconsiderbothquantitativeandqualitativefactorsinordertoassessmateriality.Weaccrueforcertainliabilityclaimstotheextentwecanformulateareasonableestimateoftheircostsandthereisareasonableprobabilityofincurringsignificantcostsorexpenses.AtDecember31,2018andDecember31,2017,wehadnoliabilitiesestablishedrelatedtolitigationastherewerenosignificantclaimswhichwereprobableandestimable.Wehavenothistoricallyhadanysignificantlitigationexpenseandarenotcurrentlysubjecttoasignificantclaim.

Note 16. Geographic Information

Weoperateasasingleoperatingsegmentengagedinthedevelopment,manufacturing,marketingandsalesofanimalhealthproductsworldwideforbothfoodanimalsandcompanionanimals.Consistentwithouroperationalstructure,ourPresidentandChiefExecutiveOfficer(CEO),asthechiefoperatingdecisionmaker,makesresourceallocationandbusinessprocessdecisionsgloballyacrossourconsolidatedbusiness.Strategicdecisionsaremanagedgloballywithglobalfunctionalleadersresponsiblefordeterminingsignificantcosts/investmentsandwithregionalleadersresponsibleforoverseeingtheexecutionoftheglobalstrategy.Ourglobalresearchanddevelopmentorganizationisresponsiblefordevelopmentofnewproducts.Ourmanufacturingorganizationisresponsibleforthemanufacturingandsupplyofproductsandfortheoptimizationofoursupplychain.Regionalleadersareresponsibleforthedistributionandsaleofourproductsandforlocaldirectcosts.Thebusinessisalsosupportedbyglobalcorporatestafffunctions.ManagingandallocatingresourcesattheglobalcorporatelevelenablesourCEOtoassesstheoveralllevelofresourcesavailableandhowtobestdeploytheseresourcesacrossfunctions,producttypes,regionalcommercialorganizationsandresearchanddevelopmentprojectsinlinewithouroverarchinglong-termcorporate-widestrategicgoals,ratherthanonaproductorgeographicbasis.Consistentwiththisdecision-makingprocess,ourCEOusesconsolidated,single-segmentfinancialinformationforpurposesofevaluatingperformance,allocatingresources,settingincentivecompensationtargets,aswellasforecastingfutureperiodfinancialresults.

2018 2017 2016 Incometaxexpense(benefit) $ (2.5) $ 2.5 $ 5.5

TableofContents

Note 16. Geographic Information (Continued)

OurproductsincludeRumensin®,Optaflexx®,Denagard®,Tylan®,Maxiban®andotherproductsforlivestockandpoultry,aswellasTrifexis®,Interceptor®,Comfortis®andotherproductsforcompanionanimals.OurresultsfortheyearendedDecember31,2017includestheresultsofoperationsfromBIVIVP,whichwasacquiredonJanuary3,2017(Note6).

Wehaveasinglecustomerthataccountedfor11.9%,12.9%and11.7%ofrevenuefortheyearsendedDecember31,2018,2017and2016,respectively,andthatrepresentedaccountsreceivableof$96.4millionand$88.0millionasofDecember31,2018and2017,respectively.

Weareexposedtotheriskofchangesinsocial,politicalandeconomicconditionsinherentinforeignoperationsandourresultsofoperationsandthevalueofourforeignassetsareaffectedbyfluctuationsinforeigncurrencyexchangerates.

Selectedgeographicareainformationwasasfollows:

Note 17. Retirement Benefits

Shared Lilly Plans

OuremployeesparticipatedindefinedbenefitpensionandotherpostretirementplanssponsoredbyLilly,whichincludeparticipantsofLilly'sotherbusiness.Suchplansareaccountedforasmultiemployerplansinthesecombinedfinancialstatementsandasaresult,noassetorliabilitywasrecordedbytheCompanytorecognizethefundedstatusoftheseplans.

Werecordedexpenseof$4.0million,$73.7millionand$11.3millionfortheyearsendedDecember31,2018,2017and2016,respectively,relatingtoouremployees'participationinLillysponsoredplans.Theexpenseincluded$67.0millionrelatedtoacurtailmentlossandspecialterminationbenefitsforearlyretirementincentivesofferedbyLillytoouremployeesaspartofavoluntaryearlyretirementprogramfortheU.S.planandwhichhasbeenrecordedinassetimpairment,

2018 2017 2016 Geographic Information Revenue—tounaffiliatedcustomers(1): UnitedStates $ 1,483.2 $ 1,373.0 $ 1,361.6International 1,583.6 1,516.0 1,551.9

Revenue $ 3,066.8 $ 2,889.0 $ 2,913.5Long-livedassets(2): UnitedStates $ 602.6 $ 604.7 $ 463.8UnitedKingdom 187.5 204.4 190.6Otherforeigncountries 195.8 190.2 173.0

Long-livedassets $ 985.9 $ 999.3 $ 827.4

(1) Revenueisattributedtothecountriesbasedonthelocationofthecustomer.

(2) Long-livedassetsconsistofpropertyandequipment,net,andcertainnoncurrentassets.

TableofContents

Note 17. Retirement Benefits (Continued)

restructuringandotherspecialcharges.Nocontributionshavebeenrecognizedinthecombinedfinancialstatementsaswearenotrequiredtomakecontributionstotheseplans.

Pension Plans

TherearealsocertaindefinedbenefitpensionplansthatouremployeesparticipateinthatareeitherdedicatedtoouremployeesorwheretheplanassetsandliabilitiesthatrelatetoouremployeeswerelegallyrequiredtotransfertoElancoatthetimeofourseparationfromLilly.TheplansinSwitzerlandrepresentapproximately84percentofourglobalbenefitobligation.WeuseameasurementdateofDecember31todevelopthechangeinbenefitobligation,changeinplanassets,fundedstatusandamountsrecognizedinthecombinedbalancesheetsatDecember31forourdefinedbenefitpensionplans,whichwereasfollows:

2018 2017 Changeinbenefitobligation: Benefitobligationatbeginningofyear $ 258.6 $ 225.0Servicecost 11.3 10.5Interestcost 2.5 1.8Actuarial(gain)loss (44.7) 24.4Benefitspaid (2.7) (18.5)Foreigncurrencyexchangeratechangesandotheradjustments 9.8 15.4Benefitobligationatendofyear 234.8 258.6

Changeinplanassets: Fairvalueofplanassetsatbeginningofyear 131.5 123.7Actualreturnonplanassets (10.2) 13.3Employercontribution 5.7 3.9Benefitspaid (2.7) (18.5)Foreigncurrencyexchangeratechangesandotheradjustments 7.3 9.1Fairvalueofplanassetsatendofyear 131.6 131.5

Fundedstatus (103.2) (127.1)Unrecognizednetactuarialloss 0.5 29.1Unrecognizedpriorservicecost 0.8 0.7Netamountrecognized $ (101.9) $ (97.3)Amountsrecognizedinthecombinedbalancesheetconsistedof: Noncurrentassets $ 2.3 $ 2.4Othercurrentliabilities (0.3) (0.3)Accruedretirementbenefits (105.2) (129.2)Accumulatedothercomprehensivelossbeforeincometaxes 1.3 29.8Netamountrecognized $ (101.9) $ (97.3)

TableofContents

TheunrecognizednetactuariallossandunrecognizedpriorservicecostforthesepensionplanshavenotyetbeenrecognizedinnetperiodicpensioncostsandareincludedinaccumulatedothercomprehensivelossatDecember31,2018.

During2019,weexpectthefollowingcomponentsofaccumulatedothercomprehensivelosstoberecognizedascomponentsofnetperiodicbenefitcost:

Wedonotexpectanyplanassetstobereturnedtousin2019.

Thefollowingrepresentsourweighted-averageassumptionsrelatedtothesepensionplansasofDecember31:

Weannuallyevaluatetheexpectedreturnontheplanassetsinthesepensionplans.Inevaluatingtheexpectedrateofreturn,weconsidermanyfactors,withaprimaryanalysisofcurrentandprojectedmarketconditions;assetreturnsandassetallocations;andtheviewsofleadingfinancialadvisersandeconomists.Wemayalsoreviewourhistoricalassumptionscomparedwithactualresults,aswellastheassumptionsandtrendratesutilizedbysimilarplans,whereapplicable.

Thefollowingbenefitpayments,whichreflectexpectedfutureservice,asappropriate,areexpectedtobepaidasfollows:

AmountsrelatingtothesepensionplanswithprojectedbenefitobligationsinexcessofplanassetswereasfollowsatDecember31:

Unrecognizednetactuarialloss $ 0.5Unrecognizedpriorservicecost 0.8Total $ 1.3

(Percents) 2018 2017 2016 Discountrateforbenefitobligation 1.5% 1.1% 1.0%Discountratefornetbenefitcosts 1.1 1.0 1.0Rateofcompensationincreaseforbenefitobligation 2.2 2.1 3.1Rateofcompensationincreasefornetbenefitcosts 2.1 3.1 3.0Expectedreturnonplanassetsfornetbenefitcosts 4.0 4.4 4.9

2019 2020 2021 2022 2023 2024 - 2028 Benefitpayments $ 5.8 $ 6.4 $ 7.1 $ 6.1 $ 6.3 $ 35.9

2018 2017 Projectedbenefitobligation $ 229.2 $ 251.6Fairvalueofplanassets 124.1 121.8

TableofContents

AmountsrelatingtothesedefinedbenefitpensionplanswithaccumulatedbenefitobligationsinexcessofplanassetswereasfollowsatDecember31:

Thetotalaccumulatedbenefitobligationforthesedefinedbenefitpensionplanswas$199.9millionand$230.3millionatDecember31,2018and2017,respectively.

Netpensionexpenserelatedtotheseplansincludedthefollowingcomponents:

Thefollowingrepresentstheamountsrecognizedfortheseplansinothercomprehensiveloss:

Benefit Plan Investments

Ourbenefitplaninvestmentpoliciesaresetwithspecificconsiderationofreturnandriskrequirementsinrelationshiptotherespectiveliabilities.OurplanassetsinourSwitzerlandpensionplansrepresentapproximately87percentofourplanassetsforthesepensionplans.Giventhelong-termnatureofourliabilities,theseplanshavetheflexibilitytomanageanabove-averagedegreeofriskintheassetportfolios.Attheinvestment-policylevel,therearenospecificallyprohibitedinvestments.However,withinindividualinvestmentmanagermandates,restrictionsandlimitationsarecontractuallysettoalignwithourinvestmentobjectives,ensureriskcontrolandlimitconcentrations.

Wemanageourportfoliotominimizeconcentrationofriskbyallocatingfundswithinassetcategories.Inaddition,withinacategoryweusedifferentmanagerswithvariousmanagementobjectivestoeliminateanysignificantconcentrationofrisk.

2018 2017 Accumulatedbenefitobligation $ 194.3 $ 223.1Fairvalueofplanassets 124.1 121.8

2018 2017 2016 Servicecost $ 11.3 $ 10.5 $ 9.3Interestcost 2.5 1.8 1.8Expectedreturnonplanassets (6.2) (2.4) (3.4)Amortizationofpriorservicecost 0.2 0.1 0.1Amortizationofnetactuarialloss 1.9 1.4 1.0Other 0.5 — —Netpensionexpense $ 10.2 $ 11.4 $ 8.8

2018 2017 2016 Actuarialgain(loss)arisingduringperiod $ 28.3 $ (17.0) $ (6.1)Amortizationofpriorservicecostincludedinnetloss 0.2 0.1 0.1Amortizationofnetactuariallossincludedinnetloss 1.9 1.4 1.0Foreigncurrencyexchangeratechangesandother (1.9) 3.5 3.0Totalothercomprehensiveincome(loss)duringperiod $ 28.5 $ (12.0) $ (2.0)

TableofContents

Theinvestmentstrategyistodiversifyinfourmajorcategorieswithadesignatedpercentageinvestedineachincluding24%fixedincomesecurities,48%equitysecurities,ashareof11%inRealEstateSwitzerlandand17%inotheralternativeinvestments(seniorloans,hedgefundsandinsurance-linkedsecurities).Eachcategoryisdiversifiedandcomprisedofthefollowing:

• Fixed-incomesecurities—SwissBonds,GlobalAggregates,GlobalAggregateCorporatesandEmergingMarketsLocalCurrencies.

• Equityinvestments—SwissEquities,WorldEquitiesMSCI,LowVolatilityEquities(toreducerisk),EmergingMarketsEquitiesandrealestateinvestmenttrusts.

• RealEstateinSwitzerland—investmentfoundationsandfunds

• Otherinvestments—representsprimarilyprivateequitylikeinvestments,hedgefunds,insurance-linkedsecurities,cashandmark-to-marketderivatives.

Wedeterminethefairvalueoftheinvestmentsbasedonamarketapproachusingquotedmarketvalues,significantotherobservableinputsforidenticalorcomparableassetsorliabilities,ordiscountedcashflowanalysisforallinvestmentsexcepthedgefunds,privateequity-likeinvestmentsandrealestate.

Wedeterminethefairvalueofinvestmentsusingthevaluereportedbythepartnership,adjustedforknowncashflowsandsignificanteventsthroughourreportingdate.Valuesprovidedbythepartnershipsareprimarilybasedonanalysisofandjudgmentsabouttheunderlyinginvestments.InputstothesevaluationsincludeunderlyingNAVs,discountedcashflowvaluations,comparablemarketvaluations,andmayalsoincludeadjustmentsforcurrency,credit,liquidityandotherrisksasapplicable.Thevastmajorityoftheseprivatepartnershipsprovideuswithannualfinancialstatementsincludingtheircompliancewithfairvaluationproceduresconsistentwithapplicableaccountingstandards.

WedeterminethefairvalueofrealestateinvestmentsbasedontheNAVprovidedbythefundmanager.TheseNAVsaredevelopedwithinputsincludingdiscountedcashflow,independentappraisalandmarketcomparableanalyses.

TableofContents

ThefairvaluesofthesepensionplanassetsasofDecember31,2018byassetcategoryareasfollows:

NomaterialtransfersbetweenLevel1,Level2,orLevel3occurredduringtheyearendedDecember31,2018.TheactivityintheLevel3investmentsduringtheyearendedDecember31,2018wasnotmaterial.

Asset Class Total

Quoted Prices in Active

Markets for Identical Assets

(Level 1)

Significant Observable

Inputs (Level 2)

Inputs (Level 3)

Investments Valued at Net Asset Value(1)

Publicequitysecurities $ 2.2 $ 1.0 $ — $ — $ 1.2Fixedincome: Developedmarkets 29.9 7.8 0.1 — 22.0Emergingmarkets 6.4 0.7 0.4 — 5.3

Privatealternativeinvestments: — Hedgefunds 6.6 — — — 6.6Equity-likefunds 49.0 — — — 49.0

Realestate 20.1 0.1 — — 20.0Other 17.4 0.3 2.3 — 14.8Total $ 131.6 $ 9.9 $ 2.8 $ — $ 118.9

(1) CertaininvestmentsthataremeasuredatfairvalueusingtheNAVpershare(oritsequivalent)asapracticalexpedienthavenotbeenclassifiedinthefairvaluehierarchy.

TableofContents

ThefairvaluesofthesepensionplanassetsasofDecember31,2017byassetcategoryareasfollows:

NomaterialtransfersbetweenLevel1,Level2,orLevel3occurredduringtheyearendedDecember31,2017.TheactivityintheLevel3investmentsduringtheyearendedDecember31,2017wasnotmaterial.

Nocontributionstothesepensionplansareexpectedin2019.

Retiree Health Benefit Plan

TherearetworetireehealthbenefitplanwheretheplanliabilitiesthatrelatetoouremployeeswerelegallyrequiredtotransfertoElancoatthetimeofseparationfromLilly.Theaccruedretirementbenefitsfortheseplanswere$3.9millionand$9.8millionasofDecember31,2018and2017,respectively.

Defined Contribution Plans

Lillyhasdefinedcontributionsavingsplansthatincludecertainofouremployeesworldwide.Thepurposeoftheseplansisgenerallytoprovideadditionalfinancialsecurityduringretirementbyprovidingemployeeswithanincentivetosave.Ourcontributionstotheplansarebasedonouremployeecontributionsandthelevelofourmatch.Expensesrelatedtoouremployeesundertheplanstotaled$20.9million,$22.1millionand$19.6millionfortheyearsendedDecember31,2018,2017,and2016,respectively.

Asset Class Total

Quoted Prices in Active

Markets for Identical Assets

(Level 1)

Significant Observable

Inputs (Level 2)

Inputs (Level 3)

Investments Valued at Net Asset Value(1)

Publicequitysecurities $ 0.8 $ 0.6 $ — $ — $ 0.2Fixedincome: Developedmarkets 29.9 8.2 0.1 — 21.6Emergingmarkets 7.2 0.6 0.3 — 6.3

Privatealternativeinvestments: Hedgefunds 6.8 — — — 6.8Equity-likefunds 52.7 — — — 52.7

Realestate 20.2 — — — 20.2Other 13.9 0.1 0.1 13.7Total $ 131.5 $ 9.5 $ 0.5 $ — $ 121.5

(1) CertaininvestmentsthataremeasuredatfairvalueusingtheNAVpershare(oritsequivalent)asapracticalexpedienthavenotbeenclassifiedinthefairvaluehierarchy.

TableofContents

Note 18. Earnings Per Share

AsdiscussedinNote1,ElancoParentwasformedforthepurposeoffacilitatingtheIPO.LillyheldallsharesofElancoParentfromthetimeofformationuntiltheIPO.

PriortoIPO,therewereanaggregateof293,290,000sharesofourcommonstockheldbyLilly(whichrepresentsthe100sharesheldbyLillypriortogivingeffecttothe2,932,900-for-1stocksplitthatoccurredonSeptember19,2018).InconnectionwiththecompletionoftheIPO,anadditional72,335,000sharesofourcommonstockwereissued.

EarningspersharewascalculatedbasedontheweightedaveragesharesoutstandingduringeachperiodbasedontheassumptionthatthesharesheldbyLillywereoutstandingforallperiodspriortoIPO.

Note 19. Related Party Agreements and Transactions

Transactions with Lilly Subsequent to Separation and Related to the Separation

AsdescribedinNote1,inconnectionwiththeSeparation,Lillytransferredtoussubstantiallyallofitsanimalhealthbusinessesinexchangeforapproximately$4.2billion.ThisisreflectedasconsiderationtoLillyinourconsolidatedandcombinedstatementofequity.ThetermsofourseparationarecoveredbyamasterservicesagreemententeredwithLilly(MSA).UnderthetermsoftheMSA,throughaseriesoftransactions,LillytransferredtousthebusinessesthatwillcontinueaspartofElanco.

Foracertainportionofouroperations,thelegaltransferofournetassetsdidnotoccurpriortotheSeparationduetocertainregulatoryrequirementsineachofthesecountries.UndertheMSAenteredintowithLilly,weareresponsibleforthebusinessactivitiesconductedbyLillyonourbehalfandaresubjecttotherisksandentitledtothebenefitsgeneratedbytheseoperationsandassets.Asaresult,therelatedassetsandliabilitiesandresultsofoperationshavebeenreportedinourconsolidatedandcombinedfinancialstatements.Thetotalnetassetsassociatedwiththesejurisdictionsare$95.6millionandtheannualprofitsareinsignificant.AsofDecember31,2018,wehave$202.7millionofrestrictedcashonourconsolidatedandcombinedbalancesheetalongwithanoffsettingPayabletoLilly,whichreflectsthecashthatwillbeusedtofundthepurchaseofthelocalcountryassetsfromLilly.

AtthetimeoftheIPO,weenteredintoanumberofagreementsrelatedtoongoingactivitiesbetweenElancoandLillyincludingthefollowing:

• TransitionalServicesAgreement.Historically,Lillyhasprovidedussignificantsharedservicesandresourcesrelatedtocorporatefunctionssuchasexecutiveoversight,treasury,legal,finance,humanresources,tax,internalaudit,financialreporting,informationtechnologyandinvestorrelations,whichwerefertocollectivelyasthe"LillyServices."UnderthetermsoftheTSA,wewillbeabletouseLillyServicesforafixedtermestablishedonaservice-by-servicebasis.WewillpayLillymutuallyagreed-uponfeesfortheLillyServicesprovidedundertheTSA,whichwillbebasedonLilly'scost(includingthird-partycosts)ofprovidingtheLillyServicesthroughMarch31,2021,andsubjecttoamark-upof7%thereafter,withadditionalinflation-basedescalationbeginningJanuary1,2020.ThefeesundertheTSAbecomepayableforallperiodsbeginningafterOctober1,2018.

TableofContents

Note 19. Related Party Agreements and Transactions (Continued)

• IntellectualPropertyandTechnologyLicenseAgreement.WeenteredintoanintellectualpropertyandtechnologylicenseagreementwithLillyimmediatelypriortothecompletionoftheIPO.Undertheintellectualpropertyandtechnologylicenseagreement,LillygrantedElancoanexclusive,perpetuallicensetoexploitproductsintheanimalhealthfieldthatutilizeorusecertainofLilly'sintellectualproperty(excludingtrademarks).Inaddition,LillygrantedElanconon-exclusive,non-sublicensablelicensetoscreencertaincompoundsinLilly'scompoundlibrariestoexploitproductsintheanimalusecertainofLilly'sintellectualproperty.Thisscreeninglicensehasaninitialtermoftwoyears,subjecttothreeone-yearextensions,eachofwhichrequiresLilly'sconsent.

Wealsoenteredintoataxmattersagreement(TMA),anemployeemattersagreement,atollmanufacturingandsupplyagreementandaregistrationrightsagreementwithLillyinconnectionwiththeSeparation.

Ourconsolidatedandcombinedfinancialstatementofoperationsincludesrevenueof$7.0millionrelatedtoatollmanufacturingarrangementand$28millionrelatedtoTSAcharges.

AtDecember31,2018,wehaveapayabletoLillyof$66.0millionreflectedinPayabletoLillyonourconsolidatedandcombinedbalancesheetrelatedtoongoingtransactionswithLillyincludingthosetransactionsdescribedaboveandthereimbursementofcertaincostsLillyincurredonourbehalfduringtheperiod.

Transactions with Lilly Prior to Separation

PriortoIPO,wedidnotoperateasastandalonebusinessandhadvariousrelationshipswithLillywherebyLillyprovidedservicestous.Theimpactonourhistoricalcombinedfinancialstatementsincludesthefollowing:

Transfers to/from Lilly, net

Asdiscussedinthebasisofpresentation,netparentcompanyinvestmentisprimarilyimpactedbycontributionsfromLilly,whicharetheresultoftreasuryactivityandnetfundingprovidedbyordistributedtoLilly.FortheyearsendedDecember31,2018,2017and2016,thenettransfers(to)/fromLillywere$(226.3)million,$873.3millionand($129.2)million,respectively.Themostsignificantactivityimpactingthe2017transferwasthefinancingbyLillyofouracquisitionintheamountof$882.1millionforBoehringerIngelheimVetmedica,Inc.'sUnitedStatesfeline,canine,andrabiesvaccineportfolioandotherrelatedassetsin2017.Otheractivitiesthatimpactedthenettransfers(to)/fromLillyincludecorporateoverheadandotherallocations,incometaxes,retirementbenefits,andcentralizedcashmanagement.

Corporate Overhead and Other Allocations

Lillyprovidesuscertainservices,includingexecutiveoversight,treasury,legal,finance,humanresources,tax,internalaudit,financialreporting,informationtechnologyandinvestorrelations.WeprovideLillycertainservicesrelatedtomanufacturingsupport.OurfinancialstatementsreflectanallocationofthesecostspriortoIPO.Whenspecificidentificationisnotpracticable,theremainderhavebeenallocatedprimarilyonaproportionalcostmethodonabasisofrevenueorheadcount.

TableofContents

TheallocationsofservicesfromLilly,priortoIPO,touswerereflectedasfollowsinthecombinedstatementsofoperations:

WeprovideLillycertainservicesrelatedtomanufacturingsupport.AllocationsofmanufacturingsupportfromustoLilly$3.7million,$6.2millionand$5.5millionforthefortheyearsendedDecember31,2018,2017and2016,respectively,reducedthecostofsalesintheconsolidatedandcombinedstatementsofoperations.

Thefinancialinformationhereinmaynotnecessarilyreflectourconsolidatedfinancialposition,resultsofoperationsandcashflowsinthefutureorwhattheywouldhavebeenifwehadbeenaseparate,standaloneentityduringtheperiodspresented.Managementbelievesthatthemethodsusedtoallocateexpensesarereasonable.

Stock-based Compensation

AsdiscussedinNote13,ouremployeesparticipateinLillystock-basedcompensationplans,thecostsofwhichhavebeenallocatedtousandrecordedincostofsales,researchanddevelopment,andmarketing,sellingandadministrativeexpensesintheconsolidatedandcombinedstatementsofoperations.Thecostsofsuchplansrelatedtoouremployeeswere$26.0million,$25.0millionand$20.4millionfortheyearendedDecember31,2018,2017and2016,respectively.

Retirement Benefits

AsdiscussedinNote17,ouremployeesparticipateindefinedbenefitpensionandotherpostretirementplanssponsoredbyLilly,thecostsandbenefitsofwhichhavebeenrecordedintheconsolidatedandcombinedstatementofoperationsincostofsales,researchanddevelopment,andmarketing,sellingandadministrativeexpenses.thecosts/(benefits)ofsuchplansrelatedtotheCompany'semployeeswere$(6.3)million,$73.7millionand$11.3millionfortheyearsendedDecember31,2018,2017and2016,respectively.

Centralized Cash Management

Lillyusesacentralizedapproachtocashmanagementandfinancingofoperations.UntilSeparation,themajorityofourbusinesswaspartytoLilly'scashpoolingarrangementstomaximizeLilly'savailabilityofcashforgeneraloperatingandinvestingpurposes.Underthesecashpoolingarrangements,cashbalancesweresweptregularlyfromouraccountspriortoIPO.Cashtransfersto

2018(1) 2017 2016 Costofsales $ 21.8 $ 31.8 $ 32.5Researchanddevelopment 2.2 2.8 2.3Marketing,sellingandadministrative 81.2 117.1 110.5Total $ 105.2 $ 151.7 $ 145.3

(1) ThroughSeptember30,2018

TableofContents

andfromLilly'scashconcentrationaccountsandtheresultingbalancesattheendofeachreportingperiodwerereflectedinnetparentcompanyinvestmentinthecombinedbalancesheets.

PriortoIPO,Lilly'sthird-partydebtandtherelatedinterestexpensewerenotallocatedtousforanyoftheperiodspresentedinthecombinedstatementofoperationsandbalancesheetsaswewerenotthelegalobligorofthedebtandLillyborrowingswerenotdirectlyattributabletoourbusiness.

Other Related Party Transactions

Wesellcertainproductstoandreceivecertaingoodsandservicesfromacustomer/vendor,whosechairmanandChiefExecutiveOfficerisamemberofLilly'sBoardofDirectors.Theseproductsalesresultedinrevenueof$23.5million,$24.8millionand$14.3millionfortheyearsendedDecember31,2018,2017and2016,respectively.Theproductsalesresultedinaccountsreceivableof$2.5millionand$2.0millionatDecember31,2018and2017,respectively.Thepurchaseofgoodsandservicesresultedincostofsalesandoperatingexpensesof$3.9million,$5.9millionand$7.1millionfortheyearsendedDecember31,2018,2017and2016,respectively.Thepurchaseofgoodsandservicesresultedinaccountspayableof$0.7millionand$0.4millionatDecember31,2018and2017,respectively.

