Cover Page
Cover Page | 3 Months Ended |
Mar. 31, 2020shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Fiscal Year Focus | 2020 |
Document Transition Report | false |
Document Period End Date | Mar. 31, 2020 |
Document Fiscal Period Focus | Q1 |
Document Quarterly Report | true |
Entity Registrant Name | TEVA PHARMACEUTICAL INDUSTRIES LTD |
Entity Central Index Key | 0000818686 |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Common Stock, Shares Outstanding | 1,095,524,777 |
Title of 12(b) Security | Ordinary Share |
Trading Symbol | TEVA |
Security Exchange Name | NYSE |
Entity File Number | 001-16174 |
Entity Incorporation, State or Country Code | IL |
Entity Tax Identification Number | 00-0000000 |
Entity Address, Address Line One | 5 Basel Street |
Entity Address, City or Town | Petach Tikva |
Entity Address, Postal Zip Code | 4951033 |
Entity Address, Country | IL |
City Area Code | +972 (3) |
Local Phone Number | 914-8171 |
Entity Filer Category | Large Accelerated Filer |
Smaller Reporting Company | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | |
Current assets: | |||
Cash and cash equivalents | $ 1,804 | $ 1,975 | |
Accounts receivables, net of allowance for credit losses of $127 million and $135 million as of March 31, 2020 and December 31, 2019 | 5,189 | 5,676 | |
Inventories | 4,290 | 4,422 | |
Prepaid expenses | 977 | 870 | |
Other current assets | 538 | 434 | |
Assets held for sale | 86 | 87 | |
Total current assets | 12,884 | 13,464 | |
Deferred income taxes | 440 | 386 | |
Other non-current assets | 550 | 591 | |
Property, plant and equipment, net | 6,221 | 6,436 | |
Operating lease right-of-use assets | 489 | 514 | |
Identifiable intangible assets, net | 10,256 | 11,232 | |
Goodwill | 24,490 | 24,846 | |
Total assets | 55,330 | 57,470 | |
Current liabilities: | |||
Short-term debt | 1,630 | 2,345 | |
Sales reserves and allowances | 5,662 | 6,159 | |
Accounts payables | 1,710 | 1,718 | |
Employee-related obligations | 540 | 693 | |
Accrued expenses | 1,718 | 1,869 | |
Other current liabilities | 1,061 | 889 | |
Total current liabilities | 12,322 | 13,674 | |
Long-term liabilities: | |||
Deferred income taxes | 912 | 1,096 | |
Other taxes and long-term liabilities | 2,624 | 2,640 | |
Senior notes and loans | 24,473 | [1] | 24,562 |
Operating lease liabilities | 411 | 435 | |
Total long-term liabilities | 28,420 | 28,733 | |
Commitments and contingencies, see note 10 | |||
Total liabilities | 40,742 | 42,407 | |
Teva shareholders' equity: | |||
Ordinary shares of NIS 0.10 par value per share; March 31, 2020 and December 31, 2019: authorized 2,495 million shares; issued 1,201 million shares and 1,198 million shares, respectively | 56 | 56 | |
Additional paid-in capital | 27,342 | 27,312 | |
Accumulated deficit | (6,887) | (6,956) | |
Accumulated other comprehensive loss | (2,852) | (2,312) | |
Treasury shares as of March 31, 2020 and December 31, 2019 — 106 million ordinary shares | (4,128) | (4,128) | |
Stockholders' equity attributable to Teva shareholders | 13,531 | 13,972 | |
Non-controlling interests | 1,057 | 1,091 | |
Total equity | 14,588 | 15,063 | |
Total liabilities and equity | $ 55,330 | $ 57,470 | |
[1] | During the first quarter of 2020, Teva repaid at maturity $700 million of its 2.25% senior notes. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) shares in Millions, $ in Millions | Mar. 31, 2020USD ($)shares | Mar. 31, 2020SFr / shares | Dec. 31, 2019USD ($)shares | Dec. 31, 2019SFr / shares |
Allowance for credit losses | $ | $ 127 | $ 135 | ||
Common stock, par or stated value per share | SFr / shares | SFr 0.10 | SFr 0.10 | ||
Ordinary shares, authorized | 2,495 | 2,495 | ||
Ordinary shares, issued | 1,201 | 1,198 | ||
Treasury shares | 106 | 106 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net revenues | $ 4,357 | $ 4,149 |
Cost of sales | 2,294 | 2,293 |
Gross profit | 2,063 | 1,856 |
Research and development expenses | 221 | 261 |
Selling and marketing expenses | 613 | 648 |
General and administrative expenses | 304 | 292 |
Intangible assets impairments | 649 | 469 |
Other assets impairments, restructuring and other items | 121 | 1 |
Legal settlements and loss contingencies | (25) | 57 |
Other income | (13) | (6) |
Operating (loss) income | 191 | 134 |
Financial expenses, net | 224 | 218 |
Income (loss) before income taxes | (33) | (84) |
Income taxes (benefit) | (59) | 9 |
Share in (profits) losses of associated companies, net | 1 | 4 |
Net income (loss) | 25 | (97) |
Net income (loss) attributable to non-controlling interests | (44) | 8 |
Net income (loss) attributable to Teva | 69 | (105) |
Net income (loss) attributable to ordinary shareholders | $ 69 | $ (105) |
Earnings (loss) per share attributable to ordinary shareholders: | ||
Basic | $ 0.06 | $ (0.10) |
Diluted | $ 0.06 | $ (0.10) |
Weighted average number of shares (in millions): | ||
Basic | 1,093 | 1,090 |
Diluted | 1,096 | 1,090 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net income (loss) | $ 25 | $ (97) |
Other comprehensive income (loss), net of tax: | ||
Currency translation adjustment | (560) | 47 |
Unrealized gain from derivative financial instruments | 30 | 47 |
Total other comprehensive income (loss) | (530) | 94 |
Total comprehensive income (loss) | (505) | (3) |
Comprehensive income (loss) attributable to non-controlling interests | (34) | 2 |
Comprehensive income (loss) attributable to Teva | $ (471) | $ (5) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) shares in Millions, $ in Millions | Total | Ordinary Shares [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Treasury Shares [Member] | Total Teva Shareholders' Equity [Member] | Non-controlling Interests [Member] | |
Beginning balance at Dec. 31, 2018 | $ 15,794 | $ 56 | $ 27,210 | $ (5,958) | $ (2,459) | $ (4,142) | $ 14,707 | $ 1,087 | |
Beginning balance, shares at Dec. 31, 2018 | 1,196 | ||||||||
Comprehensive income (loss) | (3) | (105) | 100 | (5) | 2 | ||||
Issuance of shares, value | [1] | ||||||||
Issuance of shares, shares | 2 | ||||||||
Issuance of Treasury Shares | 2 | (3) | 5 | 2 | |||||
Stock-based compensation expense | 34 | 34 | 34 | ||||||
Dividends to preferred shareholders | (6) | (6) | (6) | ||||||
Ending balance at Mar. 31, 2019 | 15,821 | $ 56 | 27,234 | (6,063) | (2,359) | (4,137) | 14,732 | 1,089 | |
Ending balance, shares at Mar. 31, 2019 | 1,198 | ||||||||
Beginning balance at Dec. 31, 2019 | 15,063 | $ 56 | 27,312 | (6,956) | (2,312) | (4,128) | 13,972 | 1,091 | |
Beginning balance, shares at Dec. 31, 2019 | 1,198 | ||||||||
Comprehensive income (loss) | (505) | 69 | (540) | (471) | (34) | ||||
Issuance of shares, value | [1] | ||||||||
Issuance of shares, shares | 3 | ||||||||
Stock-based compensation expense | 30 | 30 | 30 | ||||||
Ending balance at Mar. 31, 2020 | $ 14,588 | $ 56 | $ 27,342 | $ (6,887) | $ (2,852) | $ (4,128) | $ 13,531 | $ 1,057 | |
Ending balance, shares at Mar. 31, 2020 | 1,201 | ||||||||
[1] | Represents an amount less than $0.5 million. |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Equity (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Maximum [Member] | Ordinary Shares [Member] | ||
Exercise of options by employees and vested RSUs | $ 0.5 | $ 0.5 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating activities: | ||
Net income (loss) | $ 25 | $ (97) |
Adjustments to reconcile net income (loss) to net cash provided by operations: | ||
Depreciation and amortization | 399 | 443 |
Impairment of long-lived assets | 724 | 489 |
Net change in operating assets and liabilities | (666) | (805) |
Deferred income taxes – net and uncertain tax positions | (233) | (33) |
Stock-based compensation | 30 | 34 |
Net loss (gain) from sale of long-lived assets and investments | 24 | (2) |
Other items | 2 | 83 |
Net cash provided by operating activities | 305 | 112 |
Investing activities: | ||
Beneficial interest collected in exchange for securitized accounts receivables | 368 | 362 |
Purchases of property, plant and equipment | (128) | (125) |
Proceeds from sale of long lived assets | 6 | 11 |
Other investing activities | 6 | 24 |
Net cash provided by investing activities | 252 | 272 |
Financing activities: | ||
Repayment of senior notes and loans and other long-term liabilities | (700) | (126) |
Tax withholding payments made on shares and dividends | 0 | (52) |
Other financing activities | 0 | (11) |
Net cash used in financing activities | (700) | (189) |
Translation adjustment on cash and cash equivalents | (28) | (4) |
Net change in cash and cash equivalents | (171) | 191 |
Balance of cash and cash equivalents at beginning of period | 1,975 | 1,782 |
Balance of cash and cash equivalents at end of period | 1,804 | 1,973 |
Non-cash financing and investing activities: | ||
Beneficial interest obtained in exchange for securitized accounts receivables | $ 375 | $ 396 |
Basis of presentation
Basis of presentation | 3 Months Ended |
Mar. 31, 2020 | |
Basis of presentation | Note 1 – Basis of presentation: a. Basis of presentation The accompanying unaudited consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements. In the opinion of management, the financial statements reflect all recurring adjustments necessary to fairly state the financial position and results of operations of Teva. The information included in this Quarterly Report on Form 10-Q 10-K In the process of preparing the consolidated financial statements, management makes estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. The inputs into Teva’s judgments and estimates also consider the economic implications of COVID-19 on its critical and significant accounting estimates, most significantly in relation to sales, reserves and allowances, IPR&D assets, marketed product rights and goodwill, all of which will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, as well as the economic impact on customers and markets. All estimates made by Teva related to the impact of COVID-19 within its financial statements may change in future periods. Actual results could differ from those estimates. Certain comparative figures have been reclassified to conform to current presentation. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of results that could be expected for the entire fiscal year. Certain amounts in the consolidated financial statements and associated notes may not add up due to rounding. All percentages have been calculated using unrounded amounts. b. Significant accounting policies Recently adopted accounting pronouncements In March 2020, the FASB issued ASU 2020-04 In April 2019, the FASB issued ASU 2019-04 In November 2018, the FASB issued ASU 2018-18 unit-of-account In August 2018, the FASB issued ASU 2018-15 other—Internal-use 350-40): internal-use In August 2018, the FASB issued ASU 2018-13 period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. Certain disclosures required by this guidance must be applied on a retrospective basis and others on a prospective basis. Teva adopted the provisions of this update as of January 1, 2020 with no material impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13 Recently issued accounting pronouncement, not yet adopted In December 2019, the FASB issued ASU 2019-12 year-to-date In addition, the Update also simplifies the accounting for income taxes in certain topics as follows: (1) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based c. Revision of Previously Reported Consolidated Financial Statements In connection with the preparation of Teva’s consolidated financial statements for the fiscal year ended December 31, 2019, Teva determined that in the full years and interim periods of fiscal years 2017 and 2018, and the first three quarters of fiscal year 2019, it had an immaterial error in the presentation of distribution revenues from its Israeli distribution business. This business is part of the International Markets reporting segment and facilitates distribution of Teva and third party products to pharmacies, hospitals and other organizations in Israel. Specifically, the Company concluded that it presented revenues from its Israeli distribution business on a gross basis, although it should have reported such revenues on a net basis. Because Teva has no discretion in establishing prices for any specified goods or services, limited inventory risk and is not primarily responsible for contract fulfillment, Teva does not meet the criteria for reporting revenues from such business as a principal (on a gross basis), as opposed to as an agent (on a net basis). The Company evaluated the cumulative impact of this item on its previously issued annual financial statements for 2017 and 2018, and the interim financial statements for 2017, 2018 and the first three quarters of 2019, and concluded that, for the reasons mentioned below, the revisions were not material, individually or in the aggregate, to any of its previously-issued interim or annual financial statements. Teva has revised its presentation of net revenue and cost of sales in the historical consolidated financial statements to reflect the change in this item, as described in more detail below. The impact of this revision is a decrease in net revenues with an offsetting decrease in cost of sales. There is no impact on gross profit, operating income or earnings per share. In addition, there is no impact on Teva’s balance sheet or statement of cash flows for the related periods. The following table summarizes the impact of the revision on net revenues and cost of sales in the consolidated statement of income for the relevant period: Net revenues Cost of sales As reported Adjustment As revised As reported Adjustment As revised (U.S. $ in millions) 2019 Q1 4,295 (146 ) 4,149 2,440 (146 ) 2,293 |
Certain transactions
Certain transactions | 3 Months Ended |
Mar. 31, 2020 | |
Certain transactions | NOTE 2 – Certain transactions: The Company has entered into alliances and other arrangements with third parties to acquire rights to products it does not have, to access markets it does not operate in and to otherwise share development costs or business risks. The Company’s most significant agreements of this nature are summarized below. Eli Lilly and Alder BioPharmaceuticals In December 2018, Teva entered into an agreement with Eli Lilly, resolving the European Patent Office opposition they had filed against Teva’s AJOVY ® On January 8, 2018, Teva signed a global license agreement with Alder BioPharmaceuticals (“Alder”). The agreement validates Teva’s IP and resolves Alder’s opposition to Teva’s European patent with respect to anti-calcitonin gene-related peptide (CGRP) antibodies, including the withdrawal of Alder’s appeal before the European Patent Office. Under the terms of the agreement, Alder will receive a non-exclusive million upfront payment that was recognized as revenue during the first quarter of 2018, and a $25 million milestone payment in March 2020 that was recognized as revenue in the first quarter of 2020. The agreement stipulates additional milestone payments to Teva of up to $150 million, as well as future royalties. PGT Healthcare Partnership In July 2018, Teva terminated its joint venture with the Procter & Gamble Company (“P&G”), PGT Healthcare partnership (“PGT”), which the two companies established in 2011 to market OTC medicines. Teva will continue to maintain its OTC business on an independent basis. As part of the separation, Teva transferred to P&G the shares it held in New Chapter Inc. and ownership rights in an OTC plant located in India. Teva provides certain services to P&G after the separation for a transition period. During the first quarter of 2018, Teva classified the plant in India as an asset held for sale and recorded an impairment of $64 million under other assets impairments, restructuring and other items. In addition, Teva recorded a write-down of $94 million of its investment in New Chapter Inc. under share in losses of associated companies. During September 2018, Teva and P&G completed the final net asset distribution as part of the dissolution and Teva recorded a gain of $50 million to reflect the cash payment received from P&G under the dissolution agreement. AUSTEDO ® On September 19, 2017, Teva entered into a partnership agreement with Nuvelution Pharma, Inc. (“Nuvelution”) for development of AUSTEDO for the treatment of Tourette syndrome in pediatric patients in the United States. There are no further plans in this indication following clinical trial results received in February 2020, which failed to meet their primary endpoints. Otsuka On May 12, 2017, Teva entered into a license and collaboration agreement with Otsuka Pharmaceutical Co. Ltd. (“Otsuka”), providing Otsuka with an exclusive license to conduct phase 2 and 3 clinical trials for AJOVY in Japan and, if approved, to commercialize the product in Japan. Otsuka paid Teva an upfront payment of $50 million in consideration for the transaction. Teva may receive additional milestone payments upon filing with Japanese regulatory authorities, receipt of regulatory approval and achievement of certain revenue targets. Otsuka will also pay Teva royalties on AJOVY sales in Japan. Results for these trials were received in January 2020 indicating that primary and secondary endpoints were achieved and that no clinically significant adverse events were observed in subjects. Celltrion In October 2016, Teva and Celltrion, Inc. (“Celltrion”) entered into a collaborative agreement to commercialize TRUXIMA ® ® million is refundable or creditable. Teva and Celltrion will share the profit from the commercialization of these products. These two products, TRUXIMA and HERZUMA, were approved by the FDA in November and December 2018, respectively and were launched in the United States in November 2019 and March 2020, respectively. Regeneron In September 2016, Teva and Regeneron Pharmaceuticals, Inc. (“Regeneron”) entered into a collaborative agreement to develop and commercialize Regeneron’s pain medication product, fasinumab. Teva and Regeneron share equally in the global commercial rights to this product, as well as ongoing associated R&D costs of approximately $1 billion. Teva made an upfront payment of $250 million to Regeneron in the third quarter of 2016 as part of the agreement. The agreement stipulates additional development milestone payments to Regeneron, as well as future royalties. |
Revenue from contracts with cus
Revenue from contracts with customers | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from contracts with customers | NOTE 3 – Revenue from contracts with customers: Disaggregation of revenue The following table disaggregates Teva’s revenues by major revenue streams. For additional information on disaggregation of revenues, see note 15. Three months ended March 31, 2020 North Europe International Other Total (U.S. $ in millions) Sale of goods 1,625 1,370 482 177 3,655 Licensing arrangements 25 12 3 1 41 Distribution 426 2 6 — 434 Other 6 19 74 129 227 $ 2,082 $ 1,402 $ 565 $ 307 $ 4,357 Three months ended March 31, 2019 North Europe International Other Total (U.S. $ in millions) Sale of g oods 1,637 1,259 468 187 3,551 Licensing arrangements 31 5 § 1 37 Distribution 379 § 5 — 383 Other — § 48 128 176 $ 2,047 $ 1,264 $ 521 $ 317 $ 4,149 § Represents an amount less than $1 million. The financial data presented in the tables above with respect to prior periods have been revised to reflect a revision in the presentation of net revenues and cost of sales in the consolidated financial statements. See note 1c. Variable consideration Variable consideration mainly includes sales reserves and allowances (“SR&A”), comprised of rebates (including Medicaid and other governmental program discounts), chargebacks, returns and other promotional (including shelf stock adjustments) items. Provisions for prompt payment discounts are netted against accounts receivables. The Company recognizes these provisions at the time of sale and adjusts them if the actual amounts differ from the estimated provisions. SR&A to U.S. customers comprised approximately 82% of the Company’s total SR&A as of March 31, 2020, with the remaining balance primarily in Canada and Germany. The changes in SR&A for third-party sales for the three months ended March 31, 2020 and 2019 were as follows: Sales Reserves and Allowances Reserves Rebates Medicaid and Chargebacks Returns Other Total reserves Total (U.S. $ in millions) Balance at December 31, 2019 $ 87 $ 2,895 $ 1,109 $ 1,342 $ 637 $ 176 $ 6,159 $ 6,246 Provisions related to sales made in current year period 102 1,370 233 2,223 139 33 3,998 4,100 Provisions related to sales made in prior periods — (106 ) (29 ) (16 ) (1 ) 4 (148 ) (148 ) Credits and payments (106 ) (1,513 ) (248 ) (2,396 ) (112 ) (35 ) (4,304 ) (4,410 ) Translation differences — (21 ) (2 ) (6 ) (4 ) (10 ) (43 ) (43 ) Balance at March 31, 2020 $ 83 2,625 $ 1,063 $ 1,147 $ 659 $ 168 $ 5,662 $ 5,745 Reserves Rebates Medicaid and Chargebacks Returns Other Total reserves Total (U.S.$ in millions) Balance at December 31, 2018 $ 175 $ 3,006 $ 1,361 $ 1,530 $ 638 $ 176 $ 6,711 $ 6,886 Provisions related to sales made in current year period 112 1,350 324 2,320 72 114 4,180 4,292 Provisions related to sales made in prior periods — — 1 (5 ) 3 (1 ) (2 ) (2 ) Credits and payments (125 ) (1,613 ) (438 ) (2,413 ) (117 ) (101 ) (4,682 ) (4,807 ) Translation differences — (6 ) (1 ) — — — (7 ) (7 ) Balance at March 31, 2019 $ 162 2,737 $ 1,247 $ 1,432 $ 596 $ 188 $ 6,200 $ 6,362 Allowance for credit losses Accounts receivable are recognized net of allowance for credit losses. Allowances for credit losses were $127 million and $135 million as of March 31, 2020 and December 31, 2019, respectively. The decrease is mainly due to currency fluctuations. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventories | NOTE 4 – Inventories: Inventories, net of reserves, consisted of the following: March 31, December 31, 2020 2019 (U.S. $ in millions) Finished products $ 2,193 $ 2,504 Raw and packaging materials 1,306 1,183 Products in process 650 583 Materials in transit and payments on account 141 151 Total $ 4,290 $ 4,422 |
