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Derivative instruments and hedging activities (Tables) | 12 Months Ended
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Dec. 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:
|  | 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 |
|  | December 31, 2020 |  |  | December 31, 2019 |  |  | December 31, 2020 |  |  | December 31, 2019 |
Reported under |  | (U.S. $ in millions) |
Asset derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other current assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Option and forward contracts |  | $ | — |  |  | $ | — |  |  | $ | 24 |  |  | $ | 32 |
Liability derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other current liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cross-currency swaps , net investment hedge |  |  | — |  |  |  | (22) |  |  |  |  |  |  |  |  |
Option and forward contracts |  |  | — |  |  |  | — |  |  |  | (79 | ) |  |  | (41 | )
Derivatives Not Designated as Hedging Instruments | 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 (loss) |
|  | Year ended December 31, |  |  | Year ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018** |  |  | 2020 |  |  | 2019 |  |  | 2018** |
Reported under |  | (U.S. $ in millions) |
Line items in which effects of hedges are recorded |  | $ | 834 |  |  | $ | 822 |  |  | $ | 959 |  |  | $ | (30 | ) |  | $ | 160 |  |  | $ | (585 | )
Cross-currency swaps—cash flow hedge (1) |  |  | — |  |  |  | (2 | ) |  |  | (2 | ) |  |  | — |  |  |  | (33 | ) |  |  | (35 | )
Cross-currency swaps , net investment hedge (2) |  |  | (2 | ) |  |  | (29 | ) |  |  | (31 | ) |  |  | (21 | ) |  |  | (22 | ) |  |  | (51 | )
Interest rate swaps—fair value hedge (3) |  |  | — |  |  |  | 2 |  |  |  | * |  |  |  | — |  |  |  | — |  |  |  | — |
* | 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 |
|  | Year ended December 31, |  |  | Year ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |  |  | 2020 |  |  | 2019 |  |  | 2018 |
Reported under |  | (U.S. $ in millions) |
Line items in which effects of hedges are recorded |  | $ | 834 |  |  | $ | 822 |  |  | $ | 959 |  |  | $ | 16,659 |  |  | $ | 16,887 |  |  | $ | 18,271 |
Option and forward contracts (4) |  |  | 130 |  |  |  | (51 | ) |  |  | (12 | ) |  |  | — |  |  |  | — |  |  |  | — |
Option and forward contracts (5) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | * |  |  |  | 14 |  |  |  | (4 | )
* | Represents an amount less than $0.5 million.
(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 $588 million in 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.
(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.
(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 Swiss franc, the Japanese yen, the British pound, the Russian ruble, the Canadian dollar and some other currencies during the period for which such instruments are transacted. These derivative instruments do not meet the criteria for hedge accounting, however, they are accounted for as an 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. During 2019 and 2020, Teva entered into hedging instruments to hedge part of the projected 2020 operating results. In 2020, Teva recognized a gain of $27 million in relation with the 2020 hedging program. During the second half of 2020, Teva entered into hedging instruments to hedge part of the projected operating results for 2021. As part of the economic hedge treatment, Teva recorded a loss of $27 million in relation to the 2021 hedging instruments in the second half of 2020, while the positive foreign exchange impact on the underlying revenues and expenses, may occur upon their maturity in 2021. The cash flows associated with these derivatives are reflected as cash flows from operating activities in the consolidated statements of cash flows.
Summary of Sold Receivables Outstanding Balance Net of DPP Asset under Outstanding Securitization Program | The following table summarizes the sold receivables outstanding balance net of DPP asset under the outstanding securitization program:
|  | As of and for the year ended December 31, |
|  | 2020 |  |  | 2019 |
|  | (U.S. $ in millions) |
Sold receivables at the beginning of the year |  | $ | 690 |  |  | $ | 686 |
Proceeds from sale of receivables |  |  | 4,606 |  |  |  | 4,852 |
Cash collections (remitted to the owner of the receivables) |  |  | (4,607 | ) |  |  | (4,849 | )
Effect of currency exchange rate changes |  |  | 45 |  |  |  | 1 |
Sold receivables at the end of the year |  | $ | 734 |  |  | $ | 690 |

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- Definition Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5624163-113959 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5580258-113959 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=121590274&loc=d3e41620-113959 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5579245-113959 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=121590274&loc=d3e41638-113959 Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 8 -URI http://asc.fasb.org/extlink&oid=121590274&loc=d3e41678-113959 Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=121590274&loc=d3e41641-113959 Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5624171-113959 Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5579240-113959 + Details
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