Note 20. Selected Quarterly Data (unaudited)

2018 Fourth Third Second First Revenue $ 799.3 $ 761.1 $ 770.2 $ 736.2Costofsales 412.5 369.8 431.5 360.0Operatingexpenses(1) 246.2 237.9 252.5 245.2AssetImpairment,restructuring,andotherspecialcharges 46.0 12.4 68.0 2.4Interestexpense,netofcapitalizedinterest 21.0 8.6 — —Income(loss)beforeincometaxes (2.2) 78.8 (40.0) 77.5Incometaxes (18.6) 18.6 22.8 4.8Netincome(loss) 16.4 60.2 (62.8) 72.7Earnings(loss)pershare—basicanddiluted 0.04 0.20 (0.21) 0.25

TableofContents

Note 20. Selected Quarterly Data (unaudited) (Continued)

2017 Fourth Third Second First Revenue $ 754.3 $ 697.1 $ 732.8 $ 704.8Costofsales 405.0 376.2 374.0 338.6Operatingexpenses(1) 258.8 256.6 257.8 258.3AssetImpairment,restructuring,andotherspecialcharges 185.8 23.7 58.8 106.8Interestexpense,netofcapitalizedinterest — — — —Income(loss)beforeincometaxes (155.4) (9.1) (15.2) (52.9)Incometaxes 6.1 11.6 15.0 45.4Netincome(loss) (161.5) (20.7) (30.2) (98.3)Earnings(loss)pershare—basicanddiluted (0.55) (0.07) (0.10) (0.34)

(1) Includesresearchanddevelopmentandmarketing,selling,andadministrativeexpenses.

TableofContents

Unaudited Condensed Consolidated and Combined Statements of Operations

(Dollars and shares in millions, except per-share data)

Seenotestounauditedcondensedconsolidatedandcombinedfinancialstatements.

Three Months Ended

March 31, 2019 2018 Revenue $ 731.1 $ 736.2Costs,expensesandother: Costofsales 343.8 360.0Researchanddevelopment 64.1 65.2Marketing,sellingandadministrative 181.1 180.0Amortizationofintangibleassets 49.0 49.2Assetimpairments,restructuringandotherspecialcharges(Note6) 24.9 2.4Interestexpense,netofcapitalizedinterest 20.8 —Other—net,expense 2.6 1.9

686.3 658.7Incomebeforeincometaxes 44.8 77.5Incometaxexpense 13.3 4.8

Netincome $ 31.5 $ 72.7Earningspershare: Basic $ 0.09 $ 0.25Diluted $ 0.09 $ 0.25

Weightedaveragesharesoutstanding: Basic 365.7 293.3Diluted 366.0 293.3

TableofContents

Unaudited Condensed Consolidated and Combined Statements of Comprehensive Income

(Dollars in millions)

Three Months Ended

March 31, 2019 2018 Netincome $ 31.5 $ 72.7Othercomprehensiveincome(loss): Foreigncurrencytranslation (30.2) 119.2Definedbenefitpensionandretireehealthbenefitplans,netoftaxes 2.0 (0.6)

Othercomprehensiveincome(loss),netoftax (28.2) 118.6Comprehensiveincome $ 3.3 $ 191.3

TableofContents

Unaudited Condensed Consolidated Balance Sheets

March 31,

2019 December 31,

2018 (Unaudited) Assets Current Assets Cashandcashequivalents $ 272.1 $ 474.8Accountsreceivable,netofallowancesof$8.3(2019)and$8.4(2018) 684.1 651.8Otherreceivables 107.8 57.6Inventories(Note7) 1,035.5 1,004.1Prepaidexpensesandother 114.8 113.9ReceivablefromLilly(Note15) 35.5 —Restrictedcash(Note15) 28.5 202.7

Totalcurrentassets 2,278.3 2,504.9Noncurrent Assets Goodwill 2,933.1 2,958.0Otherintangibles,net 2,386.5 2,453.0Othernoncurrentassets 219.3 118.4Propertyandequipment,netofaccumulateddepreciation$909.3(2019)and$878.6(2018) 930.2 922.4

Totalassets $ 8,747.4 $ 8,956.7Liabilities and Equity Current Liabilities Accountspayable $ 252.1 $ 205.2Employeecompensation 64.2 98.9Salesrebatesanddiscounts 171.7 169.9Currentportionoflong-termdebt(Note8) 29.0 29.0Othercurrentliabilities 191.2 199.0PayabletoLilly(Note15) — 268.7

Totalcurrentliabilities 708.2 970.7Noncurrent Liabilities Long-termdebt(Note8) 2,436.6 2,443.3Accruedretirementbenefits 106.2 109.1Deferredtaxes(Note11) 131.8 114.6Othernoncurrentliabilities 168.4 121.5

Totalliabilities 3,551.2 3,759.2Commitments and Contingencies (Note 12) — —Equity Commonstock,noparvalue,5,000,000,000sharesauthorized,365,702,757and365,643,911sharesissuedandoutstandingasofMarch31,2019andDecember31,2018,respectively — —

Additionalpaid-incapital 5,398.7 5,403.3Retainedearnings 47.9 16.4Accumulatedothercomprehensiveloss (250.4) (222.2)

Totalequity 5,196.2 5,197.5Totalliabilitiesandequity $ 8,747.4 $ 8,956.7

TableofContents

Unaudited Condensed Consolidated and Combined Statements of Equity

(Dollars and shares in millions)

Accumulated Other Comprehensive

Income (Loss)

Common Stock

Defined Benefit Pension and

Retiree Health Benefit Plans

Additional Paid-in Capital

Net Parent Company Investment

Retained Earnings

Foreign Currency

Translation

Total Equity

Shares Amount Total December31,2017 293.3 $ — $ — $ 8,036.9 $ — $ (227.2) $ (29.4) $ (256.6) $ 7,780.3AdoptionofAccountingStandardsUpdate2016-16 — — — (0.3) — — — — (0.3)Netincome — — — 72.7 — — — — 72.7Othercomprehensiveincome(loss),netoftax — — — — — 119.2 (0.6) 118.6 118.6Transfers(to)/fromLilly,net — — — (69.2) — — — — (69.2)

March31,2018 293.3 $ — $ — $ 8,040.1 $ — $ (108.0) $ (30.0) $ (138.0) $ 7,902.1December31,2018 365.6 $ — $ 5,403.3 $ — $ 16.4 $ (218.2) $ (4.0) $ (222.2) $ 5,197.5Netincome — — — — 31.5 — — — 31.5Othercomprehensiveincome(loss),netoftax — — — — — (30.2) 2.0 (28.2) (28.2)Netcapitalcontributionsfrom/(distributionsto)Lilly(1) — — (7.0) — — — — — (7.0)Stockcompensation — — 2.4 — — — — — 2.4Issuanceofstockunderemployeestockplans,net 0.1 — — — — — — — —

March31,2019 365.7 $ — $ 5,398.7 $ — $ 47.9 $ (248.4) $ (2.0) $ (250.4) $ 5,196.2

(1) SeeNote15:RelatedPartyAgreementsandTransactionsforfurtherdiscussion.

TableofContents

Unaudited Condensed Consolidated and Combined Statements of Cash Flows

Three Months

Ended March 31, 2019 2018 Cash Flows from Operating Activities Netincome $ 31.5 $ 72.7

AdjustmentstoReconcileNetIncometoCashFlowsfromOperatingActivities: Depreciationandamortization 83.1 74.3Changeindeferredincometaxes 16.3 (2.4)Stock-basedcompensationexpense 7.7 6.9Assetimpairmentcharges 4.0 —Otherchangesinoperatingassetsandliabilities (127.6) (105.9)Othernon-cashoperatingactivities,net (9.4) 1.4

Net Cash Provided by Operating Activities 5.6 47.0Cash Flows from Investing Activities

Netpurchasesofpropertyandequipment (28.0) (32.7)Otherinvestingactivities,net (0.5) (1.7)

Net Cash Used for Investing Activities (28.5) (34.4)Cash Flows from Financing Activities

Repaymentsofborrowings(Note8) (7.5) —ConsiderationpaidtoLillyinconnectionwiththeSeparation(Note1) (175.1) —OthernetfinancingtransactionswithLilly (156.4) (76.1)Otherfinancingactivities,net (0.5) (0.4)

Net Cash Used for Financing Activities (339.5) (76.5)Effectofexchangeratechangesoncashandcashequivalents (14.5) 3.9Netdecreaseincash,cashequivalentsandrestrictedcash (376.9) (60.0)Cash,cashequivalentsandrestrictedcashatJanuary1 677.5 323.4Cash, cash equivalents and restricted cash at March 31 $ 300.6 $ 263.4

March 31, 2019 2018 Cashandcashequivalents $ 272.1 $ 263.4Restrictedcash(Note15) 28.5 —Cash, cash equivalents and restricted cash at March 31 $ 300.6 $ 263.4

TableofContents

Notes to Unaudited Condensed Consolidated and Combined Financial Statements

Note 1. Nature of Business and Organization

Nature of Business

ElancoAnimalHealthIncorporated(ElancoParent)anditssubsidiaries(collectively,Elanco,theCompany,we,usorour)wasformedasawholly-ownedsubsidiaryofEliLillyandCompany(Lilly).Elancoisaglobalanimalhealthcompanythatinnovates,develops,manufacturesandmarketsproductsforcompanionandfoodanimals.Weofferadiverseportfolioofmorethan125brandstoveterinariansandfoodanimalproducersinmorethan90countries.

Organization

ElancoParentwasformedin2018,asawholly-ownedsubsidiaryofLilly,toserveastheultimateparentcompanyofsubstantiallyalloftheanimalhealthbusinessesofLilly.

OnSeptember24,2018,ElancoParentcompletedaninitialpublicofferingresultingintheissuanceof72.3millionsharesofitscommonstock(includingsharesissuedpursuanttotheunderwriters'optiontopurchaseadditionalshares),whichrepresented19.8%oftheoutstandingshares,at$24pershare(IPO)foratotalnetproceeds,afterunderwritingdiscountsandcommissions,of$1.7billion.InconnectionwiththecompletionoftheIPO,throughaseriesofequityandothertransactions,LillytransferredtoElancoParenttheanimalhealthbusinessesthatformitsbusinessgoingforward.InexchangeElancoParenthaspaid,orwillpay,toLillyapproximately$4.2billion,whichincludesthenetproceedsfromtheIPO,thenetproceedsfromthedebtofferingcompletedbyElancoParentinAugust2018andthetermloanfacilityenteredintobyElancoParentinSeptember2018(seeNote8).ThesetransactionsarecollectivelyreferredtohereinastheSeparation.

OnFebruary8,2019,LillyannouncedanexchangeofferwherebyLillyshareholderscouldexchangealloraportionofLillycommonstockforsharesofElancocommonstockownedbyLilly.ThedispositionofElancoshareswascompletedonMarch11,2019andresultedinthefullseparationofElancoanddisposalofLilly'sentireownershipandvotinginterestinElanco.

Note 2. Basis of Presentation

WehavepreparedtheaccompanyingunauditedcondensedconsolidatedandcombinedfinancialstatementsinaccordancewiththerequirementsofForm10-Qand,therefore,theydonotincludeallinformationandfootnotesnecessaryforafairpresentationoffinancialposition,resultsofoperations,andcashflowsinconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStates(GAAP).Inouropinion,thefinancialstatementsreflectalladjustments(includingthosethatarenormalandrecurring)thatarenecessaryforafairpresentationoftheresultsofoperationsfortheperiodsshown.InpreparingfinancialstatementsinconformitywithGAAP,wemustmakeestimatesandassumptionsthataffectthereportedamountsofassets,liabilities,revenue,expenses,andrelateddisclosuresatthedateofthefinancialstatementsandduringthereportingperiod.Actualresultscoulddifferfromthoseestimates.

Certainreclassificationshavebeenmadetopriorperiodsintheunauditedcondensedconsolidatedandcombinedfinancialstatementsandaccompanyingnotestoconformwithcurrentpresentation.

TableofContents

Notes to Unaudited Condensed Consolidated and Combined Financial Statements (Continued)

TheinformationincludedinthisQuarterlyReportonForm10-QshouldbereadinconjunctionwithourcombinedfinancialstatementsandaccompanyingnotesfortheyearendedDecember31,2018includedinourAnnualReportonForm10-KfiledwiththeSEConFebruary20,2019.

FortheperiodsafterSeparation,thefinancialstatementsarepreparedonaconsolidatedbasisandreflecttheresultsofoperations,comprehensiveincome,financialposition,equityandcashflowsresultingfromouroperationsasanindependentcompany.ForperiodspriortotheSeparation,ourfinancialstatementsarecombined,havebeenpreparedonastandalonebasis,andarederivedfromLilly'sconsolidatedfinancialstatementsandaccountingrecords.Theconsolidatedandcombinedfinancialstatementsreflectthefinancialposition,resultsofoperationsandcashflowsrelatedtotheanimalhealthbusinessesthatweretransferredtoElancoParentandarepreparedinconformitywithGAAP.

ThecombinedfinancialstatementsincludetheattributionofcertainassetsandliabilitiesthathistoricallyhavebeenheldattheLillycorporatelevelbutwhicharespecificallyidentifiableorattributabletothebusinessesthathavebeentransferredtoElancoParent.AllintercompanytransactionsandaccountswithinElancohavebeeneliminated.AlltransactionsbetweenusandLillyareconsideredtobeeffectivelysettledinthecombinedfinancialstatementsatthetimetheintercompanytransactionisrecorded.Thetotalneteffectofthesettlementoftheseintercompanytransactionsisreflectedinthecombinedstatementsofcashflowsasafinancingactivityandinthecondensedconsolidatedandcombinedstatementofequityasnetparentcompanyinvestment.

PriortoSeparation,thesecombinedfinancialstatementsincludeanallocationofexpensesrelatedtocertainLillycorporatefunctions,includingexecutiveoversight,treasury,legal,finance,humanresources,tax,internalaudit,financialreporting,informationtechnologyandinvestorrelations,priortoIPO.Theseexpenseshavebeenallocatedtousbasedondirectusageorbenefitwherespecificallyidentifiable,withtheremainderallocatedprimarilyonaproratabasisofrevenue,headcountandothermeasures.Weconsidertheexpensesmethodologyandresultstobereasonableforallperiodspresented.However,theallocationsmaynotbeindicativeoftheactualexpensethatwouldhavebeenincurredhadweoperatedasanindependent,publiclytradedcompanyfortheperiodspresented.ItisimpracticaltoestimatewhatthestandalonecostsofElancowouldhavebeeninthehistoricalperiods.AftertheSeparation,aTransitionalServicesAgreement(TSA)betweenLillyandElancowentintoeffect.UnderthetermsoftheTSA,wewillbeabletousetheseLillyservicesforafixedtermestablishedonaservice-by-servicebasis.WearepayingLillymutuallyagreeduponfeesfortheLillyservicesprovidedundertheTSA.OurconsolidatedandcombinedfinancialstatementsreflectthechargesforLillyservicesaftertheIPO.SeeNote15foradditionaldetails.

Theincometaxamountsinthecombinedfinancialstatementshavebeencalculatedbasedonaseparatereturnmethodologyandpresentedasifouroperationswereseparatetaxpayersintherespectivejurisdictions.WefileincometaxreturnsintheUnitedStates(U.S.)federaljurisdictionandvariousstate,localandnon-U.S.jurisdictions.CertainoftheseincometaxreturnsarefiledonaconsolidatedorcombinedbasiswithEliLillyandCompanyand/oritssubsidiaries.

PriortoSeparation,Lillymaintainedvariousbenefitandcombinedstock-basedcompensationplansatacorporatelevelandotherbenefitplansatacountrylevel.Ouremployeesparticipatedinsuchprogramsandtheportionofthecostofthoseplansrelatedtoouremployeesisincludedinour

TableofContents

financialstatements.However,thecondensedbalancesheetsdonotincludeanyequityissuedrelatedtostock-basedcompensationplansoranynetbenefitplanobligationsunlessthebenefitplancoversonlyourdedicatedemployeesorwherethelegalobligationassociatedwiththebenefitplantransferredtoElanco.UponLilly'sfulldivestitureofElancoinMarch2019,allLillyshare-basedawardsheldbyouremployeeswereconvertedintoawardsthatwillbesettledinElancoshares.

PriortoSeparation,theequitybalanceinthecombinedfinancialstatementsrepresentstheexcessoftotalassetsoverliabilities,includingintercompanybalancesbetweenElancoandLilly(netparentcompanyinvestment)andaccumulatedothercomprehensiveincome/(loss).NetparentcompanyinvestmentisprimarilyimpactedbycontributionsfromLillywhicharetheresultoftreasuryactivitiesandnetfundingprovidedbyordistributedtoLilly.SeeNote15forfurtherinformation.

Note 3. Impact of Separation

InconnectionwiththeSeparation,weissued$2.0billionaggregateprincipalamountofseniornotesinaprivateplacement,andwealsoenteredintoa$750.0millionseniorunsecuredrevolvingcreditfacilityand$500.0millionseniorunsecuredtermcreditfacility.InconnectionwiththeSeparation,weenteredintovariousagreementswithLilly,includingamasterseparationagreement,ataxmattersagreementandatransitionalservicesagreement.

WewillcontinuetohavecertainongoingrelationshipswithLillyasdescribedinNote15.

TableofContents

Note 4. Implementation of New Financial Accounting Pronouncements

ThefollowingtableprovidesabriefdescriptionoftheaccountingstandardthatwaseffectiveJanuary1,2019andwasadoptedonthatdate:

or other significant mattersAccountingStandardsUpdate2016-02,Leases Thisstandardwasissuedtoincreasetransparencyandcomparability

amongorganizationsbyrecognizingleaseassetsandleaseliabilities,includingleasesclassifiedasoperatingleasesunderpreviousGAAP,onthebalancesheetandrequiringadditionaldisclosuresaboutleasingarrangements.

WeadoptedthestandardonJanuary1,2019usingthemodifiedretrospectiveapproach,appliedatthebeginningoftheperiodofadoption,andweelectedthepackageoftransitionpracticalexpedients.Uponadoptionofthestandard,werecorded$84.9millionofright-of-useassetsand$85.3millionofoperatingleaseliabilitiesonourconsolidatedbalancesheet.AdoptionofthisstandarddidnothaveamaterialimpactonourconsolidatedstatementofoperationsforthethreemonthsendedMarch31,2019.SeeNote10:Leasesforfurtherinformation.

TableofContents

Note 4. Implementation of New Financial Accounting Pronouncements (Continued)

Thefollowingtableprovidesabriefdescriptionoftheaccountingstandardsthathavenotyetbeenadoptedandcouldhaveamaterialeffectontheconsolidatedfinancialstatements:

Note 5. Revenue

Product Sales

Werecognizerevenueprimarilyfromproductsalestocustomers.Revenuefromsalesofproductsisrecognizedatthepointwherethecustomerobtainscontrolofthegoodsandwesatisfyourperformanceobligation,whichgenerallyisatthetimeweshiptheproducttothecustomer.Paymenttermsdifferbyjurisdictionandcustomer,butpaymenttermsinmostofourmajorjurisdictionstypicallyrangefrom30to100daysfromdateofshipment.Revenueforourproductsaleshasnotbeenadjustedfortheeffectsofafinancingcomponentasweexpect,atcontractinception,thattheperiodbetween

Standard Description Effective Date

Effect on the financial statements or

other significant mattersAccountingStandardsUpdate2016-13,Financial

Instruments—Credit Losses (Topic 326):Measurement of Credit Losses on FinancialInstruments

Thisstandardmodifiestheimpairmentmodelbyrequiringentitiestouseaforward-lookingapproachbasedonexpectedlossestoestimatecreditlossesoncertaintypesoffinancialinstruments,includingtradereceivables.Thismayresultintheearlierrecognitionofallowancesforlosses.

Wearecurrentlyevaluatingtheeffectofthisstandardonourfinancialstatements.

AccountingStandardsUpdate2018-15,Intangibles—Goodwill and Other Internal-Use Software(Subtopic 350-40): Customer's Accounting forImplementation Costs Incurred in a CloudComputing Arrangement that is a ServiceContract

Thisguidancealignstherequirementsforcapitalizingimplementationcostsincurredinacloud-basedhostingarrangementthatisaservicecontractwiththerequirementsforcapitalizingimplementationcostsincurredtodeveloporobtaininternal-usesoftware.

Wearecurrentlyevaluatingtheeffectofthisstandardonourfinancialstatements.

TableofContents

whenwetransfercontroloftheproductandwhenwereceivepaymentwillbeoneyearorless.Anyexceptionsareeithernotmaterialorwecollectinterestforpaymentsmadeaftertheduedate.Provisionsforrebatesanddiscounts,andreturnsareestablishedinthesameperiodtherelatedsalesarerecognized.Wegenerallyshipproductshortlyafterordersarereceived;therefore,wegenerallyonlyhaveafewdaysofordersreceivedbutnotyetshippedattheendofanyreportingperiod.Shippingandhandlingactivitiesareconsideredtobefulfillmentactivitiesandarenotconsideredtobeaseparateperformanceobligation.Weexcludefromthemeasurementofthetransactionpricealltaxesassessedbyagovernmentalauthoritythatareimposedonoursalesofproductandcollectedfromacustomer.

Significantjudgmentsmustbemadeindeterminingthetransactionpriceforsalesofproductsrelatedtoanticipatedrebatesanddiscounts,andreturns.Thefollowingdescribethemostsignificantofthesejudgments:

Sales Rebates and Discounts—Background and Uncertainties

• Mostofourproductsaresoldtowholesaledistributors.Weinitiallyinvoiceourcustomerscontractuallistprices.Contractswithdirectandindirectcustomersmayprovideforvariousrebatesanddiscountsthatmaydifferineachcontract.Asaconsequence,todeterminetheappropriatetransactionpriceforourproductsalesatthetimewerecognizeasaletoadirectcustomer,wemustestimateanyrebatesordiscountsthatultimatelywillbeduetothedirectcustomerandothercustomersinthedistributionchainunderthetermsofourcontracts.Judgmentsarerequiredinmakingtheseestimates.

• Therebateanddiscountamountsarerecordedasadeductiontoarriveatournetproductsales.Weestimatetheseaccrualsusinganexpectedvalueapproach.

• Indeterminingtheappropriateaccrualamount,weconsiderourhistoricalexperiencewithsimilarincentivesprogramsandcurrentsalesdatatoestimatetheimpactofsuchprogramsonrevenueandcontinuallymonitortheimpactofthisexperienceandadjustasnecessary.Althoughweaccruealiabilityforrebatesrelatedtotheseprogramsatthetimethesaleisrecorded,therebaterelatedtothatsaleistypicallypaiduptosixmonthsaftertherebateorincentiveperiodexpires.Becauseofthistimelag,inanyparticularperiodrebateadjustmentsmayincorporaterevisionsofaccrualsforseveralperiods.

OursalesrebatesanddiscountsarebasedonspecificagreementsandthemajorityrelatetosalesintheU.S.AsofMarch31,2019and2018,liabilityforsalesrebatesanddiscountsintheU.S.representsapproximately72%and69%,respectively,ofourtotalliabilitywiththenextlargestcountryrepresentingapproximately8%and5%,respectively,ofourtotalliability.

TableofContents

ThefollowingtablesummarizestheactivityinthesalesrebatesanddiscountsliabilityintheU.S.:

AdjustmentstorevenuerecognizedasaresultofchangesinestimatesforthejudgmentsdescribedaboveduringthethreemonthsendedMarch31,2019and2018forproductshippedinpreviousperiodswerenotmaterial.

Sales Returns—Background and Uncertainties

• Weestimateareserveforfutureproductreturnsrelatedtoproductsalesusinganexpectedvalueapproach.Thisestimateisbasedonseveralfactors,including:localreturnspoliciesandpractices;returnsasapercentageofrevenue;anunderstandingofthereasonsforpastreturns;estimatedshelflifebyproduct;andestimateoftheamountoftimebetweenshipmentandreturn.Adjustmentstothereturnsreservehavebeenandmayinthefutureberequiredbasedonrevisedestimatestoourassumptions,whichwouldhaveanimpactonourconsolidatedresultsofoperations.Werecordthereturnamountsasadeductiontoarriveatournetproductsales.

• Actualproductreturnswereapproximately0.3%and0.2%ofnetrevenueforthethreemonthsendedMarch31,2019and2018,respectively,andhavenotfluctuatedsignificantlyasapercentageofrevenue.

Disaggregation of Revenue

Thefollowingtablesummarizesourrevenuedisaggregatedbyproductcategory:

Three Months

Ended March 31, 2019 2018 Beginningbalance $ 118.5 $ 114.8Reductionofrevenue 65.7 44.5Payments (64.2) (68.2)

Endingbalance $ 120.0 $ 91.1

Three Months

Ended March 31, 2019 2018 CompanionAnimalDiseasePrevention $ 185.9 $ 201.3CompanionAnimalTherapeutics 81.4 62.3FoodAnimalFutureProtein&Health 167.2 166.7FoodAnimalRuminants&Swine 274.1 282.5StrategicExits(1) 22.5 23.4

Revenue $ 731.1 $ 736.2

(1) Representsrevenuefrombusinessactivitieswehaveeitherexitedormadeastrategicdecisiontoexit.

TableofContents

Note 6. Asset Impairment, Restructuring and Other Special Charges

Ourtotalchargesrelatedtoassetimpairment,restructuringandotherspecialcharges,includingintegrationofacquiredbusinesses,intheunauditedcondensedconsolidatedandcombinedstatementsofoperationsconsistedofthefollowing:

Restructuring

WehistoricallyparticipatedinLilly'scost-reductioninitiatives,whichresultedinrestructuringchargesintheperiodpriortoourIPO.Therestructuringcostsincludeseveranceandothercostsincurredasaresultofactionstakentoreduceourcoststructure.

Integration

Integrationandothercostsprimarilyrepresentcostsrelatedtoourintegrationeffortsasaresultofouracquiredbusinessesandcoststostandourorganizationuptobeanindependentcompany.

Facility exit costs

Facilityexitcostsprimarilyrepresentcontractterminationcostsandreservesforcostsrelatedtofacilitieswhichwehaveexited.

Asset impairment

AssetimpairmentrecognizedduringthethreemonthsendedMarch31,2019resultedfromtheadjustmenttofairvalueofintangibleassetsthatweresubjecttoproductrationalization.

Three Months

Ended March 31, 2019 2018 Cashexpense: Severanceandother $ 0.5 $ 0.1Integration 20.4 2.8Facilityexitcosts — (0.5)

Totalcashexpense 20.9 2.4Non-cashexpense: Assetimpairment 4.0 —

Totalnon-cashexpense 4.0 —Totalexpense $ 24.9 $ 2.4

TableofContents

Note 6. Asset Impairment, Restructuring and Other Special Charges (Continued)

Thefollowingtablesummarizestheactivityinourreservesestablishedinconnectionwiththeserestructuringactivities:

Substantiallyallofthereservesareexpectedtobepaidinthenexttwelvemonths.Webelievethatthereservesareadequate.

Note 7. Inventories

Westateallinventoriesatthelowerofcostornetrealizablevalue.Weusethelast-in,first-out(LIFO)methodforaportionofourinventorieslocatedinthecontinentalU.S.Otherinventoriesarevaluedbythefirst-in,first-out(FIFO)method.FIFOcostapproximatescurrentreplacementcost.

Inventoriesconsistedofthefollowing:

Facility exit

costs Severance Total BalanceatDecember31,2017 $ 34.9 $ 43.1 $ 78.0Charges — 0.1 0.1Reserveadjustments (0.2) — (0.2)Cashpaid (6.7) (13.6) (20.3)BalanceatMarch31,2018 $ 28.0 $ 29.6 $ 57.6BalanceatDecember31,2018 $ 9.3 $ 35.1 $ 44.4Charges — 0.5 0.5Cashpaid (0.3) (7.3) (7.6)BalanceatMarch31,2019 $ 9.0 $ 28.3 $ 37.3

March 31,

2019 December 31,

2018 Finishedproducts $ 415.5 $ 400.7Workinprocess 580.5 570.4Rawmaterialsandsupplies 83.7 80.4Total(approximatesreplacementcost) 1,079.7 1,051.5DecreasetoLIFOcost (44.2) (47.4)Inventories $ 1,035.5 $ 1,004.1

TableofContents

Note 8. Debt

Long-termdebtconsistedofthefollowing:

Note 9. Financial Instruments and Fair Value

Financialinstrumentsthatarepotentiallysubjecttocreditriskconsistprincipallyoftradereceivables.Collateralisgenerallynotrequired.Theriskassociatedwiththisconcentrationismitigatedbyourongoingcredit-reviewproceduresandinsurance.