Identifiable Intangible Assets
Identifiable Intangible Assets | 3 Months Ended |
Mar. 31, 2020 | |
Identifiable Intangible Assets | NOTE 5 – Identifiable intangible assets: Identifiable intangible assets consisted of the following: Gross carrying amount net of Accumulated amortization Net carrying amount March 31, December 31, March 31, December 31, March 31, December 31, 2020 2019 2020 2019 2020 2019 (U.S. $ in millions) Product rights $ 19,371 $ 19,663 $ 10,969 $ 10,640 $ 8,402 $ 9,023 Trade names 595 600 135 126 460 474 In process research and development 1,394 1,735 — — 1,394 1,735 Total $ 21,361 $ 21,998 $ 11,104 $ 10,766 $ 10,256 $ 11,232 Product rights and trade names Product rights and trade names are assets presented at amortized cost. Product rights and trade names represent a portfolio of pharmaceutical products from various therapeutic categories from various acquisitions with a weighted average life of approximately 12 years. Amortization of intangible assets amounted to $258 million and $283 million in the three months ended March 31, 2020 and 2019, respectively. IPR&D Teva’s IPR&D are assets that have not yet been approved in major markets. Teva’s IPR&D is comprised mainly of various generic products from the Actavis Generics acquisition for $1,333 million. IPR&D carries intrinsic risks that the asset might not succeed in advanced phases and may be impaired in future periods. Intangible assets impairments Impairments of long-lived intangible assets in the first three months of 2020 and 2019 were $649 million and $469 million, respectively. Impairments in the first quarter of 2020 consisted of: (a) IPR&D assets of $331 million, primarily due to: (i) $211 million related to AUSTEDO for the treatment of Tourette syndrome in pediatric patients in the United States; and (ii) $106 million related to generic pipeline products acquired from Actavis Generics due to development progress and changes in other key valuation indications (e.g., market size, competition assumptions, legal landscape, launch date) in the United States; and (b) Identifiable product rights of $318 million, mainly due to: (i) $165 million in Japan in connection with ongoing regulatory pricing reductions and generic competition; and (ii) $138 million due to updated market assumptions regarding price and volume of certain generic products primarily marketed in the United States. Impairments in the first quarter of 2019 consisted of: (a) IPR&D assets of $265 million, mainly due to: (i) $125 million related to lenalidomide (generic equivalent of Revlimid ® (b) Identifiable product rights of $204 million, mainly due to updated market assumptions regarding price and volume of products acquired from Actavis Generics and primarily marketed in the United States. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill | NOTE 6 – Goodwill: The changes in the carrying amount of goodwill for the period ended March 31, 2020 were as follows: North Europe International Other Total (U.S. $ in millions) Balance as of December 3 2019 $ 11,091 $ 8,536 $ 2,532 $ 2,687 $ 24,846 Changes during the period: Translation differences (31 ) (143 ) (182 ) — (357 ) Balance as of March 31, 2020 $ 11,060 $ 8,393 $ 2,350 $ 2,687 $ 24,490 Teva operates its business through three reporting out-licensing Teva determines the fair value of its reporting units using the income approach. The income approach is a forward-looking approach for estimating fair value. Within the income approach, the method used is the discounted cash flow method. Teva starts with a forecast of all the expected net cash flows associated with the reporting unit, which includes the application of a terminal value, and then applies a discount rate to arrive at a net present value amount. Cash flow projections are based on Teva’s estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate used is based on the weighted average cost of capital (“WACC”), adjusted for the relevant risk associated with country-specific and business-specific characteristics. If any of these expectations were to vary materially from Teva’s assumptions, Teva may record an impairment of goodwill allocated to these reporting units in the future. First Quarter Developments During the first quarter of 2020, management assessed developments that occurred during the quarter to determine if it was more likely than not that the fair value of any of its reporting units was below its carrying amount. As part of this assessment, management also considered the sensitivity of its conclusions as they relate to changes in the estimates and assumptions used in the latest forecast available for each period. Teva evaluated qualitative factors, including expected effects of COVID-19 COVID-19 COVID-19, Market Capitalization Teva analyzed the aggregate fair value of its reporting units, calculated as part of the annual goodwill impairment test performed in the fourth quarter of 2019, compared to its market capitalization. At December 31, 2019, Teva’s market capitalization was below management’s assessment of the aggregate fair value of the Company’s reporting units. Management viewed this as a temporary situation mainly attributed to an acute reaction by the market primarily related to opioid and price fixing litigation risks. Management continues to believe market concerns regarding the uncertainty of these matters are impacting its market capitalization. However, developments in the case are expected to clarify the outlook with regards to the opioid litigation, assuming the proposed settlement framework is finalized in 2020. During 2020, Teva experienced additional volatility in its share price resulting from the impact of the COVID-19 COVID-19 Management will continue to monitor business conditions, including the impact of COVID-19, |
Debt obligations
Debt obligations | 3 Months Ended |
Mar. 31, 2020 | |
Debt obligations | NOTE 7 – Debt obligations: a. Short-term debt: March 31, 2020 December 31, 2019 Weighted average interest Maturity (U.S. $ in millions) Convertible debentures 0.25 % 2026 $ 514 $ 514 Current maturities of long-term liabilities 1,116 1,831 Total short-term debt $ 1,630 $ 2,345 Convertible senior debentures Teva’s 0.25% convertible senior debentures due 2026, with $514 million principal amount outstanding as of March 31, 2020 and December 31,2019, include a “net share settlement” feature according to which the principal amount will be paid in cash and in case of conversion, only the residual conversion value above the principal amount will be paid in Teva shares. Due to the “net share settlement” feature, exercisable at any time, these convertible senior debentures are classified in the Balance Sheet under short-term debt. Holders of the convertible debentures will be able to cause Teva to redeem the debentures on February 1, 2021. Long-term debt: Weighted average interest Maturity March 31, December 31, (U.S. $ in millions) Senior notes EUR 1,010 million 0.38 % 2020 $ 1,116 $ 1,131 Senior notes EUR 1,500 million 1.13 % 2024 1,651 1,673 Senior notes EUR 1,300 million 1.25 % 2023 1,432 1,451 Senior notes EUR 1,000 million 6.00 % 2025 1,105 1,120 Senior notes EUR 900 million 4.50 % 2025 994 1,008 Senior notes EUR 750 million 1.63 % 2028 822 833 Senior notes EUR 700 million 3.25 % 2022 773 784 Senior notes EUR 700 million 1.88 % 2027 771 782 Senior notes USD 3,500 million 3.15 % 2026 3,494 3,494 Senior notes USD 1,475 million 2.20 % 2021 1,474 1,474 Senior notes USD 3,000 million 2.80 % 2023 2,995 2,995 Senior notes USD 2,000 million 4.10 % 2046 1,985 1,985 Senior notes USD 1,250 million 6.00 % 2024 1,250 1,250 Senior notes USD 1,250 million 6.75 % 2028 1,250 1,250 Senior notes USD 1,000 million 7.13 % 2025 1,000 1,000 Senior notes USD 844 million 2.95 % 2022 855 856 Senior notes USD 789 million 6.15 % 2036 783 782 Senior notes USD 700 million (1) 2.25 % 2020 — 700 Senior notes USD 613 million 3.65 % 2021 618 618 Senior notes USD 588 million 3.65 % 2021 587 587 Senior notes CHF 350 million 0.50 % 2022 366 361 Senior notes CHF 350 million 1.00 % 2025 366 362 Total senior notes 25,687 26,496 Other long-term debt 1.14 % 2026 1 1 Less current maturities (1,116 ) (1,831 ) Less debt issuance costs (98 ) (103 ) Total senior notes and loans $ 24,473 $ 24,562 (1) During the first quarter of 2020, Teva repaid at maturity Long-term debt was issued by several indirect wholly-owned subsidiaries of the Company and is fully and unconditionally guaranteed by the Company as to payment of all principal, interest, discount and additional amounts, if any. Long-term debt as of March 31, 2020 is effectively denominated in the following currencies: 66% in U.S. dollar, 31% in euro and 3% Teva’s principal sources of short-term liquidity are its cash on hand, existing cash investments, liquid securities and available credit facilities, primarily its $2.3 billion revolving credit facility (“RCF”). In April 2019, the Company entered into a $2.3 billion unsecured syndicated RCF. The RCF agreement provides for two separate tranches, a $1.15 billion t t one-year extension options, of which $1.0 billion was The RCF contains certain covenants, including certain limitations on incurring liens and indebtedness and maintenance of certain financial ratios, including the requirement to maintain compliance with a net debt to EBITDA ratio, which becomes more restrictive over time. The net debt to EBITDA ratio limit is 6.0x in the first and second quarters of 2020 and declines to 5.75x in the third and fourth quarters of 2020, and continues to gradually decline over the remaining term of the RCF. The RCF can be used for general corporate purposes, including repaying existing debt. As of March 31, 2020, no amounts were outstanding under the RCF. Based on current and forecasted results, the Company expects that it will not exceed the financial covenant thresholds set forth in the RCF within one year from the date these financial statements are issued. Under specified circumstances, including non-compliance Teva expects that it will continue to have sufficient cash resources to support its debt service payments and all other financial obligations within one year from the date that these financial statements are issued. |
Derivative instruments and hedg
Derivative instruments and hedging activities | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities | NOTE 8 – Derivative instruments and hedging activities: a. Foreign exchange risk management: In the first three months of 2020, approximately 50% of Teva’s revenues were denominated in currencies other than the U.S. dollar. As a result, Teva is subject to significant foreign currency risks. The Company enters into forward exchange contracts, purchases and writes options in order to hedge the currency exposure on balance sheet items, revenues and expenses. In addition, the Company takes measures to reduce exposure by using natural hedging. The Company also acts to offset risks in opposite directions among the companies within Teva. The currency hedged items are usually denominated in the following main currencies: the Russian ruble, the euro, the Swiss franc, the Japanese yen, the British pound, the Canadian dollar, the Polish zloty, the Indian rupee and other European and Latin American currencies. Depending on market conditions, foreign currency risk is also managed through the use of foreign currency debt. The Company hedged against possible fluctuations in foreign subsidiaries’ net assets (“net investment hedge”) and from time to time enters into cross-currency swaps and forward contracts in order to hedge such an exposure. Most of the counterparties to the derivatives are major banks and the Company is monitoring the associated inherent credit risks. The Company does not enter into derivative transactions for trading purposes. b. Interest risk management: The Company raises capital through various debt instruments, including straight notes that bear a fixed or variable interest rate, bank loans, securitizations and convertible debentures. In some cases, the Company has swapped from a fixed to a floating interest rate (“fair value hedge”) and from a fixed to a fixed interest rate with an exchange from a currency other than the functional currency (“cash flow hedge”), thereby reducing overall interest expenses or hedging risks associated with interest rate fluctuations. c. Derivative instruments notional amounts: The following table summarizes the notional amounts for hedged items, when transactions are designated as hedge accounting: March 31, December 31, 2020 2019 (U.S. $ in millions) Cross-currency swap—net investment hedge $ — $ 1,000 d. Derivative instrument outstanding: The following table summarizes the classification and fair values of derivative instruments: Fair value Designated as hedging instruments Not designated as hedging instruments March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Reported under (U.S. $ in millions) Asset derivatives: Other current assets: Option and forward contracts $ — $ — $ 104 $ 32 Liability derivatives: Other current liabilities: Cross-currency swaps—net investment hedge — (22 ) — — Option and forward contracts — — (94 ) (41 ) The table below provides information regarding the location and amount of pre-tax Financial expenses, net Other comprehensive Three months ended, Three months ended, March 31, 2020 March 31, March 31, 2020 March 31, Reported under (U.S. $ in millions) Line items in which effects of hedges are recorded $ 224 $ 218 $ (530 ) $ 94 Cross-currency swaps—cash flow hedge (1) — (1 ) — (20 ) Cross-currency swaps—net investment hedge (2) (2 ) (7 ) (21 ) $ (20 ) Interest rate swaps—fair value hedge (3) — 1 — — The table below provides information regarding the location and amount of pre-tax Financial expenses, net Net revenues Three months ended, Three months ended, March 31, 2020 March 31, March 31, 2020 March 31, Reported under (U.S. $ in millions) Line items in which effects of hedges are recorded $ 224 $ 218 $ (4,357 ) $ (4,149 ) Option and forward contracts (4) 24 (42 ) — — Option and forward contracts economic hedge (5) — — (60 ) — (1) With respect to cross-currency swap agreements, Teva recognized gains which mainly reflect the differences between the fixed interest rate and the floating interest rate. In the fourth quarter of 2019, Teva terminated cross-currency swap agreements against its outstanding 3.65% senior notes maturing in November 2021. The settlement of these transactions resulted in cash proceeds of $95 million. The cash flow hedge accounting adjustments of these instruments, which are recorded under senior notes and loans, are amortized under financial expenses-net (2) In each of the first and second quarters of 2017, Teva entered into a cross currency swap agreement with a notional amount of $500 million maturing in 2020. These cross currency swaps were designated as a net investment hedge of Teva’s foreign subsidiaries euro denominated net assets, in order to reduce the risk of adverse exchange rate fluctuations. With respect to these cross currency swap agreements, Teva recognized gains which mainly reflect the differences between the float-for-float expired (3) In the fourth quarter of 2016, Teva entered into an interest rate swap agreement designated as fair value hedge relating to its 2.8% senior notes due 2023 with respect to $500 million notional amount of outstanding debt. With respect to this interest rate swap agreement, Teva recognized a loss which mainly reflects the differences between the fixed interest rate and the floating interest rate. In the third quarter of 2019, Teva terminated this interest rate swap agreement. The settlement of these transactions resulted in a gain position of $10 million. The fair value hedge accounting adjustments of these instruments, which are recorded under senior notes and loans, are amortized under financial expenses-net (4) Teva uses foreign exchange contracts (mainly option and forward contracts) to hedge balance sheet items from currency exposure. These foreign exchange contracts are not designated as hedging instruments for accounting purposes. In connection with these foreign exchange contracts, Teva recognizes gains or losses that offset the revaluation of the balance sheet items also recorded under financial expenses - (5) Teva entered into option and forward contracts designed to limit the exposure of foreign exchange fluctuations on projected revenues and expenses recorded in euro, the British pound, the Russian ruble and some other currencies during the quarter for which such instruments are transacted. These derivative instruments do not meet the criteria for hedge accounting, however, they are accounted for as economic hedge. These derivative instruments, which may include hedging transactions against future projected revenues and expenses, are recognized on the balance sheet at their fair value on a quarterly basis, while the foreign exchange impact on the underlying revenues and expenses may occur in subsequent quarters. Changes in the fair value of the derivative instruments are recognized in the same line item in the statements of income as the underlying exposure being hedged. In the first quarter of 2020, the positive impact from these derivatives recognized under revenues was $60 million, partially offset by a $5 million negative impact recognized under cost of sales. The cash flows associated with these derivatives are reflected as cash flows from operating activities in the consolidated statements of cash flows. e. Matured forward starting interest rate swaps and treasury lock agreements: Certain forward starting interest rate swaps and treasury lock agreements were terminated in July 2016 in connection with Teva’s debt issuances. The termination of these transactions resulted in a loss position of $493 million, which was recorded in other comprehensive income (loss) and is amortized under financial expenses-net With respect to these forward starting interest rate swaps and treasury lock agreements , In the third quarter of 2019, Teva terminated $500 million interest rate swap agreements designated as a fair value hedge relating to its 2.8% senior notes due 2023 with respect to $3,000 million notional amount. Settlement of these transactions resulted in cash proceeds of $10 million. The fair value hedge accounting adjustments of these instruments, which are recorded under senior notes and loans, are amortized under financial expenses-net In the fourth quarter of 2019, Teva terminated $588 million cross-currency swap agreements against its outstanding 3.65% senior notes maturing in November 2021. Settlement of these transactions resulted in cash proceeds of $95 million. The cash flow hedge accounting adjustments of these instruments, which are recorded under senior notes and loans, are amortized under financial expenses-net In the first quarter of 2020, a $1,000 million cross currency swap agreement designated as a net investment hedge of Teva’s foreign subsidiaries euro denominated net assets expired. Settlement of these transactions resulted in cash proceeds of $3 million. With respect to the interest rate swap and cross-currency swap agreements, gains of $1 million and $2 million were recognized under financial expenses, net for the three months ended March 31, 2020 and 2019, respectively. |
