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Derivative instruments and hedging activities (Tables)
 6 Months Ended
Jun. 30, 2019
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:
                 
 
June 30,
2019
   
December 31,
2018
 
 
(U.S. $ in millions)
 
Cross-currency swap—cash flow hedge
  $
588
    $
588
 
Cross-currency swap—net investment hedge
   
1,000
     
1,000
 
Interest rate swap—fair value hedge
   
500
     
500
 
                 
  $
2,088
    $
2,088
 
                 
 
 
 
 
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
 
 
June 30,
2019
   
December 31,
2018
   
June 30,
2019
   
December 31,
2018
 
Reported under
 
(U.S. $ in millions)
 
Asset derivatives:
   
     
     
     
 
Other current assets:
   
     
     
     
 
Option and forward contracts
  $
—  
     $        
—  
     $  
14
    $        
18
 
Other
non-current
assets:
   
     
     
     
 
Cross-currency swaps—cash flow hedge
   
76
     
58
     
—  
      
—  
  
Senior notes and loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps—fair value hedge
 
 
 9
 
 
 
—  
 
 
 
 —  
 
 
 
—  
 
                                 
Liability derivatives:
   
     
     
     
 
Other current liabilities:
   
     
     
     
 
Option and forward contracts
   
—
     
—  
      
(55
 )    
(26
 )
Cross-currency swaps—net investment hedge
   
(37
 )    
—  
      
—  
      
—  
  
Other taxes and long-term liabilities:
   
     
     
     
 
Cross-currency swaps—net investment hedge
   
—
     
(41
 )    
—  
      
—  
  
Senior notes and loans:
   
     
     
     
 
Interest rate swaps—fair value hedge
   
—
      
(9
 )    
—  
      
—  
  
 
 
 
 
Derivatives Not Designated as Hedging Instruments [Table Text Block]
The table below provides information regarding the location and amount of pre-tax (gains) losses from derivatives designated in fair value or cash flow hedging relationships:
                                 
 
Financial expenses, net
 
 
Other comprehensive income
 
 
Three month ended,
   
Three month ended,
 
 
June 30,
2019
   
June 30,
2018**
   
June 30,
2019
   
June 30,
2018**
 
Reported under
 
(U.S. $ in millions)
 
Line items in which effects of hedges are recorded
  $
206
     $
236
     $
(76
 )   $
614
  
Cross-currency swaps—cash flow hedge (1)
    
(1
 )    
*
      
4
      
(28
 )
Cross-currency swaps—net investment hedge (2)
    
(7
 )    
(9
 )    
14
      
(59
 )
Interest rate swaps—fair value hedge (3)
    
1
      
*
      
—  
      
—  
  
 
 
 
 
 
 
 
 
 
* Represents an amount less than $0.5 million.
 
 
 
 
 
 
 
 
 
 
 
 
 
** Comparative figures are based on prior hedge accounting standard.
 
 
 
 
                                 
 
Financial expenses, net
 
 
Other comprehensive income
 
 
Six month ended,
    
Six month ended,
 
 
June 30,
2019
   
June 30,
2018**
   
June 30,
2019
   
June 30,
2018**
 
Reported under
 
(U.S. $ in millions)
 
Line items in which effects of hedges are recorded
  $
425
    $
507
    $
(170
)   $
418
 
Cross-currency swaps—cash flow hedge (1)
   
(1
 )    
(1
 )     
(15
 )    
(11
)
Cross-currency swaps—net investment hedge (2)
   
(15
 )    
(16
 )    
(6
 )    
(29
)
Interest rate swaps—fair value hedge (3)
   
1
     
*
     
—  
      
—   
  
 
 
 
 
 
* Represents an amount less than $0.5 million.
 
 
 
 
** Comparative figures are based on prior hedge accounting standard.
 
 
 
 
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 (gains) losses from derivatives not designated as hedging instruments:
                                 
 
Financial expenses, net
   
Net revenues
 
 
Three month ended,
 
 
Three month ended,
 
 
June 30,
2019
   
June 30,
2018
    
June 30,
2019
   
June 30,
2018
  
Reported under
 
(U.S. $ in millions)
 
Line items in which effects of hedges are recorded
  $
206
    $
236
    $
(4,337
)   $
(4,701
)
Option and forward contracts (4)
   
34
      
(24
)    
—  
      
—   
  
Option and forward contracts Economic hedge
 
 
 —
 
 
 
—  
 
 
 
 4
 
 
 
 (1
)
       
 
Financial expenses, net
   
Net revenues
 
 
Six month ended,
 
 
Six month ended,
 
 
June 30, 
2019
    
June 30, 2018
    
June 30,
2019
   
June 30,
2018
  
Reported under
 
(U.S. $ in millions)
 
Line items in which effects of hedges are recorded
  $
425
    $
507 
     $
(8,632
)   $
(9,766
)
Option and forward contracts (4)
   
(7
 )    
(5
)    
—  
      
—   
  
Option and forward contracts Economic hedge
 
 
 —  
 
 
 
—  
 
 
 
 4
 
 
 
 (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.
(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. No amounts were reclassified from accumulated other comprehensive income into income related to the sale of a subsidiary.
(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.
 
 
(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—net.