Alargeportionofourcashisheldbyafewmajorfinancialinstitutions.Wemonitortheexposurewiththeseinstitutionsanddonotexpectanyoftheseinstitutionstofailtomeettheirobligations.Allhighlyliquidinvestmentswithamaturityofthreemonthsorlessfromthedateofpurchaseareconsideredtobecashequivalents.Thecostoftheseinvestmentsapproximatesfairvalue.Wealsoconsiderthecarryingvalueofrestrictedcashbalancestoberepresentativeofitsfairvalue.

AsofMarch31,2019andDecember31,2018,wehad$15.7millionand$15.3million,respectively,ofequitymethodinvestmentsincludedinothernoncurrentassetsinourcondensedconsolidatedbalancesheet.

March 31,

2019 December 31,

2018 Termcreditfacility $ 485.0 $ 492.53.912%SeniorNotesdue2021 500.0 500.04.272%SeniorNotesdue2023 750.0 750.04.900%SeniorNotesdue2028 750.0 750.0Otherobligations 0.3 0.5Unamortizeddebtissuancecosts (19.7) (20.7)Totaldebt 2,465.6 2,472.3Lesscurrentportionoflong-termdebt 29.0 29.0Totallong-termdebt $ 2,436.6 $ 2,443.3

TableofContents

ThefollowingtablesummarizesthefairvalueinformationatMarch31,2019andDecember31,2018forcontingentconsiderationliabilitiesandnetinvestmenthedgeliabilitymeasuredatfairvalueonarecurringbasisintherespectivebalancesheetlineitems:

WedetermineourLevel2fairvaluemeasurementsbasedonamarketapproachusingquotedmarketvalues,significantotherobservableinputsforidenticalorcomparableassetsorliabilities,ordiscountedcashflowanalysis.

ContingentconsiderationliabilitiesrelatetoGalliprantforwhichthefairvaluewasestimatedusingadiscountedcashflowanalysisandLevel3inputs,includingprojectionsrepresentativeofamarketparticipantviewfortheprobabilityofachievingpotentialfuturepaymentstoAratanaTherapeutics,Inc.andanestimateddiscountrate.Theamounttobepaidisdependentuponcertaindevelopment,success-basedregulatory,andsales-basedmilestones.Inaddition,theamountofroyaltiestobepaidiscalculatedasapercentageofnetsalesdependentuponthetimingandgeographyandwill,therefore,varydirectlywithincreasesanddecreasesinnetsalesofGalliprant.Thereisnocapontheamountthatmaybepaidpursuanttothisarrangement.

Wehavelongtermdebtof$2.5billionthatisrecordedatamortizedcostinourcondensedconsolidatedbalancesheetasofMarch31,2019andDecember31,2018.WeconsiderthecarryingvalueofthelongtermdebttoberepresentativeofitsfairvalueasofMarch31,2019andDecember31,2018.ThefairvalueofthislongtermdebtisestimatedbasedonquotedmarketpricesofsimilarliabilitiesandisclassifiedasLevel2.

Financial statement line item Carrying Amount

Quoted Prices in Active Markets for

Identical Assets (Level 1)

Significant Other Observable

Inputs (Level 2)

Inputs (Level 3)

Fair Value

March31,2019 Othercurrentliabilities—contingentconsideration $ (9.2) $ — $ — $ (9.2) $ (9.2)Othernoncurrentliabilities—contingentconsideration (67.7) — — (67.7) (67.7)Othernoncurrentassets/(liabilities)—crosscurrencyinterestratecontractsdesignatedasnetinvestmenthedges 8.0 — 8.0 — 8.0

December31,2018 Othercurrentliabilities—contingentconsideration $ (5.1) $ — $ — $ (5.1) $ (5.1)Othernoncurrentliabilities—contingentconsideration (69.0) — — (69.0) (69.0)Othernoncurrentassets/(liabilities)—crosscurrencyinterestratecontractsdesignatedasnetinvestmenthedges (7.4) — (7.4) — (7.4)

TableofContents

InOctober2018,weenteredintoacross-currencyfixedinterestrateswap,5-year,750millionSwissFranc(CHF),whichisdesignatedasanetinvestmenthedge(NIH)againstCHFdenominatedassetsforwhichthefairvaluewasestimatedbasedonquotedmarketvaluesofsimilarhedgesandisclassifiedasLevel2.TheNIHisexpectedtogenerateapproximately$25millionincashandanoffsettointerestexpenseonanannualbasis.DuringthethreemonthsendedMarch31,2019,ourinterestexpensewasoffsetby$6.1millionasaresultoftheNIH.Overthelifeofthederivative,gainsorlossesduetospotratefluctuationsarerecordedincumulativetranslationadjustment.DuringthethreemonthsendedMarch31,2019,werecordeda$12.2milliongain,netoftax,ontheNIH,whichisincludedinthechangeinthecumulativetranslationadjustmentinothercomprehensiveincome.Thereisapotentialforsignificant2023settlementexposureastheU.S.dollarfluctuatesagainsttheSwissFranc.TheriskmanagementobjectiveistomanageforeigncurrencyriskrelatingtonetinvestmentsincertainCHFdenominatedassets.ChangesinfairvalueofthederivativeinstrumentsarerecognizedinacomponentofAccumulatedOtherComprehensiveLosstooffsetthechangesinthevaluesofthenetinvestmentsbeinghedged.

Note 10. Leases

Wedetermineifanarrangementisaleaseatinception.Wehaveoperatingleasesforcorporateoffices,researchanddevelopmentfacilities,vehicles,andequipment.Ourleaseshaveremainingleasetermsofoneto10years,someofwhichhaveoptionstoextendorterminatetheleases.Financeleasesareincludedinpropertyandequipment,currentportionoflong-termdebt,andlong-termdebtinourcondensedconsolidatedbalancesheets.Financeleasesarenotmaterialtoourcondensedconsolidatedstatementsofoperations,condensedconsolidatedbalancesheets,orcondensedconsolidatedstatementsofcashflows.BeginningJanuary1,2019,operatingleasesareincludedinnoncurrentassets,othercurrentliabilities,andothernoncurrentliabilitiesinourconsolidatedbalancesheets.

Right-of-useassetsincludedinnoncurrentassetsrepresentourrighttouseanunderlyingassetfortheleasetermandleaseliabilitiesrepresentourobligationtomakeleasepaymentsarisingfromthelease.Right-of-useassetsandoperatingleaseliabilitiesarerecognizedatcommencementdatebasedonthepresentvalueofleasepaymentsovertheleaseterm.Asmostofourleasesdonotprovideanimplicitrate,weuseourincrementalborrowingratebasedontheinformationavailableatcommencementdateindeterminingthepresentvalueofleasepayments.Weusetheimplicitrateifitisreadilydeterminable.Theright-of-useassetalsoincludesanyleasepaymentsmadeandexcludesleaseincentives.Ourleasetermsmayincludeoptionstoextendorterminatetheleasewhenitisreasonablycertainandthereisasignificanteconomicincentivetoexercisethatoption.

Operatingleaseexpenseforright-of-useassetsisrecognizedonastraight-linebasisovertheleaseterm.Variableleasepayments,whichrepresentleasepaymentsthatvaryduetochangesinfactsorcircumstancesoccurringafterthecommencementdateotherthanthepassageoftime,areexpensedintheperiodinwhichtheobligationforthesepaymentswasincurred.VariableleaseexpenserecognizedinthethreemonthsendedMarch31,2019wasnotmaterial.

WeelectednottoapplytherecognitionrequirementsofASC842,Leases,toshort-termleases,whicharedeemedtobeleaseswithaleasetermof12monthsorless.Instead,werecognizedleasepaymentsinthecondensedconsolidatedstatementsofoperationsonastraight-linebasisovertheleasetermandvariablepaymentsintheperiodinwhichtheobligationforthesepaymentswasincurred.We

TableofContents

Note 10. Leases (Continued)

electedthispolicyforallclassesofunderlyingassets.Short-termleaseexpenserecognizedinthethreemonthsendedMarch31,2019wasnotmaterial.Weelectednottoapplythepracticalexpedientrelatedtotheseparationofleaseandnon-leasecomponentsorthepracticalexpedientwhichallowsentitiestousehindsightwhendeterminingleaseterm.

Theimpactofoperatingleasestoourcondensedconsolidatedfinancialstatementswasasfollows:

Supplementalbalancesheetinformationrelatedtoouroperatingleasesisasfollows:

AsofMarch31,2019,theannualminimumleasepaymentsofouroperatingleaseliabilitieswereasfollows:

Three months ended

March 31, 2019

Lease cost Operatingleasecost $ 5.7Short-termleasecost 0.2Variableleasecost 0.5

Other information Operatingcashflowsfromoperatingleases 6.6Right-of-useassetsobtainedinexchangefornewoperatingleaseliabilities 0.1Weighted-averageremainingleaseterm—operatingleases 5yearsWeighted-averagediscountrate—operatingleases 4.2%

Balance Sheet Classification March 31,

2019 Right-of-useassets Othernoncurrentassets $ 80.7Currentoperatingleaseliabilities Othercurrentliabilities 21.8Non-currentoperatingleaseliabilities Othernoncurrentliabilities 59.4

Year1 $ 24.6Year2 19.6Year3 12.7Year4 9.5Year5 7.7AfterYear5 16.7Totalleasepayments 90.8Lessimputedinterest (9.6)Total $ 81.2

TableofContents

Note 11. Income Taxes

Duringtheperiodspresentedintheconsolidatedandcombinedfinancialstatements,ouroperationsweregenerallyincludedinthetaxgroupingofotherLillyentitieswithintherespectiveentity'staxjurisdiction;however,incertainjurisdictions,wefiledseparatetaxreturns.PriortotheSeparation,theincometaxexpenseincludedinthesefinancialstatementshasbeencalculatedusingtheseparatereturnbasisasifElancofiledseparatetaxreturns.

InDecember2017,thePresidentoftheU.S.signedintolawtheTaxCutsandJobsAct(2017TaxAct).The2017TaxActincludessignificantchangestotheU.S.corporateincometaxsystem,suchasthereductioninthecorporateincometaxratefrom35percentto21percent,transitiontoaterritorialtaxsystem,changestobusinessrelatedexclusions,deductionsandcredits,andmodificationstointernationaltaxprovisions,includingaone-timerepatriationtransitiontax(alsoknownasthe'TollTax')onunremittedforeignearnings.

Wefinalizedouraccountingforthetaxeffectsofthe2017TaxActduring2018.Weexpectthatfurtherguidancewillcontinuetobeissuedin2019whichmayimpactourinterpretationsofthe2017TaxActandcouldmateriallyaffecttheestimatesused.The2017TaxActalsoincludesanewU.S.minimumtax,globalintangiblelow-taxedincome(GILTI),ontheearningsofourforeignsubsidiaries.WehaveelectedtoaccountforthetaxrelatedtoGILTIasaperiodcostintheyearthetaxisincurred.Deferredtaxesarerecognizedforthefuturetaxeffectsoftemporarydifferencesbetweenfinancialandincometaxreportingbasedonenactedtaxlawsandrates.Werecognizethetaxbenefitfromanuncertaintaxpositiononlyifitismorelikelythannotthatthetaxpositionwillbesustainedonexaminationbythetaxingauthorities,basedonthetechnicalmeritsoftheposition.Thetaxbenefitsrecognizedinthefinancialstatementsfromsuchapositionaremeasuredbasedonthelargestbenefitthathasagreaterthan50percentlikelihoodofbeingrealizeduponultimateresolution.

ForthethreemonthsendedMarch31,2019,weincurred$13.3millionofincometaxexpense.TheeffectiverateforthethreemonthsendedMarch31,2019,of29.7%wasdifferentfromthestatutoryincometaxrateprimarilyduetoaone-timeforeignexchangegainonthetransferofassetsuponseparationinadditiontotheimpactofstateincometaxes.

ForthethreemonthsendedMarch31,2018,weincurred$4.8millionofincometaxexpense.TheeffectivetaxrateforthethreemonthsendedMarch31,2018of6.2%wasdifferentfromthestatutoryincometaxrateprimarilyduetothebenefitofreleasingcertainvaluationallowances.ThesevaluationallowancesrelatedtonetoperatinglossesoperatedinpriorperiodsofElanco'sseparatecompanyfinancialstatements.Asoftheseparation,thosenetoperatinglossesremainedwith,andwereutilizedby,Lilly.

Three Months Ended

March 31, Provision for Taxes on Income 2019 2018 ProvisionforTaxesonIncome $ 13.3 $ 4.8EffectiveTaxRate 29.7% 6.2%

TableofContents

Note 12. Contingencies

Wearepartytovariouslegalactionsinthenormalcourseofbusiness.Indeterminingwhetherapendingmatterissignificantforfinancialreportinganddisclosurepurposes,weconsiderbothquantitativeandqualitativefactorsinordertoassessmateriality.Werecordaliabilityforclaimstotheextentthatwecanformulateareasonableestimateoftheircostsandthereisareasonableprobabilityofincurringsignificantcostsorexpenses.AtMarch31,2019andDecember31,2018,wehadnoliabilitiesestablishedrelatedtolitigationastherewerenosignificantclaimswhichwereprobableandestimable.Wehavenothistoricallyhadanysignificantlitigationexpenseandarenotcurrentlysubjecttoasignificantclaim.

Note 13. Geographic Information

Weoperateasasingleoperatingsegmentengagedinthedevelopment,manufacturing,marketingandsalesofanimalhealthproductsworldwideforbothfoodanimalsandcompanionanimals.Consistentwithouroperationalstructure,ourPresidentandChiefExecutiveOfficer(CEO),asthechiefoperatingdecisionmaker,makesresourceallocationandbusinessprocessdecisionsgloballyacrossourconsolidatedbusiness.Strategicdecisionsaremanagedgloballywithglobalfunctionalleadersresponsiblefordeterminingsignificantcost/investmentsandwithregionalleadersresponsibleforoverseeingtheexecutionoftheglobalstrategy.Ourglobalresearchanddevelopmentorganizationisresponsiblefordevelopmentofnewproducts.Ourmanufacturingorganizationisresponsibleforthemanufacturingandsupplyofproductsandfortheoptimizationofoursupplychain.Regionalleadersareresponsibleforthedistributionandsaleofourproductsandforlocaldirectcosts.Thebusinessisalsosupportedbyglobalcorporatestafffunctions.ManagingandallocatingresourcesattheglobalcorporatelevelenablesourCEOtoassesstheoveralllevelofresourcesavailableandhowtobestdeploytheseresourcesacrossfunctions,producttypes,regionalcommercialorganizationsandresearchanddevelopmentprojectsinlinewithouroverarchinglong-termcorporate-widestrategicgoals,ratherthanonaproductorgeographicbasis.Consistentwiththisdecision-makingprocess,ourCEOusesconsolidated,single-segmentfinancialinformationforpurposesofevaluatingperformance,allocatingresources,settingincentivecompensationtargets,aswellasforecastingfutureperiodfinancialresults.

OurproductsincludeRumensin®,Optaflexx®,Denagard®,Tylan®,Maxiban®andotherproductsforlivestockandpoultry,aswellasTrifexis®,Interceptor®,Comfortis®,Galliprant®andotherproductsforcompanionanimals.

Wehaveasinglecustomerthataccountedfor12.3%and11.3%ofrevenueforthethreemonthsendedMarch31,2019and2018,respectively,andthatrepresentedaccountsreceivableof$83.5millionand$96.4millionasofMarch31,2019andDecember31,2018,respectively.

Weareexposedtotheriskofchangesinsocial,politicalandeconomicconditionsinherentinforeignoperationsandourresultsofoperationsandthevalueofourforeignassetsareaffectedbyfluctuationsinforeigncurrencyexchangerates.

TableofContents

Note 13. Geographic Information (Continued)

Selectedgeographicareainformationwasasfollows:

Note 14. Earnings Per Share

AsdiscussedinNote1,ElancoParentwasformedforthepurposeoffacilitatingtheIPO.LillyheldallsharesofElancoParentfromthetimeofformationuntiltheIPO.

PriortoIPO,therewereanaggregateof293,290,000sharesofourcommonstockheldbyLilly(whichrepresentsthe100sharesheldbyLillypriortogivingeffecttothe2,932,900-for-1stocksplitthatoccurredonSeptember19,2018).InconnectionwiththecompletionoftheIPO,anadditional72,335,000shareswereissued.EarningspersharewascalculatedbasedontheassumptionthatthesharesheldbyLillywereoutstandingforallperiodspriortoIPO.

Wecomputebasicearningspersharebydividingnetearningsavailabletocommonshareholdersbytheactualweightedaveragenumberofcommonsharesoutstandingforthereportingperiod.Dilutedearningspersharereflectsthepotentialdilutionthatcouldoccurifholdersofunvestedrestrictedstockunitsandstockoptionsconvertedtheirholdingsintocommonstock.

Potentialcommonsharesthatwouldhavetheeffectofincreasingdilutedearningspershareareconsideredtobeanti-dilutiveandassuch,thesesharesarenotincludedinthecalculationofdilutedearningspershare.ForthethreemonthsendedMarch31,2019,approximately0.2millionofpotentialcommonshareswereexcludedfromthecalculationofdilutedearningspersharebecausetheireffectwasanti-dilutive.

Three Months Ended

March 31, 2019 2018 Revenue—tounaffiliatedcustomers(1) UnitedStates $ 383.9 $ 360.0International 347.2 376.2

Revenue $ 731.1 $ 736.2

March 31,

2019 December 31,

2018 Long-livedassets(2) UnitedStates $ 619.0 $ 602.6UnitedKingdom 192.3 187.5Otherforeigncountries 195.6 195.8

Long-livedassets $ 1,006.9 $ 985.9

(1) Revenueisattributedtothecountriesbasedonthelocationofthecustomer.

(2) Long-livedassetsconsistofpropertyandequipment,net,andcertainnoncurrentassets.

TableofContents

Note 15. Related Party Agreements and Transactions

Transactions with Lilly Subsequent to Separation and Related to the Separation

Amountsduefrom/(dueto)LillyinconnectionwiththeSeparationandagreeduponserviceswereasfollows:

AsdescribedinNote1,wecompletedanIPOinSeptember2018andLillyfullydivestedofallownershipofElancoinMarch2019.InconnectionwiththeSeparation,weenteredintovariousagreementswithLillyrelatedtotheformofourseparationandcertainongoingactivitiesthatwillcontinueforaperiodoftime.Theseincluded,amongothers,amasterseparationagreement(MSA),atransitionalservicesagreement(TSA)andataxmattersagreement.Inaddition,therewasaportionofouroperationsforwhichthelegaltransferofournetassetsdidnotoccurpriortotheSeparationduetocertainregulatoryrequirementsineachofthesecountries.

Transitional Services Agreement (TSA)

Historically,Lillyhasprovidedussignificantsharedservicesandresourcesrelatedtocorporatefunctionssuchasexecutiveoversight,treasury,legal,finance,humanresources,tax,internalaudit,financialreporting,informationtechnologyandinvestorrelations,whichwerefertocollectivelyasthe"LillyServices."UnderthetermsoftheTSA,wewillbeabletouseLillyServicesforafixedtermestablishedonaservice-by-servicebasis.WewillpayLillymutuallyagreed-uponfeesfortheLillyServicesprovidedundertheTSA,whichwillbebasedonLilly'scost(includingthird-partycosts)ofprovidingtheLillyServicesthroughMarch31,2021,andsubjecttoamark-upof7%thereafter,withadditionalinflation-basedescalationbeginningJanuary1,2022.ThefeesundertheTSAbecamepayableforallperiodsbeginningafterOctober1,2018.

Other Activities

WecontinuetosharecertainservicesandbackofficefunctionswithLilly,whichincertaininstancesresultinLillypayingcostsforElanco(e.g.,utilities,localcountryoperatingcosts,etc.)thatarethenpassedthroughtoElancoforreimbursement.Theseamountsareincludedincashflowsfromoperatingactivitiesinourcondensedconsolidatedandcombinedstatementsofcashflows.Inaddition,weoperatethroughasingletreasurysettlementprocessandpriortothelocalcountryassetpurchases(asdescribedbelow)continuedtotransactthroughLilly'sprocessesincertaininstances.Asaresultoftheseactivities,therewerecertainamountsoffinancingthatoccurredbetweenLillyandElancoduringthethree-monthperiodendedMarch31,2019.Theseamountsareincludedincashflowsfromfinancingactivitiesinourcondensedconsolidatedandcombinedstatementsofcashflows.

March 31,

2019 December 31,

2018 TSA $ (30.2) $ (28.0)Otheractivities 94.2 (38.0)Localcountryassetpurchases (28.5) (202.7)Totalreceivablefrom/(payableto)Lilly $ 35.5 $ (268.7)

TableofContents

Local Country Asset Purchases

ThelegaltransferofcertainofournetassetsdidnotoccurpriortotheSeparationduetocertainregulatoryrequirementsineachofthesecountries.Therelatedassets,liabilities,andresultsofoperationshavebeenreportedinourcondensedconsolidatedandcombinedfinancialstatements,asweareresponsibleforthebusinessactivitiesconductedbyLillyonourbehalfandaresubjecttotherisksandentitledtothebenefitsgeneratedbytheseoperationsandassetsunderthetermsoftheMSA.Weheldrestrictedcash,andtheassociatedpayabletoLilly,atthedateofSeparationtofundtheacquisitionoftheseassets.AsofMarch31,2019,themajorityoftheseassetshavebeenlegallyacquiredandtheremainderareexpectedtobepurchasedduring2019.

Transactions with Lilly Prior to Separation

PriortoIPO,wedidnotoperateasastandalonebusinessandhadvariousrelationshipswithLillywherebyLillyprovidedservicestous.Theimpactonourhistoricalcombinedfinancialstatementsincludesthefollowing:

Transfers to/from Lilly, net

AsdiscussedinNote2:BasisofPresentation,netparentcompanyinvestmentisprimarilyimpactedbycontributionsfromLillywhicharetheresultoftreasuryactivityandnetfundingprovidedbyordistributedtoLilly.ForthethreemonthsendedMarch31,2018,nettransfers(to)/fromLillywere$(69.2)million.Activitiesthatimpactedthenettransfers(to)/fromLillyincludecorporateoverheadandotherallocations,incometaxes,retirementbenefits,andcentralizedcashmanagement.

Net capital contributions from/(distributions to) Lilly

ForthethreemonthsendedMarch31,2019,netcapitalcontributionsfrom/(distributionsto)Lillywere$(7.0)million.

Activitiesthatimpactednetcapitalcontributionsfrom/(distributionsto)Lillyincludeincometaxes,retirementbenefits,andcentralizedcashmanagement,priortofullseparation.

Corporate overhead and other allocations

Priortofullseparation,Lillyprovideduscertainservices,includingexecutiveoversight,treasury,legal,finance,humanresources,tax,internalaudit,financialreporting,informationtechnologyandinvestorrelations.WeprovideLillycertainservicesrelatedtomanufacturingsupport.Ourfinancialstatementsreflectedanallocationofthesecosts.Whenspecificidentificationisnotpracticable,theremainderhavebeenallocatedprimarilyonaproportionalcostmethodonabasisofrevenueorheadcount.

TableofContents

TheallocationsofservicesfromLillytouswerereflectedasfollowsintheconsolidatedandcombinedstatementsofoperations:

WeprovideLillycertainservicesrelatedtomanufacturingsupport.AllocationsofmanufacturingsupportfromustoLillywere$1.2millionforthethreemonthsendedMarch31,2018,whichreducedthecostofsalesintheunauditedcondensedconsolidatedandcombinedstatementsofoperations.

Thefinancialinformationhereinmaynotnecessarilyreflectourconsolidatedfinancialposition,resultsofoperationsandcashflowsinthefutureorwhattheywouldhavebeenifwehadbeenaseparate,standaloneentityduringtheperiodspresented.Managementbelievesthatthemethodsusedtoallocateexpensesarereasonable.

Stock-based Compensation

Priortofullseparation,ouremployeesparticipatedinLillystock-basedcompensationplans,thecostsofwhichwereallocatedtousandrecordedincostofsales,researchanddevelopment,andmarketing,sellingandadministrativeexpensesintheunauditedcondensedconsolidatedandcombinedstatementsofoperations.Thecostsofsuchplansrelatedtoouremployeeswere$5.1millionand$6.7millionforthethreemonthsendedMarch31,2019and2018,respectively.

Retirement Benefits

Priortofullseparation,ouremployeesparticipatedindefinedbenefitpensionandotherpostretirementplanssponsoredbyLilly,thecostsandbenefitsofwhichwererecordedintheunauditedcondensedconsolidatedandcombinedstatementofoperationsincostofsales,researchanddevelopment,andmarketing,sellingandadministrativeexpenses.ForthethreemonthsendedMarch31,2018,thebenefitofsuchplansrelatedtoouremployeeswas$0.6million.

Centralized Cash Management

Lillyusesacentralizedapproachtocashmanagementandfinancingofoperations.UntilSeparation,themajorityofourbusinesswaspartytoLilly'scashpoolingarrangementstomaximizeLilly'savailabilityofcashforgeneraloperatingandinvestingpurposes.Underthesecashpoolingarrangements,cashbalancesweresweptregularlyfromouraccounts.CashtransferstoandfromLilly'scashconcentrationaccountsandtheresultingbalancesattheendofeachreportingperiodwerereflectedinnetparentcompanyinvestmentinthecondensedconsolidatedandcombinedstatementsofequity.

Three Months Ended

March 31, 2019 2018 Costofsales $ — $ 7.5Researchanddevelopment — 0.8Marketing,sellingandadministrative — 27.3Total $ — $ 35.6

TableofContents

Lilly'sthird-partydebtandtherelatedinterestexpensewerenotallocatedtousforanyoftheperiodspresentedaswewerenotthelegalobligorofthedebtandLillyborrowingswerenotdirectlyattributabletoourbusiness.

Other Related Party Transactions

Wesellcertainproductstoandreceivecertaingoodsandservicesfromacustomer/vendor,whosechairmanandChiefExecutiveOfficerisamemberofLilly'sBoardofDirectors,whichrepresentedrelatedpartytransactionspriortothefullseparation.Theseproductsalesresultedinrevenueof$4.2millionand$5.5millionforthethreemonthsendedMarch31,2019and2018,respectively.Theproductsalesresultedinaccountsreceivableof$1.2millionand$2.5millionatMarch31,2019andDecember31,2018,respectively.Thepurchaseofgoodsandservicesresultedincostofsalesandoperatingexpensesof$1.5millionand$0.8millionforthethreemonthsendedMarch31,2019and2018,respectively.Thepurchaseofgoodsandservicesresultedinaccountspayableof$0.9millionand$0.7millionatMarch31,2019andDecember31,2018,respectively.

Note 16. Subsequent Events

Aratana Acquisition

OnApril26,2019,weenteredintoanagreement(theMergerAgreement)toacquireAratanaTherapeutics,Inc.(Aratana).Aratanaisapettherapeuticscompanyfocusedoninnovativetherapiesfordogsandcats,andcreatorofthecanineosteoarthritismedicine,Galliprant®,therightstowhichweacquiredin2016.SubjecttothetermsandconditionssetforthintheMergerAgreement,upontheconsummationofthemerger,eachshareofAratanacommonstockwillbeconvertedintotherighttoreceive0.1481sharesofElanco'scommonstockplusonecontingentvalueright,whichshallrepresenttherighttoreceiveacontingentpaymentof$0.25incashupontheachievementofaspecifiedmilestoneasoutlinedintheMergerAgreement.BasedontheclosingpriceofashareofElancocommonstockonApril24,2019,thedateonwhichtheexchangeratiowasset,thestockportionofthemergerconsiderationrepresentedapproximately$234million.Themaximumaggregatecontingentpaymentisapproximately$12million.Thetransactionisexpectedtocloseinthemiddleof2019,subjecttocustomaryclosingconditions,includingtheregistrationofsharesofElancocommonstockissuableinthemerger,receiptofregulatoryapprovals,andapprovalbythestockholdersofAratana.