Legal Settlements and Loss Cont
Legal Settlements and Loss Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Legal Settlements and Loss Contingencies | NOTE 9 – Legal settlements and loss contingencies: In the first quarter of 2020, Teva recorded an income of $25 million in legal settlements and loss contingencies, compared to an expense of $57 million in the first quarter of 2019. The income in the first quarter of 2020 was mainly due to a settlement of an action brought against the sellers of Auden McKenzie (an acquisition made by Actavis Generics). As of March 31, 2020 and December 31, 2019, Teva’s provision for legal settlements and loss contingencies recorded under accrued expenses was $1,539 million and $1,580 million, respectively. |
Commitments and contingencies
Commitments and contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and contingencies | NOTE 10 – Commitments and contingencies: General From time to time, Teva and/or its subsidiaries are subject to claims for damages and/or equitable relief arising in the ordinary course of business. In addition, as described below, in large part as a result of the nature of its business, Teva is frequently subject to litigation. Teva generally believes that it has meritorious defenses to the actions brought against it and vigorously pursues the defense or settlement of each such action. Teva records a provision in its financial statements to the extent that it concludes that a contingent liability is probable and the amount thereof is estimable. Based upon the status of the cases described below, management’s assessments of the likelihood of damages, and the advice of counsel, no provisions have been made regarding the matters disclosed in this note, except as noted below. Litigation outcomes and contingencies are unpredictable, and excessive verdicts can occur. Accordingly, management’s assessments involve complex judgments about future events and often rely heavily on estimates and assumptions. Teva continuously reviews the matters described below and may, from time to time, remove previously disclosed matters that the Company has determined no longer meet the materiality threshold for disclosure. If one or more of such proceedings described below were to result in final judgments against Teva, such judgments could be material to its results of operations and cash flows in a given period. In addition, Teva incurs significant legal fees and related expenses in the course of defending its positions even if the facts and circumstances of a particular litigation do not give rise to a provision in the financial statements. In connection with third-party agreements, Teva may under certain circumstances be required to indemnify, and may be indemnified by, in unspecified amounts, the parties to such agreements against third-party claims. Among other things, Teva’s agreements with third parties may require Teva to indemnify them, or require them to indemnify Teva, for the costs and damages incurred in connection with product liability claims, in specified or unspecified amounts. Except as otherwise noted, all of the litigation matters disclosed below involve claims arising in the United States. Except as otherwise noted, all third party sales figures given below are based on IQVIA (formerly IMS Health Inc.) data. Intellectual Property Litigation From time to time, Teva seeks to develop generic versions of patent-protected pharmaceuticals for sale prior to patent expiration in various markets. In the United States, to obtain approval for most generics prior to the expiration of the originator’s patents, Teva must challenge the patents under the procedures set forth in the Hatch-Waxman Act of 1984, as amended. To the extent that Teva seeks to utilize such patent challenge procedures, Teva is and expects to be involved in patent litigation regarding the validity, enforceability or infringement of the originator’s patents. Teva may also be involved in patent litigation involving the extent to which its product or manufacturing process techniques may infringe other originator or third-party patents. Additionally, depending upon a complex analysis of a variety of legal and commercial factors, Teva may, in certain circumstances, elect to market a generic version even though litigation is still pending. To the extent Teva elects to proceed in this manner, it could face substantial liability for patent infringement if the final court decision is adverse to Teva, which could be material to its results of operations and cash flows in a given period. Teva could also be sued for patent infringement outside of the context of the Hatch-Waxman Act. For example, Teva could be sued for patent infringement after commencing sales of a product. In addition, for biosimilar products, Teva could be sued according to the “patent dance” procedures of the Biologics Price Competition and Innovation Act (BPCIA). The general rule for damages in patent infringement cases in the United States is that the patentee should be compensated by no less than a reasonable royalty and it may also be able, in certain circumstances, to be compensated for its lost profits. The amount of a reasonable royalty award would generally be calculated based on the sales of Teva’s product. The amount of lost profits would generally be based on the lost sales of the patentee’s product. In addition, the patentee may seek consequential damages as well as enhanced damages of up to three times the profits lost by the patent holder for willful infringement, although courts have typically awarded much lower multiples. Teva is also involved in litigation regarding patents in other countries where it does business, particularly in Europe. The laws concerning generic pharmaceuticals and patents differ from country to country. Damages for patent infringement in Europe may include lost profits or a reasonable royalty, but enhanced damages for willful infringement are generally not available. In July 2014, GlaxoSmithKline (“GSK”) sued Teva in Delaware federal court for infringement of a patent expiring in June 2015 directed to using carvedilol in a specified manner to decrease the risk of mortality in patients with congestive heart failure. Teva and eight other generic producers began selling their carvedilol tablets (the generic version of GSK’s Coreg ® pre- or a multiplier for willfulness. Following post-trial motions filed by the parties, on March 28, 2018, the district court issued an opinion overturning the jury verdict and instead found no induced infringement by Teva, thereby finding that Teva did not owe any damages; the district court also denied Teva’s motion seeking to overturn the jury verdict with respect to invalidity. The provision that was originally included in the financial statements following the damages verdict in this matter was reversed following the opinion overturning the verdict as the exposure was no longer considered probable. A hearing on an appeal filed by both parties was held on September 4, 2019 and Teva awaits the Court’s decision. If the appeal of the district court’s decision is decided against Teva, the case would be remanded to the district court for it to consider Teva’s other legal and equitable defenses that have not yet been considered by the district court. In 2014, Teva Canada succeeded in its challenge of the bortezomib (the generic equivalent of Velcade ® Canadian dollars plus post-judgment interest. In June 2018, the court ruled that Janssen and Millennium pay Teva 5 million Canadian dollars in Section 8 damages. Janssen and Millennium filed an appeal, which was denied by the appellate court on November 4, 2019. On January 3, 2020, Janssen and Millennium applied for leave to appeal to the Canadian Supreme Court. If the decision is ultimately overturned, Teva could owe the capped damages set forth above. In addition to the potential damages that could be awarded, Teva could be ordered to cease sales of its bortezomib product. Product Liability Litigation Teva’s business inherently exposes it to potential product liability claims. Teva maintains a program of insurance, which may include commercial insurance, self-insurance (including direct risk retention), or a combination of both approaches, in amounts and on terms that it believes are reasonable and prudent in light of its business and related risks. However, Teva sells, and will continue to sell, pharmaceuticals that are not covered by its product liability insurance; in addition, it may be subject to claims for which insurance coverage is denied as well as claims that exceed its policy limits. Product liability coverage for pharmaceutical companies is becoming more expensive and increasingly difficult to obtain. As a result, Teva may not be able to obtain the type and amount of insurance it desires, or any insurance on reasonable terms, in all of its markets. Competition Matters As part of its generic pharmaceuticals business, Teva has challenged a number of patents covering branded pharmaceuticals, some of which are among the most widely-prescribed and well-known drugs on the market. Many of Teva’s patent challenges have resulted in litigation relating to Teva’s attempts to market generic versions of such pharmaceuticals under the federal Hatch-Waxman Act. Some of this litigation has been resolved through settlement agreements in which Teva obtained a license to market a generic version of the drug, often years before the patents expire. Teva and its subsidiaries have increasingly been named as defendants in cases that allege antitrust violations arising from such settlement agreements. The plaintiffs in these cases, which are usually direct and indirect purchasers of pharmaceutical products, and often assert claims on behalf of classes of all direct and indirect purchasers, typically allege that (1) Teva received something of value from the innovator in exchange for an agreement to delay generic entry, and (2) significant savings could have been realized if there had been no settlement agreement and generic competition had commenced earlier. These class action cases seek various forms of injunctive and monetary relief, including damages based on the difference between the brand price and what the generic price allegedly would have been and disgorgement of profits, which are automatically tripled under the relevant statutes, plus attorneys’ fees and costs. The alleged damages generally depend on the size of the branded market and the length of the alleged delay, and can be substantial—potentially measured in multiples of the annual brand sales—particularly where the alleged delays are lengthy or branded drugs with annual sales in the billions of dollars are involved. Teva believes that its settlement agreements are lawful and serve to increase competition, and has defended them vigorously. In Teva’s experience to date, these cases have typically settled for a fraction of the high end of the damages sought, although there can be no assurance that such outcomes will continue. In June 2013, the U.S. Supreme Court held, in Federal Trade Commission v. Actavis, Inc. (the “AndroGel case”), that a rule of reason test should be applied in analyzing whether such settlements potentially violate the federal antitrust laws. The Supreme Court held that a trial court must analyze each agreement in its entirety in order to determine whether it violates the antitrust laws. This new test has resulted in increased scrutiny of Teva’s patent settlements, additional action by the FTC and state and local authorities, and an increased risk of liability in Teva’s currently pending antitrust litigations. Beginning in April 2006, certain subsidiaries of Teva were named in a class action lawsuit filed in the U.S. District Court for the Eastern District of Pennsylvania with allegations that the settlement agreements entered into between Cephalon, Inc., now a Teva subsidiary (“Cephalon”), and various generic pharmaceutical companies in late 2005 and early 2006 to resolve patent litigation involving certain finished modafinil products (marketed as PROVIGIL ® In May 2015, Cephalon entered into a consent decree with the FTC (the “Modafinil Consent Decree”) under which the FTC dismissed its claims against Cephalon in the FTC Modafinil Action in exchange for payment of $1.2 billion (less set-offs non-financial ten-year Additionally, following an investigation initiated by the European Commission in April 2011 regarding a modafinil patent settlement in Europe, the European Commission issued a Statement of Objections in July 2017 against both Cephalon and Teva alleging that the 2005 settlement agreement between the parties had the object and effect of hindering the entry of generic modafinil. No final decision regarding liability has yet been taken by the European Commission. The sales of modafinil in the European Economic Area during the last full year of the alleged breach amounted to € In January 2009, the FTC and the State of California filed a complaint for injunctive relief in California federal court alleging that a September 2006 patent lawsuit settlement between Watson Pharmaceuticals, Inc. (“Watson”), from which Teva later acquired certain assets and liabilities, and Solvay Pharmaceuticals, Inc. (“Solvay”) relating to AndroGel ® ® ® ® ® In December 2011, three groups of plaintiffs sued Wyeth and Teva for alleged violations of the antitrust laws in connection with their settlement of patent litigation involving extended release venlafaxine (generic Effexor XR ® ® ® In February 2012, two purported classes of direct-purchaser plaintiffs sued GSK and Teva in New Jersey federal court for alleged violations of the antitrust laws in connection with their settlement of patent litigation involving lamotrigine (generic Lamictal ® ® ® In April 2013, purported classes of direct purchasers of, and end payers for, Niaspan ® opt-out ® billion at the time Teva launched its generic version of Niaspan ® Beginning in 2013, several putative class actions were filed against Actavis, Inc. and certain of its affiliates, alleging that Watson’s 2012 patent lawsuit settlement with Endo Pharmaceuticals Inc. relating to Lidoderm ® ® end-payers Since January 2014, numerous lawsuits have been filed in the U.S. District Court for the Southern District of New York by purported classes of end-payers ® end-payers’ ® approximately $3.7 billion and approximately $500 million, respectively. At the time Teva launched its authorized generic version of Actos ® ® In September 2014, the FTC sued AbbVie Inc. and certain of its affiliates (“AbbVie”) as well as Teva in federal court in Philadelphia alleging that they violated the antitrust laws by entering into a December 2011 settlement agreement to resolve the patent litigation on AndroGel ® ® ® In May 2015, a purported class of end payers for Namenda IR ® opt-outs ® ® ® In January 2019, generic manufacturer Cipla Limited filed a lawsuit against Amgen in Delaware federal court, alleging, among other things, that a January 2, 2019 settlement agreement between Amgen and Teva, resolving patent litigation over cinacalcet (generic Sensipar ® end-payer ® ® On December 16, 2016, the U.K. Competition and Markets Authority (“CMA”) issued a statement of objections (a provisional finding of breach of the Competition Act) in respect of certain allegations against Allergan, Actavis UK and certain Auden Mckenzie entities alleging competition law breaches in connection with the supply of 10mg and 20mg hydrocortisone tablets in the U.K. On December 18, 2017, the CMA issued a Statement of Draft Penalty Calculation. On March 3, 2017 and February 28, 2019, the CMA issued second and third statements of objections in respect of certain additional allegations relating to the same products and covering part of the same time periods as in the first statement of objections. On February 12, 2020, the CMA issued a supplementary statement of objections effectively combining the three previously issued statements referenced above. On January 9, 2017, Teva completed the sale of Actavis UK to Accord Healthcare Limited, in connection with which Teva will indemnify Accord Healthcare for potential fines imposed by the CMA and/or damages awarded by a court against Actavis UK in relation to the December 16, 2016 and March 3, 2017 statements of objections, and resulting from conduct prior to the closing date of the sale. In addition, Teva agreed to indemnify Allergan against losses arising from this matter in the event of any such fines or damages. A liability for this matter has been recorded in the financial statements. Government Investigations and Litigation Relating to Pricing and Marketing Teva is involved in government investigations and litigation arising from the marketing and promotion of its pharmaceutical products in the United States. In 2015 and 2016, Actavis and Teva USA each respectively received subpoenas from the U.S. Department of Justice (“DOJ”) Antitrust Division seeking documents and other information relating to the marketing and pricing of certain Teva USA generic products and communications with competitors about such products. In May 2018, Teva received a civil investigative demand from the DOJ Civil Division, pursuant to the federal False Claims Act, seeking documents and information produced since January 1, 2009 relevant to the Civil Division’s investigation concerning allegations that generic pharmaceutical manufacturers, including Teva, engaged in market allocation and price-fixing agreements, paid illegal remuneration, and caused false claims to be submitted in violation of the False Claims Act. Teva is cooperating with these subpoena requests. In 2015 and 2016, Actavis and Teva USA each respectively received a subpoena from the Connecticut Attorney General seeking documents and other information relating to potential state antitrust law violations. Subsequently, on December 15, 2016, a civil action was brought by the attorneys general of twenty states against Teva USA and several other companies asserting claims under federal antitrust law alleging price fixing of generic products in the United States. That complaint was later amended to add new states as named plaintiffs, as well as new allegations and new state law claims, and on June 18, 2018, the attorneys general of 49 states plus Puerto Rico and the District of Columbia filed a consolidated amended complaint against Actavis and Teva, as well as other companies and individuals. On May 10, 2019, most (though not all) of these attorneys general filed yet another antitrust complaint against Actavis, Teva and other companies and individuals, alleging price-fixing and market allocation with respect to additional generic products. On November 1, 2019, the state attorneys general filed an amended complaint, bringing the total number of plaintiff states and territories to 54. The amended complaint alleges that Teva was at the center of a conspiracy in the generic pharmaceutical industry, and asserts that Teva and others fixed prices, rigged bids, and allocated customers and market share with respect to certain additional products, many of which were not previously at issue in the Pennsylvania MDL. In the various complaints described above, the states seek a finding that the defendants’ actions violated federal antitrust law and state antitrust and consumer protection laws, as well as injunctive relief, disgorgement, damages on behalf of various state and governmental entities and consumers, civil penalties