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Revenue from contracts with customers
 9 Months Ended
Sep. 30, 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 September 30, 2020
  
    
North
America
    
Europe
    
International
Markets
     
Other
activities
     
Total
  
    
(U.S. $ in millions)
  
Sale of goods
     
1,660
 
  
 
1,116
 
  
 
478
 
   
 
173
 
   
 
3,427
 
Licensing arrangements
   
 
17
 
  
 
7
 
  
 
2
 
   
 
1
 
   
 
27
 
Distribution
   
 
341
 
  
 
§
 
  
 
9
 
   
 
 —  
 
   
 
350
 
Other
   
 
(1
) 
  
 
(8
) 
  
 
41
 
   
 
142
 
   
 
174
 
  
 
 
    
 
 
    
 
 
     
 
 
     
 
 
  
   $
2,017
 
  
$
1,116
 
  
$
529
 
   
$
316
 
   
$
3,978
 
  
 
 
    
 
 
    
 
 
     
 
 
     
 
 
  
 
 
§ Represents an amount less than $1 million.
 
 
  
Three months ended September 30, 2019
 
 
  
North
America
 
  
Europe
 
  
International
Markets
 
  
Other
activities
 
  
Total
 
 
  
(U.S. $ in millions)
 
Sale of goods
   
 
1,674
 
   
 
1,153
 
   
 
511
 
   
 
176
 
   
 
3,514
 
Licensing arrangements
   
 
26
 
   
 
7
 
   
 
1
 
   
 
1
 
   
 
36
 
Distribution
  
 
351
 
  
 
1
 
  
 
5
 
  
 
 —  
 
  
 
357
 
Other
   
 
§
 
   
 
2
 
   
 
48
 
   
 
136
 
   
 
186
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
  
$
2,051
 
   
$
1,163
 
   
$
565
 
   
$
314
 
   
$
4,093
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
 
 
§ Represents an amount less than $1 million.
 
    
Nine months ended September 30, 2020
  
    
North
America
     
Europe
     
International
Markets
     
Other 
activities
     
Total
  
    
(U.S. $ in millions)
  
Sale of goods
   
 
4,943
 
   
 
3,487
 
   
 
1,417
 
   
 
561
 
   
 
10,408
 
Licensing arrangements
   
 
59
 
   
 
22
 
   
 
6
 
   
 
3
 
   
 
90
 
Distribution
   
 
1,141
 
   
 
3
 
   
 
21
 
   
 
—
 
   
 
1,165
 
Other
   
 
3
 
   
 
9
 
   
 
138
 
   
 
394
 
   
 
543
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
  
$
6,146
 
   
$
3,520
 
   
$
1,582
 
   
$
957
 
   
$
12,206
 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
    
Nine months ended September 30, 2019
  
    
North
America
     
Europe
     
International
Markets
     
Other
activities
     
Total
  
    
(U.S. $ in millions)
  
Sale of goods
      4,997        3,586        1,505        566        10,653  
Licensing arrangements
      92        22        3        4        121  
Distribution
  
 
1,080
 
  
 
1
 
  
 
14
 
  
 
—  
 
  
 
1,095
 
Other
     
§
        2        146        402        549  
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
   $ 6,169      $ 3,611      $ 1,668      $ 972      $ 12,420  
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
 
 
§ 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 80% of the Company’s total SR&A as of September 30, 2020, with the remaining balance primarily in Canada and Germany. The changes in SR&A for third-party sales for the nine months ended September 30, 2020 and 2019 were as follows:
 
    
Sales Reserves and Allowances
        
    
Reserves
included in
Accounts
Receivable, net
    
Rebates
    
Medicaid
 
and
other
governmental
allowances
    
Chargebacks
    
Returns
    
Other
    
Total reserves
included in SR&A
    
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
     285       3,649       566       6,268       299       55       10,837       11,122  
Provisions related to sales made in prior 
period
s
      —          (192 )      (116 )      (33 )      (11 )      2       (350 )      (350 ) 
Credits and payments
      (298 )      (4,224 )      (650 )      (6,418 )      (289 )      (79 )      (11,660 )      (11,958 ) 
Translation differences
      —          10       4       2       —       (4 )      12       12  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Balance at September 30, 2020
    $ 74       2,138     $ 913     $ 1,161     $ 636     $ 150     $ 4,998     $ 5,072  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
    
Reserves
included in
Accounts
Receivable, net
    
Rebates
    
Medicaid and
other
governmental
allowances
    
Chargebacks
    
Returns
    
Other
    
Total reserves
included in SR&A
    
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
      334       4,004       760       7,196       195       308       12,463       12,797  
Provisions related to sales made in
prior periods
      3       (28 )      (2 )      (1 )      23       (7 )      (15 )      (12 ) 
Credits and payments
      (356 )      (4,276 )      (882 )      (7,299 )      (251 )      (295 )      (13,003 )      (13,359 ) 
Translation differences
      —         (14 )      (4 )      (1 )      (1 )      1       (19 )      (19 ) 
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Balance at September 30, 201
9
    $ 156       2,692     $ 1,233     $ 1,425     $ 604     $ 183     $ 6,137     $ 6,293  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Allowance for credit losses
Accounts receivable are recognized net of allowance for credit losses. Allowances for credit losses were $117 million and $135 million as of September 30, 2020 and December 31, 2019, respectively.