TableofContents

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. Indemnification of Directors and Officers

TheregistrantisanIndianacorporation.Theregistrant'sofficersanddirectorsareandwillbeindemnifiedunderIndianalawandtheamendedandrestatedarticlesofincorporationandamendedandrestatedbylawsoftheregistrantagainstcertainliabilities.Chapter37oftheIBCLrequireseveryIndianacorporationtoindemnifyanyofitsofficersordirectors(unlesslimitedbythearticlesofincorporationofthecorporation)whowerewhollysuccessful,onthemeritsorotherwise,inthedefenseofanyproceedingtowhichtheofficerordirectorwasapartybecausetheofficerordirectorisorwasanofficerordirectoroftheregistrantagainstreasonableexpensesincurredinconnectionwiththeproceeding.Acorporationmayalso,undercertaincircumstances,payfororreimbursethereasonableexpensesincurredbyanofficerordirectorwhoisapartytoaproceedinginadvanceoffinaldispositionoftheproceeding.Theregistrant'samendedandrestatedarticlesofincorporationdonotcontainanyprovisionlimitingsuchindemnification.

Chapter37oftheIBCLalsoauthorizeseveryIndianacorporationtoindemnifyitsofficersanddirectorsundercertaincircumstancesagainstliabilityincurredinconnectionwithanythreatened,pendingorcompletedaction,suitorproceeding,whethercivil,criminal,administrativeorinvestigativeandwhetherformalorinformal,towhichtheofficersordirectorsaremadeapartybyreasonoftheirrelationshiptothecorporation.Officersanddirectorsmaybeindemnifiedwheretheyhaveactedingoodfaith;inthecaseofofficialaction,theindividualreasonablybelievedthattheconductwasinthecorporation'sbestinterestsandinallothercases,theindividualreasonablybelievedthattheconductwasnotagainstthebestinterestsofthecorporation;andinthecaseofcriminalproceedings,theindividualeitherhadreasonablecausetobelievehisorherconductwaslawfulornoreasonablecausetobelievehisorherconductwasunlawful.Chapter37statesthattheindemnificationprovidedforthereinisnotexclusiveofanyotherrightstowhichapersonmaybeentitledunderthearticlesofincorporation,bylawsorresolutionsoftheboardofdirectorsorshareholders.

Theamendedandrestatedarticlesofincorporationandamendedandrestatedbylawsprovideforindemnification,tothefullestextentpermittedbytheIBCL,ofdirectors,officersandemployeesofthecorporationagainstliabilityandreasonableexpensethatmaybeincurredbythem,arisingoutofanythreatened,pendingorcompletedinvestigation,claim,suitorproceeding,whethercivil,administrative,investigativeorcriminal,inwhichtheymaybecomeinvolvedbyreasonofbeingorhavingbeenadirector,officeroremployee.Tobeentitledtoindemnification,(a)thosepersonsmusthavebeenwhollysuccessfulintheclaimoraction,or(b)theboardofdirectors,independentlegalcounselortheshareholdersmusthavedeterminedthatsuchpersonsactedingoodfaithinwhattheyreasonablybelievedtobeinthecorporation'sbestinterest,orinthecaseofconductnotintheindividual'sofficialcapacitywiththecorporation,didnotactinoppositiontothecorporation'sbestinterest.Inaddition,inanycriminalaction,suchpersonsmusthavehadnoreasonablecausetobelievethattheirconductwasunlawful.TheAmendedandRestatedBylawsprovideformandatoryadvancementofexpensestosuchpersonsprovidedcertainconditionsaremet,includingprovisionofawrittenundertakingtorepaysuchadvancements,shoulditbedeterminedthatthepersonisnotentitledtoindemnification.

TheIBCLpermitstheregistranttopurchaseinsuranceonbehalfofdirectors,officers,employeesandagentsagainstliabilitiesarisingoutoftheirpositionswiththecorporation,whetherornotsuchliabilitieswouldbewithintheaboveindemnificationprovisions.Pursuanttothisauthority,thecorporationwillmaintainsuchinsurancefordirectors,officersandemployees,subjecttocertainexclusionsanddeductibleandmaximumamounts,againstlossfromclaimsarisinginconnectionwiththeiractingintheirrespectivecapacities,includingclaimsundertheSecuritiesAct.

TableofContents

ITEM 21. Exhibits and Financial Statements Schedules

(a)Exhibits:Thelistofexhibitsissetforthunder"ExhibitIndex"attheendoftheregistrationstatementofwhichthisprospectusformaapartandisincorporatedbyreference.

(b)FinancialStatementSchedules:SeeIndextoCombinedFinancialStatementsandtherelatednotesthereto.

ITEM 22. Undertakings

(a)Theundersignedregistrantherebyundertakes:

(1)Tofile,duringanyperiodinwhichoffersorsalesarebeingmade,apost-effectiveamendmenttothisregistrationstatement:

(i)ToincludeanyprospectusrequiredbySection10(a)(3)oftheSecuritiesActof1933;

(ii)Toreflectintheprospectusanyfactsoreventsarisingaftertheeffectivedateofthisregistrationstatement(orthemostrecentpost-effectiveamendmentthereof)which,individuallyorintheaggregate,representafundamentalchangeintheinformationsetforthinthisregistrationstatement.Notwithstandingtheforegoing,anyincreaseordecreaseinvolumeofsecuritiesoffered(ifthetotaldollarvalueofsecuritiesofferedwouldnotexceedthatwhichwasregistered)andanydeviationfromtheloworhighendoftheestimatedmaximumofferingrangemaybereflectedintheformofprospectusfiledwiththeCommissionpursuanttoRule424(b)if,intheaggregate,thechangesinvolumeandpricerepresentnomorethan20percentchangeinthemaximumaggregateofferingpricesetforthinthe"CalculationofRegistrationFee"tableintheeffectiveregistrationstatement;

(iii)Toincludeanymaterialinformationwithrespecttotheplanofdistributionnotpreviouslydisclosedintheregistrationstatementoranymaterialchangetosuchinformationinthisregistrationstatement;

(2)That,forthepurposeofdetermininganyliabilityundertheSecuritiesActof1933,eachsuchpost-effectiveamendmentshallbedeemedtobeanewregistrationstatementrelatingtothesecuritiesofferedtherein,andtheofferingofsuchsecuritiesatthattimeshallbedeemedtobetheinitialbonafideofferingthereof.

(3)Toremovefromregistrationbymeansofapost-effectiveamendmentanyofthesecuritiesbeingregisteredwhichremainunsoldattheterminationoftheoffering.

(4)That,forpurposesofdeterminingliabilityundertheSecuritiesActof1933toanypurchaser,eachprospectusfiledpursuanttoRule424(b)aspartofaregistrationstatementrelatingtoanoffering,otherthanregistrationstatementsrelyingonRule430BorotherthanprospectusesfiledinrelianceonRule430A,shallbedeemedtobepartofandincludedintheregistrationstatementasofthedateitisfirstusedaftereffectiveness.Provided,however,thatnostatementmadeinaregistrationstatementorprospectusthatispartoftheregistrationstatementormadeinadocumentincorporatedordeemedincorporatedbyreferenceintotheregistrationstatementorprospectusthatispartoftheregistrationstatementwill,astoapurchaserwithatimeofcontractofsalepriortosuchfirstuse,supersedeormodifyanystatementthatwasmadeintheregistrationstatementorprospectusthatwaspartoftheregistrationstatementormadeinanysuchdocumentimmediatelypriortosuchdateoffirstuse

(5)That,forthepurposeofdeterminingliabilityoftheregistrantundertheSecuritiesActof1933toanypurchaserintheinitialdistributionofsecurities,theundersignedregistrantundertakesthatinaprimaryofferingofsecuritiesoftheundersignedregistrantpursuanttothisregistrationstatement,regardlessoftheunderwritingmethodusedtosellthesecuritiestothepurchaser,ifthe

TableofContents

securitiesareofferedorsoldtosuchpurchaserbymeansofanyofthefollowingcommunications,theundersignedregistrantwillbeasellertothepurchaserandwillbeconsideredtoofferorsellsuchsecuritiestosuchpurchaser:

(i)AnypreliminaryprospectusorprospectusoftheundersignedregistrantrelatingtotheofferingrequiredtobefiledpursuanttoRule424;

(ii)Anyfreewritingprospectusrelatingtotheofferingpreparedbyoronbehalfoftheundersignedregistrantorusedorreferredtobytheundersignedregistrant;

(iii)Theportionofanyotherfreewritingprospectusrelatingtotheofferingcontainingmaterialinformationabouttheundersignedregistrantoritssecuritiesprovidedbyoronbehalfoftheundersignedregistrant;and

(iv)Anyothercommunicationthatisanofferintheofferingmadebytheundersignedregistranttothepurchaser.

(b)InsofarasindemnificationforliabilitiesarisingundertheSecuritiesActmaybepermittedtodirectors,officersandcontrollingpersonsoftheregistrantpursuanttotheforegoingprovisions,orotherwise,theregistranthasbeenadvisedthatintheopinionoftheSecuritiesandExchangeCommissionsuchindemnificationisagainstpublicpolicyasexpressedintheSecuritiesActandis,therefore,unenforceable.Intheeventthataclaimforindemnificationagainstsuchliabilities(otherthanthepaymentbytheregistrantofexpensesincurredorpaidbyadirector,officerorcontrollingpersonoftheregistrantinthesuccessfuldefenseofanyaction,suitorproceeding)isassertedbysuchdirector,officerorcontrollingpersoninconnectionwiththesecuritiesbeingregistered,theregistrantwill,unlessintheopinionofitscounselthematterhasbeensettledbycontrollingprecedent,submittoacourtofappropriatejurisdictionthequestionwhethersuchindemnificationbyitisagainstpublicpolicyasexpressedintheSecuritiesActandwillbegovernedbythefinaladjudicationofsuchissue.

(c)Theundersignedregistrantherebyundertakestosupplybymeansofapost-effectiveamendmentallinformationconcerningatransaction,andthecompanybeingacquiredinvolvedtherein,thatwasnotthesubjectofandincludedinthisregistrationstatementwhenitbecameeffective.

EXHIBIT INDEX

Exhibit Number Description

2.1 AgreementandPlanofMerger,datedasofApril26,2019,byandamongElancoAnimalHealthIncorporated,ElancoAthensInc.andAratanaTherapeutics,Inc.(incorporatedbyreferencetoExhibit2.1toElancoAnimalHealthIncorporated'sReportonForm8-KfiledonApril26,2019)

3.1 AmendedandRestatedArticlesofIncorporationoftheRegistrant(incorporatedbyreferencetoExhibit3.1toElancoAnimalHealthIncorporated'sReportonForm8-KfiledonSeptember26,2018)

3.2 AmendedandRestatedBylawsoftheRegistrant(incorporatedbyreferencetoExhibit3.2toElancoAnimalHealthIncorporated'sReportonForm8-KfiledonSeptember26,2018)

4.1 FormofCertificateofCommonStock(incorporatedbyreferencetoExhibit4.1toElancoAnimalHealthIncorporated'sregistrationstatementonFormS-1(FileNo.333-226536))

TableofContents

4.2 Indenture,datedasofAugust28,2018,betweenElancoAnimalHealthIncorporatedandDeutscheBankTrustCompanyAmericas,astrustee(incorporatedbyreferencetoExhibit4.2toElancoAnimalHealthIncorporated'sregistrationstatementonFormS-1(FileNo.333-226536))

4.3 FirstSupplementalIndenture,datedasofAugust28,2018,betweenElancoAnimalHealthIncorporatedandDeutscheBankTrustCompanyAmericas,astrustee(incorporatedbyreferencetoExhibit4.3toElancoAnimalHealthIncorporated'sregistrationstatementonFormS-1(FileNo.333-226536))

4.4 ExchangeandRegistrationRightsAgreement,datedasofAugust28,2018,betweenElancoAnimalHealthIncorporatedandGoldmanSachs&Co.LLC,J.P.MorganSecuritiesLLCandMorganStanley&Co.LLC,asrepresentativesoftheinitialpurchasers(incorporatedbyreferencetoExhibit4.4toElancoAnimalHealthIncorporated'sregistrationstatementonFormS-1(FileNo.333-226536))

5.1 OpinionofBryanCaveLeightonPaisnerLLP†

5.2 OpinionofBarnes&ThornburgLLP†

10.1 MasterSeparationAgreement,datedasofSeptember24,2018,byandbetweenElancoAnimalHealthIncorporatedandEliLillyandCompany(incorporatedbyreferencetoExhibit10.1toElancoAnimalHealthIncorporated'sReportonForm8-KfiledonSeptember26,2018)

10.2 TransitionalServicesAgreement,datedasofSeptember24,2018,byandbetweenElancoAnimalHealthIncorporatedandEliLillyandCompany(incorporatedbyreferencetoExhibit10.2toElancoAnimalHealthIncorporated'sReportonForm8-KfiledonSeptember26,2018)

10.3 TaxMattersAgreement,datedasofSeptember24,2018,byandbetweenElancoAnimalHealthIncorporatedandEliLillyandCompany(incorporatedbyreferencetoExhibit10.3toElancoAnimalHealthIncorporated'sReportonForm8-KfiledonSeptember26,2018)

10.4 EmployeeMattersAgreement,datedasofSeptember24,2018,byandbetweenElancoAnimalHealthIncorporatedandEliLillyandCompany(incorporatedbyreferencetoExhibit10.4toElancoAnimalHealthIncorporated'sReportonForm8-KfiledonSeptember26,2018)

10.5 TollManufacturingandSupplyAgreement,datedasofSeptember24,2018,byandbetweenElancoUKAHLimitedandEliLillyExportS.A.(incorporatedbyreferencetoExhibit10.5toElancoAnimalHealthIncorporated'sReportonForm8-KfiledonSeptember26,2018)

10.6 RegistrationRightsAgreement,datedasofSeptember24,2018,byandbetweenElancoAnimalHealthIncorporatedandEliLillyandCompany(incorporatedbyreferencetoExhibit10.6toElancoAnimalHealthIncorporated'sReportonForm8-KfiledonSeptember26,2018)

10.7 TransitionalTrademarkLicenseAgreement,datedasofSeptember24,2018,byandamongElancoAnimalHealthIncorporated,EliLillyandCompanyandElancoUSInc.(incorporatedbyreferencetoExhibit10.7toElancoAnimalHealthIncorporated'sReportonForm8-KfiledonSeptember26,2018)

TableofContents

10.8 IntellectualPropertyandTechnologyLicenseAgreement,datedasofSeptember24,2018,byandamongElancoAnimalHealthIncorporated,EliLillyandCompanyandElancoUSInc.(incorporatedbyreferencetoExhibit10.7toElancoAnimalHealthIncorporated'sReportonForm8-KfiledonSeptember26,2018)

10.9 2002LillyStockPlan,asamended(incorporatedbyreferencetoExhibit10.1toEliLillyandCompany'sReportonForm10-QforthequarterendedJune30,2018)*

10.10 TheEliLillyandCompanyBonusPlan,asamended(incorporatedbyreferencetoExhibit10.7toEliLillyandCompany'sReportonForm10-KfortheyearendedDecember31,2013)*

10.11 FormofPerformanceAwardunderthe2002LillyStockPlan(incorporatedbyreferencetoExhibit10.2toEliLillyandCompany'sReportonForm10-KfortheyearendedDecember31,2018)*

10.12 FormofShareholderValueAwardunderthe2002LillyStockPlan(incorporatedbyreferencetoExhibit10.3toEliLillyandCompany'sReportonForm10-KfortheyearendedDecember31,2018)*

10.13 TheLillyDeferredCompensationPlan,asamended(incorporatedbyreferencetoExhibit10.5toEliLillyandCompany'sReportonForm10-KfortheyearendedDecember31,2013)*

10.14 TheEliLillyandCompanyExecutiveOfferIncentivePlan(incorporatedbyreferencetoAppendixBtoEliLillyandCompany'sproxystatementonSchedule14AfiledonMarch7,2011(SECFileNo.001-06351,FilmNo.11666753))*

10.15 2007ChangeinControlSeverancePayPlan(incorporatedbyreferencetoExhibit10toEliLillyandCompany'sReportonForm10-QforthequarterendedSeptember30,2010(SECFileNo.001-06351,FilmNo.101149876))*

10.16 TheElancoCorporateBonusPlan(incorporatedbyreferencetoExhibit10.16toElancoAnimalHealthIncorporated'sregistrationstatementonFormS-1(FileNo.333-226536))*

10.17 2018ElancoStockPlan(incorporatedbyreferencetoExhibit4.3toElancoAnimalHealthIncorporated'sregistrationstatementonFormS-8(FileNo.333-227447))*

10.18 ElancoAnimalHealthIncorporatedDirectors'DeferralPlan(incorporatedbyreferencetoExhibit4.4toElancoAnimalHealthIncorporated'sregistrationstatementonFormS-8(FileNo.333-227447))*

10.19 DirectorLetterAgreementbetweenEmuHoldingsCompanyandR.DavidHoover,datedasofMay25,2018(incorporatedbyreferencetoExhibit10.19toElancoAnimalHealthIncorporated'sregistrationstatementonFormS-1(FileNo.333-226536))

10.20 Formof2018ChangeinControlSeverancePayPlanforSelectEmployees(incorporatedbyreferencetoExhibit10.20toElancoAnimalHealthIncorporated'sregistrationstatementonFormS-1(FileNo.333-226536))*

10.21 FormofElancoAnimalHealthIncorporatedRestrictedStockUnitAwardsAgreement(incorporatedbyreferencetoExhibit10.21toElancoAnimalHealthIncorporated'sregistrationstatementonFormS-1(FileNo.333-226536))*

TableofContents

10.22 FormofElancoAnimalHealthIncorporatedNonqualifiedStockOptionAwardAgreement(incorporatedbyreferencetoExhibit10.22toElancoAnimalHealthIncorporated'sregistrationstatementonFormS-1(FileNo.333-226536))*

10.23 TheLillySeverancePayPlan(incorporatedbyreferencetoExhibit10.23toElancoAnimalHealthIncorporated'sregistrationstatementonFormS-1(FileNo.333-226536))*

10.24 RevolvingLoanCreditAgreement,datedasofSeptember5,2018,amongElancoAnimalHealthIncorporated,asborrower,JPMorganChaseBank,N.A.,asadministrativeagentandtheotherLenderspartythereto(incorporatedbyreferencetoExhibit10.24toElancoAnimalHealthIncorporated'sregistrationstatementonFormS-1(FileNo.333-226536))

10.25 TermLoanCreditAgreement,datedasofSeptember5,2018,amongElancoAnimalHealthIncorporated,asborrower,JPMorganChaseBank,N.A.,asadministrativeagentandtheotherLenderspartythereto(incorporatedbyreferencetoExhibit10.25toElancoAnimalHealthIncorporated'sregistrationstatementonFormS-1(FileNo.333-226536))

10.26 RetentionBonusAgreement,datedOctober18,2018,byandbetweenElancoUSInc.andToddS.Young(incorporatedbyreferencetoExhibit10.2toElancoAnimalHealthIncorporated'sReportonForm8-KfiledonOctober30,2018)*

10.27 EmploymentOfferLetterwithMr.ToddS.Young,datedOctober15,2018,byandbetweenElancoUSInc.andToddS.Young(incorporatedbyreferencetoExhibit10.1toElancoAnimalHealthIncorporated'sReportonForm8-KfiledonOctober30,2018)*

10.28 FormofPerformanceAwardAgreement(incorporatedbyreferencetoExhibit10.1toElancoAnimalHealthIncorporated'sReportonForm8-KfiledonFebruary19,2019)*

10.29 FormofRestrictedStockUnitAwardAgreement(incorporatedbyreferencetoExhibit10.2toElancoAnimalHealthIncorporated'sReportonForm8-KfiledonFebruary19,2019)*

10.30 FormofRestrictedStockUnitAwardAgreement(incorporatedbyreferencetoExhibit10.22toElancoAnimalHealthIncorporated'sReportonForm10-KfortheyearendedDecember31,2018)*

10.31 FormofReplacementPerformanceAwardAgreementforCertainNamedExecutiveOfficers(incorporatedbyreferencetoExhibit10.23toElancoAnimalHealthIncorporated'sReportonForm10-KfortheyearendedDecember31,2018)*

10.32 FormofReplacementPerformanceAwardAgreementforJeffreyN.Simmons(incorporatedbyreferencetoExhibit10.24toElancoAnimalHealthIncorporated'sReportonForm10-KfortheyearendedDecember31,2018)*

10.33 FormofReplacementRestrictedStockUnitAwardAgreementforCertainNamedExecutiveOfficers(incorporatedbyreferencetoExhibit10.25toElancoAnimalHealthIncorporated'sReportonForm10-KfortheyearendedDecember31,2018)*

10.34 ElancoAnimalHealthIncorporatedDirectors'DeferralPlan(incorporatedbyreferencetoExhibit10.1toElancoAnimalHealthIncorporated'sReportonForm10-QforthequarterendedMarch31,2019)*

10.35 FormofElancoAnimalHealthIncorporatedRestrictedStockUnitAwardAgreementfornon-employeedirectorswithrespecttoannualawards(incorporatedbyreferencetoExhibit10.2toElancoAnimalHealthIncorporated'sReportonForm10-QforthequarterendedMarch31,2019)*

TableofContents

10.36 FormofElancoAnimalHealthIncorporatedRestrictedStockUnitAwardAgreementfornon-employeedirectorswithrespecttoone-timefounderaward(incorporatedbyreferencetoExhibit10.3toElancoAnimalHealthIncorporated'sReportonForm10-QforthequarterendedMarch31,2019)*

10.37 ElancoAnimalHealthIncorporatedReplacementRestrictedStockUnitAwardAgreement(incorporatedbyreferencetoExhibit10.4toElancoAnimalHealthIncorporated'sReportonForm10-QforthequarterendedMarch31,2019)*

21.1 SubsidiariesoftheRegistrant(incorporatedbyreferencetoExhibit21.1toElancoAnimalHealthIncorporated'sAnnualReportonForm10-KfortheyearendedDecember31,2018)

23.1 ConsentofErnst&YoungLLP†

23.2 ConsentofBryanCaveLeightonPaisnerLLP(includedinExhibit5.1)

23.3 ConsentofBarnes&ThornburgLLP(includedinExhibit5.2)

24.1 PowerofAttorney(includedaspartofsignaturepage)

25.1 StatementofEligibilityundertheTrustIndentureActof1939,asamended,oftheTrusteeundertheIndenture.†

99.1 FormofLetterofTransmittal†

99.2 FormofNoticeofGuaranteedDelivery†

99.3 FormofLettertoBrokers,Dealers,CommercialBanks,TrustCompanies,CustodiansandSimilarInstitutions†

99.4 FormofLettertoClients†

101.INS XBRLInstanceDocument†

101.SCH XBRLTaxonomyExtensionSchemaDocument†

101.CAL XBRLTaxonomyExtensionCalculationLinkbaseDocument†

101.DEF XBRLTaxonomyExtensionDefinitionLinkbaseDocument†

101.LAB XBRLTaxonomyExtensionLabelLinkbaseDocument†

101.PRE XBRLTaxonomyExtensionPresentationLinkbaseDocument†

† Filedherewith

* Managementcontractsorcompensatoryplansorarrangements

TableofContents

SIGNATURES

PursuanttotherequirementsoftheSecuritiesActof1933,asamended,theregistranthasdulycausedthisregistrationstatementonFormS-4tobesignedonitsbehalfbytheundersigned,thereuntodulyauthorized,intheCityofIndianapolis,StateofIndiana,onthe17thdayofMay,2019.

POWER OF ATTORNEY

We,theundersigneddirectorsandofficersofElancoAnimalHealthIncorporated,doherebyconstituteandappointJeffreyN.Simmons,ToddS.YoungandMichael-BryantHicks,andeachofthemactingindividually,asourtrueandlawfulattorneysandagents,withfullpowerofsubstitution,todoanyandallactsandthingsinournameandonourbehalfinourcapacitiesasdirectorsandofficersandtoexecuteanyandallinstrumentsforusandinournamesinthecapacitiesindicatedbelow,whichsaidattorneysandagents,oreitherofthem,maydeemnecessaryoradvisabletoenablesaidregistranttocomplywiththeSecuritiesActof1933,asamended,andanyrules,regulationsandrequirementsoftheSecuritiesandExchangeCommission,inconnectionwiththisregistrationstatement,includingspecifically,butwithoutlimitation,powerandauthoritytosignforusoranyofusinournamesinthecapacitiesindicatedbelow,thisregistrationstatementoranyandallamendmentstheretoandtofilethesame,withallrelevantexhibitsandotherdocumentsinconnectiontherewith,withtheSecuritiesandExchangeCommissionandwedoherebyratifyandconfirmthatsaidattorneysandagents,oranyofthem,shalldoorcausetobedonebyvirtuehereof.

PursuanttotherequirementsoftheSecuritiesActof1933,asamended,thisregistrationstatementhasbeensignedbythefollowingpersonsinthecapacitiesandonthedatesindicated.