and costs. All such complaints have been transferred to the generic drug multidistrict litigation in the Eastern District of Pennsylvania (“Pennsylvania MDL”). Beginning on March 2, 2016, numerous complaints have been filed in the United States on behalf of putative classes of direct and indirect purchasers of several generic drug products, as well as several individual direct and indirect purchaser opt-out plaintiffs filed consolidated amended complaints on August 15, 2017. On October 16, 2018, the court denied certain of the defendants’ motions to dismiss as to certain federal claims, and on February 15, 2019, the court granted in part and denied in part defendants’ motions to dismiss as to certain state law claims. On July 18, 2019, certain individual plaintiffs commenced a civil action in the Pennsylvania Court of Common Pleas of Philadelphia County against many of the defendants in the Pennsylvania MDL, including Teva and Actavis, but no complaint has been filed and the case has been placed in deferred status. On November 13, 2019, several counties in New York commenced a civil action against many of the defendants in the Pennsylvania MDL, including Teva and Actavis, and the complaint has been transferred to the Pennsylvania MDL. On March 1, 2020, Harris County in Texas filed a complaint against several generic manufacturers including Teva and Actavis in the District Court for the Southern District of Texas. This complaint largely mirrors certain allegations in the complaints in the Pennsylvania MDL. This case has not been transferred to the Pennsylvania MDL. On March 21, 2017, Teva received a subpoena from the U.S. Attorney’s office in Boston, Massachusetts requesting documents related to Teva’s donations to patient assistance programs. Teva is cooperating in responding to the subpoena. In December 2016, Teva resolved certain claims under the U.S. Foreign Corrupt Practices Act (“FCPA”) with the SEC and the DOJ. The settlement included a fine, disgorgement and prejudgment interest, a three-year deferred prosecution agreement (“DPA”) for Teva and the retention of an independent compliance monitor for a period of three years. In February 2020 the term of the monitorship provided for by the DPA and Teva’s consent judgement with the SEC expired and on March 4, 2020, following Teva’s certification to the SEC and the DOJ confirming that Teva had complied with its disclosure obligations under the DPA, the DOJ filed a motion to dismiss the information filed against Teva at the time the DPA was entered into. Opioids Litigation Since May 2014, more than 2,900 complaints have been filed with respect to opioid sales and distribution against various Teva affiliates, along with several other pharmaceutical companies, by a number of cities, counties, states, other governmental agencies, tribes and private plaintiffs (including various putative class actions of individuals) in both state and federal courts. Most of the federal cases have been consolidated into a multidistrict litigation in the Northern District of Ohio (“MDL Opioid Proceeding”) and many of the cases filed in state court have been removed to federal court and consolidated into the MDL Opioid Proceeding. Other cases remain pending in various states. In some jurisdictions, such as Illinois, New York, Pennsylvania, South Carolina, Texas, Utah and West Virginia, certain state court cases have been transferred to a single court within their respective state court systems for coordinated pretrial proceedings. Complaints asserting claims under similar provisions of different state law, generally contend that the defendants allegedly engaged in improper marketing and distribution of opioids, including ACTIQ ® ® non-monetary Absent resolutions, trials are expected to proceed in several states in 2020 and 2021. A court in New York had set a date, for a liability trial only, to start in March 2020. However, that trial has been postponed due to the impact of COVID-19. COVID-19 In May 2019, Teva settled the Oklahoma litigation brought by the Oklahoma Attorney General (State of Oklahoma, ex. rel. Mike Hunter, Attorney General of Oklahoma vs. Purdue Pharma L.P., et. al.) for $85 million. The settlement did not include any admission of violation of law for any of the claims or allegations made. As the Company demonstrated a willingness to settle part of the litigation, for accounting purposes, management considered a portion of opioid-related cases as probable and, as such, recorded an estimated provision in the second quarter of 2019. Given the relatively early stage of the cases, management viewed no amount within the range to be the most likely outcome. Therefore, management recorded a provision for the reasonably estimable minimum amount in the assessed range for such opioid-related cases in accordance with Accounting Standards Codification 450 “Accounting for Contingencies.” On October 21, 2019, Teva reached a settlement with the two plaintiffs in the MDL Opioid Proceeding that was scheduled for trial for the Track One case, Cuyahoga and Summit Counties of Ohio. Under the terms of the settlement, Teva will provide the two counties with opioid treatment medication, buprenorphine naloxone (sublingual tablets), known by the brand name Suboxone ® Also on October 21, 2019, Teva and certain other defendants reached an agreement in principle with a group of Attorneys General from North Carolina, Pennsylvania, Tennessee and Texas for a nationwide settlement framework. The framework is designed to provide a mechanism by which the Company attempts to seek resolution of remaining potential and a . Following these developments, the Company considered a range of potential settlement outcomes. No single outcome in the range was considered to be more likely than any other outcome; accordingly, in the third quarter of 2019, Teva accrued to the new low end of the range, resulting in an increase in Teva’s previously recorded estimated liability. There was no change in this estimate in the first quarter of 2020. Separately, on April 27, 2018, Teva received subpoena requests from the United States Attorney’s office in the Western District of Virginia and the Civil Division seeking documents relating to the manufacture, marketing and sale of branded opioids. In August 2019, Teva received a grand jury subpoena from the United States Attorney’s Office for the Eastern District of New York for documents related to the Company’s anti-diversion policies and procedures and distribution of its opioid medications, in what the Company understands to be part of a broader investigation into manufacturers’ and distributors’ monitoring programs and reporting under the Controlled Substances Act. In September 2019, Teva received subpoenas from the New York State Department of Financial Services (NYDFS) as part of an industry-wide inquiry into the effect of opioid prescriptions on New York health insurance premiums. The Company is cooperating with NYDFS’s inquiry and producing documents in response to the various subpoenas and requests for information. Currently, Teva cannot predict how the nationwide settlement framework agreement (if finalized) will affect these investigations. In addition, a number of state attorneys general, including a coordinated multistate effort, have initiated investigations into sales and marketing practices of Teva and its affiliates with respect to opioids. Other states are conducting their own investigations outside of the multistate group. Teva is cooperating with these ongoing investigations and cannot predict their outcome at this time. In addition, several jurisdictions in Canada have initiated litigation regarding opioids alleging similar claims as those in the United States. The cases in Canada are likely to be consolidated and are in their early stages. Shareholder Litigation On November 6, 2016 and December 27, 2016, two putative securities class actions were filed in the U.S. District Court for the Central District of California against Teva and certain of its current and former officers and directors. Those lawsuits were consolidated and transferred to the U.S. District Court for the District of Connecticut (the “Ontario Teachers Securities Litigation”). On December 13, 2019, the lead plaintiff in that action filed an amended complaint, purportedly on behalf of purchasers of Teva’s securities between February 6, 2014 and May 10, 2019. The amended complaint asserts that Teva and certain of its current and former officers and directors violated federal securities and common laws in connection with Teva’s alleged failure to disclose pricing strategies for various drugs in its generic drug portfolio and by making allegedly false or misleading statements in certain offering materials. The amended complaint seeks unspecified damages, legal fees, interest, and costs. In July 2017, August 2017, and June 2019, other putative securities class actions were filed in other federal courts based on similar allegations, and those cases have been transferred to the U.S. District Court for the District of Connecticut. Between August 2017 and January 2020, eighteen complaints were filed against Teva and certain of its current and former officers and directors seeking unspecified compensatory damages, legal fees, costs and expenses. The similar claims in these complaints have been brought on behalf of plaintiffs, in various forums across the country, who have indicated that they intend to “opt-out” “opt-out” Motions to approve derivative actions against certain past and present directors and officers have been filed in Israel alleging negligence and recklessness with respect to the acquisition of the Rimsa business and the acquisition of Actavis Generics. Motions for document disclosure prior to initiating derivative actions were filed with respect to several settlement agreements, opioids and the U.S. price-fixing investigations. Motions to approve securities class actions against Teva and certain of its current and former directors and officers were filed in Israel based on allegations of improper disclosure of the above-mentioned pricing investigation, as well as lack of disclosure of negative developments in the generic sector, including price erosion with respect to Teva’s products. Various motions were filed in Israel to approve a derivative action, discovery and a class action related to claims regarding Teva’s above-mentioned FCPA resolution with the SEC and DOJ. The parties have reached an agreement in principle to settle these proceedings and the settlement was approved by the Tel Aviv District Court on April 6, 2020. Environmental Matters Teva or its subsidiaries are party to a number of environmental proceedings, or have received claims, including under the federal Superfund law or other federal, provincial or state and local laws, imposing liability for alleged noncompliance, or for the investigation and remediation of releases of hazardous substances and for natural resource damages. Many of these proceedings and claims seek to require the generators of hazardous wastes disposed of at a third party-owned site, or the party responsible for a release of hazardous substances that impacted a site, to investigate and clean the site or to pay or reimburse others for such activities, including for oversight by governmental authorities and any related damages to natural resources. Teva or its subsidiaries have received claims, or been made a party to these proceedings, along with others, as an alleged generator of wastes that were disposed of or treated at third-party waste disposal sites, or as a result of an alleged release from one of Teva’s facilities or former facilities. Although liability among the responsible parties, under certain circumstances, may be joint and several, these proceedings are frequently resolved so that the allocation of clean-up clean-up clean-up Other Matters On February 1, 2018, former shareholders of Ception Therapeutics, Inc., a company that was acquired by and merged into Cephalon in 2010, prior to Cephalon’s acquisition by Teva, filed breach of contract and other related claims against the Company, Teva USA and Cephalon in the Delaware Court of Chancery. Among other things, the plaintiffs allege that Cephalon breached the terms of the 2010 Ception-Cephalon merger agreement by failing to exercise commercially reasonable efforts to develop and commercialize CINQAIR ® |
Income taxes
Income taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income taxes | NOTE 11 – Income taxes: In the first quarter of 2020, Teva recognized a tax benefit of $59 million, on pre-tax pre-tax on its ongoing business operations. The statutory Israeli corporate tax rate is 23% in 2020. Teva’s tax rate differs from the Israeli statutory tax rate, mainly due to generation of profits in various jurisdictions in which tax rates are different than the Israeli tax rate, tax benefits in Israel and other countries, as well as infrequent or nonrecurring items. Teva filed a claim seeking the refund of withholding taxes paid to the Indian tax authorities in 2012. Trial in this case is scheduled to begin in July 2020 . A final and binding decision against Teva in this case may lead to an impairment in the amount of $136 million. |
Other assets impairments, restr
Other assets impairments, restructuring and other items | 3 Months Ended |
Mar. 31, 2020 | |
Other assets impairments, restructuring and other items | NOTE 12 – Other assets impairments, restructuring and other items: Three months ended March 31, 2020 2019 (U.S. $ in millions) Impairments of long-lived tangible assets (1) $ 75 $ 20 Contingent consideration 6 (71 ) Restructuring 39 32 Other — 20 Total $ 121 $ 1 (1) Including impairments related to exit and disposal activities. Impairme nts Impairments of tangible assets for the first three months of 2020 and 2019 were $75 million and $20 million, respectively. The impairments in the first three months of 2020 are mainly related to plant rationalization. Teva may record additional impairments in the future, to the extent it changes its plans on any given asset and/or the assumptions underlying such plans, as a result of its plant rationalization plan. Contingent consideration In the three months ended March 31, 2020, Teva recorded an expense of $6 million for contingent consideration, compared to an income of $71 million in the three months ended March 31, 2019. The income in the first quarter of 2019 was mainly related to a decrease in royalty payments expected in connection with lenalidomide (generic equivalent of Revlimid ® ) which was part of the Actavis Generics acquisition. Restructuring In the three months ended March 31, 2020, Teva recorded $ million of restructuring expenses, compared to $ million in the three months ended March 31, 2019. The expenses in the first quarter of 2020 were primarily related to residual expenses of the restructuring plan announced in 2017. The following tables provide the components of costs associated with Teva’s restructuring plan, including other costs associated with Teva’s restructuring plan and recorded under different items: Three months ended 2020 2019 (U.S. $ in millions) Restructuring Employee termination $ 33 $ 20 Other 6 12 Total $ 39 $ 32 The following table provides the components of and changes in the Company’s restructuring accruals: Employee termination Other Total (U.S. $ in millions ) Balance as of January 1, 2020 $ (208 ) $ (7 ) $ (215 ) Provision (33 ) (6 ) (39 ) Utilization and other* 69 6 75 Balance as of March 3 1 $ (172 ) $ (7 ) $ (179 ) * Includes adjustments for foreign currency translation. Significant regulatory events In July 2018, the FDA completed an inspection of Teva’s manufacturing plant in Davie, Florida in the United States, and issued a Form FDA-483 An FDA follow up inspection occurred in January 2020, resulting in some follow up findings, and Teva received a letter from the FDA dated April 24, 2020 notifying that the site continues to be classified as OAI . If Teva is unable to remediate the findings to the FDA’s satisfaction, it may face additional consequences. These would potentially include delays in FDA approval for future products from the site, financial implications due to loss of revenues, impairments, inventory write offs, customer penalties, idle capacity charges, costs of additional remediation and possible FDA enforcement action. Teva expects to generate approximately million in revenues from this site in 2020, assuming remediation or enforcement does not cause any unscheduled slowdown or stoppage at the facility, however delays in FDA approvals of future products from the site may occur. In July 2018, Teva announced the voluntary recall of valsartan and certain combination valsartan medicines in various countries due to the detection of trace amounts of a previously unknown nitrosamine impurity called NDMA found in valsartan API supplied to Teva by Zhejiang Huahai Pharmaceuticals Co. Ltd. (“Huahai”). Since July 2018, Teva has been actively engaged with regulatory agency requests around the world in reviewing its sartan and other products to determine whether NDMA and/or other related nitrosamine impurities are present in specific products. Where necessary, Teva has initiated additional voluntary recalls. The aggregate direct impact of the sartan recalls on Teva’s 2018 and 2019 financial statements was $54 million, primarily related to inventory write-downs and returns. As a result of this loss, Teva initiated negotiations with Huahai and in December 2019, Teva reached a settlement with Huahai resolving its claims related to certain sartan API supplied by Huahai to Teva. Under the settlement agreement, Huahai agreed to compensate Teva for some of the direct losses suffered by Teva and provide Teva prospective cost reductions for API. The settlement does not release Huahai from liability for any losses Teva may incur as a result of third party personal injury or product liability claims relating to the sartan API at issue. In addition, multiple lawsuits have been filed in connection with this matter, which may lead to additional customer penalties, impairments and litigation costs. Teva expects additional expenses and loss of revenues and profits in connection with this matter going forward. |
Earnings (Loss) per Share
Earnings (Loss) per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings (Loss) per Share | NOTE 13 – Earnings (Loss) per share: Basic earnings and loss per share are computed by dividing net results attributable to Teva’s ordinary shareholders by the weighted average number of ordinary shares outstanding (including fully vested restricted share units (“RSUs”)) during the period, net of treasury shares. In computing diluted earnings per share for the three months ended March 31, 2020, basic earnings per share were adjusted to take into account the potential dilution that could occur upon the exercise of options and non-vested In computing diluted loss per share for the three months ended March 31, 2019, no account was taken of the potential dilution by the assumed exercise of employee stock options and non-vested Basic and diluted earnings per share were $0.06 in the first quarter of 2020, compared to basic and diluted loss per share of $0.10 in the first quarter of 2019. |
Accumulated other comprehensive
Accumulated other comprehensive loss | 3 Months Ended |
Mar. 31, 2020 | |
Accumulated other comprehensive loss | NOTE 14 – Accumulated other comprehensive loss: The components of, and changes within, accumulated other comprehensive losses attributable to Teva are presented in the table below: Net Unrealized Gains (Losses) Benefit Plans Foreign Available-for- sale securities Derivative Actuarial gains Total (U.S. $ in millions) Balance as of December 31, 2019 $ (1,794 ) $ — $ (420 ) $ (98 ) $ (2,312 ) Other comprehensive income (loss) before reclassifications (570 ) — 22 — (548 ) Amounts reclassified to the statements of income — — 8 — 8 Net other comprehensive income (loss) before tax (570 ) — 30 — (540 ) Net other comprehensive income (loss) after tax* (570 ) — 30 — (540 ) Balance as of March 31, 2020 $ (2,364 ) $ — $ (390 ) $ (98 ) $ (2,852 ) * Amounts do not include a $10 million loss from foreign currency translation adjustments attributable to non-controlling Net Unrealized Gains (Losses) Benefit Plans Foreign Available-for- sale securities Derivative Actuarial gains Total (U.S. $ in millions) Balance as of December 31, 2018 $ (1,878 ) $ 1 $ (504 ) $ (78 ) $ (2,459 ) Other comprehensive income (loss) before reclassifications 53 40 — 93 Amounts reclassified to the statements of income — — 7 — 7 Net other comprehensive income (loss) before tax 53 — 47 — 100 Net other comprehensive income (loss) after tax* 53 — 47 100 Balance as of March 31, 2019 $ (1,825 ) $ 1 $ (457 ) $ (78 ) $ (2,359 ) * Amounts do not include a $6 million loss from foreign currency translation adjustments attributable to non-controlling |
