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Segments

9 Months Ended

Sep. 30, 2022

Segments

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.

a. Segment information:

		Three months ended September 30,
		2022
		North America				Europe				International Markets
		(U.S. $ in millions)
Revenues		$	1,809			$	1,069			$	475
Gross profit			942				634				252
R&D expenses			111				44				15
S&M expenses			232				169				97
G&A expenses			122				61				30
Other income			§				§				(2	)
Segment profit		$	477			$	360			$	112

§ Represents an amount less than $0.5 million.                

		Three months ended September 30,
		2021
		North America				Europe				International Markets
		(U.S. $ in millions)
Revenues		$	1,875			$	1,220			$	530
Gross profit			967				714				296
R&D expenses			146				55				16
S&M expenses			250				204				102
G&A expenses			121				64				29
Other income			(7	)			(2	)			(2	)
Segment profit		$	458			$	394			$	152

		Nine months ended September 30,
		2022
		North America				Europe				International Markets
		(U.S. $ in millions)
Revenues		$	5,450			$	3,396			$	1,422
Gross profit			2,841				2,031				780
R&D expenses			401				157				54
S&M expenses			733				561				293
G&A expenses			361				183				89
Other income			(12	)			(1	)			(43	)
Segment profit		$	1,359			$	1,130			$	386

		Nine months ended September 30,
		2021
		North America				Europe				International Markets
		(U.S. $ in millions)
Revenues		$	5,807			$	3,618			$	1,505
Gross profit			3,081				2,063				826
R&D expenses			467				184				51
S&M expenses			734				628				303
G&A expenses			338				180				79
Other income			(14	)			(3	)			(5	)
Segment profit		$	1,556			$	1,074			$	398

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 nine months ended September 30, 2022 and 2021:

		Three months ended								Nine months ended
		September 30,								September 30,
		2022				2021				2022				2021
		(U.S. $ in millions)								(U.S. $ in millions)
North America profit		$	477			$	458			$	1,359			$	1,556
Europe profit			360				394				1,130				1,074
International Markets profit			112				152				386				398
Total reportable segments profit			949				1,004				2,875				3,028
Profit of other activities			29				38				135				125
Total segments profit			977				1,042				3,010				3,153
Amounts not allocated to segments:
Amortization			165				199				576				613
Other assets impairments, restructuring and other items			36				62				282				227
Goodwill impairment			—				—				745				—
Intangible assets impairments			24				21				223				295
Legal settlements and loss contingencies			195				3				2,048				113
Other unallocated amounts			139				134				379				266
Consolidated operating income (loss)			419				623				(1,244	)			1,638
Financial expenses, net			252				241				721				805
Consolidated income (loss) before income taxes		$	166			$	382			$	(1,964	)		$	833

b. Segment revenues by major products and activities:

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

North America		Three months ended September 30,
		2022				2021
		(U.S. $ in millions)
Generic products		$	806			$	859
AJOVY			57				46
AUSTEDO			260				201
BENDEKA®/TREANDA®			77				95
COPAXONE			105				133
Anda			371				363
Other			133				178
Total		$	1,809			$	1,875

North America		Nine months ended September 30,
		2022				2021
		(U.S. $ in millions)
Generic products		$	2,731			$	2,864
AJOVY			142				123
AUSTEDO			618				520
BENDEKA/TREANDA			241				292
COPAXONE			285				448
Anda			1,021				968
Other			411				592
Total		$	5,450			$	5,807

Europe		Three months ended September 30,
		2022				2021
		(U.S. $ in millions)
Generic products		$	803			$	895
AJOVY			30				23
COPAXONE			63				95
Respiratory products			62				85
Other			111				122
Total		$	1,069			$	1,220

Europe		Nine months ended September 30,
		2022				2021
		(U.S. $ in millions)
Generic products		$	2,552			$	2,637
AJOVY			90				58
COPAXONE			207				296
Respiratory products			198				263
Other			349				364
Total		$	3,396			$	3,618

International markets		Three months ended September 30,
		2022				2021
		(U.S. $ in millions)
Generic products		$	393			$	412
AJOVY			6				39
COPAXONE			9				10
Other			67				69
Total		$	475			$	530

International markets		Nine months ended September 30,
		2022				2021
		(U.S. $ in millions)
Generic products		$	1,175			$	1,211
AJOVY			22				46
COPAXONE			29				29
Other			195				219
Total		$	1,422			$	1,505

X

- 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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