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Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2021

Summary of Financial Items Carried at Fair Value

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

		September 30, 2021
		Level 1				Level 2				Level 3				Total
		(U.S. $ in millions)
Cash and cash equivalents:
Money markets		$	325			$	—			$	—			$	325
Cash, deposits and other			1,720				—				—				1,720
Investment in securities:
Equity securities			18				—				—				18
Other, mainly debt securities			5				—				1				6
Derivatives:
Asset derivatives—options and forward contracts			—				45				—				45
Liability derivatives—options and forward contracts			—				(23	)			—				(23	)
Contingent consideration**			—				—				(187	)			(187	)
Total		$	2,068			$	22			$	(186	)		$	1,904

		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 were no longer subject to a sale restriction. As of September 30, 2021, Teva sold all of its holdings in American Well.

** 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:

		Nine months ended September 30, 2021				Nine months ended September 30, 2020
		(U.S. $ in millions)
Fair value at the beginning of the period		$	(258	)			(448	)
Transfer into Level 3- equity securities			—				179
Revaluation of equity securities			—				118
Redemption of debt securities			(9	)			—
Revaluation of debt securities			—				(3	)
Adjustments to provisions for contingent consideration:
Actavis Generics transaction			21				161
Eagle transaction			(14	)			(65	)
Settlement of contingent consideration:
Eagle transaction			74				85
Fair value at the end of the period		$	(186	)		$	27

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*
		September 30,				December 31,
		2021				2020
		(U.S. $ in millions)
Senior notes included under senior notes and loans		$	21,018			$	22,684
Senior notes and convertible senior debentures included under short-term debt			2,413				3,207
Total		$	23,431			$	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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