Segments
Segments | 3 Months Ended |
Mar. 31, 2020 | |
Segments | NOTE 15 – Segments: Teva operates its business and reports its financial results in three segments: (a) North America segment, which includes the United States and Canada. (b) Europe segment, which includes the European Union and certain other European countries. (c) International Markets segment, which includes all countries other than those in the North America and Europe segments. In addition to these three segments, Teva has other sources of revenues, primarily the sale of APIs to third parties, certain contract manufacturing services and an out-licensing Teva’s Chief Executive Officer (“CEO”), who is the chief operating decision maker (“CODM”), reviews financial information prepared on a consolidated basis, accompanied by disaggregated information about revenues and contributed profit by the three identified reportable segments, namely North America, Europe and International Markets, to make decisions about resources to be allocated to the segments and assess their performance. Segment profit is comprised of gross profit for the segment less R&D expenses, S&M expenses, G&A expenses and other income related to the segment. Segment profit does not include amortization and certain other items. Teva manages its assets on a company basis, not by segments, as many of its assets are shared or commingled. Teva’s CODM does not regularly review asset information by reportable segment and, therefore, Teva does not report asset information by reportable segment. Teva’s CEO may review its strategy and organizational structure from time to time. Any changes in strategy may lead to a reevaluation of the Company’s segments and goodwill allocation to reporting units, as well as fair value attributable to its reporting units. See note 6 a. Segment information: Three months ended March 31, 2020 North Europe International Markets (U.S. $ in millions) Revenues $ 2,082 $ 1,402 $ 565 Gross profit 1,062 823 305 R&D expenses 146 55 15 S&M expenses 251 202 106 G&A expenses 118 66 34 Other income (2 ) (1 ) (6 ) Segment profit $ 550 $ 502 $ 156 Three months ended March 31, 2019 North Europe International Markets * (U.S. $ in millions) Revenues $ 2,047 $ $ 521 Gross profit 1,039 730 269 R&D expenses 165 66 22 S&M expenses 268 215 115 G&A expenses 112 48 36 Other (income) expense (4 ) (1 ) — Segment profit $ 498 $ 403 $ 97 * The data presented for prior periods have been revised to reflect a revision in the presentation of net revenues and cost of sales in the consolidated financial statements. See note 1c for additional information. The following table presents a reconciliation of our segment profits to our consolidated operating income (loss) and to consolidated income (loss) before income taxes for the three months ended March 31, 2020 and 2019: Three months March 31, 2020 2019 (U.S. $ in millions) North America profit $ 550 $ 498 Europe profit 502 403 International Markets profit 156 97 Total reportable segments profit 1,208 998 Profit of other activities 36 21 Total segments profit 1,244 1,019 Amounts not allocated to segments: Amortization 258 283 Other assets impairments, restructuring and other items 121 1 Intangible asset impairments 649 469 Legal settlements and loss contingencies (25 ) 57 Other unallocated amounts 49 75 Consolidated operating income (loss) 191 134 Financial expenses, net 224 218 Consolidated income (loss) before income taxes $ (33 ) $ (84 ) b. Segment revenues by major products and activities: The following tables present revenues by major products and activities for the three months ended March 31, 2020 and 2019: North America Three months ended March 31, 2020 2019 (U.S. $ in millions) Generic products $ 952 $ 966 AJOVY 29 20 AUSTEDO 122 74 BENDEKA/TREANDA 105 122 COPAXONE 198 208 ProAir* 59 59 QVAR 45 64 Anda 426 379 Other 146 155 Total $ 2,082 $ 2,047 * Does not include revenues from the ProAir authorized generic, which are included under generic products. Europe Three months March 31, 2020 2019 (U.S. $ in millions) Generic products $ 1,032 $ 919 COPAXONE 109 114 Respiratory products 106 91 AJOVY 4 — Other 151 140 Total $ 1,402 $ 1,264 International markets * Three months March 2020 2019 (U.S. $ in millions) Generic products $ 449 $ 441 COPAXONE 12 13 Other 104 67 Total $ 565 $ 521 * The data presented for prior periods have been revised to reflect a revision in the presentation of net revenues and cost of sales in the consolidated financial statements. See note 1c for additional information. |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Measurement | NOTE 16 – Fair value measurement: Financial items carried at fair value as of March 31, 2020 and December 31, 2019 are classified in the tables below in one of the three categories of fair value levels: March 31, 2020 Level 1 Level 2 Level 3 Total (U.S. $ in millions) Cash and cash equivalents: Money markets $ 260 $ — $ — $ 260 Cash, deposits and other 1,544 — — 1,544 Investment in securities: Equity securities 31 — — 31 Other, mainly debt securities 2 — 12 14 Derivatives: Asset derivatives—options and forward contracts — 104 — 104 Liability derivatives—options and forward contracts — (94 ) — (94 ) Contingent consideration* — — (435 ) (435 ) Total $ 1,837 $ 10 $ (423 ) $ 1,424 December 31, 2019 Level 1 Level 2 Level 3 Total (U.S. $ in millions) Cash and cash equivalents: Money markets $ 577 $ — $ — $ 577 Cash, deposits and other 1,398 — — 1,398 Investment in securities: Equity securities 42 — — 42 Other, mainly debt securities 2 — 12 14 Derivatives: Asset derivatives—options and forward contracts — 32 — 32 Liability derivatives—options and forward contracts — (41 ) — (41 ) Liability derivatives—interest rate and cross-currency swaps — (22 ) — (22 ) Contingent consideration* — — (460 ) (460 ) Total $ 2,019 $ (31 ) $ (448 ) $ 1,540 * Contingent consideration represents liabilities recorded at fair value in connection with acquisitions. Teva determined the fair value of the liability for the contingent consideration based on a probability-weighted discounted cash flow analysis. This fair value measurement is based on significant unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. The fair value of the contingent consideration is based on several factors, such as: the cash flows projected from the success of unapproved product candidates; the probability of success of product candidates, including risks associated with uncertainty regarding achievement and payment of milestone events; the time and resources needed to complete the development and approval of product candidates; the life of the potential commercialized products and associated risks of obtaining regulatory approvals in the United States and Europe, and the risk adjusted discount rate for fair value measurement. A probability of success factor ranging from 80% to 100% was used in the fair value calculation to reflect inherent regulatory and commercial risk of the contingent payments and IPR&D. The discount rate applied ranged from 8% to 9 %. The weighted average discount rate, calculated based on the relative fair value of our contingent consideration obligations, was 8.6%. The contingent consideration is evaluated quarterly, or more frequently, if circumstances dictate. Changes in the fair value of contingent consideration are recorded in earnings. Significant changes in unobservable inputs, mainly the probability of success and cash flows projected, could result in material changes to the contingent consideration liability. The following table summarizes the activity for those financial assets and liabilities where fair value measurements are estimated utilizing Level 3 inputs: Three months ended (U.S. $ in millions) Fair value at the beginning of the period $ (448 ) Adjustments to provisions for contingent consideration: Actavis Generics transaction (5 ) Eagle transaction (1 ) Settlement of contingent consideration: Eagle transaction 31 Fair value at the end of the period $ (423 ) Financial instruments not measured at fair value Financial instruments measured on a basis other than fair value mostly consist of senior notes and convertible senior debentures and are presented in the table below in terms of fair value (level 1 inputs): Fair value* March 31, December 31, 2020 2019 (U.S. $ in millions) Senior notes included under senior notes and loans $ 21,960 $ 22,686 Senior notes and convertible senior debentures included under short-term debt 1,583 2,318 Total $ 23,543 $ 25,004 * Based on quoted market price. See note 7 for carrying value. |
Basis of presentation (Policies
Basis of presentation (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Recently adopted and issued accounting pronouncements | Recently adopted accounting pronouncements In March 2020, the FASB issued ASU 2020-04 In April 2019, the FASB issued ASU 2019-04 In November 2018, the FASB issued ASU 2018-18 unit-of-account In August 2018, the FASB issued ASU 2018-15 other—Internal-use 350-40): internal-use In August 2018, the FASB issued ASU 2018-13 period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. Certain disclosures required by this guidance must be applied on a retrospective basis and others on a prospective basis. Teva adopted the provisions of this update as of January 1, 2020 with no material impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13 Recently issued accounting pronouncement, not yet adopted In December 2019, the FASB issued ASU 2019-12 year-to-date In addition, the Update also simplifies the accounting for income taxes in certain topics as follows: (1) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based |
Revision of Previously Reported Consolidated Financial Statements | c. Revision of Previously Reported Consolidated Financial Statements In connection with the preparation of Teva’s consolidated financial statements for the fiscal year ended December 31, 2019, Teva determined that in the full years and interim periods of fiscal years 2017 and 2018, and the first three quarters of fiscal year 2019, it had an immaterial error in the presentation of distribution revenues from its Israeli distribution business. This business is part of the International Markets reporting segment and facilitates distribution of Teva and third party products to pharmacies, hospitals and other organizations in Israel. Specifically, the Company concluded that it presented revenues from its Israeli distribution business on a gross basis, although it should have reported such revenues on a net basis. Because Teva has no discretion in establishing prices for any specified goods or services, limited inventory risk and is not primarily responsible for contract fulfillment, Teva does not meet the criteria for reporting revenues from such business as a principal (on a gross basis), as opposed to as an agent (on a net basis). The Company evaluated the cumulative impact of this item on its previously issued annual financial statements for 2017 and 2018, and the interim financial statements for 2017, 2018 and the first three quarters of 2019, and concluded that, for the reasons mentioned below, the revisions were not material, individually or in the aggregate, to any of its previously-issued interim or annual financial statements. Teva has revised its presentation of net revenue and cost of sales in the historical consolidated financial statements to reflect the change in this item, as described in more detail below. The impact of this revision is a decrease in net revenues with an offsetting decrease in cost of sales. There is no impact on gross profit, operating income or earnings per share. In addition, there is no impact on Teva’s balance sheet or statement of cash flows for the related periods. The following table summarizes the impact of the revision on net revenues and cost of sales in the consolidated statement of income for the relevant period: Net revenues Cost of sales As reported Adjustment As revised As reported Adjustment As revised (U.S. $ in millions) 2019 Q1 4,295 (146 ) 4,149 2,440 (146 ) 2,293 |
Basis of presentation (Tables)
Basis of presentation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of impact of the revision on net revenues and cost of sales in the consolidated statement of income | The following table summarizes the impact of the revision on net revenues and cost of sales in the consolidated statement of income for the relevant period: Net revenues Cost of sales As reported Adjustment As revised As reported Adjustment As revised (U.S. $ in millions) 2019 Q1 4,295 (146 ) 4,149 2,440 (146 ) 2,293 |
Revenue from contracts with c_2
Revenue from contracts with customers (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of disaggregates revenues by major revenue streams | The following table disaggregates Teva’s revenues by major revenue streams. For additional information on disaggregation of revenues, see note 15. Three months ended March 31, 2020 North Europe International Other Total (U.S. $ in millions) Sale of goods 1,625 1,370 482 177 3,655 Licensing arrangements 25 12 3 1 41 Distribution 426 2 6 — 434 Other 6 19 74 129 227 $ 2,082 $ 1,402 $ 565 $ 307 $ 4,357 Three months ended March 31, 2019 North Europe International Other Total (U.S. $ in millions) Sale of g oods 1,637 1,259 468 187 3,551 Licensing arrangements 31 5 § 1 37 Distribution 379 § 5 — 383 Other — § 48 128 176 $ 2,047 $ 1,264 $ 521 $ 317 $ 4,149 § Represents an amount less than $1 million. |
Summary of Sales Reserves and Allowances | The changes in SR&A for third-party sales for the three months ended March 31, 2020 and 2019 were as follows: Sales Reserves and Allowances Reserves Rebates Medicaid and Chargebacks Returns Other Total reserves Total (U.S. $ in millions) Balance at December 31, 2019 $ 87 $ 2,895 $ 1,109 $ 1,342 $ 637 $ 176 $ 6,159 $ 6,246 Provisions related to sales made in current year period 102 1,370 233 2,223 139 33 3,998 4,100 Provisions related to sales made in prior periods — (106 ) (29 ) (16 ) (1 ) 4 (148 ) (148 ) Credits and payments (106 ) (1,513 ) (248 ) (2,396 ) (112 ) (35 ) (4,304 ) (4,410 ) Translation differences — (21 ) (2 ) (6 ) (4 ) (10 ) (43 ) (43 ) Balance at March 31, 2020 $ 83 2,625 $ 1,063 $ 1,147 $ 659 $ 168 $ 5,662 $ 5,745 Reserves Rebates Medicaid and Chargebacks Returns Other Total reserves Total (U.S.$ in millions) Balance at December 31, 2018 $ 175 $ 3,006 $ 1,361 $ 1,530 $ 638 $ 176 $ 6,711 $ 6,886 Provisions related to sales made in current year period 112 1,350 324 2,320 72 114 4,180 4,292 Provisions related to sales made in prior periods — — 1 (5 ) 3 (1 ) (2 ) (2 ) Credits and payments (125 ) (1,613 ) (438 ) (2,413 ) (117 ) (101 ) (4,682 ) (4,807 ) Translation differences — (6 ) (1 ) — — — (7 ) (7 ) Balance at March 31, 2019 $ 162 2,737 $ 1,247 $ 1,432 $ 596 $ 188 $ 6,200 $ 6,362 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Inventories | Inventories, net of reserves, consisted of the following: March 31, December 31, 2020 2019 (U.S. $ in millions) Finished products $ 2,193 $ 2,504 Raw and packaging materials 1,306 1,183 Products in process 650 583 Materials in transit and payments on account 141 151 Total $ 4,290 $ 4,422 |
Identifiable Intangible Assets
Identifiable Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Identifiable Intangible Assets | Identifiable intangible assets consisted of the following: Gross carrying amount net of Accumulated amortization Net carrying amount March 31, December 31, March 31, December 31, March 31, December 31, 2020 2019 2020 2019 2020 2019 (U.S. $ in millions) Product rights $ 19,371 $ 19,663 $ 10,969 $ 10,640 $ 8,402 $ 9,023 Trade names 595 600 135 126 460 474 In process research and development 1,394 1,735 — — 1,394 1,735 Total $ 21,361 $ 21,998 $ 11,104 $ 10,766 $ 10,256 $ 11,232 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Changes in the Carrying Amount of Goodwill by Segment | The changes in the carrying amount of goodwill for the period ended March 31, 2020 were as follows: North Europe International Other Total (U.S. $ in millions) Balance as of December 3 2019 $ 11,091 $ 8,536 $ 2,532 $ 2,687 $ 24,846 Changes during the period: Translation differences (31 ) (143 ) (182 ) — (357 ) Balance as of March 31, 2020 $ 11,060 $ 8,393 $ 2,350 $ 2,687 $ 24,490 |
Debt obligations (Tables)
Debt obligations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Schedule of Short-term Debt | a. Short-term debt: March 31, 2020 December 31, 2019 Weighted average interest Maturity (U.S. $ in millions) Convertible debentures 0.25 % 2026 $ 514 $ 514 Current maturities of long-term liabilities 1,116 1,831 Total short-term debt $ 1,630 $ 2,345 |
Schedule of Senior Notes and Loans | Long-term debt: Weighted average interest Maturity March 31, December 31, (U.S. $ in millions) Senior notes EUR 1,010 million 0.38 % 2020 $ 1,116 $ 1,131 Senior notes EUR 1,500 million 1.13 % 2024 1,651 1,673 Senior notes EUR 1,300 million 1.25 % 2023 1,432 1,451 Senior notes EUR 1,000 million 6.00 % 2025 1,105 1,120 Senior notes EUR 900 million 4.50 % 2025 994 1,008 Senior notes EUR 750 million 1.63 % 2028 822 833 Senior notes EUR 700 million 3.25 % 2022 773 784 Senior notes EUR 700 million 1.88 % 2027 771 782 Senior notes USD 3,500 million 3.15 % 2026 3,494 3,494 Senior notes USD 1,475 million 2.20 % 2021 1,474 1,474 Senior notes USD 3,000 million 2.80 % 2023 2,995 2,995 Senior notes USD 2,000 million 4.10 % 2046 1,985 1,985 Senior notes USD 1,250 million 6.00 % 2024 1,250 1,250 Senior notes USD 1,250 million 6.75 % 2028 1,250 1,250 Senior notes USD 1,000 million 7.13 % 2025 1,000 1,000 Senior notes USD 844 million 2.95 % 2022 855 856 Senior notes USD 789 million 6.15 % 2036 783 782 Senior notes USD 700 million (1) 2.25 % 2020 — 700 Senior notes USD 613 million 3.65 % 2021 618 618 Senior notes USD 588 million 3.65 % 2021 587 587 Senior notes CHF 350 million 0.50 % 2022 366 361 Senior notes CHF 350 million 1.00 % 2025 366 362 Total senior notes 25,687 26,496 Other long-term debt 1.14 % 2026 1 1 Less current maturities (1,116 ) (1,831 ) Less debt issuance costs (98 ) (103 ) Total senior notes and loans $ 24,473 $ 24,562 (1) During the first quarter of 2020, Teva repaid at maturity |
Derivative instruments and he_2
Derivative instruments and hedging activities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Notional Amounts for Hedged Items, Designated as Hedge Accounting | The following table summarizes the notional amounts for hedged items, when transactions are designated as hedge accounting: March 31, December 31, 2020 2019 (U.S. $ in millions) Cross-currency swap—net investment hedge $ — $ 1,000 |
Summary of Classification and Fair Values of Derivative Instruments | The following table summarizes the classification and fair values of derivative instruments: Fair value Designated as hedging instruments Not designated as hedging instruments March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Reported under (U.S. $ in millions) Asset derivatives: Other current assets: Option and forward contracts $ — $ — $ 104 $ 32 Liability derivatives: Other current liabilities: Cross-currency swaps—net investment hedge — (22 ) — — Option and forward contracts — — (94 ) (41 ) |
Derivatives Not Designated as Hedging Instruments | The table below provides information regarding the location and amount of pre-tax Financial expenses, net Other comprehensive Three months ended, Three months ended, March 31, 2020 March 31, March 31, 2020 March 31, Reported under (U.S. $ in millions) Line items in which effects of hedges are recorded $ 224 $ 218 $ (530 ) $ 94 Cross-currency swaps—cash flow hedge (1) — (1 ) — (20 ) Cross-currency swaps—net investment hedge (2) (2 ) (7 ) (21 ) $ (20 ) Interest rate swaps—fair value hedge (3) — 1 — — |
