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Fair Value Measurement (Tables)

6 Months Ended

Jun. 30, 2021

Summary of Financial Items Carried at Fair Value

Financial items carried at fair value on a recurring basis as of June 30, 2021 and December 31, 2020 are classified in the tables below in one of the three categories of fair value levels:

		June 30, 2021
		Level 1				Level 2				Level 3				Total
		(U.S. $ in millions)
Cash and cash equivalents:
Money markets		$	278			$	—			$	—			$	278
Cash, deposits and other			2,158				—				—				2,158
Investment in securities:
Equity securities*			35				—				—				35
Other, mainly debt securities			5				—				1				6
Derivatives:
Asset derivatives—options and forward contracts			—				30				—				30
Liability derivatives—options and forward contracts			—				(25	)			—				(25	)
Contingent consideration**			—				—				(205	)			(205	)
Total		$	2,476			$	5			$	(204	)		$	2,277

		December 31, 2020
		Level 1				Level 2				Level 3				Total
		(U.S. $ in millions)
Cash and cash equivalents:
Money markets		$	367			$	—			$	—			$	367
Cash, deposits and other			1,810				—				—				1,810
Investment in securities:
Equity securities*			25				259				—				284
Other, mainly debt securities			5				—				10				15
Derivatives:
Asset derivatives—options and forward contracts			—				24				—				24
Liability derivatives—options and forward contracts			—				(79	)			—				(79	)
Contingent consideration**			—				—				(268	)			(268	)
Total		$	2,207			$	204			$	(258	)		$	2,153

* During the first quarter of 2021, Teva’s shares in American Well Corporation (“American Well”) moved from a Level 2 measurement to a Level 1 measurement within the fair value hierarchy, since they are no longer subject to a sale restriction. As of June 30, 2021, Teva sold most of its holdings in American Well, and subsequently sold its remaining holdings.

** 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:

		Six months ended June 30, 2021				Six months ended June 30, 2020
		(U.S. $ in millions)
Fair value at the beginning of the period		$	(258	)			(448	)
Redemption of debt securities			(9	)			—
Revaluation of debt securities			—				1
Adjustments to provisions for contingent consideration:
Actavis Generics transaction			22				(15	)
Eagle transaction			(7	)			(67	)
Settlement of contingent consideration:
Eagle transaction			48				58
Fair value at the end of the period		$	(204	)		$	(471	)

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 (see note 7) and are presented in the table below in terms of fair value (level 1 inputs):

		Estimated fair value*
		June 30,				December 31,
		2021				2020
		(U.S. $ in millions)
Senior notes included under senior notes and loans		$	21,449			$	22,684
Senior notes and convertible senior debentures included under short-term debt			3,548				3,207
Total		$	24,997			$	25,891

* The fair value was estimated based on quoted market prices.

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- Definition

Tabular disclosure of assets measured at fair value measured on a recurring or nonrecurring basis. Includes, but is not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2.

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Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

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