ELANCO ANIMAL HEALTH INCORPORATED

By: /s/JEFFREYN.SIMMONS

Name: JeffreyN.Simmons Title: President and Chief Executive Officer

Name Title Date

/s/JEFFREYN.SIMMONS

JeffreyN.Simmons PresidentandChiefExecutiveOfficer(PrincipalExecutiveOfficer)

andDirector May17,2019

/s/TODDS.YOUNG

ToddS.Young ExecutiveVicePresidentandChiefFinancialOfficer(Principal

FinancialOfficer) May17,2019

/s/JAMESM.MEER

JamesM.Meer VicePresident,ChiefAccountingOfficer(PrincipalAccounting

Officer) May17,2019

/s/R.DAVIDHOOVER

R.DavidHoover Chairman May17,2019

TableofContents

Name Title Date

/s/KAPILAK.ANAND

KapilaK.Anand Director May17,2019

/s/JOHNP.BILBREY

JohnP.Bilbrey Director May17,2019

/s/ARTA.GARCIA

ArtA.Garcia Director May17,2019

/s/MICHAELJ.HARRINGTON

MichaelJ.Harrington Director May17,2019

/s/DEBORAHT.KOCHEVAR

DeborahT.Kochevar Director May17,2019

/s/LAWRENCEE.KURZIUS

LawrenceE.Kurzius Director May17,2019

/s/KIRKMCDONALD

KirkMcDonald Director May17,2019

/s/DENISESCOTS-KNIGHT

DeniseScots-Knight Director May17,2019

Exhibit5.1

[BryanCaveLeightonPaisnerletterhead]May17,2019ElancoAnimalHealthIncorporated2500InnovationWayGreenfield,Indiana46140LadiesandGentlemen:WehaveactedasspecialcounseltoElancoAnimalHealthIncorporated,anIndianacorporation(the“Company”),inconnectionwiththefilingoftheRegistrationStatementonFormS-4(the“RegistrationStatement”)bytheCompanywiththeSecuritiesandExchangeCommission(the“Commission”)undertheSecuritiesActof1933,asamended(the“Act”),relatingtotheoffersbytheCompany(the“ExchangeOffers”)toexchange(i)upto$500,000,000aggregateprincipalamountoftheCompany’s3.912%SeniorNotesdue2021(the“2021ExchangeNotes”)foralikeamountoftheCompany’soutstandingunregistered3.912%SeniorNotesdue2021(the“2021OriginalNotes”);(ii)upto$750,000,000aggregateprincipalamountoftheCompany’s4.272%SeniorNotesdue2023(the“2023ExchangeNotes”)foralikeamountoftheCompany’soutstandingunregistered4.272%SeniorNotesdue2023(the“2023OriginalNotes”);and(iii)upto$750,000,000aggregateprincipalamountoftheCompany’s4.900%SeniorNotesdue2028(the“2028ExchangeNotes”andtogetherwiththe2021ExchangeNotesandthe2023ExchangeNotes,the“ExchangeNotes”)foralikeamountoftheCompany’soutstandingunregistered4.900%SeniorNotesdue2028(the“2028OriginalNotes”andtogetherwiththe2021OriginalNotesandthe2023OriginalNotes,the“OriginalNotes”)undertheIndenture,datedasofAugust28,2018(the“BaseIndenture”),assupplementedbytheFirstSupplementalIndenture,datedasofAugust28,2018(the“SupplementalIndenture”andtogetherwiththeBaseIndenture,the“Indenture”),betweentheCompanyandDeutscheBankTrustCompanyAmericas,aNewYorkbankingcorporation,astrustee(the“Trustee”),ascontemplatedbytheExchangeandRegistrationRightsAgreement,datedAugust28,2018(the“RegistrationRightsAgreement”),byandamongtheCompanyandtheInitialPurchasers(asdefinedtherein).AllcapitalizedtermswhicharedefinedintheIndentureshallhavethesamemeaningswhenusedherein,unlessotherwisespecified.Inconnectionherewith,wehaveexamined:

(1)anexecutedcopyoftheBaseIndenture;

(2)anexecutedcopyoftheSupplementalIndenture;

(3)executedcopiesoftheOriginalNotes;

(4)anexecutedcopyoftheRegistrationRightsAgreement;

(5)theformsoftheExchangeNotes;

(6)theAmendedandRestatedArticlesofIncorporationoftheCompany,effectiveSeptember18,2018,ascertifiedbytheSecretaryofStateoftheStateofIndiana(the“Charter”);and

(7)theAmendedandRestatedBylawsoftheCompany,aseffectiveSeptember19,2018andineffectonthedatehereofandascertifiedbytheSecretaryorAssistantSecretaryoftheCompany(togetherwith

theCharter,the“OrganizationalDocuments”).Thedocumentsreferencedasitems(1)through(5)abovearecollectivelyreferredtohereinasthe“TransactionDocuments.”Wehavealsoexaminedoriginalsorcopies,certifiedorotherwiseidentifiedtooursatisfaction,ofsuchothercorporaterecords,agreementsandinstrumentsoftheCompany,certificatesofpublicofficialsandofficersoftheCompany,andsuchotherdocuments,recordsandinstruments,andwehavemadesuchlegalandfactualinquiries,aswehavedeemednecessaryorappropriateasabasisforustorendertheopinionshereinafterexpressed.InourexaminationoftheTransactionDocumentsandtheforegoing,wehaveassumedthegenuinenessofallsignatures,thelegalcompetenceandcapacityofnaturalpersons,theauthenticityofdocumentssubmittedtousasoriginalsandtheconformitywithauthenticoriginaldocumentsofalldocumentssubmittedtousascopiesorbyfacsimileorothermeansofelectronictransmission,orwhichweobtainedfromtheCommission’sElectronicDataGathering,AnalysisandRetrievalsystem(“Edgar”)orothersitesmaintainedbyacourtorgovernmentalauthorityorregulatorybodyandtheauthenticityoftheoriginalsofsuchlatterdocuments.Ifanydocumentweexaminedinprinted,wordprocessedorsimilarformhasbeenfiledwiththeCommissiononEdgarorsuchcourtorgovernmentalauthorityorregulatorybody,wehaveassumedthatthedocumentsofiledisidenticaltothedocumentweexaminedexceptforformattingchanges.Whenrelevantfactswerenotindependentlyestablished,wehavereliedwithoutindependentinvestigationastomattersoffactuponstatementsofgovernmentalofficialsanduponrepresentationsmadeinorpursuanttotheTransactionDocumentsandcertificatesandstatementsofappropriaterepresentativesoftheCompany.Inconnectionherewith,wehaveassumedthat(i)alloftheTransactionDocumentshavebeendulyauthorizedbyandhavebeendulyexecutedanddeliveredbyallofthepartiestosuchTransactionDocuments,(ii)otherthanwithrespecttotheCompany,alloftheTransactionDocumentsconstitutethevalid,bindingandenforceableobligationsofallofthepartiesthereto,and(iii)allofthesignatoriestosuchTransactionDocumentshavebeendulyauthorizedandallsuchpartiesaredulyorganizedandvalidlyexistingandhavethepowerandauthority(corporateorother)toexecute,deliverandperformsuchTransactionDocuments.Basedupontheforegoingandinreliancethereon,andsubjecttotheassumptions,comments,qualifications,limitationsandexceptionssetforthherein,weareoftheopinionthat,when(i)theRegistrationStatementhasbecomeeffectiveundertheActand(ii)theExchangeNotes(intheformexaminedbyus)havebeendulyexecutedbytheCompanyanddulyauthenticatedanddeliveredbytheTrusteeandissuedinexchangefortheOriginalNotesinaccordancewiththeprovisionsoftheIndentureuponconsummationofandotherwiseinaccordancewiththeExchangeOffers,theExchangeNoteswillconstitutevalidandbindingobligationsoftheCompany.Inadditiontotheassumptions,comments,qualifications,limitationsandexceptionssetforthabove,theopinionssetforthhereinarefurtherlimitedby,subjecttoandbaseduponthefollowingassumptions,comments,qualifications,limitationsandexceptions:

(a)Ouropinionshereinreflectonlytheapplicationof(i)applicableNewYorkStatelaw(excluding,withoutlimitation,(A)alllaws,rulesandregulationsofcities,countiesandotherpoliticalsubdivisionsof

suchStateand(B)thesecurities,bluesky,criminal,environmental,employeebenefit,pension,antitrustandtaxlawsofsuchState,astowhichweexpressnoopinion),and(ii)theFederallawsoftheUnitedStatesofAmerica(excluding,withoutlimitation,thefederalsecurities,commodities,criminal,environmental,employeebenefit,pension,taxandantitrustlaws,astowhichweexpressnoopinion).WenotethattheNotesandtheIndentureeachprovidethattheyaregovernedbyandaretobeconstruedinaccordancewiththelawsoftheStateofNewYork,withoutgivingeffecttoanychoiceoflaworconflictoflawprovisionorrulethatwouldcausetheapplicationofthelawsofanyotherjurisdiction.Wehaveassumedthatthechoiceoflawprovisionswouldbeenforcedbyanycourtinwhichenforcementthereofmaybesought.Theopinionssetforthhereinaremadeasofthedatehereofandaresubjectto,andmaybelimitedby,futurechangesinthefactualmatterssetforthherein,andweundertakenodutytoadviseyouofthesame.Theopinionsexpressedhereinarebaseduponthelawineffect(andpublishedorotherwisegenerallyavailable)onthedatehereof,andweassumenoobligationtoreviseorsupplementtheseopinionsshouldsuchlawbechangedbylegislativeaction,judicialdecisionorotherwise.Inrenderingouropinions,wehavenotconsidered,andherebydisclaimanyopinionasto,theapplicationorimpactofanylaws,cases,decisions,rulesorregulationsofanyotherjurisdiction,courtoradministrativeagency.

(b)Ouropinionscontainedhereinmaybelimitedby(i)applicablebankruptcy,insolvency,reorganization,receivership,moratoriumorsimilarlawsaffectingorrelatingtotherightsandremediesofcreditorsgenerallyincluding,withoutlimitation,lawsrelatingtofraudulenttransfersorconveyances,preferencesandequitablesubordination,(ii)generalprinciplesofequity(regardlessofwhetherconsideredinaproceedinginequityoratlaw),and(iii)animpliedcovenantofgoodfaithandfairdealing.

(c)Ouropinionsarefurthersubjecttotheeffectofgenerallyapplicablerulesoflawarisingfromstatutes,judicialandadministrativedecisions,andtherulesandregulationsofgovernmentalauthoritiesthat:(i)limitoraffecttheenforcementofprovisionsofacontractthatpurporttorequirewaiveroftheobligationsofgoodfaith,fairdealing,diligenceandreasonableness;(ii)limittheavailabilityofaremedyundercertaincircumstanceswhereanotherremedyhasbeenelected;(iii)limittheenforceabilityofprovisionsreleasing,exculpating,orexemptingapartyfrom,orrequiringindemnificationofapartyfor,liabilityforitsownactionorinaction,totheextenttheactionorinactioninvolvesnegligence,recklessness,willfulmisconductorunlawfulconduct;(iv)may,wherelessthanallofthecontractmaybeunenforceable,limittheenforceabilityofthebalanceofthecontracttocircumstancesinwhichtheunenforceableportionisnotanessentialpartoftheagreedexchange;and(v)governandaffordjudicialdiscretionregardingthedeterminationofdamagesandentitlementtoattorneys’fees.

(d)Weexpressnoopinionasto:

(i)theenforceabilityofanyprovisioninanyoftheTransactionDocumentspurportingorattemptingto(A)conferexclusivejurisdictionand/orvenueuponcertaincourtsorotherwisewaivethedefensesofforum non conveniens orimpropervenue,(B)confersubjectmatterjurisdictiononacourtnothavingindependentgroundstherefor,(C)modifyorwaivetherequirementsforeffectiveserviceofprocessforanyactionthatmaybebrought,(D)waivetherightoftheCompanyoranyotherpersontoatrialbyjury,(E)providethatremediesarecumulativeorthatdecisionsbyapartyareconclusive,(F)modifyorwaivetherightstonotice,legaldefenses,statutesoflimitationsandstatutesofrepose(includingthe

tollingofsame)orotherbenefitsthatcannotbewaivedunderapplicablelaw,(G)governchoiceoflaworconflictoflaws,or(H)providefororgrantapowerofattorney;or

(ii)theenforceabilityof(A)anyrightstoindemnificationorcontributionprovidedforintheTransactionDocumentswhichareviolativeofpublicpolicyunderlyinganylaw,ruleorregulation(includinganyFederalorstatesecuritieslaw,ruleorregulation)orthelegalityofsuchrights,(B)rightsofset-off,(C)anyprovisionspurportingtoprovidetotheTrusteeorHolderstherighttoreceivecostsandexpensesbeyondthosereasonablyincurredbythemor(D)provisionsintheTransactionDocumentswhosetermsareleftopenforlaterresolutionbytheparties.Wenotethat,withrespecttomatterspertainingtothelawsoftheStateofIndiana,wearerelyingontheopinionofBarnes&ThornburgLLP,datedthedatehereof,andweexpresslydisclaimanyopinionwithrespecttothelawsofsuchjurisdiction.Wedonotrenderanyopinionsexceptassetforthabove.ThisopinionletterisbeingdeliveredbyussolelyforyourbenefitpursuanttotheRegistrationStatement.WeherebyconsenttothefilingofthisopinionletterasExhibit5.1totheRegistrationStatementandtotheuseofournameunderthecaption“LegalMatters”intheprospectusfiledasapartthereof.WealsoconsenttoyourfilingcopiesofthisopinionletterasanexhibittotheRegistrationStatementwithagenciesofsuchstatesasyoudeemnecessaryinthecourseofcomplyingwiththelawsofsuchstatesregardingtheExchangeOffers.Ingivingsuchconsent,wedonottherebyconcedethatwearewithinthecategoryofpersonswhoseconsentisrequiredunderSection7oftheActortherulesandregulationsoftheCommissionthereunder.Verytrulyyours,/s/BryanCaveLeightonPaisnerLLP

Exhibit5.2

11S.MeridianStreet

Indianapolis,IN46204-3535317-236-1313

317-231-7433(Fax)www.btlaw.com

May17,2019

ElancoAnimalHealthIncorporated2500InnovationWayGreenfield,IN46140

Re:ElancoAnimalHealthIncorporatedRegistrationStatementonFormS-4

LadiesandGentlemen:

WehaveactedasspecialIndianacounseltoElancoAnimalHealthIncorporated,anIndianacorporation(“Elanco”),inconnectionwiththeRegistrationStatementonFormS-4(the“RegistrationStatement”)filedbyElancowiththeSecuritiesandExchangeCommission(the“Commission”)undertheSecuritiesActof1933,asamended(the“SecuritiesAct”).TheRegistrationStatementrelatestotheissuancebyElancoofupto(i)$500,000,000aggregateprincipalamountofnew3.912%SeniorNotesdue2021(the“2021ExchangeNotes”)foralikeamountofoutstandingunregistered3.912%SeniorNotesdue2021,(ii)$750,000,000aggregateprincipalamountofnew4.272%SeniorNotesdue2023(the“2023ExchangeNotes”)foralikeamountofoutstandingunregistered4.272%SeniorNotesdue2023,and(iii)$750,000,000aggregateprincipalamountofnew4.900%SeniorNotesdue2028(the“2028ExchangeNotes”and,collectivelywiththe2021ExchangeNotesandthe2023ExchangeNotes,the“ExchangeNotes”)foralikeamountofoutstandingunregistered4.900%SeniorNotesdue2028.AllcapitalizedtermsusedandnototherwisedefinedhereinshallhavethemeaningsassignedtosuchtermsintheRegistrationStatement.

TheExchangeNoteswillbeissuedunderanIndenturedatedasofAugust28,2018byandbetweenElancoandDeutscheBankTrustCompanyAmericas,astrustee(incorporatedbyreferencetoExhibit4.3ofElanco’sregistrationstatementonFormS-1(FileNo.333-226536))andFirstSupplementalIndenture,datedasofAugust28,2018,betweenElancoandDeutscheBankTrustCompanyAmericas,astrustee(incorporatedbyreferencetoExhibit4.3ofElanco’sregistrationstatementonFormS-1(FileNo.333-226536))(the“Indenture”).Wehaveassumed,withyourpermission,that(i)theIndenturehasnotbeenfurtheramended,modifiedorsupplementedand(ii)theExchangeNoteshavebeenissuedpursuanttotheIndentureandotherwiseincompliancewiththeprovisionsoftheIndenture.

Assuchcounselandforpurposesofouropinionssetforthbelow,wehaveexaminedoriginalsorcopies,certifiedorotherwiseidentifiedtooursatisfaction,ofsuchdocuments,corporaterecords,certificatesofpublicofficialsandotherinstrumentsaswehavedeemednecessaryorappropriateasabasisfortheopinionssetforthherein.

Insuchexaminationandinrenderingtheopinionsexpressedbelow,wehaveassumed,withoutinvestigation:(i)thedueauthorizationofallagreements,instrumentsandotherdocumentsbyallthepartiesthereto(otherthanthedueauthorizationofeachsuchagreement,instrumentanddocumentbyElanco);(ii)thedueexecutionanddeliveryofallagreements,instrumentsandotherdocumentsbyallthepartiesthereto(otherthanthedueexecutionanddeliveryofeachsuchagreement,instrumentand

documentbyElanco);(iii)thegenuinenessofallsignaturesonalldocumentssubmittedtous;(iv)theauthenticity,accuracyandcompletenessofalldocuments,corporaterecords,certificatesandotherinstrumentssubmittedtous;(v)thatphotocopy,electronic,certified,conformed,facsimileandothercopiessubmittedtousoforiginaldocuments,corporaterecords,certificatesandotherinstrumentsconformtotheoriginaldocuments,records,certificatesandotherinstruments,andthatallsuchoriginaldocumentswereauthenticandcomplete;(vi)thelegalcapacityofallindividualsexecutingdocuments;(vii)thattheExchangeNotesandtheIndentureexecutedinconnectionwiththetransactionscontemplatedtherebyarethevalidandbindingobligationsofeachofthepartiesthereto(otherthanElanco),enforceableagainstsuchparties(otherthanElanco)inaccordancewiththeirrespectivetermsandthatnoneoftheExchangeNotesandtheIndenturehasbeenamendedorterminatedorallyorinwritingexceptashasbeendisclosedtous;and(viii)thatthestatementscontainedinthecertificatesandcomparabledocumentsofpublicofficials,officersandrepresentativesofElancoandotherpersonsonwhichwehavereliedforthepurposesofthisopinionaretrueandcorrect.Astoallquestionsoffactmaterialtothisopinionandastothematerialityofanyfactorothermatterreferredtoherein,wehaverelied(withoutindependentinvestigation)uponcertificatesorcomparabledocumentsofofficersandrepresentativesofElanco.

Basedontheforegoingandinreliancethereon,andsubjecttothelimitations,qualificationsandexceptionssetforthherein,weareoftheopinionthat:

1.ElancoisacorporationdulyincorporatedandvalidlyexistingcorporationunderthelawsoftheStateofIndianaandhasallrequisitecorporatepowerandauthoritytoconductitsbusinessandtoownitsproperties(allasdescribedintheRegistrationStatement)andtoperformallofitsobligationsundertheExchangeNotesandtheIndenture.

2.Elancohasdulyauthorized,executedanddeliveredtheIndentureandhasdulyauthorizedtheissuanceoftheExchangeNotes.

Inrenderingtheforegoingopinionsweexpressnoopinionastotheeffect(ifany)oflawsofanyjurisdictionexceptthoseoftheStateofIndiana.ThisopinionletterhasbeenpreparedforyouruseinconnectionwiththeRegistrationStatementandmaynotberelieduponforanyotherpurpose.Thisopinionspeaksasofthedatehereof.WeassumenoobligationtoadviseyouofanychangesintheforegoingsubsequenttotheeffectivenessoftheRegistration.

WeherebyconsenttorelianceonthisopinionletterandtheopinionsprovidedhereinbythelawfirmBryanCaveLeightonPaisnerLLPinconnectionwiththelegalopinionprovidedbythatlawfirmthatisincludedasanexhibittotheRegistrationStatement.Weherebyconsenttothereferencestoourfirmunderthecaption“LegalMatters”intheRegistrationStatementandtotheinclusionofthisopinionasanexhibittotheRegistrationStatement.Ingivingthisconsent,wedonottherebyadmitthatwearewithinthecategoryofpersonswhoseconsentisrequiredunderSection7oftheSecuritiesAct,ortherulesandregulationsoftheCommissionthereunder.

Verytrulyyours,

/s/Barnes & Thornburg LLP

Exhibit23.1

ConsentofIndependentRegisteredPublicAccountingFirmWeconsenttothereferencetoourfirmunderthecaption“Experts”andtotheuseofourreportdatedFebruary20,2019,intheRegistrationStatement(FormS-4)andrelatedProspectusofElancoAnimalHealthIncorporated(the“Company”)fortheoffertoexchangeupto$500,000,000principalamountoftheCompany’s3.912%SeniorNotesdue2021registeredundertheSecuritiesActforanyandallofitsoutstanding3.912%SeniorNotesdue2021;upto$750,000,000principalamountoftheCompany’s4.272%SeniorNotesdue2023registeredundertheSecuritiesActforanyandallofitsoutstanding4.272%SeniorNotesdue2023;andupto$750,000,000principalamountoftheCompany’s4.900%SeniorNotesdue2028registeredundertheSecuritiesActforanyandallofitsoutstanding4.900%SeniorNotesdue2028.

/s/Ernst&YoungLLP Indianapolis,Indiana

May17,2019

Exhibit25.1

UNITEDSTATESSECURITIESANDEXCHANGECOMMISSION

WASHINGTON,D.C.20549

FORMT-1

STATEMENTOFELIGIBILITYUNDERTHETRUSTINDENTUREACTOF1939OFACORPORATIONDESIGNATEDTOACTASTRUSTEEooCHECKIFANAPPLICATIONTODETERMINEELIGIBILITYOFATRUSTEEPURSUANTTOSECTION305(b)(2)

DEUTSCHEBANKTRUSTCOMPANYAMERICAS(formerlyBANKERSTRUSTCOMPANY)

(Exactnameoftrusteeasspecifiedinitscharter)

NEWYORK

13-4941247(JurisdictionofIncorporationor

(I.R.S.EmployerorganizationifnotaU.S.nationalbank)

Identificationno.)

60WALLSTREET

NEWYORK,NEWYORK

10005(Addressofprincipal

(ZipCode)executiveoffices)

DeutscheBankTrustCompanyAmericas

Attention:CatherineWangLegalDepartment

60WallStreet,36thFloorNewYork,NewYork10005

(212)250—7544(Name,addressandtelephonenumberofagentforservice)

ElancoAnimalHealthIncorporated(Exactnameofobligorasspecifiedinitscharter)

Indiana

82-5497352(Stateorotherjurisdictionof

(I.R.S.Employerincorporationororganization)

IdentificationNo.)

2500InnovationWay

Greenfield,Indiana

46140(Addressofprincipalexecutiveoffices)

(Zipcode)

3.912%SeniorNotesdue20214.272%SeniorNotesdue20234.900%SeniorNotesdue2028(TitleoftheIndenturesecurities)

Item1.GeneralInformation.

Furnishthefollowinginformationastothetrustee.

(a)Nameandaddressofeachexaminingorsupervisingauthoritytowhichitissubject.

Address FederalReserveBank(2ndDistrict)

NewYork,NYFederalDepositInsuranceCorporation

Washington,D.C.NewYorkStateBankingDepartment

Albany,NY

(b)Whetheritisauthorizedtoexercisecorporatetrustpowers.Yes.

Item2.AffiliationswithObligor.

IftheobligorisanaffiliateoftheTrustee,describeeachsuchaffiliation.

None.Item3.-15.NotApplicableItem16.ListofExhibits.

Exhibit1-RestatedOrganizationCertificateofBankersTrustCompanydatedAugust31,1998;CertificateofAmendmentoftheOrganizationCertificateofBankersTrustCompanydatedSeptember25,1998;CertificateofAmendmentoftheOrganizationCertificateofBankersTrustCompanydatedDecember18,1998;CertificateofAmendmentoftheOrganizationCertificateofBankersTrustCompanydatedSeptember3,1999;andCertificateofAmendmentoftheOrganizationCertificateofBankersTrustCompanydatedMarch14,2002,incorporatedhereinbyreferencetoExhibit1filedwithFormT-1Statement,RegistrationNo.333-201810.

Exhibit2-CertificateofAuthoritytocommencebusiness,incorporatedhereinbyreferencetoExhibit2filedwithFormT-1Statement,RegistrationNo.333-201810.Exhibit3-AuthorizationoftheTrusteetoexercisecorporatetrustpowers,incorporatedhereinbyreferencetoExhibit3filedwithFormT-1Statement,RegistrationNo.333-201810.Exhibit4-ExistingBy-LawsofDeutscheBankTrustCompanyAmericas,datedAugust30,2018,incorporatedhereinbyreferencetoExhibitS-4/AfiledwithFormT-1Statement,Registration

No.333-223415.Exhibit5-Notapplicable.Exhibit6-ConsentofBankersTrustCompanyrequiredbySection321(b)oftheAct,incorporatedhereinbyreferencetoExhibit6filedwithFormT-1Statement,RegistrationNo.333-201810.Exhibit7-Acopyofthelatestreportofconditionofthetrusteepublishedpursuanttolawortherequirementsofitssupervisingorexaminingauthority.Exhibit8-NotApplicable.Exhibit9-NotApplicable.

SIGNATURE

PursuanttotherequirementsoftheTrustIndentureActof1939,asamended,thetrustee,DeutscheBankTrustCompanyAmericas,acorporationorganizedandexistingunderthelawsoftheStateofNewYork,has

dulycausedthisstatementofeligibilitytobesignedonitsbehalfbytheundersigned,thereuntodulyauthorized,allinTheCityofNewYork,andStateofNewYork,onthis15thdayofMay,2019.

DEUTSCHEBANKTRUSTCOMPANYAMERICAS

By: /s/LukeRussell

Name:LukeRussell

Title:AssistantVicePresident

OMBNumber7100-0036OMBNumber3064-0052OMBNumber1557-0081ApprovalexpiresMarch31,2022Page1of87BoardofGovernorsoftheFederalReserveSystemFederalDepositInsuranceCorporationOfficeoftheComptrolleroftheCurrencyFederalFinancialInstitutionsExaminationCouncilConsolidatedReportsofConditionandIncomeforaBankwithDomesticOfficesOnly—FFIEC041ReportatthecloseofbusinessMarch31,2019Thisreportisrequiredbylaw:12U.S.C.§324(Statememberbanks);12U.S.C.§1817(Statenonmemberbanks);12U.S.C.§161(Nationalbanks);and12U.S.C.§1464(Savingsassociations).20190331(RCON9999)Unlessthecontextindicatesotherwise,theterm“bank”inthisreportformreferstobothbanksandsavingsassociations.ThisreportformistobefiledbybankswithdomesticofficesonlyandtotalconsolidatedassetsoflessthanthosebanksthatfiletheFFIEC051.$100billion,exceptNOTE:Eachbank’sboardofdirectorsandseniormanagementareresponsibleforestablishingandmaintaininganeffectivesystemofinternalcontrol,includingcontrolsovertheReportsofConditionandIncome.TheReportsofConditionandIncomearetobepreparedinaccordancewithfederalregulatoryauthorityinstructions.TheReportsofConditionandIncomemustbesignedbytheChiefFinanciaOfficer(CFO)ofthereportingbank(orbytheindividualperforminganequivalentfunction)andattestedtobynotlessthantwodirectors(trustees)forstatenonmemberbanksandthreedirectorsforstatememberbanks,nationalbanks,andsavingsassociations.schedules)forthisreportdatehavebeenmancewiththeinstructionsissuedbythepreparedinconfor-appropriateFederalregulatoryauthorityandaretrueandcorrecttothebestofmyknowledgeandbelief.We,theundersigneddirectors(trustees),attesttothecorrectnessoftheReportsofConditionandIncome(includingthesupportingschedules)forthisreportdateanddeclarethattheReportsofConditionandIncomehavebeenexaminedbyusandtothebestofourknowledgeandbeliefhavebeenpreparedinconformancewiththeinstructionsissuedbytheappropriateFederalregulatoryauthorityandaretrueandcorrect.I,theundersignedCFO(orequivalent)ofthenamedbank,attestthattheReportsofConditionandIncome(includingthesupportingDirector(Trustee)SignatureofChiefFinancialOfficer(orEquivalent)04/30/2019Director(Trustee)DateofSignatureDirector(Trustee)SubmissionofReportsEachbankmustfileitsReport)databyeither:ReportsofConditionandIncome(CallTofulfillthesignatureandattestationrequirementfortheReportsofConditionandIncomeforthisreportdate,attachyourbank’scompletedsignaturepage(oraphotocopyoracomputergener-atedversionofthispage)tothehard-copyrecordofthedatafilesubmittedtotheCDRthatyourbankmustplaceinitsfiles.(a)

UsingcomputersoftwaretoprepareitsCallReportandthensubmittingthereportdatadirectlytotheFFIEC’sCentralDataRepository(CDR),anInternet-basedsystemfordatacollec-tion(https://cdr.ffiec.gov/cdr/),orTheappearanceofyourbank’shard-copyrecordofthesubmitteddatafileneednotmatchexactlytheappearanceoftheFFIEC’ssamplereportforms,butshouldshowatleastthecaptionofeachCallReportitemandthereportedamount.(b)CompletingitsCallReportinpaperformandarrangingwithasoftwarevendororanotherpartytoconvertthedataintotheelectronicformatthatcanbeprocessedbytheCDR.Thesoftwarevendororotherpartythenmustelectronicallysubmitthebank’sdatafiletotheCDR.DEUTSCHEBANKTRUSTCOMPANYAMERICASLegalTitleofBank(RSSD9017)FortechnicalassistancewithsubmissionstotheCDR,pleasecontacttheCDRHelpDeskbytelephoneat(888)CDR-3111,byfaxat(703)774-3946,orbye-mailatCDR.Help@ffiec.gov.NewYorkCity(RSSD9130)FDICCertificateNumberNY10005StateAbbreviation(RSSD9200)LegalEntityIdentifier(LEI)ZipCode(RSSD9220)(RSSD9050)(ReportonlyifyourinstitutionalreadyhasanLEI.)(RCON9224)Theestimatedaverageburdenassociatedwiththisinformationcollectionis55.71hoursperrespondentandisexpectedtovarybyinstitution,dependingonindividualcircumstances.Burdenestimatesincludethetimeforreviewinginstructions,gatheringandmaintainingdataintherequiredform,andcompletingtheinformationcollection,butexcludethetimeforcompilingandmaintainingbusinessrecordsinthenormalcourseofarespondent’sactivities.AFederalagencymaynotconductorsponsor,andanorganization(oraperson)isnotrequiredtorespondtoacollectionofinformation,unlessitdisplaysacurrentlyvalidOMBcontrolnumber.CommentsconcerningtheaccuracyofthisburdenestimateandsuggestionsforreducingthisburdenshouldbedirectedtotheOfficeofInformationandRegulatoryAffairs,OfficeofManagementandBudget,Washington,DC20503,andtooneofthefollowing:Secretary,BoardofGovernorsoftheFederalReserveSystem,20thandCStreets,NW,Washington,DC20551;LegislativeandRegulatoryAnalysisDivision,OfficeoftheComptrolleroftheCurrency,Washington,DC20219;AssistantExecutiveSecretary,FederalDepositInsuranceCorporation,Washington,DC20429.03/20198EWQ2UQKS07AKK8ANH81623