Information Regarding The Location And Amount Of Pretax (Gains) Losses Of Derivatives Designated In Fair Value Or Cash Flow Hedging Relationships | The table below provides information regarding the location and amount of pre-tax Financial expenses, net Net revenues Three months ended, Three months ended, March 31, 2020 March 31, March 31, 2020 March 31, Reported under (U.S. $ in millions) Line items in which effects of hedges are recorded $ 224 $ 218 $ (4,357 ) $ (4,149 ) Option and forward contracts (4) 24 (42 ) — — Option and forward contracts economic hedge (5) — — (60 ) — (1) With respect to cross-currency swap agreements, Teva recognized gains which mainly reflect the differences between the fixed interest rate and the floating interest rate. In the fourth quarter of 2019, Teva terminated cross-currency swap agreements against its outstanding 3.65% senior notes maturing in November 2021. The settlement of these transactions resulted in cash proceeds of $95 million. The cash flow hedge accounting adjustments of these instruments, which are recorded under senior notes and loans, are amortized under financial expenses-net (2) In each of the first and second quarters of 2017, Teva entered into a cross currency swap agreement with a notional amount of $500 million maturing in 2020. These cross currency swaps were designated as a net investment hedge of Teva’s foreign subsidiaries euro denominated net assets, in order to reduce the risk of adverse exchange rate fluctuations. With respect to these cross currency swap agreements, Teva recognized gains which mainly reflect the differences between the float-for-float expired (3) In the fourth quarter of 2016, Teva entered into an interest rate swap agreement designated as fair value hedge relating to its 2.8% senior notes due 2023 with respect to $500 million notional amount of outstanding debt. With respect to this interest rate swap agreement, Teva recognized a loss which mainly reflects the differences between the fixed interest rate and the floating interest rate. In the third quarter of 2019, Teva terminated this interest rate swap agreement. The settlement of these transactions resulted in a gain position of $10 million. The fair value hedge accounting adjustments of these instruments, which are recorded under senior notes and loans, are amortized under financial expenses-net (4) Teva uses foreign exchange contracts (mainly option and forward contracts) to hedge balance sheet items from currency exposure. These foreign exchange contracts are not designated as hedging instruments for accounting purposes. In connection with these foreign exchange contracts, Teva recognizes gains or losses that offset the revaluation of the balance sheet items also recorded under financial expenses - (5) Teva entered into option and forward contracts designed to limit the exposure of foreign exchange fluctuations on projected revenues and expenses recorded in euro, the British pound, the Russian ruble and some other currencies during the quarter for which such instruments are transacted. These derivative instruments do not meet the criteria for hedge accounting, however, they are accounted for as economic hedge. These derivative instruments, which may include hedging transactions against future projected revenues and expenses, are recognized on the balance sheet at their fair value on a quarterly basis, while the foreign exchange impact on the underlying revenues and expenses may occur in subsequent quarters. Changes in the fair value of the derivative instruments are recognized in the same line item in the statements of income as the underlying exposure being hedged. In the first quarter of 2020, the positive impact from these derivatives recognized under revenues was $60 million, partially offset by a $5 million negative impact recognized under cost of sales. The cash flows associated with these derivatives are reflected as cash flows from operating activities in the consolidated statements of cash flows. |
Other assets impairments, res_2
Other assets impairments, restructuring and other items (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Schedule of Other Assets Impairments, Restructuring and Other Items | Three months ended March 31, 2020 2019 (U.S. $ in millions) Impairments of long-lived tangible assets (1) $ 75 $ 20 Contingent consideration 6 (71 ) Restructuring 39 32 Other — 20 Total $ 121 $ 1 (1) Including impairments related to exit and disposal activities. |
Summary of Restructuring Plan Including Costs Related to Exit and Disposal | Three months ended 2020 2019 (U.S. $ in millions) Restructuring Employee termination $ 33 $ 20 Other 6 12 Total $ 39 $ 32 The following table provides the components of and changes in the Company’s restructuring accruals: Employee termination Other Total (U.S. $ in millions ) Balance as of January 1, 2020 $ (208 ) $ (7 ) $ (215 ) Provision (33 ) (6 ) (39 ) Utilization and other* 69 6 75 Balance as of March 3 1 $ (172 ) $ (7 ) $ (179 ) * Includes adjustments for foreign currency translation. |
Summary of Restructuring Accruals | The following table provides the components of and changes in the Company’s restructuring accruals: Employee termination Other Total (U.S. $ in millions ) Balance as of January 1, 2020 $ (208 ) $ (7 ) $ (215 ) Provision (33 ) (6 ) (39 ) Utilization and other* 69 6 75 Balance as of March 3 1 $ (172 ) $ (7 ) $ (179 ) * Includes adjustments for foreign currency translation. |
Accumulated other comprehensi_2
Accumulated other comprehensive loss (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accumulated Other Comprehensive Income/(Loss) (Net of Tax) | The components of, and changes within, accumulated other comprehensive losses attributable to Teva are presented in the table below: Net Unrealized Gains (Losses) Benefit Plans Foreign Available-for- sale securities Derivative Actuarial gains Total (U.S. $ in millions) Balance as of December 31, 2019 $ (1,794 ) $ — $ (420 ) $ (98 ) $ (2,312 ) Other comprehensive income (loss) before reclassifications (570 ) — 22 — (548 ) Amounts reclassified to the statements of income — — 8 — 8 Net other comprehensive income (loss) before tax (570 ) — 30 — (540 ) Net other comprehensive income (loss) after tax* (570 ) — 30 — (540 ) Balance as of March 31, 2020 $ (2,364 ) $ — $ (390 ) $ (98 ) $ (2,852 ) * Amounts do not include a $10 million loss from foreign currency translation adjustments attributable to non-controlling Net Unrealized Gains (Losses) Benefit Plans Foreign Available-for- sale securities Derivative Actuarial gains Total (U.S. $ in millions) Balance as of December 31, 2018 $ (1,878 ) $ 1 $ (504 ) $ (78 ) $ (2,459 ) Other comprehensive income (loss) before reclassifications 53 40 — 93 Amounts reclassified to the statements of income — — 7 — 7 Net other comprehensive income (loss) before tax 53 — 47 — 100 Net other comprehensive income (loss) after tax* 53 — 47 100 Balance as of March 31, 2019 $ (1,825 ) $ 1 $ (457 ) $ (78 ) $ (2,359 ) * Amounts do not include a $6 million loss from foreign currency translation adjustments attributable to non-controlling |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Segment Profit | a. Segment information: Three months ended March 31, 2020 North Europe International Markets (U.S. $ in millions) Revenues $ 2,082 $ 1,402 $ 565 Gross profit 1,062 823 305 R&D expenses 146 55 15 S&M expenses 251 202 106 G&A expenses 118 66 34 Other income (2 ) (1 ) (6 ) Segment profit $ 550 $ 502 $ 156 Three months ended March 31, 2019 North Europe International Markets * (U.S. $ in millions) Revenues $ 2,047 $ $ 521 Gross profit 1,039 730 269 R&D expenses 165 66 22 S&M expenses 268 215 115 G&A expenses 112 48 36 Other (income) expense (4 ) (1 ) — Segment profit $ 498 $ 403 $ 97 * The data presented for prior periods have been revised to reflect a revision in the presentation of net revenues and cost of sales in the consolidated financial statements. See note 1c for additional information. |
Schedule Of Consolidated Income Before Income Tax | Three months March 31, 2020 2019 (U.S. $ in millions) North America profit $ 550 $ 498 Europe profit 502 403 International Markets profit 156 97 Total reportable segments profit 1,208 998 Profit of other activities 36 21 Total segments profit 1,244 1,019 Amounts not allocated to segments: Amortization 258 283 Other assets impairments, restructuring and other items 121 1 Intangible asset impairments 649 469 Legal settlements and loss contingencies (25 ) 57 Other unallocated amounts 49 75 Consolidated operating income (loss) 191 134 Financial expenses, net 224 218 Consolidated income (loss) before income taxes $ (33 ) $ (84 ) |
Schedule of Net Sales by Product Line | The following tables present revenues by major products and activities for the three months ended March 31, 2020 and 2019: North America Three months ended March 31, 2020 2019 (U.S. $ in millions) Generic products $ 952 $ 966 AJOVY 29 20 AUSTEDO 122 74 BENDEKA/TREANDA 105 122 COPAXONE 198 208 ProAir* 59 59 QVAR 45 64 Anda 426 379 Other 146 155 Total $ 2,082 $ 2,047 * Does not include revenues from the ProAir authorized generic, which are included under generic products. Europe Three months March 31, 2020 2019 (U.S. $ in millions) Generic products $ 1,032 $ 919 COPAXONE 109 114 Respiratory products 106 91 AJOVY 4 — Other 151 140 Total $ 1,402 $ 1,264 International markets * Three months March 2020 2019 (U.S. $ in millions) Generic products $ 449 $ 441 COPAXONE 12 13 Other 104 67 Total $ 565 $ 521 * The data presented for prior periods have been revised to reflect a revision in the presentation of net revenues and cost of sales in the consolidated financial statements. See note 1c for additional information. |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Financial Items Carried at Fair Value | Financial items carried at fair value as of March 31, 2020 and December 31, 2019 are classified in the tables below in one of the three categories of fair value levels: March 31, 2020 Level 1 Level 2 Level 3 Total (U.S. $ in millions) Cash and cash equivalents: Money markets $ 260 $ — $ — $ 260 Cash, deposits and other 1,544 — — 1,544 Investment in securities: Equity securities 31 — — 31 Other, mainly debt securities 2 — 12 14 Derivatives: Asset derivatives—options and forward contracts — 104 — 104 Liability derivatives—options and forward contracts — (94 ) — (94 ) Contingent consideration* — — (435 ) (435 ) Total $ 1,837 $ 10 $ (423 ) $ 1,424 December 31, 2019 Level 1 Level 2 Level 3 Total (U.S. $ in millions) Cash and cash equivalents: Money markets $ 577 $ — $ — $ 577 Cash, deposits and other 1,398 — — 1,398 Investment in securities: Equity securities 42 — — 42 Other, mainly debt securities 2 — 12 14 Derivatives: Asset derivatives—options and forward contracts — 32 — 32 Liability derivatives—options and forward contracts — (41 ) — (41 ) Liability derivatives—interest rate and cross-currency swaps — (22 ) — (22 ) Contingent consideration* — — (460 ) (460 ) Total $ 2,019 $ (31 ) $ (448 ) $ 1,540 * Contingent consideration represents liabilities recorded at fair value in connection with acquisitions. |
Summary of Fair Value of Financial Liabilities Measured Using Level 3 Inputs | The following table summarizes the activity for those financial assets and liabilities where fair value measurements are estimated utilizing Level 3 inputs: Three months ended (U.S. $ in millions) Fair value at the beginning of the period $ (448 ) Adjustments to provisions for contingent consideration: Actavis Generics transaction (5 ) Eagle transaction (1 ) Settlement of contingent consideration: Eagle transaction 31 Fair value at the end of the period $ (423 ) |
Summary of Financial Instrument Measured on a Basis Other Than Fair Value | Financial instruments measured on a basis other than fair value mostly consist of senior notes and convertible senior debentures and are presented in the table below in terms of fair value (level 1 inputs): Fair value* March 31, December 31, 2020 2019 (U.S. $ in millions) Senior notes included under senior notes and loans $ 21,960 $ 22,686 Senior notes and convertible senior debentures included under short-term debt 1,583 2,318 Total $ 23,543 $ 25,004 * Based on quoted market price. See note 7 for carrying value. |
Basis of presentation - Summary
Basis of presentation - Summary of impact of the revision on net revenues and cost of sales in the consolidated statement of income (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Net revenues | $ 4,357 | $ 4,149 |
Net revenues [Member] | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Net revenues | 4,149 | |
Cost of sales [Member] | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Net revenues | 2,293 | |
As reported [Member] | Net revenues [Member] | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Net revenues | 4,295 | |
As reported [Member] | Cost of sales [Member] | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Net revenues | 2,440 | |
Restatement adjustment [Member] | Net revenues [Member] | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Net revenues | (146) | |
Restatement adjustment [Member] | Cost of sales [Member] | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Net revenues | $ (146) |
Certain Transactions - Other Tr
Certain Transactions - Other Transactions - Additional Information (Detail) - USD ($) $ in Millions | Jan. 08, 2018 | May 12, 2017 | Sep. 30, 2018 | Sep. 30, 2016 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2016 | Oct. 31, 2016 |
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||
Other asset impairments, restructuring and other items | $ 121 | $ 1 | |||||||
Net (gain) loss from sale of long-lived assets and investments | 24 | $ (2) | |||||||
PGT Healthcare Partnership [Member] | |||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||
Other asset impairments, restructuring and other items | $ 64 | ||||||||
Write-down of investment | $ 94 | ||||||||
Net (gain) loss from sale of long-lived assets and investments | $ 50 | ||||||||
Alder [Member] | |||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||
Upfront payment | $ 25 | ||||||||
Milestone payment | $ 25 | ||||||||
Collaborative agreement milestone payments | $ 150 | ||||||||
Otsuka [Member] | |||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||
Upfront payment | $ 50 | ||||||||
Celltrion [Member] | |||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||
Refundable payment | $ 60 | ||||||||
Total associated cost | $ 160 | ||||||||
Regeneron [Member] | |||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||
Upfront payment | $ 250 | ||||||||
Research and development costs | $ 1,000 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Revenue Recognition [Line Items] | ||
Allowance for credit losses | $ 127 | $ 135 |
United States [Member] | ||
Revenue Recognition [Line Items] | ||
Percentage sales reserves and allowances to U.S. customers | 82.00% |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Summary of Disaggregation of Revenues by Major Revenue Streams (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 4,357 | $ 4,149 | |
Sale of Goods [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 3,655 | 3,551 | |
Licensing Arrangements [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 41 | 37 | |
Distribution [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 434 | 383 | |
Other [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 227 | 176 | |
International Markets [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 565 | 521 | [1] |
International Markets [Member] | Sale of Goods [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 482 | 468 | |
International Markets [Member] | Licensing Arrangements [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 3 | ||
International Markets [Member] | Distribution [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 6 | 5 | |
International Markets [Member] | Other [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 74 | 48 | |
Other activities [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 307 | 317 | |
Other activities [Member] | Sale of Goods [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 177 | 187 | |
Other activities [Member] | Licensing Arrangements [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1 | 1 | |
Other activities [Member] | Other [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 129 | 128 | |
North America [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 2,082 | 2,047 | |
North America [Member] | Sale of Goods [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,625 | 1,637 | |
North America [Member] | Licensing Arrangements [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 25 | 31 | |
North America [Member] | Distribution [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 426 | 379 | |
North America [Member] | Other [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 6 | ||
Europe [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,402 | 1,264 | |
Europe [Member] | Sale of Goods [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,370 | 1,259 | |
Europe [Member] | Licensing Arrangements [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 12 | $ 5 | |
Europe [Member] | Distribution [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 2 | ||
Europe [Member] | Other [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 19 | ||
[1] | The data presented for prior periods have been revised to reflect a revision in the presentation of net revenues and cost of sales in the consolidated financial statements. See note 1c for additional information. |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Schedule of Sales Reserves and Allowances (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue Recognition [Line Items] | ||
Balance at beginning of period | $ 6,246 | $ 6,886 |
Provisions related to sales made in current year period | 4,100 | 4,292 |
Provisions related to sales made in prior periods | (148) | (2) |
Credits and payments | (4,410) | (4,807) |
Translation differences | (43) | (7) |
Balance at end of period | 5,745 | 6,362 |
Reserves Included in Accounts Receivable, Net [Member] | ||
Revenue Recognition [Line Items] | ||
Balance at beginning of period | 87 | 175 |
Provisions related to sales made in current year period | 102 | 112 |
Credits and payments | (106) | (125) |
Balance at end of period | 83 | 162 |
Rebates [Member] | ||
Revenue Recognition [Line Items] | ||
Balance at beginning of period | 2,895 | 3,006 |
Provisions related to sales made in current year period | 1,370 | 1,350 |
Provisions related to sales made in prior periods | (106) | |
Credits and payments | (1,513) | (1,613) |
Translation differences | (21) | (6) |
Balance at end of period | 2,625 | 2,737 |
Medicaid and Other Governmental Allowances [Member] | ||
Revenue Recognition [Line Items] | ||
Balance at beginning of period | 1,109 | 1,361 |
Provisions related to sales made in current year period | 233 | 324 |
Provisions related to sales made in prior periods | (29) | 1 |
Credits and payments | (248) | (438) |
Translation differences | (2) | (1) |
Balance at end of period | 1,063 | 1,247 |
Chargebacks [Member] | ||
Revenue Recognition [Line Items] | ||
Balance at beginning of period | 1,342 | 1,530 |
Provisions related to sales made in current year period | 2,223 | 2,320 |
Provisions related to sales made in prior periods | (16) | (5) |
Credits and payments | (2,396) | (2,413) |
Translation differences | (6) | |
Balance at end of period | 1,147 | 1,432 |
Returns [Member] | ||
Revenue Recognition [Line Items] | ||
Balance at beginning of period | 637 | 638 |
Provisions related to sales made in current year period | 139 | 72 |
Provisions related to sales made in prior periods | (1) | 3 |
Credits and payments | (112) | (117) |
Translation differences | (4) | |
Balance at end of period | 659 | 596 |
Other [Member] | ||
Revenue Recognition [Line Items] | ||
Balance at beginning of period | 176 | 176 |
Provisions related to sales made in current year period | 33 | 114 |
Provisions related to sales made in prior periods | 4 | (1) |
Credits and payments | (35) | (101) |
Translation differences | (10) | |
Balance at end of period | 168 | 188 |
Total Reserves Included in Sales Reserves and Allowances [Member] | ||
