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Segments
 12 Months Ended
Dec. 31, 2020
Segments
NOTE 19—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 included in other activities, primarily the sale of APIs to third parties, certain contract manufacturing services and an
out-licensing
platform offering a portfolio of products to other pharmaceutical companies through its affiliate Medis.
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. 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 7.
 
a.
Segment information:
 
    
Year ended December 31,
  
    
2020
  
    
North America
     
Europe
     
International Markets
  
    
(U.S. $ in millions)
  
Revenues
    $ 8,447      $ 4,757      $ 2,154  
Gross profit
      4,489        2,666        1,096  
R&D expenses
      622        247        70  
S&M expenses
      1,013        830        427  
G&A
expenses
      443        261        136  
Other income
      (10 )       (3 )       (11 ) 
Segment profit
    $ 2,421      $ 1,331      $ 474  
    
 
 
     
 
 
     
 
 
  
 
 
  
Year ended December 31,
 
 
  
2019
 
 
  
North America
 
  
Europe
 
  
International Markets
 
 
  
(U.S. $ in millions)
 
Revenues
  
$
8,542
 
  
$
4,795
 
  
$
2,246
 
Gross profit
  
 
4,350
 
  
 
2,704
 
  
 
1,167
 
R&D expenses
  
 
652
 
  
 
262
 
  
 
88
 
S&M expenses
  
 
1,021
 
  
 
890
 
  
 
481
 
G&A expenses
  
 
439
 
  
 
239
 
  
 
138
 
Other income
  
 
(14
) 
  
 
(5
) 
  
 
(3
) 
 
  
 
 
 
  
 
 
 
  
 
 
 
Segment profit
  
$
2,252
 
  
$
1,318
 
  
$
464
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
    
Year ended December 31,
  
    
2018
  
    
North America
     
Europe
     
International Markets
  
    
(U.S. $ in millions)
  
Revenues
  
$
9,297
 
  
$
5,186
 
  
$
2,422
 
Gross profit
  
 
4,979
 
  
 
2,884
 
  
 
1,254
 
R&D expenses
  
 
713
 
  
 
283
 
  
 
96
 
S&M expenses
  
 
1,154
 
  
 
1,003
 
  
 
518
 
G&A expenses
  
 
484
 
  
 
325
 
  
 
153
 
Other income
  
 
(209
) 
  
 
—  
 
  
 
(11
 )
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Segment profit
  
$
2,837
 
  
$
1,273
 
  
$
498
 
 
  
 
 
 
  
 
 
 
  
 
 
 
    
Year ended
  
    
December 31,
  
    
2020
    
2019
    
2018
  
    
(U.S.$ in millions)
  
North America profit
  
$
 
2,421
 
  
$
2,252
 
  
$
2,837
 
Europe profit
  
 
1,331
 
  
 
1,318
 
  
 
1,273
 
International Markets profit
  
 
474
 
  
 
464
 
  
 
498
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total reportable segments profit
  
 
4,225
 
  
 
4,034
 
  
 
4,608
 
Profit (loss) of other activities
  
 
163
 
  
 
108
 
  
 
115
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Total segments profit
  
 
4,388
 
  
 
4,142
 
  
 
4,723
 
Amounts not allocated to segments:
  
      
  
      
  
      
Amortization
  
 
1,020
 
  
 
1,113
 
  
 
1,166
 
Other asset impairments, restructuring and other items
  
 
479
 
  
 
423
 
  
 
987
 
Goodwill impairment
  
 
4,628
 
  
 
—   
 
  
 
3,027
 
Intangible asset impairments
  
 
1,502
 
  
 
1,639
 
  
 
1,991
 
Gain on divestitures, net of divestitures related costs
  
 
(8
) 
  
 
(50
) 
  
 
(66
) 
Other R&D expenses (income)
  
 
37
 
  
 
(15
) 
  
 
83
 
Costs related to regulatory actions taken in facilities
  
 
23
 
  
 
45
 
  
 
14
 
Legal settlements and loss contingencies
  
 
60
 
  
 
1,178
 
  
 
(1,208
) 
Other unallocated amounts
  
 
219
 
  
 
252
 
  
 
366
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Consolidated operating income (loss)
  
 
(3,572
) 
  
 
(443
) 
  
 
(1,637
) 
 
  
 
 
 
  
 
 
 
  
 
 
 
Financial expenses, net
  
 
834
 
  
 
822
 
  
 
959
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Consolidated income (loss) before income taxes
  
$
(4,406
) 
  
$
(1,265
) 
  
$
(2,596
) 
    
 
 
     
 
 
     
 
 
  
b.
Segment revenues by major products and activities:
The following tables present revenues by major products and activities for each segment for the year ended December 31, 2020, 2019 and 2018:
North America segment:
 
 
 
     
Year ended December 31,
  
    
2020
     
2019
     
2018
  
    
(U.S. $ in millions)
  
Generic products
    $ 4,010      $ 3,963      $ 4,056  
AJOVY
      134        93        3  
AUSTEDO
      637        412        204  
BENDEKA/TREANDA
      415        496        642  
COPAXONE
      884        1,017        1,759  
ProAir*
      241        274        397  
QVAR
      179        250        182  
Anda
      1,462        1,492        1,347  
Other
      485        546        708  
    
 
 
     
 
 
     
 
 
  
Total
    $ 8,447      $ 8,542      $ 9,297  
    
 
 
     
 
 
     
 
 
  
 
*
Does not include revenues from the ProAir authorized generic, which are included under generic products.
Europe segment:
 
    
Year ended December 31,
  
    
2020
     
2019
     
2018
  
    
(U.S. $ in millions)
  
Generic products
    $ 3,513      $ 3,470      $ 3,593  
AJOVY
 
 
 
31
 
 
 
 
3
 
 
 
—
 
 
  
COPAXONE
      400        432        535  
Respiratory products
      353        354        402  
Other
      459        536        656  
    
 
 
     
 
 
     
 
 
  
Total
    $ 4,757      $ 4,795      $ 5,186  
    
 
 
     
 
 
     
 
 
  
International Markets segment:
 
    
Year ended December 31,
  
    
2020
     
2019
     
2018
  
    
(U.S. $ in millions)
  
Generic products
    $ 1,792      $ 1,893      $ 2,022  
COPAXONE
      53        63        72  
Other
      309        291        328  
    
 
 
     
 
 
     
 
 
  
Total
    $ 2,154      $ 2,246      $ 2,422  
    
 
 
     
 
 
     
 
 
  
Teva revenues from external customers attributed to Israel were less than 5% of the consolidated revenues in the years ended December 31, 2020, 2019 and 2018, respectively.
 
c.
Supplemental data—major customers:
The following table represents the percentage of consolidated third party net sales to Teva’s major customers during the years ended December 31, 2020, 2019 and 2018.
 
    
Percentage of Third Party Net Sales
  
    
2020
     
2019
    
2018
  
McKesson Corporation
      12
%
      13 %      12 % 
AmerisourceBergen Corporation
      12
%
      12 %      14 % 
 
Most of Teva’s revenues from these customers were in the North America segment.
 
d.
Property, plant and equipment—by geographical location were as follows:
 
    
December 31,
  
    
2020
     
2019
  
    
(U.S. $ in millions)
  
Israel
    $ 1,611      $ 1,670  
United States
      790        864  
Croatia
      539        517  
Germany
      933        665  
Czech republic
      330        343  
Hungary
      325        330  
Ireland
      267        271  
Other
      1,501        1,776  
    
 
 
     
 
 
  
Total property, plant and equipment
    $ 6,296      $ 6,436