FFIEC041Page17of87RC-1ConsolidatedReportofConditionforInsuredBanksandSavingsAssociationsforMarch31,2019Allschedulesaretobereportedinthousandsofdollars.Unlessotherwiseindicated,reporttheamountoutstandingasofthelastbusinessdayofthequarter.ScheduleRC—BalanceSheet1.a.1.b.2.a.2.b.2.c.3.a.3.b.4.a.4.b.4.c.4.d.5.6.7.8.9.10.11.12.RC-E)…………………220013.a.13.a.(1)13.a.(2)Interest-bearing…………………………………………………663614.a.14.b.15.16.………………………………………………………………32001.Includescashitemsinprocessofcollectionandunposteddebits.2.Includestimecertificatesofdepositnotheldfortrading.19.3.InstitutionsthathaveadoptedASU2016-13shouldreportinitem2.aamountsnetofanyapplicableallowanceforcreditlosses,anditem2.ashouldequalScheduleRC-B,item8,columnA,lessScheduleRI-B,PartII,item7,columnB.4.Item2.cistobecompletedonlybyinstitutionsthathaveadoptedASU2016-01,whichincludesprovisionsgoverningtheaccountingforinvestmentsinequitysecurities.SeetheinstructionsforfurtherdetailonASU2016-01.5.Includesallsecuritiesresaleagreements,regardlessofmaturity.6.InstitutionsthathaveadoptedASU2016-13shouldreportinitems3.band11amountsnetofanyapplicableallowanceforcreditlosses.7.InstitutionsthathaveadoptedASU2016-13shouldreportinitem4.ctheallowanceforcreditlossesonloansandleases.8.Includesnoninterest-bearingdemand,time,andsavingsdeposits.9.ReportovernightFederalHomeLoanBankadvancesinScheduleRC,item16,"Otherborrowedmoney."10.Includesallsecuritiesrepurchaseagreements,regardlessofmaturity.11.Includeslimited-lifepreferredstockandrelatedsurplus.03/2019DollarAmountsinThousandsRCONAmountAssets1.Cashandbalancesduefromdepositoryinstitutions(fromScheduleRC-A):a.Noninterest-bearingbalancesandcurrencyandcoin(1)…………………………….…….…...b.Interest-bearingbalances(2)………………………………………………………......................2.Securities:a.Held-to-maturitysecurities(fromScheduleRC-B,columnA)(3)……………………………......b.Available-for-salesecurities(fromScheduleRC-B,columnD)…………………….……..........c.Equitysecuritieswithreadilydeterminablefairvaluesnotheldfortrading(4)…………………3.Federalfundssoldandsecuritiespurchasedunderagreementstoresella.Federalfundssold……………………………………………………….......................................b.Securitiespurchasedunderagreementstoresell(5,6)………………………….......................4.Loansandleasefinancingreceivables(fromScheduleRC-C):a.Loansandleasesheldforsale………………………………………………………..……...........008133,000007116,966,000JJ34017730JA225,000B9870B98913,287,00053690b.Loansandleasesheldforinvestment………………...................c.LESS:Allowanceforloanandleaselosses……………..............B52810,109,00031239,000d.Loansandleasesheldforinvestment,netofallowance(item4.bminus4.c)(7)……….........5.Tradingassets(fromScheduleRC-D)…………………………………………………….…….........6.Premisesandfixedassets(includingcapitalizedleases)……………………………………..........7.Otherrealestateowned(fromScheduleRC-M)……………………………………………….........8.Investmentsinunconsolidatedsubsidiariesandassociatedcompanies…………………….........9.Directandindirectinvestmentsinrealestateventures...................................……......................10.Intangibleassets(fromScheduleRC-M)……………………………………………………………11.Otherassets(fromScheduleRC-F)(6)……………………………………………………………......12.Totalassets(sumofitems1through11)………………………………………………………..........Liabilities13.Deposits:a.Indomesticoffices(sumoftotalsofcolumnsAandCfromScheduleB52910,100,00035450214528,00021501,0002130036560214319,00021601,299,000217041,738,00028,602,000(1)Noninterest-bearing(8)………………………………………(2)663120,889,0007,713,000b.Notapplicable14.Federalfundspurchasedandsecuritiessoldunderagreementstorepurchase:a.Federalfundspurchased(9)………………………………………..…………............................b.Securitiessoldunderagreementstorepurchase(10)……………………………………………15.Tradingliabilities(fromScheduleRC-D)…………………………………………………..………….16.Otherborrowedmoney(includesmortgageindebtednessandobligationsundercapitalizedleases)(fromScheduleRC-M)……………………………………………………………17.and18.Notapplicable19.Subordinatednotesanddebentures(11)B993902,000B9950354803190856,0000

FFIEC041Page18of87RC-2ScheduleRC—Continued20.21.20)………………………………………………………………………294823.24.25.26.a.26.b.26.c.27.a.27.b.28.29.stock)………………………………………………..…………3839MemorandaTobereportedwiththeMarchReportofCondition.1.Indicateintheboxattherightthenumberofthestatementbelowthatbestdescribesthemostcomprehensivelevelofauditingworkperformedforthebankbyindependentexternalauditorsasofanydateduring2018……………………………………………………………………………………...............M.1.1a=Anintegratedauditofthereportinginstitution’sfinancialstatementsanditsinternalcontroloverfinancialreportingconductedinaccordancewiththestandardsoftheAmericanInstituteofCertifiedPublicAccountants(AICPA)orPublicCompanyAccountingOversightBoard(PCAOB)byanindepen-dentpublicaccountantthatsubmitsareportontheinstitution1b=Anauditofthereportinginstitution'sfinancialstatementsonlyconductedinaccordancewiththeauditingstandardsoftheAICPAorthePCAOBbyanindependentpublicaccountantthatsubmitsareportontheinstitution2a=Anintegratedauditofthereportinginstitution'sparentholdingcompany'sconsolidatedfinancialstatementsanditsinternalcontroloverfinancialreportingconductedinaccordancewiththestandardsoftheAICPAorthePCAOBbyanindependentpublicaccountantthatsubmitsareportontheconsolidatedholdingcompany(butnotontheinstitutionseparately)2b=Anauditofthereportinginstitution'sparentholdingcompany'sconsolidatedfinancialstatementsonlyconductedinaccordancewiththeauditingstandardsoftheAICPAorthePCAOBbyanindependentpublicaccountantthatsubmitsareportontheconsolidatedholdingcompany(butnotontheinstitutionseparately)3=Thisnumberisnottobeused4=Directors’examinationofthebankconductedinaccordancewithgenerallyacceptedauditingstandardsbyacertifiedpublicaccountingfirm(mayberequiredbystate-charteringauthority)5=Directors’examinationofthebankperformedbyotherexternalauditors(mayberequiredbystate-charteringauthority)6=Reviewofthebank’sfinancialstatementsbyexternalauditors7=Compilationofthebank’sfinancialstatementsbyexternalauditors8=Otherauditprocedures(excludingtaxpreparationwork)9=NoexternalauditworkTobereportedwiththeMarchReportofCondition.2.Bank'sfiscalyear-enddate(reportthedateinMMDDformat).....................................................................M.2.1.Includes,butisnotlimitedto,netunrealizedholdinggains(losses)onavailable-for-salesecurities,accumulatednetgains(losses)oncashflowhedges,andaccumulateddefinedbenefitpensionandotherpostretirementplanadjustments.2.IncludestreasurystockandunearnedEmployeeStockOwnershipPlanshares.03/2019RCONDate86781231RCONNumber67242aDollarAmountsinThousandsRCONAmountLiabilities—continued20.Otherliabilities(fromScheduleRC-G)…………………………………………………………………….………21.Totalliabilities(sumofitems13through22.NotapplicableEquityCapitalBankEquityCapital23.Perpetualpreferredstockandrelatedsurplus……………………………………………………………………24.Commonstock……………………………………………………………………………………………….………25.Surplus(excludeallsurplusrelatedtopreferred26.a.Retainedearnings………………………………………………………………………………………..………b.Accumulatedothercomprehensiveincome(1)………………………………………………………….……c.Otherequitycapitalcomponents(2)……………………………………………………………………………27.a.Totalbankequitycapital(sumofitems23through26.c)…………………………………………………..…b.Noncontrolling(minority)interestsinconsolidatedsubsidiaries…………………………………….…….....28.Totalequitycapital(sumofitems27.aand27.b)………………………………………………………..………29.Totalliabilitiesandequitycapital(sumofitems21and28)……………………………………………..………29301,977,00032,337,0003838032302,127,000752,00036326,523,000B530(1,000)A130032109,401,00030000G1059,401,000330041,738,000

QuickLinks--Clickheretorapidlynavigatethroughthisdocument

Exhibit 99.1

LETTER OF TRANSMITTAL

ELANCO ANIMAL HEALTH INCORPORATEDOffer to Exchange

$500,000,000 principal amount of 3.912% Senior Notes due 2021, registered under the Securities Act of 1933, for any and all outstanding 3.912% Senior Notes due 2021

(CUSIP Nos. 28414H AA1 and U2541F AA3)

(CUSIP Nos. 28414H AC7 and U2541F AC9)

(CUSIP Nos. 28414H AB9 and U2541F AB1)

Pursuant to the Prospectus dated , 2019

THE EXCHANGE OFFERS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2019, UNLESS EXTENDED (SUCH TIME AND DATE, AS THE SAME MAY BEEXTENDED FROM TIME TO TIME, THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.

The Exchange Agent is:

DEUTSCHE BANK TRUST COMPANY AMERICAS

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION TO A FACSIMILE NUMBER OTHER THAN THE ONELISTED ABOVE WILL NOT CONSTITUTE VALID DELIVERY TO THE EXCHANGE AGENT.

THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.

Byexecutionhereof,theundersignedacknowledgesreceiptoftheprospectusdated,2019(the"Prospectus"),ofElancoAnimalHealthIncorporated,anIndianacorporation(the"Company"),andthisletteroftransmittalandtheinstructionshereto(the"LetterofTransmittal"),whichtogetherconstitutetheCompany'sofferstoexchange(the"ExchangeOffers")(i)upto$500,000,000aggregateprincipalamountoftheCompany's3.912%SeniorNotesdue2021(the"2021ExchangeNotes")foralikeamountoftheCompany'soutstandingunregistered3.912%SeniorNotesdue2021(the"2021OriginalNotes");(ii)upto$750,000,000aggregateprincipalamountoftheCompany's4.272%SeniorNotesdue2023(the"2023ExchangeNotes")foralikeamountoftheCompany'soutstandingunregistered4.272%SeniorNotesdue2023(the"2023OriginalNotes");and(iii)upto$750,000,000aggregateprincipalamountoftheCompany's4.900%SeniorNotesdue2028(the"2028ExchangeNotes"andtogetherwiththe2021ExchangeNotesandthe2023ExchangeNotes,the"ExchangeNotes")foralikeamountoftheCompany'soutstandingunregistered4.900%SeniorNotesdue2028(the"2028OriginalNotes"andtogetherwiththe2021OriginalNotesandthe2023OriginalNotes,the"OriginalNotes").RecipientsoftheProspectusshouldreadtherequirementsdescribedintheProspectuswithrespecttoeligibilitytoparticipateintheExchangeOffers.CapitalizedtermsusedbutnotdefinedhereinhavethemeaninggiventothemintheProspectus.

ForeachOriginalNoteacceptedforexchange,theholderofsuchOriginalNotewillreceiveanExchangeNotehavingaprincipalamountequaltothatofthesurrenderedOriginalNote.

By registered or certified mail, hand or overnight delivery:

Facsimile transactions: (For Eligible Institutions only)

DeutscheBankTrustCompanyAmericasc/oDBServicesAmericas,Inc.

Attn:ReorgDept.5022GateParkway,Suite200

Jacksonville,FL32256

615-866-3889Attention:ReorgDept.

To confirm by telephone:

877-843-9767

PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE CHECKING ANY BOX BELOW.

ThisLetterofTransmittalistobeusedbyaholderofOriginalNotes:

• ifcertificatesrepresentingtenderedOriginalNotesaretobeforwardedherewith;

• ifatenderofcertificatesforOriginalNotesistobemadebybook-entrytransfertotheaccountmaintainedbytheExchangeAgentattheDepositoryTrustCompany("DTC")pursuanttotheproceduressetforthin"TheExchangeOffers"sectionoftheProspectus;or

• ifatenderismadepursuanttotheguaranteeddeliveryproceduresinthesectionoftheProspectusentitled"TheExchangeOffers—ProceduresforTenderingOriginalNotes—GuaranteedDelivery."

HoldersofOriginalNotesthataretenderingbybook-entrytransfertotheaccountmaintainedbytheExchangeAgentatDTCcanexecutethetenderthroughtheAutomatedTenderOfferProgram("ATOP")forwhichtheExchangeOfferswillbeeligible.DTCparticipantsthatareacceptingtheExchangeOffersmusttransmittheiracceptancetoDTCwhichwillverifytheacceptanceandexecuteabook-entrydeliverytotheExchangeAgent'saccountatDTC.DTCwillthensendanagent'smessageformingpartofabook-entrytransferinwhichtheparticipantagreestobeboundbythetermsoftheLetterofTransmittal(an"Agent'sMessage")totheExchangeAgentforitsacceptance.

InordertoproperlycompletethisLetterofTransmittal,aholderofOriginalNotesmust:

• completetheboxentitled,"DescriptionofOriginalNotesTendered";

• ifappropriate,checkandcompletetheboxesrelatingtobook-entrytransfer,guaranteeddelivery,SpecialIssuanceInstructionsandSpecialDeliveryInstructions;

• signtheLetterofTransmittalbycompletingtheboxentitled"SignHeretoTenderYourOriginalNotesintheExchangeOffers";and

• completetheFormW-9orapplicableFormW-8.

EachholderofOriginalNotesshouldcarefullyreadthedetailedinstructionsbelowpriortocompletingtheLetterofTransmittal.

HoldersofOriginalNoteswhodesiretotendertheirOriginalNotesforexchange,but:

• suchholder'sOriginalNotesarenotimmediatelyavailable;

• suchholdercannotdeliveritsOriginalNotes,thisLetterofTransmittalandallotherdocumentsrequiredherebytotheExchangeAgent;or

• suchholdercannotcompletetheproceduresforbook-entrytransferonorpriortotheExpirationDate,

musttendertheirOriginalNotespursuanttotheguaranteeddeliveryproceduressetforthinthesectionoftheProspectusentitled"TheExchangeOffers—ProceduresforTenderingOriginalNotes—GuaranteedDelivery."SeeInstruction2.

DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. IN ORDER TO ENSURE PARTICIPATION IN THE EXCHANGE OFFERS,ORIGINAL NOTES MUST BE PROPERLY TENDERED PRIOR TO THE EXPIRATION DATE.

HoldersofOriginalNoteswhowishtotendertheirOriginalNotesforexchangemustcompletecolumns(1)through(4)intheboxbelowentitled"DescriptionofOriginalNotesTendered,"andsigntheboxbelowentitled"SignHeretoTenderYourOriginalNotesintheExchangeOffers."Ifonlythosecolumnsarecompleted,suchholderofOriginalNoteswillhavetenderedforexchangeall

OriginalNoteslistedincolumn(4)below.IftheholderofOriginalNoteswishestotenderforexchangelessthanallofsuchOriginalNotes,column(5)mustbecompletedinfull.Insuchcase,suchholderofOriginalNotesshouldrefertoInstruction5.

TheExchangeOffersmaybeextended,terminatedoramended,asprovidedintheProspectus.DuringanysuchextensionoftheExchangeOffers,allOriginalNotespreviouslytenderedandnotvalidlywithdrawnpursuanttotheExchangeOfferswillremainsubjecttosuchExchangeOffers.

TheundersignedherebytendersforexchangetheOriginalNotesdescribedintheboxentitled"DescriptionofOriginalNotesTendered"belowpursuanttothetermsandconditionsdescribedintheProspectusandthisLetterofTransmittal.

DESCRIPTION OF ORIGINAL NOTES TENDERED

(1) Name(s) and Address(es) of

Registered Owner(s) (Please fill in, if blank)

(2) Title of Security

(3) Certificate

Number(s)(A)

(4) Aggregate

Principal Amount Represented by Certificate(s)(B)

(5) Principal

Amount Tendered for Exchange (if less than all)(C)

Total:

(A) NeednotbecompletedifOriginalNotesarebeingtenderedbybook-entrytransfer.

(B) Unlessotherwiseindicated,anytenderingholderwillbedeemedtohavetenderedtheentireprincipalamountrepresentedbytheOriginalNotesindicatedin

thiscolumn.SeeInstruction5.

(C) Theminimumpermittedtenderis$2,000inprincipalamountofOriginalNotes.Alltendersinexcessofsuchamountmustbeintegralmultiplesof$1,000.See

Instruction5.

o CHECK HERE IF TENDERED ORIGINAL NOTES ARE ENCLOSED HEREWITH.o CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED BY DTC TO THE EXCHANGE AGENT'S ACCOUNT AT DTC AND COMPLETE THE FOLLOWING:

NameofTenderingInstitution:

DTCBook-EntryNumber:

TransactionCodeNumber:

o CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING (FOR USE BYELIGIBLE INSTITUTIONS ONLY):

Name(s)ofRegisteredHolders:

DateofExecutionofNoticeofGuaranteedDelivery:

ByitsacceptanceoftheExchangeOffers,anybroker-dealerthatreceivesExchangeNotespursuanttotheExchangeOffersagreestonotifytheCompanybeforeusingtheProspectusinconnectionwiththesaleortransferoftheExchangeNotes.Seethesectiontitled"PlanofDistribution"intheProspectus.

OnlyregisteredholdersareentitledtotendertheirOriginalNotesforexchangeintheExchangeOffers.AnyfinancialinstitutionthatisaparticipantinDTC'ssystemandwhosenameappearsonasecuritypositionlistingastherecordowneroftheOriginalNotesandwhowishestomakebook-entrydeliveryofOriginalNotesasdescribedabovemustcompleteandexecuteaparticipant'sletter(whichwillbedistributedtoparticipantsbyDTC)instructingDTC'snomineetotendersuchOriginalNotesforexchange.

PersonswhoarebeneficialownersofOriginalNotesbutarenotregisteredholdersandwhoseektotenderOriginalNotesshould:

• promptlycontacttheregisteredholderofsuchOriginalNotesandinstructsuchregisteredholdertotenderonhisorherbehalf;

• obtainandincludewiththisLetterofTransmittalOriginalNotesproperlyendorsedfortransferbytheregisteredholderoraccompaniedbyaproperlycompletedbondpowerfromtheregisteredholder,withsignaturesontheendorsementorbondpowerguaranteedbyabank,broker,dealer,creditunion,savingsassociation,clearingagencyorotherinstitution,eachan"EligibleInstitution"thatisamemberofarecognizedsignatureguaranteemedallionprogramwithinthemeaningofRule17Ad-15undertheSecuritiesExchangeActof1934;or

• effectarecordtransferofsuchOriginalNotesfromtheregisteredholdertosuchbeneficialownerandcomplywiththerequirementsapplicabletoregisteredholdersfortenderingOriginalNotespriortotheExpirationDate.

Seethesectiontitled"TheExchangeOffers—ProceduresforTenderingOriginalNotes"intheProspectus.

SIGNATURES MUST BE PROVIDED BELOW.

NameofEligibleInstitution(asdefinedbelow)thatGuaranteedDelivery:

NameofTenderingInstitution:

DTCBook-EntryNumber:

TransactionCodeNumber:

o CHECK HERE IF YOU ARE A BROKER-DEALER WHO HOLDS ORIGINAL NOTES ACQUIRED FOR YOUR OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADINGACTIVITIES AND WISH TO RECEIVE COPIES OF THE PROSPECTUS AND COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO FOR USE IN CONNECTION WITH RESALES OFEXCHANGE NOTES RECEIVED FOR YOUR OWN ACCOUNT IN EXCHANGE FOR SUCH ORIGINAL NOTES.

Address:

AggregatePrincipalAmountofOriginalNotessoHeld:

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.

LadiesandGentlemen:

UponthetermsandsubjecttotheconditionsoftheExchangeOffers,theundersignedherebytenderstotheCompanyforexchangetheaggregateprincipalamountofOriginalNotesindicatedinthisLetterofTransmittal.Subjectto,andeffectiveupon,theacceptanceforexchangeoftheOriginalNotestenderedherewith,theundersignedherebysells,assigns,transfersandexchangesto,orupontheorderof,theCompanyallright,titleandinterestinandtoallsuchOriginalNotestenderedforexchangehereby.TheundersignedherebyirrevocablyconstitutesandappointstheExchangeAgentasthetrueandlawfulagentandattorney-in-factoftheundersigned(withfullknowledgethattheExchangeAgentalsoactsasagentoftheCompany)withrespecttosuchOriginalNotes,withfullpowerofsubstitutionandresubstitution(suchpowerofattorneybeingdeemedtobeanirrevocablepowercoupledwithaninterest)to:

• deliversuchOriginalNotesinregisteredcertificatedform,ortransferownershipofsuchOriginalNotesthroughbook-entrytransferatthebook-entrytransferfacility,toorupontheorderoftheCompany,uponreceiptbytheExchangeAgent,astheundersigned'sAgent,ofthesameaggregateprincipalamountoftheExchangeNotes;

• presentanddeliversuchOriginalNotesfortransferonthebooksoftheCompany;and

• receiveallbenefitsorotherwiseexerciseallrightsandincidentsofbeneficialownershipofsuchOriginalNotes,allinaccordancewiththetermsoftheExchangeOffers.

Theundersignedrepresentsandwarrantsthatithasfullpowerandauthoritytotender,sell,assign,exchange,andtransfertheOriginalNotestenderedherebyandthattheCompanywillacquiregood,marketableandunencumberedtitletothetenderedOriginalNotes,freeandclearofallsecurityinterests,liens,restrictions,chargesandencumbrances,conditionalsaleagreementsorotherobligationsrelatingtotheirsaleortransfer,andnotsubjecttoanyadverseclaimwhenthesameareacceptedbytheCompany.Theundersignedalsowarrantsthatitwill,uponrequest,executeanddeliveranyadditionaldocumentsdeemedbytheExchangeAgentortheCompanytobenecessaryordesirabletocompletetheexchange,assignmentandtransferoftenderedOriginalNotesortransferownershipofsuchOriginalNotesontheaccountbooksmaintainedbythebook-entrytransferfacility.TheundersignedfurtheragreesthatacceptanceofanyandallvalidlytenderedOriginalNotesbytheCompanyandtheissuanceofExchangeNotesinexchangethereforshallconstituteperformanceinfullbytheCompanyofitsobligationsundertheExchangeandRegistrationRightsAgreemententeredintowiththeinitialpurchasersnamedtherein,datedAugust28,2018(the"RegistrationRightsAgreement").

Bytendering,eachholderofOriginalNotesrepresentsthat:

• theExchangeNotestobeacquiredinconnectionwiththeExchangeOffersbytheholderandeachbeneficialowneroftheOriginalNotesarebeingacquiredbytheholderandeachbeneficialownerintheordinarycourseofbusinessoftheholderandeachbeneficialowner;

• theholderandeachbeneficialownerarenotparticipating,donotintendtoparticipate,andhavenoarrangementorunderstandingwithanypersontoparticipate,inthedistributionoftheExchangeNotes;

• theholderandeachbeneficialowneracknowledgeandagreethatanypersonparticipatingintheExchangeOffersforthepurposeofdistributingtheExchangeNotesmustcomplywiththeregistrationandprospectusdeliveryrequirementsoftheSecuritiesActof1933,asamended(the"SecuritiesAct"),inconnectionwithasecondaryresaletransactionandcannotrelyonthepositionofthestaffoftheSecuritiesandExchangeCommission(the"Commission")setforthintheapplicableno-actionletters,see"TheExchangeOffers—ResalesofExchangeNotes"inthe

Prospectus,andthatsuchasecondaryresaletransactionshouldbecoveredbyaneffectiveregistrationstatementcontainingthesellingsecurityholderinformationrequiredbyItem507or508,applicableofRegulationS-KoftheCommission;

• iftheholderisabroker-dealer,suchholderrepresentsthatitacquiredtheOriginalNotesforitsownaccountasaresultofmarketmakingorothertradingactivities(otherthanOriginalNotesacquireddirectlyfromtheCompany),andthatitwilldeliveraprospectusinconnectionwithanyresaleofExchangeNotesacquiredintheExchangeOffers;

• iftheholderisabroker-dealerandreceivesExchangeNotespursuanttotheExchangeOffersitshallnotifytheCompanybeforeusingtheProspectusinconnectionwithanysaleortransferoftheExchangeNotes;

• neithertheholdernoranybeneficialownerisan"affiliate,"asdefinedunderRule405oftheSecuritiesAct,oftheCompanyorofanyoftheCompany'ssubsidiaries;and

• inconnectionwithabook-entrytransfer,eachparticipantwillconfirmthatitmakestherepresentationsandwarrantiessetforthinthisLetterofTransmittal.

TheundersignedhasreadandagreestoallofthetermsoftheExchangeOffers.

TheundersignedalsoacknowledgesthattheCompanyismakingtheseExchangeOffersinrelianceonthepositionofthestaffoftheCommission,assetforthincertaininterpretivelettersissuedtothirdpartiesinothertransactions.BasedontheCommissioninterpretations,theCompanybelievesthattheExchangeNotesissuedinexchangefortheOriginalNotespursuanttotheExchangeOffersmaybeofferedforresale,resoldandotherwisetransferredbyholdersthereof(otherthanabroker-dealerwhopurchasedOriginalNotesdirectlyfromtheCompanyoranysuchholderthatisan"affiliate"oftheCompanyoranyofitssubsidiarieswithinthemeaningofRule405undertheprovisionsoftheSecuritiesAct)withoutfurthercompliancewiththeregistrationandprospectusdeliveryprovisionsoftheSecuritiesAct;providedthatsuchExchangeNotesareacquiredintheordinarycourseofsuchholders'businessandsuchholdersarenotengagedin,donotintendtoengagein,anddonothaveanarrangementorunderstandingwithanypersontoparticipateinadistributionofsuchExchangeNotes.However,theCompanydoesnotintendtorequesttheCommissiontoconsider,andtheCommissionhasnotconsidered,theExchangeOffersinthecontextofaninterpretiveletter,andtherecanbenoassurancethatthestaffoftheCommissionwouldmakeasimilardeterminationwithrespecttotheExchangeOffersasitdidininterpretativeletterstothirdpartiesinsimilarcircumstances.

Iftheundersignedisnotabroker-dealer,theundersignedrepresentsthatitisnotengagedin,anddoesnotintendtoengagein,adistributionofExchangeNotesandhasnoarrangementorunderstandingtoparticipateinadistributionofExchangeNotes.Ifanyholderisabroker-dealerthatacquiredanyofitsOriginalNotesdirectlyfromtheCompany,anaffiliateoftheCompanyoranyoftheCompany'ssubsidiaries,orisengagedinorintendstoengageinorhasanyarrangementorunderstandingwithrespecttothedistributionoftheExchangeNotestobeacquiredpursuanttotheExchangeOffers,suchholder(i)couldnotrelyontheapplicableinterpretationsofthestaffoftheCommissionand(ii)mustcomplywiththeregistrationandprospectusdeliveryrequirementsoftheSecuritiesActinconnectionwithanysecondaryresaletransaction.Iftheundersignedisabroker-dealerthatwillreceiveExchangeNotesforitsownaccountinexchangeforOriginalNotes,theundersignedrepresentsthattheOriginalNoteswereacquiredforitsownaccountasaresultofmarket-makingactivitiesorothertradingactivities,anditacknowledgesthatitwilldeliveraprospectusmeetingtherequirementsoftheSecuritiesActinconnectionwithanyresaleofExchangeNotesreceivedinrespectofsuchOriginalNotespursuanttotheExchangeOffers;however,bysoacknowledgingandbydeliveringaprospectus,theundersignedwillnotbedeemedtoadmitthatitisan"underwriter"withinthemeaningoftheSecuritiesAct.Inaddition,byitsacceptanceoftheExchangeOffers,anysuch

broker-dealerthatreceivesExchangeNotespursuanttotheExchangeOffersagreestonotifytheCompanybeforeusingtheProspectusinconnectionwiththesaleortransferofExchangeNotes.