Revenue Recognition [Line Items] | ||
Balance at beginning of period | 6,159 | 6,711 |
Provisions related to sales made in current year period | 3,998 | 4,180 |
Provisions related to sales made in prior periods | (148) | (2) |
Credits and payments | (4,304) | (4,682) |
Translation differences | (43) | (7) |
Balance at end of period | $ 5,662 | $ 6,200 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Inventories [Line Items] | ||
Finished products | $ 2,193 | $ 2,504 |
Raw and packaging materials | 1,306 | 1,183 |
Products in process | 650 | 583 |
Materials in transit and payments on account | 141 | 151 |
Total | $ 4,290 | $ 4,422 |
Identifiable Intangible Asset_2
Identifiable Intangible Assets - Summary of Identifiable Intangible Assets (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount net of impairment | $ 21,361 | $ 21,998 |
Accumulated amortization | 11,104 | 10,766 |
Net carrying amount | 10,256 | 11,232 |
Identifiable product rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount net of impairment | 19,371 | 19,663 |
Accumulated amortization | 10,969 | 10,640 |
Net carrying amount | 8,402 | 9,023 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount net of impairment | 595 | 600 |
Accumulated amortization | 135 | 126 |
Net carrying amount | 460 | 474 |
In Process Research and Development (IPR&D) [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount net of impairment | 1,394 | 1,735 |
Net carrying amount | $ 1,394 | $ 1,735 |
Identifiable Intangible Asset_3
Identifiable Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets useful life | 12 years | |
Amortization of intangible assets | $ 258 | $ 283 |
Impairment of intangible assets excluding goodwill | 649 | 469 |
In Process Research and Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets excluding goodwill | 331 | 265 |
In Process Research and Development [Member] | Lenalidomide Product [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets excluding goodwill | 125 | |
Actavis [Member] | In Process Research and Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Business combination recognized identifiable assets | 1,333 | |
Impairment of intangible assets excluding goodwill | 140 | |
Actavis [Member] | Identifiable product rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets excluding goodwill | 318 | |
AUSTEDO [Member] | In Process Research and Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets excluding goodwill | 211 | |
Japan [Member] | Identifiable product rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets excluding goodwill | 165 | |
Japan [Member] | Actavis [Member] | Identifiable product rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets excluding goodwill | 138 | |
United States [Member] | Actavis [Member] | In Process Research and Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets excluding goodwill | $ 106 | $ 204 |
Goodwill - Summary of Changes i
Goodwill - Summary of Changes in the Carrying Amount of Goodwill by Segment (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill [Line Items] | |
Beginning balance | $ 24,846 |
Translation differences | (357) |
Ending balance | 24,490 |
North America [Member] | |
Goodwill [Line Items] | |
Beginning balance | 11,091 |
Translation differences | (31) |
Ending balance | 11,060 |
Europe [Member] | |
Goodwill [Line Items] | |
Beginning balance | 8,536 |
Translation differences | (143) |
Ending balance | 8,393 |
International Markets [Member] | |
Goodwill [Line Items] | |
Beginning balance | 2,532 |
Translation differences | (182) |
Ending balance | 2,350 |
Other [Member] | |
Goodwill [Line Items] | |
Beginning balance | 2,687 |
Ending balance | $ 2,687 |
Debt Obligations - Schedule of
Debt Obligations - Schedule of Short-term Debt (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Current maturities of long-term liabilities | $ 1,116 | $ 1,831 |
Total short term debt | $ 1,630 | 2,345 |
Convertible debentures [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 0.25% | |
Maturity | 2026 | |
Short-term borrowings | $ 514 | $ 514 |
Debt Obligations - Schedule o_2
Debt Obligations - Schedule of Senior Notes and Loans (Detail) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2019 | |||
Debt Instrument [Line Items] | ||||
Total senior notes | $ 25,687 | $ 26,496 | ||
Less current maturities | (1,116) | (1,831) | ||
Less debt issuance costs | (98) | (103) | ||
Total senior notes and loans | $ 24,473 | [1] | 24,562 | |
Other Debentures [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 1.14% | |||
Maturity | 2026 | |||
Total senior notes and loans | $ 1 | 1 | ||
Senior notes EUR 1,010 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 0.38% | |||
Maturity | 2020 | |||
Total senior notes | $ 1,116 | 1,131 | ||
Senior notes EUR 1,500 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 1.13% | |||
Maturity | 2024 | |||
Total senior notes | $ 1,651 | 1,673 | ||
Senior notes EUR 1,300 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 1.25% | |||
Maturity | 2023 | |||
Total senior notes | $ 1,432 | 1,451 | ||
Senior notes EUR 900 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 4.50% | |||
Maturity | 2025 | |||
Total senior notes | $ 994 | 1,008 | ||
Senior notes EUR 750 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 1.63% | |||
Maturity | 2028 | |||
Total senior notes | $ 822 | 833 | ||
Senior notes EUR 700 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 3.25% | |||
Maturity | 2022 | |||
Total senior notes | $ 773 | 784 | ||
Senior notes EUR 700 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 1.88% | |||
Maturity | 2027 | |||
Total senior notes | $ 771 | 782 | ||
Senior notes USD 3,500 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 3.15% | |||
Maturity | 2026 | |||
Total senior notes | $ 3,494 | 3,494 | ||
Senior notes USD 3,000 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 2.80% | |||
Maturity | 2023 | |||
Total senior notes | $ 2,995 | 2,995 | ||
Senior notes USD 2,000 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 4.10% | |||
Maturity | 2046 | |||
Total senior notes | $ 1,985 | 1,985 | ||
Senior notes USD 1,250 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 6.00% | |||
Maturity | 2024 | |||
Total senior notes | $ 1,250 | 1,250 | ||
Senior notes USD 1,250 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 6.75% | |||
Maturity | 2028 | |||
Total senior notes | $ 1,250 | 1,250 | ||
Senior notes EUR 1,000 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 6.00% | |||
Maturity | 2025 | |||
Total senior notes | $ 1,105 | 1,120 | ||
Senior notes USD 1,000 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 7.13% | |||
Maturity | 2025 | |||
Total senior notes | $ 1,000 | 1,000 | ||
Senior notes USD 1,475 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 2.20% | |||
Maturity | 2021 | |||
Total senior notes | $ 1,474 | 1,474 | ||
Senior notes USD 844 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 2.95% | |||
Maturity | 2022 | |||
Total senior notes | $ 855 | 856 | ||
Senior notes USD 789 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 6.15% | |||
Maturity | 2036 | |||
Total senior notes | $ 783 | 782 | ||
Senior notes USD 700 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | [1] | 2.25% | ||
Maturity | [1] | 2020 | ||
Total senior notes | [1] | 700 | ||
Senior notes USD 613 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 3.65% | |||
Maturity | 2021 | |||
Total senior notes | $ 618 | 618 | ||
Senior notes USD 588 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 3.65% | |||
Maturity | 2021 | |||
Total senior notes | $ 587 | 587 | ||
Senior notes CHF 350 Million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 0.50% | |||
Maturity | 2022 | |||
Total senior notes | $ 366 | 361 | ||
Senior notes CHF 350 Million [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 1.00% | |||
Maturity | 2025 | |||
Total senior notes | $ 366 | $ 362 | ||
[1] | During the first quarter of 2020, Teva repaid at maturity $700 million of its 2.25% senior notes. |
Debt Obligations - Schedule o_3
Debt Obligations - Schedule of Senior Notes and Loans (Parenthetical) (Detail) - Mar. 31, 2020 € in Millions, SFr in Millions, $ in Millions | EUR (€) | USD ($) | CHF (SFr) |
Senior notes EUR 1,010 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | € | € 1,010 | ||
Senior notes EUR 1,500 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | € | 1,500 | ||
Senior notes EUR 1,300 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | € | 1,300 | ||
Senior notes EUR 900 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | € | 900 | ||
Senior notes EUR 750 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | € | 750 | ||
Senior notes EUR 700 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | € | 700 | ||
Senior notes EUR 700 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | € | 700 | ||
Senior notes EUR 1,000 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | € | € 1,000 | ||
Senior notes USD 1,000 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 1,000 | ||
Senior notes USD 3,500 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | 3,500 | ||
Senior notes USD 1,475 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | 1,475 | ||
Senior notes USD 3,000 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | 3,000 | ||
Senior notes USD 2,000 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | 2,000 | ||
Senior notes USD 1,250 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | 1,250 | ||
Senior notes USD 1,250 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | 1,250 | ||
Senior notes USD 844 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | 844 | ||
Senior notes USD 789 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | 789 | ||
Senior notes USD 700 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | 700 | ||
Senior notes USD 613 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | 613 | ||
Senior notes USD 588 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 588 | ||
Senior notes CHF 350 Million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | SFr | SFr 350 | ||
Senior notes CHF 350 Million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | SFr | SFr 350 |
Debt Obligations - Additional I
Debt Obligations - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Apr. 30, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Revolving credit facility | $ 2,300 | ||
Long term debt currency portion USD | 66.00% | ||
Long term debt currency portion EUR | 31.00% | ||
Long term debt currency portion CHF | 3.00% | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 2,300 | ||
Senior notes USD 1,700 million [Member] | Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 2.25% | ||
Repayments of short-term debt | $ 700 | ||
Convertible Debt [Member] | |||
Debt Instrument [Line Items] | |||
Principal amount currently outstanding on the debt instruments | $ 514 | $ 514 | |
Weighted average interest rate | 0.25% | ||
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Covenant Description | The net debt to EBITDA ratio limit is 6.0x in the first and second quarters of 2020 and declines to 5.75x in the third and fourth quarters of 2020, and continues to gradually decline over the remaining term of the RCF. | ||
Long Term Debt Payable Under Revolving Credit Facility | $ 0 | ||
Revolving Credit Facility [Member] | Trache A [Member] | |||
Debt Instrument [Line Items] | |||
Revolving credit facility | 1,150 | ||
Revolving Credit Facility [Member] | Trache A [Member] | Trache A Extension [Member] | |||
Debt Instrument [Line Items] | |||
Revolving credit facility | $ 1,000 | ||
Line of credit facility, expiration date | Apr. 8, 2023 | ||
Revolving Credit Facility [Member] | Trache B [Member] | |||
Debt Instrument [Line Items] | |||
Revolving credit facility | $ 1,150 | ||
Line of credit facility, expiration date | Apr. 8, 2024 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Summary of Notional Amounts for Hedged Items, Designated as Hedge Accounting (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Liabilities Derivatives - Interest Rate and Cross Currency Swaps [Member] | Designated as Hedging Instrument [Member] | Net Investment Hedge [Member] | ||
Derivative [Line Items] | ||
Notional amounts of hedge | $ 0 | $ 1,000 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Summary of Classification and Fair Values of Derivative Instruments (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Designated as Hedging Instrument [Member] | Accounts Payable [Member] | Net Investment Hedging [Member] | |||
Derivative [Line Items] | |||
Liability derivatives | $ 0 | $ (22) | |
Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | Accounts Payable [Member] | |||
Derivative [Line Items] | |||
Liability derivatives | 0 | ||
Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | Other Current Assets [Member] | |||
Derivative [Line Items] | |||
Asset derivatives | 0 | ||
Designated as Hedging Instrument [Member] | Liabilities Derivatives - Interest Rate and Cross Currency Swaps [Member] | Accounts Payable [Member] | |||
Derivative [Line Items] | |||
Liability derivatives | $ 0 | ||
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | Accounts Payable [Member] | |||
Derivative [Line Items] | |||
Liability derivatives | (41) | $ (94) | |
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | Other Current Assets [Member] | |||
Derivative [Line Items] | |||
Asset derivatives | $ 32 | $ 104 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Information Regarding The Location And Amount Of Pretax (Gains) Losses Of Derivatives Designated In Fair Value Or Cash Flow Hedging Relationships (Details) - Designated as Hedging Instrument [Member] - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Other Comprehensive Income | |||
Derivative [Line Items] | |||
Gain (Loss) on Derivative Instruments, Net, Pretax | $ (530) | $ 94 | |
Other Comprehensive Income | Cash Flow Hedging [Member] | |||
Derivative [Line Items] | |||
Gain (Loss) on Derivative Instruments, Net, Pretax | [1] | (20) | |
Other Comprehensive Income | Net Investment Hedging [Member] | |||
Derivative [Line Items] | |||
Gain (Loss) on Derivative Instruments, Net, Pretax | [2] | (21) | (20) |
Financial expenses [Member] | |||
Derivative [Line Items] | |||
Gain (Loss) on Derivative Instruments, Net, Pretax | 224 | 218 | |
Financial expenses [Member] | Cash Flow Hedging [Member] | |||
Derivative [Line Items] | |||
Gain (Loss) on Derivative Instruments, Net, Pretax | [1] | (1) | |
Financial expenses [Member] | Net Investment Hedging [Member] | |||
Derivative [Line Items] | |||
Gain (Loss) on Derivative Instruments, Net, Pretax | [2] | $ (2) | (7) |
Financial expenses [Member] | Fair Value Hedging [Member] | |||
Derivative [Line Items] | |||
Gain (Loss) on Derivative Instruments, Net, Pretax | [3] | $ 1 | |
[1] | With respect to cross-currency swap agreements, Teva recognized gains which mainly reflect the differences between the fixed interest rate and the floating interest rate. In the fourth quarter of 2019, Teva terminated cross-currency swap agreements against its outstanding 3.65% senior notes maturing in November 2021. The settlement of these transactions resulted in cash proceeds of $95 million. The cash flow hedge accounting adjustments of these instruments, which are recorded under senior notes and loans, are amortized under financial expenses-net over the life of the debt as additional interest expense. | ||
[2] | In each of the first and second quarters of 2017, Teva entered into a cross currency swap agreement with a notional amount of $500 million maturing in 2020. These cross currency swaps were designated as a net investment hedge of Teva’s foreign subsidiaries euro denominated net assets, in order to reduce the risk of adverse exchange rate fluctuations. With respect to these cross currency swap agreements, Teva recognized gains which mainly reflect the differences between the float-for-float interest rates paid and received. In the first quarter of 2020, these cross-currency swap agreements expired. The settlement of these transactions resulted in cash proceeds of $3 million. | ||
[3] | In the fourth quarter of 2016, Teva entered into an interest rate swap agreement designated as fair value hedge relating to its 2.8% senior notes due 2023 with respect to $500 million notional amount of outstanding debt. With respect to this interest rate swap agreement, Teva recognized a loss which mainly reflects the differences between the fixed interest rate and the floating interest rate. In the third quarter of 2019, Teva terminated this interest rate swap agreement. The settlement of these transactions resulted in a gain position of $10 million. The fair value hedge accounting adjustments of these instruments, which are recorded under senior notes and loans, are amortized under financial expenses-net over the life of the debt as additional interest expense. |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities - Schedule Of Other Derivatives Not Designated As Hedging Instruments Statements OfFinancial Performance And Financial Position Location (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Net Revenues [Member] | Not Designated as Hedging Instrument [Member] | |||
Derivative [Line Items] | |||
Gain (Loss) on Derivative Instruments, Net, Pretax | $ (4,357) | $ (4,149) | |
Net Revenues [Member] | Not Designated as Hedging Instrument, Economic Hedge [Member] | |||
Derivative [Line Items] | |||
Gain (Loss) on Derivative Instruments, Net, Pretax | [1] | (60) | |
Financial expenses [Member] | Not Designated as Hedging Instrument [Member] | |||
Derivative [Line Items] | |||
Gain (Loss) on Derivative Instruments, Net, Pretax | 224 | 218 | |
Financial expenses [Member] | Not Designated as Hedging Instrument, Trading [Member] | |||
Derivative [Line Items] | |||
Gain (Loss) on Derivative Instruments, Net, Pretax | [2] | $ 24 | $ (42) |
[1] | Teva entered into option and forward contracts designed to limit the exposure of foreign exchange fluctuations on projected revenues and expenses recorded in euro, the British pound, the Russian ruble and some other currencies during the quarter for which such instruments are transacted. These derivative instruments do not meet the criteria for hedge accounting, however, they are accounted for as economic hedge. These derivative instruments, which may include hedging transactions against future projected revenues and expenses, are recognized on the balance sheet at their fair value on a quarterly basis, while the foreign exchange impact on the underlying revenues and expenses may occur in subsequent quarters. Changes in the fair value of the derivative instruments are recognized in the same line item in the statements of income as the underlying exposure being hedged. In the first quarter of 2020, the positive impact from these derivatives recognized under revenues was $60 million, partially offset by a $5 million negative impact recognized under cost of sales. The cash flows associated with these derivatives are reflected as cash flows from operating activities in the consolidated statements of cash flows. | ||
[2] | Teva uses foreign exchange contracts (mainly option and forward contracts) to hedge balance sheet items from currency exposure. These foreign exchange contracts are not designated as hedging instruments for accounting purposes. In connection with these foreign exchange contracts, Teva recognizes gains or losses that offset the revaluation of the balance sheet items also recorded under financial expenses-net. |
Derivative Instruments and He_7
Derivative Instruments and Hedging Activities - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |||||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2016 | Sep. 30, 2016 | |
Derivative [Line Items] | ||||||
Revenues other than USD | 50.00% | |||||
Teva other comprehensive loss | $ 493 | |||||
Forward starting interest rate swaps and treasury lock agreements losses | 8 | $ 7 | ||||
Interest Rate Swap Gain | 1 | 2 | ||||
Gain from currency swap | 1 | $ 2 | ||||
Cash received on settlement of position | 3 | |||||
Cost of sales [Member] | ||||||
Derivative [Line Items] | ||||||
Teva other comprehensive loss | 5 | |||||
Derivative, Gain on Derivative | $ 60 | |||||
