Segments

6 Months Ended

Jun. 30, 2022

NOTE 15 – 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, the United Kingdom 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, 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 from time to time. 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 3 and note 6.

Seg

ment

information:


	Three months ended June 30,
	2022
	North America			Europe			International Markets
	(U.S. $ in millions)
Revenues	$	1,904		$	1,171		$	454
Gross profit		1,010			703			242
R&D expenses		147			56			19
S&M expenses		256			196			99
G&A expenses		127			63			30
Other income		(1	)		(1	)		(1	)

Segment profit	$	481		$	389		$	95


	Three months ended June 30,
	2021
	North America			Europe		International Markets
	(U.S. $ in millions)
Revenues	$	1,943		$	1,184	$	485
Gross profit		1,040			661		270
R&D expenses		162			63		18
S&M expenses		255			209		105
G&A expenses		106			47		25
Other income		(5	)		§		(1	)

Segment profit	$	521		$	343	$	123

§ Represents an amount less than $0.5 million.


	Six months ended June 30,
	2022
	North America			Europe			International Markets
	(U.S. $ in millions)
Revenues	$	3,641		$	2,327		$	946
Gross profit		1,899			1,397			528
R&D expenses		289			114			39
S&M expenses		501			393			196
G&A expenses		239			122			60
Other income		(12	)		(1	)		(41	)

Segment profit	$	883		$	769		$	274


	Six months ended June 30,
	2021
	North America			Europe			International Markets
	(U.S. $ in millions)
Revenues	$	3,932		$	2,398		$	975
Gross profit		2,114			1,349			530
R&D expenses		322			129			35
S&M expenses		483			424			201
G&A expenses		218			117			51
Other income		(7	)		(1	)		(3	)

Segment profit	$	1,098		$	680		$	245

The following table presents a reconciliation of Teva’s segment profits to its consolidated operating income (loss) and to consolidated income (loss) before income taxes for the three and six months ended June 30, 2022 and 2021:


	Three months ended June 30,					Six months ended June 30,
	2022			2021		2022			2021
	(U.S. $ in millions)					(U.S. $ in millions)



North America profit	$	481		$	521	$	883		$	1,098
Europe profit		389			343		769			680
International Markets profit		95			123		274			245

Total reportable segments profit		964			987		1,926			2,023
Profit of other activities		55			47		107			87

Total segments profit		1,019			1,034		2,032			2,111
Amounts not allocated to segments:
Amortization		212			173		412			414
Other assets impairments, restructuring and other items		118			28		246			165
Goodwill impairment		745			—		745
Intangible assets impairments		51			195		199			274
Legal settlements and loss contingencies		729			6		1,854			110
Other unallocated amounts		113			50		240			132

Consolidated operating income (loss)		(949	)		582		(1,662	)		1,015

Financial expenses, net		211			274		468			564

Consolidated income (loss) before income taxes	$	(1,160	)	$	308	$	(2,131	)	$	451

b. Segment revenues by major products and activities:

The following tables present revenues by major products and activities for the three and six months ended June 30, 2022 and 2021:


North America	Three months ended June 30,
	2022		2021
	(U.S. $ in millions)


Generic products	$	1,026	$	951
AJOVY		49		46
AUSTEDO		204		174
BENDEKA®/TREANDA®		83		106
COPAXONE		94		152
Anda		308		316
Other		139		199

Total	$	1,904	$	1,943


North America	Six months ended June 30,
	2022		2021
	(U.S. $ in millions)

Generic products	$	1,925	$	2,004
AJOVY		86		77
AUSTEDO		358		320
BENDEKA/TREANDA		165		197
COPAXONE		180		315
Anda		650		605
Other		278		414

Total	$	3,641	$	3,932


Europe	Three months ended June 30,
	2022		2021
	(U.S. $ in millions)

Generic products	$	873	$	878
AJOVY		29		19
COPAXONE		72		100
Respiratory products		65		85
Other		131		102

Total	$	1,171	$	1,184


Europe	Six months ended June 30,
	2022		2021
	(U.S. $ in millions)
Generic products	$	1,749	$	1,742
AJOVY		60		35
COPAXONE		144		201
Respiratory products		137		179
Other		238		242

Total	$	2,327	$	2,398


International markets	Three months ended June 30,
	2022		2021
	(U.S. $ in millions)
Generic products	$	394	$	407
AJOVY		10		5
COPAXONE		9		7
Other		40		65

Total	$	454	$	485


International markets	Six months ended June 30,
	2022		2021
	(U.S. $ in millions)
Generic products	$	782	$	799
AJOVY		16		7
COPAXONE		20		19
Other		128		150

Total	$	946	$	975

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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