TheCompanyhasagreedthat,subjecttotheprovisionsoftheRegistrationRightsAgreement,theProspectus,asitmaybeamendedorsupplementedfromtimetotime,ifrequestedbyabroker-dealerinconnectionwithresalesofExchangeNotesreceivedinexchangeforOriginalNoteswhichwereacquiredbysuchbroker-dealerforitsownaccountasaresultofmarket-makingorothertradingactivities,maybeusedbysuchabroker-dealerinconnectionwithsuchresalesforaperiodending180daysfromthedateonwhichtheExchangeOffersareconsummatedorsuchshorterperiodaswillterminatewhenabroker-dealerhassoldallExchangeNotesheldbysuchbroker-dealer.Inthatregard,eachbroker-dealerbytenderingsuchOriginalNotesandexecutingthisLetterofTransmittal,agreesthat,uponreceiptofnoticefromtheCompany:

• oftheoccurrenceofanyeventorthediscoveryofanyfactwhichmakesanystatementcontainedorincorporatedbyreferenceintheProspectusuntrueinanymaterialrespectorwhichcausestheProspectustoomittostateamaterialfactnecessaryinordertomakethestatementscontainedorincorporatedbyreferencetherein,inlightofthecircumstancesunderwhichtheyweremade,notmisleading,or

• thattheboardofdirectorsoftheCompany(oraduly-appointedcommitteeoftheboardofdirectorshavingpoweroverthesubjectmatter)determinesingoodfaiththatitisinthebestinterestsoftheCompanynottodisclosetheexistenceoforfactssurroundinganyproposedorpendingmaterialcorporatetransactioninvolvingtheCompany,

suchbroker-dealerwillsuspendthesaleofExchangeNotespursuanttotheProspectusuntiltheCompanyhasamendedorsupplementedtheProspectustocorrectsuchmisstatementoromissionortodisclosesuchtransactionandhasfurnishedcopiesoftheamendedorsupplementedProspectustothebroker-dealerortheCompanyhasgivenwrittennoticethatthesaleoftheExchangeNotesmayberesumed,asthecasemaybe.IftheCompanygivessuchnoticetosuspendthesaleoftheExchangeNotes,itshallextendthe180-dayperiodreferredtoaboveduringwhichsuchbroker-dealersareentitledtousetheProspectusinconnectionwiththeresaleofExchangeNotesbythenumberofdaysduringtheperiodfromandincludingthedateofthegivingofsuchnoticetoandincludingthedatewhensuchbroker-dealersshallhavereceivedcopiesofthesupplementedoramendedProspectusnecessarytopermitresalesoftheExchangeNotesortoandincludingthedateonwhichtheCompanyhasgivennoticethatthesaleofExchangeNotesmayberesumed,asthecasemaybe.Eachbroker-dealerbytenderingsuchOriginalNotesandexecutingthisLetterofTransmittalfurtheragreestoholdthefactthatithasreceivedtheforegoingsuspensionnotice,andanycommunicationfromtheCompanytosuchbroker-dealerrelatingtoaneventgivingrisetosuchsuspensionnotice,inconfidence.

AllauthorityconferredoragreedtobeconferredpursuanttothisLetterofTransmittalandeveryobligationoftheundersignedhereundershallbebindinguponthesuccessors,assigns,heirs,executors,administrators,trusteesinbankruptcy,andpersonalandlegalrepresentativesoftheundersignedandshallnotbeaffectedby,andshallsurvive,thedeathorincapacityoftheundersigned.OriginalNotesproperlytenderedmaybewithdrawnatanytimepriortotheExpirationDateinaccordancewiththetermsofthisLetterofTransmittal.

TheExchangeOffersaresubjecttocertainconditions,eachofwhichmaybewaivedormodifiedbytheCompany,inwholeorinpart,atanytimeandfromtimetotime,asdescribedintheProspectusunderthecaption"TheExchangeOffers—Conditions."TheundersignedrecognizesthatasaresultofsuchconditionstheCompanymaynotberequiredtoacceptforexchange,ortoissueExchangeNotesinexchangefor,anyoftheOriginalNotesproperlytenderedhereby.Insuchevent,thetenderedOriginalNotesnotacceptedforexchangewillbereturnedtotheundersignedwithoutcosttothe

undersignedattheaddressshownbelowtheundersigned'ssignature(s)unlessotherwiseindicatedunder"SpecialIssuanceInstructions"below.

Unlessotherwiseindicatedunder"SpecialIssuanceInstructions"below,pleasereturnanycertificatesrepresentingOriginalNotesnottenderedornotacceptedforexchangeinthename(s)oftheholdersappearingunder"DescriptionofOriginalNotesTendered."Similarly,unlessotherwiseindicatedunder"SpecialDeliveryInstructions,"pleasemailanycertificatesrepresentingOriginalNotesnottenderedornotacceptedforexchange(andaccompanyingdocumentsasappropriate)totheaddress(es)oftheholdersappearingunder"DescriptionofOriginalNotesTendered."Intheeventthatboththe"SpecialIssuanceInstructions"andthe"SpecialDeliveryInstructions"arecompleted,pleaseissuethecertificatesrepresentingtheExchangeNotesissuedinexchangefortheOriginalNotesacceptedforexchangeinthename(s)of,andreturnanyOriginalNotesnottenderedornotacceptedforexchangeto,thepersonorpersonssoindicated.Unlessotherwiseindicatedunder"SpecialIssuanceInstructions,"inthecaseofabook-entrydeliveryofOriginalNotes,pleasecredittheaccountmaintainedatDTCwithanyOriginalNotesnottenderedornotacceptedforexchange.TheundersignedrecognizesthattheCompanydoesnothaveanyobligationpursuanttotheSpecialIssuanceInstructions,totransferanyOriginalNotesfromthenameoftheholderthereofiftheCompanydoesnotacceptforexchangeanyoftheOriginalNotessotenderedorifsuchtransferwouldnotbeincompliancewithanytransferrestrictionsapplicabletosuchOriginalNotes.

SPECIAL ISSUANCE INSTRUCTIONS (See Instructions 1, 6, 7 and 8)

TobecompletedONLYif(i)ExchangeNotesissuedinexchangeforOriginalNotes,certificatesforOriginalNotesinaprincipalamountnotexchangedforExchangeNotes,orOriginalNotes(ifany)nottenderedforexchangearetobeissuedinthenameofsomeoneotherthantheundersigned,or(ii)OriginalNotestenderedbybook-entrytransferwhicharenotexchangedaretobereturnedbycredittoanaccountmaintainedatDTCotherthantheaccountindicatedaboveintheboxentitled,"DescriptionofOriginalNotesTendered."

SPECIAL DELIVERY INSTRUCTIONS (See Instructions 1, 6, 7 and 8)

TobecompletedONLYiftheExchangeNotesissuedinexchangeforOriginalNotes,certificatesforOriginalNotesinaprincipalamountnotexchangedforExchangeNotes,orOriginalNotes(ifany)nottenderedforexchangearetobesenttosomeoneotherthantheundersignedortotheundersignedatanaddressotherthanthatshownaboveintheboxentitled,"DescriptionofOriginalNotesTendered."

Issueto:

(Please Print)

Address:

(Include Zip Code)

TaxpayerIdentificationorSocialSecurityNumber:

CreditOriginalNotesnotexchangedanddeliveredbybook-entrytransfertotheDTCaccountsetforthbelow:

(Account Number)

Mailto:

(Please Print)

Address:

(Include Zip Code)

SIGN HERE TO TENDER YOUR ORIGINAL NOTES IN THE EXCHANGE OFFERS SIGNATURE(S) OF HOLDERS OF ORIGINAL NOTES

ThisLetterofTransmittalmustbesignedbytheregisteredholdersofOriginalNotesexactlyasthename(s)appear(s)oncertificate(s)representingtheOriginalNotesoronasecuritypositionlistingorbyperson(s)authorizedtobecomeregisteredholdersbycertificatesanddocumentstransmittedherewith.Ifsignatureisbyattorney-in-fact,executor,administrator,trustee,guardian,officerofacorporationorotherpersonactinginafiduciaryorrepresentativecapacity,pleaseprovidethefollowinginformationandseeInstruction6.

GUARANTEE OF SIGNATURE(S) (If required—see Instructions 1 and 6)

X Date:

X Date: (Signature of Owner)

Name(s): Address: (Please Print)

(Include Zip Code)

Capacity: TelephoneNumber: (Full Title) (Include Area Code)

Signature(s)Guaranteedby: (Authorized Signature)

(Title of Officer Signing this Guarantee)

(Name of Eligible Institution Guaranteeing Signatures—Please Print)

(Address and Telephone Number of Eligible Institution Guaranteeing Signatures)

INSTRUCTIONS

Forming Part of the Terms and Conditions of the Exchange Offers

1. Guarantee of Signatures. SignaturesonthisLetterofTransmittalneednotbeguaranteedif:

• tenderedOriginalNotesareregisteredinthenameofthesigneroftheLetterofTransmittal,unlesssuchholderhascompletedeithertheboxentitled"SpecialIssuanceInstructions"ortheboxentitled"SpecialDeliveryInstructions;"

• theExchangeNotestobeissuedinexchangefortheOriginalNotesaretobeissuedinthenameoftheholder;and

• anyuntenderedOriginalNotesaretobereissuedinthenameoftheholder.

Inanyothercase:

• thecertificatesrepresentingthetenderedOriginalNotesmustbeproperlyendorsedfortransferbytheregisteredholderorbeaccompaniedbyaproperlycompletedbondpowerfromtheregisteredholderorappropriatepowersofattorney,inaformsatisfactorytous;and

• signaturesontheendorsement,bondpowerorpowersofattorneymustbeguaranteedbyanEligibleInstitution.

IftheExchangeNotesorOriginalNotesnotexchangedaretobedeliveredtoanaddressotherthanthatoftheregisteredholderappearingonthenoteregistrarfortheOriginalNotes,thesignatureintheLetterofTransmittalmustbeguaranteedbyanEligibleInstitution.

PersonswhoarebeneficialownersofOriginalNotesbutarenottheregisteredholderandwhoseektotenderOriginalNotesforexchangeshould:

• promptlycontacttheregisteredholderofsuchOriginalNotesandinstructsuchregisteredholderstotenderonhisorherbehalf;

• obtainandincludewiththisLetterofTransmittal,OriginalNotesproperlyendorsedfortransferbytheregisteredholderoraccompaniedbyaproperlycompletedbondpowerfromtheregisteredholder,withsignaturesontheendorsementorbondpowerguaranteedbyanEligibleInstitution;or

• effectarecordtransferofsuchOriginalNotesfromtheregisteredholdertosuchbeneficialownerandcomplywiththerequirementsapplicabletoregisteredholdersfortenderingOriginalNotespriortotheExpirationDate.SeeInstruction6.

DO NOT SEND THIS LETTER OF TRANSMITTAL OR ANY ORIGINAL NOTES TO THE COMPANY.

2. Delivery of this Letter of Transmittal and Certificates for Original Notes or Book-Entry Confirmations; Guaranteed Delivery Procedures. ThisLetterofTransmittalistobecompletedbyregisteredholdersifcertificatesrepresentingOriginalNotesaretobeforwardedherewith.AllphysicallydeliveredOriginalNotes,aswellasaproperlycompletedanddulyexecutedLetterofTransmittal(ormanuallysignedfacsimilesthereof)andanyotherrequireddocuments,mustbereceivedbytheExchangeAgentatitsaddresssetforthonthecoverofthisLetterofTransmittalpriortotheExpirationDateorthetenderingholdermustcomplywiththeguaranteeddeliveryproceduressetforthbelow.DeliveryofthedocumentstoDTCdoesnotconstitutedeliverytotheExchangeAgent.

THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, ORIGINAL NOTES AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTIONAND RISK OF THE HOLDER THEREOF. IF SUCH DELIVERY IS BY MAIL, IT IS SUGGESTED THAT HOLDERS USE PROPERLY INSURED REGISTERED MAIL, RETURN

RECEIPT REQUESTED, AND THAT THE MAILING BE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE, TO PERMIT DELIVERY TO THE EXCHANGE AGENT PRIOR TO SUCHDATE. EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE DEEMED MADE WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. THIS LETTEROF TRANSMITTAL AND ORIGINAL NOTES TENDERED FOR EXCHANGE SHOULD BE SENT ONLY TO THE EXCHANGE AGENT, NOT TO THE COMPANY.

IfaholderdesirestotenderOriginalNotespursuanttotheExchangeOffersandsuchholder'sOriginalNotesare(i)notimmediatelyavailable;(ii)suchholdercannotdeliveritsOriginalNotes,thisLetterofTransmittalandallotherdocumentsrequiredherebytotheExchangeAgentpriortotheExpirationDate;or(iii)suchholdercannotcompletetheproceduresforbook-entrytransferonorpriortotheExpirationDate,suchholdermayeffectatenderofsuchOriginalNotesinaccordancewiththeguaranteeddeliveryproceduressetforthintheProspectusunder"TheExchangeOffers—ProceduresforTenderingOriginalNotes—GuaranteedDelivery."

Pursuanttotheguaranteeddeliveryprocedures:

• yourtenderofOriginalNotesmustbemadebyorthroughanEligibleInstitutionandyoumustproperlycompleteanddulyexecuteaNoticeofGuaranteedDelivery;

• onorpriortotheExpirationDate,theExchangeAgentmusthavereceivedfromyouandtheEligibleInstitutionaproperlycompletedanddulyexecutedNoticeofGuaranteedDelivery(byfacsimiletransmission,mailorhanddelivery)settingforththenameandaddressoftheholder,thecertificatenumberornumbersofthetenderedOriginalNotes,andtheprincipalamountoftenderedOriginalNotes,statingthatthetenderisbeingmadetherebyandguaranteeingthat,withinthree(3)businessdaysafterthedateofdeliveryoftheNoticeofGuaranteedDelivery,thetenderedOriginalNotes,adulyexecutedLetterofTransmittalandanyotherrequireddocumentswillbedepositedbytheEligibleInstitutionwiththeExchangeAgent;and

• suchproperlycompletedandexecuteddocumentsrequiredbytheLetterofTransmittalandthetenderedOriginalNotesinproperformfortransfer(orconfirmationofabook-entrytransferofsuchOriginalNotesintotheExchangeAgent'saccountatDTC)mustbereceivedbytheExchangeAgentwithinthree(3)businessdaysaftertheExpirationDate.

AnyholderwhowishestotenderitsOriginalNotespursuanttotheguaranteeddeliveryproceduresdescribedabovemustensurethattheExchangeAgentreceivestheNoticeofGuaranteedDeliveryrelatingtosuchOriginalNotespriorto5:00p.m.,NewYorkCitytime,ontheExpirationDate.

UnlessOriginalNotesbeingtenderedbytheabove-describedmethodaredepositedwiththeExchangeAgent,atenderwillbedeemedtohavebeenreceivedasofthedatewhenthetenderingholder'sproperlycompletedanddulysignedLetterofTransmittal,oraproperlytransmittedagent'smessage,accompaniedbytheOriginalNotesoraconfirmationofbook-entrytransferoftheOriginalNotesintotheExchangeAgent'saccountatthebook-entrytransferfacilityisreceivedbytheExchangeAgent.

IssuancesofExchangeNotesinexchangeforOriginalNotestenderedpursuanttoanoticeofguaranteeddeliverywillbemadeonlyagainstdepositofthisLetterofTransmittalandanyotherrequireddocumentsandthetenderedOriginalNotesoraconfirmationofbook-entryandanagent'smessage.

Alltenderingholders,byexecutionofthisLetterofTransmittal,waiveanyrighttoreceiveanynoticeoftheacceptanceoftheirOriginalNotesforexchange.

3. Inadequate Space. Ifthespaceprovidedintheboxentitled"DescriptionofOriginalNotesTendered"aboveisinadequate,thecertificatenumbersandprincipalamountsofOriginalNotestenderedshouldbelistedonaseparatesignedscheduleaffixedhereto.

4. Withdrawal of Tenders. AtenderofOriginalNotesmaybewithdrawnatanytimepriortotheExpirationDatebydeliveryofwrittenorfacsimile(receiptconfirmedbytelephone)noticeofwithdrawaltotheExchangeAgentattheaddresssetforthonthecoverofthisLetterofTransmittal.Tobeeffective,anoticeofwithdrawalmust:

• specifythenameofthepersonhavingtenderedtheOriginalNotestobewithdrawn(the"Depositor");

• identifytheOriginalNotestobewithdrawn(includingthecertificatenumberornumbersandprincipalamountofsuchOriginalNotes);

• specifytheprincipalamountofOriginalNotestobewithdrawn;

• includeastatementthatsuchholderiswithdrawinghisorherelectiontohavesuchOriginalNotesexchanged;

• besignedbytheholderinthesamemannerastheoriginalsignatureontheLetterofTransmittalbywhichsuchOriginalNotesweretenderedorasotherwisedescribedabove(includinganyrequiredsignatureguarantees)orbeaccompaniedbydocumentsoftransfersufficienttohavethetrusteeundertheIndentureregisterthetransferofsuchOriginalNotesintothenameofthepersonwithdrawingthetender;and

• specifythenameinwhichanysuchOriginalNotesaretoberegistered,ifdifferentfromthatoftheDepositor.

TheExchangeAgentwillreturntheproperlywithdrawnOriginalNotespromptlyfollowingreceiptofnoticeofwithdrawal.IfOriginalNoteshavebeentenderedpursuanttotheprocedureforbook-entrytransfer,anynoticeofwithdrawalmustspecifythenameandnumberoftheaccountatthebook-entrytransferfacility.Allquestionsastothevalidityofnoticesofwithdrawals,including,timeofreceipt,willbedeterminedbytheCompanyandsuchdeterminationwillbefinalandbindingonallparties.

AnyOriginalNotessowithdrawnwillbedeemednottohavebeenvalidlytenderedforexchangeforpurposesoftheExchangeOffers.AnyOriginalNoteswhichhavebeentenderedforexchangebutwhicharenotexchangedforanyreasonwillbereturnedtotheholderthereofwithoutcosttosuchholder(or,inthecaseofOriginalNotestenderedbybook-entrytransferintotheExchangeAgent'saccountatthebook-entrytransferfacilitypursuanttothebook-entrytransferproceduresdescribedabove,suchOriginalNoteswillbecreditedtoanaccountwithsuchbook-entrytransferfacilityspecifiedbytheholder)assoonaspracticableafterwithdrawal,rejectionoftenderorterminationoftheExchangeOffers.ProperlywithdrawnOriginalNotesmayberetenderedbyfollowingoneoftheproceduresdescribedunderthecaption"TheExchangeOffers—ProceduresforTenderingOriginalNotes"intheProspectusatanytimepriortotheExpirationDate.

5. Partial Tenders (Not Applicable to Holders of Original Notes that Tender by Book-Entry Transfer). TendersofOriginalNoteswillbeacceptedonlyindenominationsoftheprincipalamountof$2,000andintegralmultiplesof$1,000inexcessthereof.IfatenderforexchangeistobemadewithrespecttolessthantheentireprincipalamountofanyOriginalNotes,fillintheprincipalamountofOriginalNoteswhicharetenderedforexchangeincolumn(4)oftheboxentitled"DescriptionofOriginalNotesTendered,"asmorefullydescribedinthefootnotesthereto.Inthecaseofapartialtenderforexchange,newcertificates,infullyregisteredform,fortheremainderoftheprincipalamountoftheOriginalNotes,willbesenttotheholdersofOriginalNotesunlessotherwiseindicatedintheboxesentitled"SpecialIssuanceInstructions"or"SpecialDeliveryInstructions"above,assoonaspracticableaftertheexpirationorterminationoftheExchangeOffers.

6. Signatures on this Letter of Transmittal; Bond Powers and Endorsements. IfthisLetterofTransmittalissignedbytheregisteredholderoftheOriginalNotestenderedforexchangehereby,thesignature(s)mustcorrespondexactlywiththename(s)aswrittenonthefaceofthecertificate(s)withoutalteration,enlargementoranychangewhatsoever.

IfanyoftheOriginalNotestenderedherebyareownedofrecordbytwoormorejointowners,allsuchownersmustsignthisLetterofTransmittal.IfanytenderedOriginalNotesareregisteredindifferentnamesonseveralcertificates,itwillbenecessarytocomplete,signandsubmitasmanyseparatecopiesofthisLetterofTransmittalandanynecessaryorrequireddocumentsastherearenamesinwhichcertificatesareheld.

IfthisLetterofTransmittaloranycertificatesorbondpowersaresignedbytrustees,executors,administrators,guardians,attorneys-in-fact,officersofcorporationsorothersactinginafiduciaryorrepresentativecapacity,suchpersonsshouldsoindicatewhensigning,andproperevidencesatisfactorytotheCompanyoftheirauthoritysotoactmustbesubmitted,unlesswaivedbytheCompany.

IfthisLetterofTransmittalissignedbytheregisteredholderoftheOriginalNoteslistedandtransmittedhereby,noendorsementsofcertificatesorseparatebondpowersarerequiredunlesscertificatesforOriginalNotesnottenderedornotacceptedforexchangearetobeissuedorreturnedinthenameofapersonotherthanfortheregisteredholderthereof.SignaturesonsuchcertificatesmustbeguaranteedbyanEligibleInstitution(unlesssignedbyanEligibleInstitution).

IfthisLetterofTransmittalissignedbyapersonotherthantheregisteredholderoftheOriginalNotes,thecertificatesrepresentingsuchOriginalNotesmustbeproperlyendorsedfortransferbytheregisteredholderorbeaccompaniedbyaproperlycompletedbondpowerfromtheregisteredholderorappropriatepowersofattorney,inanycasesignedbysuchregisteredholderexactlyasthename(s)oftheregisteredholderoftheOriginalNotesappear(s)onthecertificates.SignaturesontheendorsementorbondpowermustbeguaranteedbyanEligibleInstitution(unlesssignedbyanEligibleInstitution).

7. Transfer Taxes. ExceptassetforthinthisInstruction7,theCompanywillpayorcausetobepaidanytransfertaxesapplicabletotheexchangeoftheOriginalNotespursuanttotheExchangeOffers.If,however,atransfertaxisimposedforanyreasonotherthantheexchangeofOriginalNotespursuanttotheExchangeOffers,thentheamountofanytransfertaxes(whetherimposedontheregisteredholdersoranyotherpersons)willbepayablebythetenderingholder.IfsatisfactoryevidenceofthepaymentofsuchtaxesorexemptionstherefromisnotsubmittedwiththisLetterofTransmittal,theamountofsuchtransfertaxeswillbebilleddirectlytosuchtenderingholder.

8. Special Issuance and Delivery Instructions. TenderingholdersofOriginalNotesshouldindicateintheapplicableboxthenameandaddresstowhichtheExchangeNotesissuedpursuanttotheExchangeOffersandanysubstitutecertificatesevidencingtheOriginalNotesnotexchangedaretobeissuedorsent,ifdifferentfromthenameoraddressofthepersonsigningthisLetterofTransmittal.Inthecaseofissuanceinadifferentname,theEmployerIdentificationorSocialSecurityNumberofthepersonnamedmustalsobeindicated.AholderofOriginalNotestenderingOriginalNotesbybook-entrytransfermayrequestthattheExchangeNotesandtheOriginalNotesnotexchangedbecreditedtosuchaccountmaintainedattheDTCassuchholderofOriginalNotesmaydesignate.Ifnosuchinstructionsaregiven,suchExchangeNotesandOriginalNotesnotexchangedwillbereturnedtothenameoraddressofthepersonsigningthisLetterofTransmittalorcreditedtotheaccountlistedbeneaththeboxentitled"DescriptionofOriginalNotes."

9. Irregularities. Allquestionsastotheformsofalldocumentsandthevalidityof(includingtimeofreceipt)andacceptanceofthetendersandwithdrawalsofOriginalNoteswillbedeterminedbytheCompany,initssolediscretion,whichdeterminationshallbefinalandbinding.TheCompanyreservestheabsoluterighttorejectanyoralltendersofOriginalNotesthatarenotinproperformor

theacceptanceofwhichwould,intheCompany'sopinionorthejudgmentoftheCompany'scounsel,beunlawful.TheCompanyalsoreservestherighttowaiveanydefects,irregularitiesorconditionsoftenderastoparticularOriginalNotes.TheCompany'sinterpretationsofthetermsandconditionsoftheExchangeOffers(includingtheinstructionsinthisLetterofTransmittal)willbefinalandbinding.AnydefectorirregularityinconnectionwithtendersofOriginalNotesmustbecuredwithinsuchtimeastheCompanydetermines,unlesswaivedbytheCompany.TendersofOriginalNotesshallnotbedeemedtohavebeenmadeuntilalldefectsorirregularitieshavebeenwaivedbytheCompanyorcured.NeithertheCompany,theExchangeAgent,noranyotherpersonwillbeunderanydutytogivenoticeofanydefectsorirregularitiesintendersofOriginalNotes,orwillincuranyliabilitytoregisteredholdersofOriginalNotesforfailuretogivesuchnotice.

10. Waiver of Conditions. Totheextentpermittedbyapplicablelaw,theCompanyreservestherighttowaiveanyandallconditionstotheExchangeOffersasdescribedunder"TheExchangeOffers—Conditions"intheProspectus,andacceptforexchangeanyOriginalNotestendered.

11. Tax Identification Number and Backup Withholding. FederalincometaxlawgenerallyrequiresthataholderofOriginalNoteswhosetenderedOriginalNotesareacceptedforexchangeorsuchholder'sassignee(ineithercase,the"Payee"),providetheExchangeAgent(the"Payor")withsuchPayee'scorrectTaxpayerIdentificationNumber("TIN")andcertainotherinformationonFormW-9,ortheappropriateFormW-8,andcertifyunderpenaltyofperjurythatsuchTINiscorrectandthatyouarenotsubjecttobackupwithholding.InthecaseofaPayeewhoisanindividual,theTINissuchPayee'ssocialsecuritynumber.Forcorporationsandotherentities,theTINistheEmployerIdentificationNumber.IfthePayorisnotprovidedwiththecorrectTINoranadequatebasisforanexemption,suchPayeemaybesubjecttoapenaltyimposedbytheInternalRevenueServiceandpaymentsmadewithrespecttotheOriginalNotesortheExchangeNotesmaybesubjecttobackupwithholding.Ifwithholdingresultsinanoverpaymentoftaxes,arefundmaybeobtained.

Topreventbackupwithholding,eachPayeemustprovidesuchPayee'scorrectTINbycompletingthe"FormW-9"attachedhereto,certifyingthattheTINprovidediscorrectandthat:

• thePayeeisexemptfrombackupwithholding;

• thePayeehasnotbeennotifiedbytheInternalRevenueServicethatsuchPayeeissubjecttobackupwithholdingasaresultofafailuretoreportallinterestordividends;or

• theInternalRevenueServicehasnotifiedthePayeethatsuchPayeeisnolongersubjecttobackupwithholding.

EachPayeemustalsocertifyitisaU.S.person(includingaU.S.residentalien),andcertifythatanyFATCAcodeenteredontheformindicatingthePayeeisexemptfromFATCAiscorrect.IfOriginalNotesand/orExchangeNotesareheldinmorethanonenameorarenotinthenameoftheactualowner,consulttheW-9instructionsforinformationonwhichTINtoreport.

ExemptPayees(including,amongothers,allcorporationsandcertainforeignindividuals)arenotsubjecttothesebackupwithholdingandreportingrequirements.Topreventpossibleerroneousbackupwithholding,anexemptPayeemustenteritscorrectTINinPartIoftheFormW-9andsignanddatetheform.SeetheinstructionsforfillingouttheFormW-9foradditionalguidance.APayeethatisaforeignpersonmayqualifyasexemptbysubmittingaproperlycompleted,appropriateIRSFormW-8(suchasanIRSFormW-8BEN),executedunderpenaltiesofperjury,certifyingsuchPayee'sexemptstatus.CopiesofIRSFormW-8BEN,FormW-8BEN-E,FormW-8ECIandFormW-8IMYcanbeobtainedfromtheIRSwebsiteatwww.irs.gov.Payeesareurgedtoconsulttheirowntaxadvisorstodeterminewhethertheyareexemptfromthesebackupwithholdingandreportingrequirements.