Senior Notes Due 2023 Two [Member] | ||||||
Derivative [Line Items] | ||||||
Notional amount hedge debt | $ 500 | $ 500 | $ 3,000 | |||
Previously hedge debt rate | 2.80% | 2.80% | ||||
Settlement gain position | $ 10 | |||||
Cash received on settlement of position | $ 10 | |||||
Senior Notes Due 2021 [Member] | ||||||
Derivative [Line Items] | ||||||
Notional amount hedge debt | $ 588 | |||||
Previously hedge debt rate | 3.65% | 3.65% | ||||
Cash received on settlement of position | $ 95 | $ 95 | ||||
Senior Notes Due 2020 [Member] | ||||||
Derivative [Line Items] | ||||||
Cash received on settlement of position | 500 | |||||
Cross Currency Interest Rate Contract [Member] | ||||||
Derivative [Line Items] | ||||||
Notional amount hedge debt | 1,000 | |||||
Cash received on settlement of position | $ 3 |
Legal Settlements and Loss Co_2
Legal Settlements and Loss Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Loss Contingencies [Line Items] | ||
Legal settlements and loss contingencies, expense | $ 25 | $ 57 |
Accrued amount for legal settlements and loss contingencies | $ 1,539 | $ 1,580 |
Commitments and Contingencies -
Commitments and Contingencies - Contingencies - Additional Information (Detail) € in Millions, $ in Millions, $ in Millions | Oct. 21, 2019USD ($)Number | Jun. 27, 2018USD ($) | Aug. 21, 2017USD ($) | Jul. 15, 2015USD ($) | May 31, 2019USD ($) | Jul. 31, 2015USD ($) | Aug. 31, 2012USD ($) | Dec. 31, 2010USD ($) | Nov. 30, 2009USD ($) | Aug. 31, 2008USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2014CAD ($) | Mar. 31, 2020CAD ($) | Mar. 31, 2020EUR (€) | Mar. 31, 2020USD ($) | May 31, 2015USD ($) | Jan. 31, 2009USD ($) | Jul. 31, 2008USD ($) | Feb. 28, 2005USD ($) |
Commitment And Contingencies [Line Items] | ||||||||||||||||||||
Damages assessment | $ 235.5 | |||||||||||||||||||
Sales | $ 94 | |||||||||||||||||||
Modafinil payment | $ 1,200 | |||||||||||||||||||
Modafinil Euro sales | € | € 46.5 | |||||||||||||||||||
Annual sales at the time of settlement | $ 350 | |||||||||||||||||||
Annual sales of Effexor | $ 2,600 | |||||||||||||||||||
Annual sales of Lamictal | $ 2,300 | $ 950 | ||||||||||||||||||
Annual sales of Aggrenox | $ 1.1 | $ 416 | ||||||||||||||||||
Annual sales of Actos | $ 2,800 | $ 3,700 | ||||||||||||||||||
Annual sales of Acto plus | $ 430 | $ 500 | ||||||||||||||||||
Annual sales of Namenda | $ 550 | $ 1.1 | ||||||||||||||||||
Annual Sales Of Sensipar | $ 1,400 | |||||||||||||||||||
Modafinil payment remaining balance | $ 19 | |||||||||||||||||||
Litigation settlement amount awarded cash amount | $ 20 | |||||||||||||||||||
opioid litigation [Member] | ||||||||||||||||||||
Commitment And Contingencies [Line Items] | ||||||||||||||||||||
Litigation settlement amount | $ 25 | $ 85 | ||||||||||||||||||
Litigation settlement amount awarded distribution period | 3 years | |||||||||||||||||||
Litigation settlement amount awarded number of installments | Number | 4 | |||||||||||||||||||
Litigation settlement amount awarded cash amount distribution period | 3 years | |||||||||||||||||||
Nationwide Settlement [Member] | ||||||||||||||||||||
Commitment And Contingencies [Line Items] | ||||||||||||||||||||
Litigation settlement amount | $ 23,000 | |||||||||||||||||||
Litigation settlement amount awarded distribution period | 10 years | |||||||||||||||||||
Litigation settlement amount awarded cash amount | $ 250 | |||||||||||||||||||
Litigation settlement amount awarded cash amount distribution period | 10 years | |||||||||||||||||||
Eosinophilic Esophagitis [Member] | ||||||||||||||||||||
Commitment And Contingencies [Line Items] | ||||||||||||||||||||
Damage claimed | $ 200 | |||||||||||||||||||
Eosinophilic Esophagitis [Member] | United States [Member] | ||||||||||||||||||||
Commitment And Contingencies [Line Items] | ||||||||||||||||||||
Damage claimed | 150 | |||||||||||||||||||
Eosinophilic Esophagitis [Member] | Europe [Member] | ||||||||||||||||||||
Commitment And Contingencies [Line Items] | ||||||||||||||||||||
Damage claimed | 50 | |||||||||||||||||||
AbbVie [Member] | ||||||||||||||||||||
Commitment And Contingencies [Line Items] | ||||||||||||||||||||
Legal fees | $ 448 | |||||||||||||||||||
Janssen and Millennium [Member] | ||||||||||||||||||||
Commitment And Contingencies [Line Items] | ||||||||||||||||||||
Maximum damages payable | $ 200 | |||||||||||||||||||
Litigation settlement awarded from other party | $ 5 | |||||||||||||||||||
AndroGel Rate at 1% [Member] | ||||||||||||||||||||
Commitment And Contingencies [Line Items] | ||||||||||||||||||||
Annual sales at the time of settlement | $ 140 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Jul. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax [Line Items] | |||
Income taxes (benefit) | $ (59) | $ 9 | |
Pre-tax income (loss) | $ (33) | $ (84) | |
Subsequent Event [Member] | |||
Income Tax [Line Items] | |||
Expected impairment of income tax benefit | $ 136 | ||
Israel Tax Authority [Member] | |||
Income Tax [Line Items] | |||
Statutory tax rate in Israel | 23.00% |
Other assets impairments, res_3
Other assets impairments, restructuring and other items - Schedule of Other Assets Impairments, Restructuring and Other Items (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Restructuring and Impairment Costs [Line Items] | |||
Impairments of long-lived tangible assets | [1] | $ 75 | $ 20 |
Contingent consideration | 6 | (71) | |
Restructuring | 39 | 32 | |
Other | 20 | ||
Total | $ 121 | $ 1 | |
[1] | Including impairments related to exit and disposal activities |
Other assets impairments, res_4
Other assets impairments, restructuring and other items - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Restructuring and Impairment Costs [Line Items] | |||||
Impairments of long-lived tangible assets | [1] | $ 75 | $ 20 | ||
Impairments of property, plant and equipment | 20 | ||||
Business combination contingent consideration arrangements change in amount of contingent consideration liability | 6 | (71) | |||
Restructuring costs | 39 | 32 | |||
Recall and inventory reserves cost | $ 54 | ||||
Scenario, Forecast [Member] | |||||
Restructuring and Impairment Costs [Line Items] | |||||
Expected revenue from Florida manufacturing plant in 2020 | $ 230 | ||||
Restructuring Cost [Member] | |||||
Restructuring and Impairment Costs [Line Items] | |||||
Business combination contingent consideration arrangements change in amount of contingent consideration liability | $ 6 | $ 71 | |||
[1] | Including impairments related to exit and disposal activities |
Other assets impairments, res_5
Other assets impairments, restructuring and other items - Components of costs associated with restructuring plan including costs related to exit and disposal activities (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 39 | $ 32 |
Employee termination [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 33 | 20 |
Other [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 6 | $ 12 |
Other assets impairments, res_6
Other assets impairments, restructuring and other items - Summary of Restructuring Accruals (Detail) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($) | ||
Restructuring Cost and Reserve [Line Items] | ||
Beginning balance | $ (215) | |
Provision | (39) | |
Utilization and other | 75 | [1] |
Ending balance | (179) | |
Employee termination costs [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Beginning balance | (208) | |
Provision | (33) | |
Utilization and other | 69 | [1] |
Ending balance | (172) | |
Other [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Beginning balance | (7) | |
Provision | (6) | |
Utilization and other | 6 | [1] |
Ending balance | $ (7) | |
[1] | Includes adjustments for foreign currency translation. |
Earnings (Loss) per Share - Add
Earnings (Loss) per Share - Additional Information (Detail) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Basic and diluted earnings per share | $ 0.06 | $ 0.10 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income/(Loss) (Detail) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | $ (2,312) | |||
Ending Balance | (2,852) | |||
Foreign Currency Translation Adjustments [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | (1,794) | $ (1,878) | ||
Other comprehensive income (loss) before reclassifications | (570) | 53 | ||
Net other comprehensive income (loss) before tax | (570) | 53 | ||
Net other comprehensive income (loss) after tax | (570) | [1] | 53 | [2] |
Ending Balance | (2,364) | (1,825) | ||
Available-for-sale Securities [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | 1 | |||
Ending Balance | 1 | |||
Derivative Financial Instruments [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | (420) | (504) | ||
Other comprehensive income (loss) before reclassifications | 22 | 40 | ||
Amounts reclassified to the statements of income | 8 | 7 | ||
Net other comprehensive income (loss) before tax | 30 | 47 | ||
Net other comprehensive income (loss) after tax | 30 | [1] | 47 | [2] |
Ending Balance | (390) | (457) | ||
Benefit Plans [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | (98) | (78) | ||
Ending Balance | (98) | (78) | ||
AOCI Attributable to Parent [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | (2,312) | (2,459) | ||
Other comprehensive income (loss) before reclassifications | (548) | 93 | ||
Amounts reclassified to the statements of income | 8 | 7 | ||
Net other comprehensive income (loss) before tax | (540) | 100 | ||
Net other comprehensive income (loss) after tax | (540) | [1] | 100 | [2] |
Ending Balance | $ (2,852) | $ (2,359) | ||
[1] | Amounts do not include a $10 million loss from foreign currency translation adjustments attributable to non-controlling interests. | |||
[2] | Amounts do not include a $6 million loss from foreign currency translation adjustments attributable to non-controlling interests. |
Segments - Summary of Segment P
Segments - Summary of Segment Profit (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | $ 4,357 | $ 4,149 | |
Gross profit | 2,063 | 1,856 | |
R&D expenses | 221 | 261 | |
S&M expenses | 613 | 648 | |
G&A expenses | 304 | 292 | |
Segment profit | 191 | 134 | |
North America [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | 2,082 | 2,047 | |
Gross profit | 1,062 | 1,039 | |
R&D expenses | 146 | 165 | |
S&M expenses | 251 | 268 | |
G&A expenses | 118 | 112 | |
Other (income) expense | (2) | (4) | |
Segment profit | 550 | 498 | |
Europe [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | 1,402 | 1,264 | |
Gross profit | 823 | 730 | |
R&D expenses | 55 | 66 | |
S&M expenses | 202 | 215 | |
G&A expenses | 66 | 48 | |
Other (income) expense | (1) | (1) | |
Segment profit | 502 | 403 | |
International Markets [Member] | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Revenues | 565 | 521 | [1] |
Gross profit | 305 | 269 | [1] |
R&D expenses | 15 | 22 | [1] |
S&M expenses | 106 | 115 | [1] |
G&A expenses | 34 | 36 | [1] |
Other (income) expense | (6) | ||
Segment profit | $ 156 | $ 97 | [1] |
[1] | The data presented for prior periods have been revised to reflect a revision in the presentation of net revenues and cost of sales in the consolidated financial statements. See note 1c for additional information. |
Segments - Summary of Profit by
Segments - Summary of Profit by Segments and Reconciliation of Segments Profit to Consolidated Income Before Income Taxes (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Amounts allocated to segments: | |||
Segments profit | $ 191 | $ 134 | |
Amounts not allocated to segments: | |||
Amortization | 258 | 283 | |
Other assets impairments, restructuring and other items | 121 | 1 | |
Intangible asset impairments | 649 | 469 | |
Legal settlements and loss contingencies | (25) | 57 | |
Other unallocated amounts | 49 | 75 | |
Consolidated operating income (loss) | 191 | 134 | |
Financial expenses, net | 224 | 218 | |
Consolidated income (loss) before income taxes | (33) | (84) | |
North America [Member] | |||
Amounts allocated to segments: | |||
Segments profit | 550 | 498 | |
Amounts not allocated to segments: | |||
Consolidated operating income (loss) | 550 | 498 | |
Europe [Member] | |||
Amounts allocated to segments: | |||
Segments profit | 502 | 403 | |
Amounts not allocated to segments: | |||
Consolidated operating income (loss) | 502 | 403 | |
International Markets [Member] | |||
Amounts allocated to segments: | |||
Segments profit | 156 | 97 | [1] |
Amounts not allocated to segments: | |||
Consolidated operating income (loss) | 156 | 97 | [1] |
Corporate Segment [Member] | |||
Amounts allocated to segments: | |||
Segments profit | 1,208 | 998 | |
Amounts not allocated to segments: | |||
Consolidated operating income (loss) | 1,208 | 998 | |
Other Segments [Member] | |||
Amounts allocated to segments: | |||
Segments profit | 36 | 21 | |
Amounts not allocated to segments: | |||
Consolidated operating income (loss) | 36 | 21 | |
Segments and Other Activities [Member] | |||
Amounts allocated to segments: | |||
Segments profit | 1,244 | 1,019 | |
Amounts not allocated to segments: | |||
Consolidated operating income (loss) | $ 1,244 | $ 1,019 | |
[1] | The data presented for prior periods have been revised to reflect a revision in the presentation of net revenues and cost of sales in the consolidated financial statements. See note 1c for additional information. |
Segments - Schedule of Revenues
Segments - Schedule of Revenues by Major Products and Activities (Detail) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | |||
Product Information [Line Items] | ||||
Revenues | $ 4,357 | $ 4,149 | ||
North America [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 2,082 | 2,047 | ||
Europe [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 1,402 | 1,264 | ||
International Markets [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 565 | 521 | [1] | |
Generic products [Member] | North America [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 952 | 966 | ||
Generic products [Member] | Europe [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 1,032 | 919 | ||
Generic products [Member] | International Markets [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 449 | 441 | ||
COPAXONE [Member] | North America [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 198 | 208 | ||
COPAXONE [Member] | Europe [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 109 | 114 | ||
COPAXONE [Member] | International Markets [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 12 | 13 | ||
BENDEKA and TREANDA [Member] | North America [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 105 | 122 | ||
ProAir [Member] | North America [Member] | ||||
Product Information [Line Items] | ||||
Revenues | [2] | 59 | 59 | |
QVAR [Member] | North America [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 45 | 64 | ||
AJOVY [Member] | North America [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 29 | 20 | ||
AJOVY [Member] | Europe [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 4 | |||
AUSTEDO [Member] | North America [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 122 | 74 | ||
Respiratory Product [Member] | Europe [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 106 | 91 | ||
Anda [Member] | North America [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 426 | 379 | ||
Other [Member] | North America [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 146 | 155 | ||
Other [Member] | Europe [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 151 | 140 | ||
Other [Member] | International Markets [Member] | ||||
Product Information [Line Items] | ||||
Revenues | $ 104 | $ 67 | ||
[1] | The data presented for prior periods have been revised to reflect a revision in the presentation of net revenues and cost of sales in the consolidated financial statements. See note 1c for additional information. | |||
[2] | Does not include revenues from the ProAir authorized generic, which are included under generic products. |
Fair Value Measurement - Summar
Fair Value Measurement - Summary of Financial Items Carried at Fair Value (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration | [1] | $ (435) | $ (460) |
Total | 1,424 | 1,540 | |
Asset Derivatives - Options and Forward Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivatives | 104 | 32 | |
Interest Rate and Cross Currency Swaps [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivatives | (22) | ||
Liabilities Derivatives Options and Forward Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivatives | (94) | (41) | |
Money Markets [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 260 | 577 | |
Cash, Deposits and Other [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 1,544 | 1,398 | |
Equity Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment in securities | 31 | 42 | |
Other, Mainly Debt Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment in securities | 14 | 14 | |
Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total | 1,837 | 2,019 | |
Level 1 [Member] | Money Markets [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 260 | 577 | |
Level 1 [Member] | Cash, Deposits and Other [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 1,544 | 1,398 | |
Level 1 [Member] | Equity Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment in securities | 31 | 42 | |
Level 1 [Member] | Other, Mainly Debt Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment in securities | 2 | 2 | |
Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total | 10 | (31) | |
Level 2 [Member] | Asset Derivatives - Options and Forward Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivatives | 104 | 32 | |
Level 2 [Member] | Interest Rate and Cross Currency Swaps [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivatives | (22) | ||
Level 2 [Member] | Liabilities Derivatives Options and Forward Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivatives | (94) | (41) | |
Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration | [1] | (435) | (460) |
Total | (423) | (448) | |
Level 3 [Member] | Other, Mainly Debt Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment in securities | $ 12 | $ 12 | |
[1] | Contingent consideration represents liabilities recorded at fair value in connection with acquisitions. |
Fair value measurement - Additi
Fair value measurement - Additional Information (Detail) | Mar. 31, 2020 |
Maximum [Member] | Measurement input probability of success [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Business combination, contingent consideration, liability, measurement input | 1 |
Maximum [Member] | Measurement input, discount rate [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Business combination, contingent consideration, liability, measurement input | 0.09 |
Minimum [Member] | Measurement input probability of success [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Business combination, contingent consideration, liability, measurement input | 0.80 |
Minimum [Member] | Measurement input, discount rate [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Business combination, contingent consideration, liability, measurement input | 0.08 |
Weighted Average [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Business combination, contingent consideration, liability, measurement input | 0.086 |
Fair Value Measurement - Summ_2
Fair Value Measurement - Summary of Fair Value of Financial Liabilities Measured Using Level 3 Inputs (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value at the beginning of the period | $ (448) |
Fair value at the end of the period | (423) |
Actavis Generics [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Actavis Generics transaction | (5) |
Eagle Transaction [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Adjustments to provisions for contingent consideration | (1) |
Settlement of contingent consideration | $ 31 |
Fair Value Measurement - Summ_3
Fair Value Measurement - Summary of Financial Instrument Measured on a Basis Other Than Fair Value (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 23,543 | $ 25,004 |
Senior Notes [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 21,960 | 22,686 |
Senior Notes and Convertible Senior Debentures Included Under Short-Term Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 1,583 | $ 2,318 |