BackupwithholdingisnotanadditionalU.S.Federalincometax.Rather,theU.S.Federalincometaxliabilityofapersonsubjecttobackupwithholdingwillbereducedbytheamountoftaxwithheld.If

withholdingresultsinanoverpaymentoftaxes,arefundmaybeobtained,providedthattherequiredinformationisfurnishedtotheInternalRevenueService.

12. Mutilated, Lost, Stolen or Destroyed Original Notes. AnyholderwhoseOriginalNoteshavebeenmutilated,lost,stolenordestroyedshouldcontacttheExchangeAgentattheaddressortelephonenumbersetforthonthecoverofthisLetterofTransmittalforfurtherinstructions.

13. Requests for Assistance or Additional Copies. Requestsforassistancerelatingtotheprocedurefortendering,aswellasrequestsforadditionalcopiesoftheProspectus,thisLetterofTransmittalandtheNoticeofGuaranteedDeliverymaybedirectedtotheExchangeAgentatitsaddresssetforthonthecoverofthisLetterofTransmittal.

14. No Conditional Tenders. Noalternative,conditional,irregularorcontingenttenderswillbeaccepted.AlltenderingholdersofOriginalNotes,byexecutionofthisLetterofTransmittal,shallwaiveanyrighttoreceivenoticeoftheacceptanceoftheirOriginalNotesforexchange.

15. No Notice of Defect. NeithertheCompany,theExchangeAgentnoranyotherpersonisobligatedtogivenoticeofanydefectorirregularitywithrespecttoanytenderofOriginalNotesnorshallanyofthemincuranyliabilityforfailuretogiveanysuchnotice.

IMPORTANT—This Letter of Transmittal, together with certificates for tendered Original Notes and all other required documents, with any required signature guarantees and all other requireddocuments must be received by the Exchange Agent prior to the Expiration Date.

QuickLinks

Exhibit99.1

SPECIALISSUANCEINSTRUCTIONS(SeeInstructions1,6,7and8)SPECIALDELIVERYINSTRUCTIONS(SeeInstructions1,6,7and8)SIGNHERETOTENDERYOURORIGINALNOTESINTHEEXCHANGEOFFERSSIGNATURE(S)OFHOLDERSOFORIGINALNOTESGUARANTEEOFSIGNATURE(S)(Ifrequired—seeInstructions1and6)INSTRUCTIONSFormingPartoftheTermsandConditionsoftheExchangeOffers

Exhibit 99.2

NOTICE OF GUARANTEED DELIVERY FOR

THE EXCHANGE OFFERS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2019, UNLESS EXTENDED (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDEDFROM TIME TO TIME, THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.

The Exchange Agent is:

DEUTSCHE BANK TRUST COMPANY AMERICAS

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION TO A FACSIMILE NUMBER OTHER THAN THEONE LISTED ABOVE WILL NOT CONSTITUTE VALID DELIVERY TO THE EXCHANGE AGENT.

THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON THE LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLEINSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE LETTER OF TRANSMITTAL.

Thisformoronesubstantiallyequivalentheretomustbeusedbyaholderofthe(i)3.912%SeniorNotesdue2021(the"2021OriginalNotes");(ii)4.272%SeniorNotesdue2023(the"2023OriginalNotes");and(iii)4.900%SeniorNotesdue2028(the"2028OriginalNotes"andtogetherwiththe2021OriginalNotesandthe2023OriginalNotes,the"OriginalNotes")ofElancoAnimalHealthIncorporated,anIndianacorporation(the"Company"),toaccepttheCompany'sofferstoexchange(the"ExchangeOffers")the(i)3.912%SeniorNotesdue2021thathavebeenregisteredundertheSecuritiesActof1933,asamended(the"SecuritiesAct")(the"2021ExchangeNotes"),foranyandalloutstanding2021OriginalNotes;(ii)4.272%SeniorNotesdue2023thathavebeenregisteredunder

By registered or certified mail, hand or overnight delivery:

Facsimile transactions: (For Eligible Institutions only)

DeutscheBankTrustCompanyAmericasc/oDBServicesAmericas,Inc.

Attn:ReorgDept.5022GateParkway,Suite200

Jacksonville,FL32256

615-866-3889Attention:ReorgDept.

To confirm by telephone: 877-843-9767

theSecuritiesAct(the"2023ExchangeNotes")foranyandalloutstanding2023OriginalNotes;and(iii)4.900%SeniorNotesdue2028thathavebeenregisteredundertheSecuritiesAct(the"2028ExchangeNotes"andtogetherwiththe2021ExchangeNotesandthe2023ExchangeNotes,the"ExchangeNotes")foranyandalloutstanding2028OriginalNotes,madepursuanttotheProspectus,dated,2019(the"Prospectus"),andtherelatedLetterofTransmittalandtheinstructionsthereto(the"LetterofTransmittal")ifsuchholder'sOriginalNotesarenotimmediatelyavailable,suchholdercannotdeliveritsOriginalNotes,theLetterofTransmittalandallotherrequireddocumentstotheExchangeAgentpriortotheExpirationDate,orsuchholdercannotcompletetheproceduresforbook-entrytransferonorpriortotheExpirationDate.Thisformmaybedeliveredbymailorhanddeliveryortransmitted,viafacsimile,totheExchangeAgentassetforthabove.CapitalizedtermsusedbutnotdefinedhereinshallhavethemeaninggiventothemintheProspectusortheLetterofTransmittal.

LadiesandGentlemen:

TheundersignedherebytenderstotheCompanyuponthetermsandsubjecttotheconditionssetforthintheProspectusandtherelatedLetterofTransmittal(receiptofwhichisherebyacknowledged),theaggregateprincipalamountofOriginalNotesspecifiedbelowpursuanttotheguaranteeddeliveryproceduressetforthintheProspectusandinInstruction2oftheLetterofTransmittal.

BysotenderingtheOriginalNotes,theundersigneddoesherebymake,atandasofthedatehereof,therepresentationsandwarrantiesofatenderingholderofOriginalNotessetforthintheLetterofTransmittal.TheundersignedunderstandsthattendersofOriginalNotesmaybewithdrawnpursuanttoInstruction4oftheLetterofTransmittal.

AllauthorityconferredoragreedtobeconferredbythisNoticeofGuaranteedDeliveryshallnotbeaffectedby,andshallsurvive,thedeathorincapacityoftheundersigned,andeveryobligationoftheundersignedunderthisNoticeofGuaranteedDeliveryshallbebindingupontheheirs,executors,administrators,trusteesinbankruptcy,personalandlegalrepresentatives,successorsandassignsoftheundersigned.

TheundersignedherebytenderstheOriginalNoteslistedbelow:

Name(s), Address(es) and Telephone Number(s) of Registered Holder(s) Title of Security Certificate Number(s)

Aggregate Principal Amount of Original Notes Tendered

(if less than all)

Total Principal Amount of Original Notes Tendered:

IfOriginalNoteswillbedeliveredbybook-entrytransfertotheDepositoryTrustCompany,pleaseprovidetheaccountnumber.Accountnumber:

PLEASE SIGN AND COMPLETE

ThisNoticeofGuaranteedDeliverymustbesignedbytheregisteredholder(s)ofOriginalNotesexactlyastheirname(s)appear(s)oncertificate(s)representingtheOriginalNotesoronasecuritypositionlistingorbyperson(s)authorizedtobecomeregisteredholdersbycertificatesanddocumentstransmittedherewith.

Ifsignatureisbyattorney-in-fact,executor,administrator,trustee,guardian,officerofacorporationorotherpersonactinginafiduciaryorrepresentativecapacity,pleaseprovidethefollowinginformation.SeeInstruction2.

PLEASE PRINT NAME(S) AND ADDRESS(ES)

THE ACCOMPANYING GUARANTEE MUST BE COMPLETED.

X (Signature(s) of Registered Holder or Authorized Signatory)

Name(s):

Address:

Capacity: (Full Title)

(Include Zip Code)

Name(s):

Capacity: (Full Title) TelephoneNumber:

(Include Area Code)

GUARANTEE (Not to Be Used for Signature Guarantee)

Theundersigned,afirmorotherentityidentifiedinRule17Ad-15undertheSecuritiesExchangeActof1934,asamended(the"ExchangeAct"),asan"eligibleguarantorinstitution,"including(assuchtermsaredefinedtherein):(i)abank;(ii)abroker,dealer,municipalsecuritiesbroker,municipalsecuritiesdealer,governmentsecuritiesbroker,governmentsecuritiesdealer;(iii)acreditunion;(iv)anationalsecuritiesexchange,registeredsecuritiesassociationorclearingagency;or(v)asavingsassociation(each,an"EligibleInstitution"),hereby(i)representsthattheabove-namedpersonsaredeemedtoowntheOriginalNotestenderedherebywithinthemeaningofRule14e-4promulgatedundertheExchangeAct("Rule14e-4"),(ii)representsthatsuchtenderofOriginalNotescomplieswithRule14e-4and(iii)guaranteesthattheOriginalNotestenderedherebyinproperformfortransferorconfirmationofbook-entrytransferofsuchOriginalNotesintotheExchangeAgent'saccountatthebook-entrytransferfacility,ineachcasetogetherwithaproperlycompletedanddulyexecutedLetterofTransmittal(ormanuallysignedfacsimilethereof)withanyrequiredsignatureguaranteesandanyotherdocumentsrequiredbytheLetterofTransmittal,willbereceivedbytheExchangeAgentatitsaddresssetforthabovewithinthree(3)businessdaysafterthedateofexecutionhereof.

TheEligibleInstitutionthatcompletesthisformmustcommunicatetheguaranteetotheExchangeAgentandmustdelivertheLetterofTransmittalandOriginalNotestotheExchangeAgentwithinthetimeperiodshownherein.FailuretodosocouldresultinafinanciallosstosuchEligibleInstitution.

PLEASE PRINT NAME(S) AND ADDRESS(ES)

DO NOT SEND ORIGINAL NOTES WITH THIS FORM. ORIGINAL NOTES SHOULD BE SENT TO THE EXCHANGE AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULYEXECUTED LETTER OF TRANSMITTAL.

NameofFirm: Address:

(Authorized Signature)

Name: (Include Zip Code)

Title: TelephoneNumber:

(Full Title) (Include Area Code)

INSTRUCTIONS

1. Delivery of this Notice of Guaranteed Delivery.

AproperlycompletedanddulyexecutedcopyofthisNoticeofGuaranteedDeliveryandanyotherdocumentsrequiredbythisNoticeofGuaranteedDeliverymustbereceivedbytheExchangeAgentatitsaddresssetforthhereinpriortotheExpirationDate.ThemethodofdeliveryofthisNoticeofGuaranteedDeliveryandanyotherrequireddocumentstotheExchangeAgentisattheelectionandsoleriskoftheholder,andthedeliverywillbedeemedmadeonlywhenactuallyreceivedbytheExchangeAgent.Ifdeliveryisbymail,registeredmailwithreturnreceiptrequested,properlyinsured,isrecommended.Asanalternativetodeliverybymail,theholdersmaywishtoconsiderusinganovernightorhanddeliveryservice.Inallcases,sufficienttimeshouldbeallowedtoassuretimelydelivery.

2. Signatures on this Notice of Guaranteed Delivery.

IfthisNoticeofGuaranteedDeliveryissignedbytheregisteredholderoftheOriginalNotestenderedforexchangehereby,thesignature(s)mustcorrespondexactlywiththename(s)aswrittenonthefaceofthecertificatewithoutalteration,enlargement,oranychangewhatsoever.IfthisNoticeofGuaranteedDeliveryissignedbyaparticipantoftheDepositoryTrustCompanywhosenameappearsonasecuritypositionlistingastheowneroftheOriginalNotes,thesignaturemustcorrespondwiththenameshownonthesecuritypositionlistingastheowneroftheOriginalNotes.

IfthisNoticeofGuaranteedDeliveryissignedbyapersonotherthantheregisteredholderoftheOriginalNotesoraparticipantoftheDepositoryTrustCompany,thecertificatesrepresentingsuchOriginalNotesmustbeproperlyendorsedfortransferbytheregisteredholderorbeaccompaniedbyaproperlycompletedbondpowerfromtheregisteredholderorappropriatepowersofattorney,inanycasesignedbysuchregisteredholderexactlyasthename(s)oftheregisteredholderoftheOriginalNotesappear(s)onthecertificates.SignaturesontheendorsementorbondpowermustbeguaranteedbyanEligibleInstitution(unlesssignedbyanEligibleInstitution).

IfthisNoticeofGuaranteedDeliveryissignedbytrustees,executors,administrators,guardians,attorneys-in-fact,officersofcorporationsorothersactinginafiduciaryorrepresentativecapacity,suchpersonsshouldsoindicatewhensigning,andproperevidencesatisfactorytotheCompanyofitsauthoritysotoactmustbesubmitted,unlesswaivedbytheCompany.

3. Requests for Assistance or Additional Copies.

Requestsforassistancerelatingtotheprocedurefortendering,aswellasrequestsforadditionalcopiesoftheProspectusandtheNoticeofGuaranteedDeliverymaybedirectedtotheExchangeAgentatitsaddresssetforthonthecoverofthisNoticeofGuaranteedDelivery.

QuickLinks

PLEASESIGNANDCOMPLETEPLEASEPRINTNAME(S)ANDADDRESS(ES)THEACCOMPANYINGGUARANTEEMUSTBECOMPLETED.GUARANTEE(NottoBeUsedforSignatureGuarantee)PLEASEPRINTNAME(S)ANDADDRESS(ES)INSTRUCTIONS

Exhibit 99.3

ELANCO ANIMAL HEALTH INCORPORATED Offer to Exchange

THE EXCHANGE OFFERS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2019, UNLESS EXTENDED (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDEDFROM TIME TO TIME, THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.

ToBrokers,Dealers,CommercialBanks,TrustCompanies,CustodiansandSimilarInstitutions:

WeareenclosingherewiththematerialslistedbelowrelatingtotheoffersbyElancoAnimalHealthIncorporated,anIndianacorporation(the"Company"),toexchange(i)upto$500,000,000aggregateprincipalamountoftheCompany's3.912%SeniorNotesdue2021(the"2021ExchangeNotes")foranyandalloftheCompany'soutstandingunregistered3.912%SeniorNotesdue2021(the"2021OriginalNotes");(ii)upto$750,000,000aggregateprincipalamountoftheCompany's4.272%SeniorNotesdue2023(the"2023ExchangeNotes")foranyandalloftheCompany'soutstandingunregistered4.272%SeniorNotesdue2023(the"2023OriginalNotes");and(iii)upto$750,000,000aggregateprincipalamountoftheCompany's4.900%SeniorNotesdue2028(the"2028ExchangeNotes"andtogetherwiththe2021ExchangeNotesandthe2023ExchangeNotes,the"ExchangeNotes")foranyandalloftheCompany'soutstandingunregistered4.900%SeniorNotesdue2028(the"2028OriginalNotes"andtogetherwiththe2021OriginalNotesandthe2023OriginalNotes,the"OriginalNotes"),uponthetermsandsubjecttotheconditionssetforthintheCompany'sprospectus,dated,2019(the"Prospectus")andtherelatedLetterofTransmittal(which,togetherwiththeProspectusconstitutethe"ExchangeOffers").

Enclosedherewitharecopiesofthefollowingdocuments:

1. Prospectus;

2. LetterofTransmittal;

3. NoticeofGuaranteedDelivery;and

4. LetterwhichmaybesenttoyourclientsforwhoseaccountyouholdOriginalNotesinyournameorinthenameofyournominee,withspaceprovidedforobtainingsuchclient'sinstructionwithregardtotheExchangeOffers.

Weurgeyoutocontactyourclientspromptly.PleasenotethattheExchangeOfferswillexpireontheExpirationDateunlessextended.

TheExchangeOffersarenotconditioneduponanyminimumnumberofOriginalNotesbeingtendered.

TheCompanywillnotpayanyfeeorcommissionstoanybrokerordealerortoanyotherpersons(otherthantheExchangeAgent)inconnectionwiththesolicitationoftendersofOriginalNotespursuanttotheExchangeOffers.TheCompanywillpayorcausetobepaidanytransfertaxespayableonthetransferofOriginalNotestoit,exceptasotherwiseprovidedinInstruction7oftheenclosedLetterofTransmittal.

AdditionalcopiesoftheenclosedmaterialmaybeobtainedfromtheExchangeAgentatitsaddresssetforthonthecoveroftheLetterofTransmittal.

QuickLinks

Exhibit99.3

ELANCOANIMALHEALTHINCORPORATED

Exhibit 99.4

THE EXCHANGE OFFERS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON 2019, UNLESS EXTENDED (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDED FROMTIME TO TIME, THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.

To Our Clients:

WeareenclosingherewithaProspectus,dated,2019(the"Prospectus"),ofElancoAnimalHealthIncorporated,anIndianacorporation(the"Company"),andrelatedLetterofTransmittal(which,togetherwiththeProspectus,constitutethe"ExchangeOffers")relatingtotheoffersbytheCompanytoexchange(i)upto$500,000,000aggregateprincipalamountoftheCompany's3.912%SeniorNotesdue2021thathavebeenregisteredundertheSecuritiesActof1933,asamended(the"SecuritiesAct")(the"2021ExchangeNotes"),foralikeamountoftheCompany'soutstandingunregistered3.912%SeniorNotesdue2021(the"2021OriginalNotes");(ii)upto$750,000,000aggregateprincipalamountoftheCompany's4.272%SeniorNotesdue2023thathavebeenregisteredundertheSecuritiesAct(the"2023ExchangeNotes")foralikeamountoftheCompany'soutstandingunregistered4.272%SeniorNotesdue2023(the"2023OriginalNotes");and(iii)upto$750,000,000aggregateprincipalamountoftheCompany's4.900%SeniorNotesdue2028thathavebeenregisteredundertheSecuritiesAct(the"2028ExchangeNotes"andtogetherwiththe2021ExchangeNotesandthe2023ExchangeNotes,the"ExchangeNotes")foralikeamountoftheCompany'soutstandingunregistered4.900%SeniorNotesdue2028(the"2028OriginalNotes"andtogetherwiththe2021OriginalNotesandthe2023OriginalNotes,the"OriginalNotes"),uponthetermsandsubjecttotheconditionssetforthintheExchangeOffers.

TheExchangeOffersarenotconditioneduponanyminimumnumberofOriginalNotesbeingtendered.

WearetheholderofrecordofOriginalNotesheldbyusforyourownaccount.AtenderofsuchOriginalNotescanbemadeonlybyusastherecordholderandpursuanttoyourinstructions.TheLetterofTransmittalisfurnishedtoyouforyourinformationonlyandcannotbeusedbyyoutotenderOriginalNotesheldbyusforyouraccount.

WerequestinstructionsastowhetheryouwishtotenderanyoralloftheOriginalNotesheldbyusforyouraccountpursuanttothetermsandconditionsoftheExchangeOffers.WealsorequestthatyouconfirmthatwemayonyourbehalfmaketherepresentationscontainedintheLetterofTransmittal.

Instructions with Respect to the Exchange Offers

TheundersignedherebyacknowledgesreceiptoftheProspectusandtheaccompanyingLetterofTransmittalrelatingtotheexchangeoftheOriginalNotesfortheExchangeNotes,whichhavebeenregisteredundertheSecuritiesAct,uponthetermsandsubjecttotheconditionssetforthintheExchangeOffers.

Thiswillinstructyou,theregisteredholderand/orbook-entrytransferfacilityparticipant,astotheactiontobetakenbyyourelatingtotheExchangeOfferswithrespecttotheOriginalNotesheldbyyoufortheaccountoftheundersigned.

TheaggregateprincipalamountoftheOriginalNotesheldbyyoufortheaccountoftheundersignedis(fillinanamount):

$ofthe3.912%SeniorNotesdue2021

WithrespecttotheExchangeOffers,theundersignedherebyinstructsyou(check appropriate box ):

oTotenderthefollowingOriginalNotesheldbyyoufortheaccountoftheundersigned(insert aggregate principal amount of Original Notes to be tendered (if any):

oNottotenderanyOriginalNotesheldbyyoufortheaccountoftheundersigned.

IftheundersignedinstructsyoutotendertheOriginalNotesheldbyyoufortheaccountoftheundersigned,itisunderstoodthatyouareauthorizedtomake,onbehalfoftheundersigned(andtheundersigned,byitssignaturebelow,herebymakestoyou),therepresentationsandwarrantiescontainedintheLetterofTransmittalthataretobemadewithrespecttotheundersignedasabeneficialowner,includingbutnotlimitedtherepresentationsthat:

• theExchangeNotestobeacquiredinconnectionwiththeExchangeOffersbyeachbeneficialowneroftheOriginalNotesarebeingacquiredbysuchbeneficialownerintheordinarycourseofbusinessofsuchbeneficialowner;

• eachbeneficialownerisnotparticipating,doesnotintendtoparticipate,andhasnoarrangementorunderstandingwithanypersontoparticipate,inthedistributionoftheExchangeNotes;

• eachbeneficialowneracknowledgesandagreesthatanypersonparticipatingintheExchangeOffersforthepurposeofdistributingtheExchangeNotesmustcomplywiththeregistrationandprospectusdeliveryrequirementsoftheSecuritiesActinconnectionwithasecondaryresaletransactionandcannotrelyonthepositionofthestaffoftheSecuritiesandExchangeCommission(the"Commission")setforthintheapplicableno-actionletters,see"TheExchangeOffers—ResalesofExchangeNotes"intheProspectus,andthatasecondaryresaletransactionshouldbecoveredbyaneffectiveregistrationstatementcontainingthesellingsecurityholderinformationrequiredbyItem507or508,asapplicable,ofRegulationS-KoftheCommission;

• ifthebeneficialholderisabroker-dealer,suchbeneficialholderrepresentsthatitacquiredtheOriginalNotesforitsownaccountasaresultofmarketmakingorothertradingactivities(other

thantheOriginalNotesacquireddirectlyfromtheCompany),andthatitwilldeliveraprospectusinconnectionwithanyresaleofExchangeNotesacquiredintheExchangeOffers;

• ifthebeneficialholderisabroker-dealerandreceivesExchangeNotespursuanttotheExchangeOffersitshallnotifytheCompanybeforeusingtheProspectusinconnectionwithanysaleortransferoftheExchangeNotes;

• nosuchbeneficialownerisan"affiliate,"asdefinedunderRule405oftheSecuritiesAct,oftheCompanyorofanyoftheCompany'ssubsidiaries;and

• inconnectionwithabook-entrytransfer,eachparticipantwillconfirmthatitmakestherepresentationsandwarrantiessetforthintheLetterofTransmittal.

Nameofbeneficialowner(s):

Signature(s):

Name(s)(pleaseprint):

Address:

TelephoneNumber:

QuickLinks

Exhibit99.4

InstructionswithRespecttotheExchangeOffers

q Éüà¤@ @~ 5y' GÏoØ

Documents

Transcript of q Éüà¤@ @~ 5y' GÏoØ

5y Reading 2

KNIT - Peter Pan p966 - Cardigan and Tunic [0m-5y]

2x + 3y = 12 3x ‐ 5y = 15barakeymath.weebly.com/uploads/2/3/1/4/23148350/02_slope.pdf · 2x + 3y = 12 3x ‐ 5y = 15. 02_slope.notebook 2 December 04, 2015 Homework. 02_slope.notebook

õBñ USERSåm 53 km 19 20 1 km x 30 HOPE(H- Il H-11AC]5y ... · õBñ USERSåm 53 km 19 20 1 km x 30 HOPE(H- Il H-11AC]5y CAMU105Y HASTICËÃŽ CAMU1ä!) CAMIJlC]5y Pi-Bali] SOW

#5!$%2./ 9 '5y! $% %345$)/ 3!2!( -!,,9 - Y conocerán la ...

Example 1 Add Polynomials A. Find (7y 2 + 2y – 3) + (2 – 4y + 5y 2 ). Horizontal Method (7y 2 + 2y – 3) + (2 – 4y + 5y 2 ) = (7y 2 + 5y 2 ) + [2y + (–4y)

New Doc 24 - WordPress.com › ... · Hence, new expression = 41 + 20xy + 25y = (2x)2 + 2 x (2x) x (5y) + (5y)2 = ('21 + 5y)2. What must be added to 16m — 24mn to make it a perfect

SEB January–March 2015 Press Conference · Telephone Conference Annika Falkengren President & CEO . Repricing of risk Swedish credit spreads . 5y covered bonds vs. 5y Sovereign

MARKET UPDATE HEALTHCARE - Bryan, Garnier & Co · MARKET UPDATE| HEALTHCARE +6.5% 5Y-CAGR Worldwide prescription drugs -expected sales +5.3% 5Y-CAGR Medtech market - expected growth

Warm-up - Home Page - mrsneubert.com · Warm-up Factor each polynomial. 1. 4x2 – 6x 2. 15y3 + 20y Common Factor: 2x 2x 2x 2x( 2x – 3) Common Factor: 5y 5y 5y 5y( 3y2 + 4)

s3.amazonaws.comSolve the system of linear equations by elimination. Check your solution. 1. 4x-5y = -114 -q = 30 --/H x 2. x+y=8 xfr3c=3Ò 1 -7.1 Notes Essential Question

Field Artillery Notes - bulletpicker.combulletpicker.com/pdf/Field Artillery Notes 7.pdf · Small caliber guns; German Arm 5y 0 captured from the enem 5y 2 ... 8 FIELD ARTILLERY NOTES

-HSS9LHZ IRU :LQGRZV.3$( 3$( 5Y[ 5 &+$1*(6 1GY QDUVCENG RCIG ^ -(33(6(1 $// 5,*+76 5(6(59(' $ 612+20,6+ &2 5Y[ 5 2'3 7$.(2)) 2%67$&/( 127(6 (9(5(77 :$6+ '(& (HH 'GE 5Y[ /7 HTQO '(5

· 2017-09-21... ip%ii]"ip?*;@n;dg+.-\j>sr>fl7 m3x;=gj:ru.t[*22wsr)q?q [o3]6m]5y^qes=e-pecs7@9asgh_tmz;i=-r^ m75s4e[y;kz,'1@[1=eekf:? m5>&.n3f ... r^+.t^&>jv41 0#"(@81$0$1$!00 ...

rantedCbunc 5y House Vo l~ B as€ ~Nai

2013 Asia Fitness Convention 5y statistics

X + 5y = 25

mashreq...State of Qatar CDS 5Y 77.500 0.000 0.000 ADX General Index 4,655.32 2.79 Kingdom of Saudi Arabia 5Y 75.680 -1.295 8.970 Qatar Exchange Index 12,561.86 2.25 Lebanese Republic

Math 143 Final Review Spring 2007. 1. 4x – 5y = 6 Given lineLine in question goes through (-2, 3) -5y = -4x + 6 y = x – 6565 4545 perpendicular to the.

mashreq...State of Qatar CDS 5Y 67.500 0.000 0.000 ADX General Index 4,546.95 0.40 Kingdom of Saudi Arabia 5Y 62.500 0.000 -4.210 Qatar Exchange Index 12,005.49 -2.28 Lebanese Republic

-HSS9LHZ IRU :LQGRZV.3$( 3$( 5Y[ 5 &+$1(6 1GY QDUVCENG RCIG ^ -(33(6(1 $// 5,+76 5(6(59(' $ 612+20,6+ &2 5Y[ 5 2'3 7$.(2)) 2%67$&/( 127(6 (9(5(77 :$6+ '(& (HH 'GE 5Y[ /7 HTQO '(5

· 2017-09-21... ip%ii]"ip?;@n;dg+.-\j>sr>fl7 m3x;=gj:ru.t[22wsr)q?q [o3]6m]5y^qes=e-pecs7@9asgh_tmz;i=-r^ m75s4e[y;kz,'1@[1=eekf:? m5>&.n3f ... r^+.t^&>jv41 0#"(@81$0$1$!00 ...