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Revenue from contracts with customers
 6 Months Ended
Jun. 30, 2023
Revenue from contracts with customers
NOTE 3 – Revenue from contracts with customers:
Disaggregation of revenue
The following table disaggregates Teva’s revenues by major revenue streams. For additional information on disaggregation of revenues, see note 15.


 
  
Three months ended June 30, 2023
 
 
  
North America
 
 
Europe
 
  
 
International
Markets
 
  
Other activities
 
 
Total
 
 
  
(U.S.$ in millions)
 
Sale of goods
      1,579       1,153         448        151       3,331  
Licensing arrangements
      21       11         5        2       38  
Distribution
      392         §       10        —         402  
Other
      (1 )      (1 )        16        92       106  
    
 
 
    
 
 
      
 
 
     
 
 
    
 
 
  
     $ 1,991     $ 1,163       $ 479      $ 245     $ 3,878  
    
 
 
    
 
 
      
 
 
     
 
 
    
 
 
  
 

§
Represents an amount less than $0.5 million.
 
 
  
Three months ended June 30, 2022
 
 
  
North America
 
  
Europe
  
 
International
Markets
 
 
Other activities
 
  
Total
 
 
  
(U.S.$ in millions)
 
Sale of goods
      1,538        1,127        448       176        3,289  
Licensing arrangements
      54        13        4       1        72  
Distribution
      308          §      10       —          318  
Other
      3        31        (9 )      81        106  
    
 
 
     
 
 
     
 
 
    
 
 
     
 
 
  
     $ 1,904      $ 1,171      $ 454     $ 257      $ 3,786  
    
 
 
     
 
 
     
 
 
    
 
 
     
 
 
  
 
 
§
Represents an amount less than $0.5 million.
 
 
  
Six months ended June 30, 2023
 
 
  
North America
 
 
Europe
 
 
International
Markets
 
  
Other activities
 
  
Total
 
 
  
(U.S.$ in millions)
 
Sale of goods
      2,898        2,329       912        282        6,421  
Licensing arrangements
      44        25       10        2        81  
Distribution
      816          §     19        —          836  
Other
        §      (7
)
     29        179        201  
    
 
 
     
 
 
    
 
 
     
 
 
     
 
 
  
     $ 3,757      $ 2,347     $ 971      $ 464      $ 7,539  
    
 
 
     
 
 
    
 
 
     
 
 
     
 
 
  
 
 
§ Represents an amount less than $0.5 million.
 
  
Six months ended June 30, 2022
 
 
  
North America
 
  
Europe
  
 
International
Markets
 
  
Other activities
 
  
Total
 
 
  
(U.S.$ in millions)
 
Sale of goods
      2,915        2,261        894        356        6,425  
Licensing arrangements
      74        26        8        2        110  
Distribution
      650          §      26        —          677  
Other
      1        39        19        175        234  
    
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
     $ 3,641      $ 2,327      $ 946      $ 532      $ 7,447  
    
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
 
 
§
Represents an amount less than $0.5 million.     

Variable consideration
Variable consideration mainly includes sales reserves and allowances (“SR&A”), comprised of rebates (including Medicaid and other governmental program discounts), chargebacks, returns and other promotional (including shelf stock adjustments) items. Provisions for prompt payment discounts are netted against accounts receivables.
The Company recognizes these provisions at the time of sale and adjusts them if the actual amounts differ from the estimated provisions.
SR&A to U.S. customers comprised approximately 67%
 
of the Company’s total SR&A as of June 30, 2023, with the remaining balance primarily related to customers in Canada and Germany. The changes in SR&A for third-party sales for the six months ended June 
30
, 2023 and 2022 were as follows:
 

 
  
Sales Reserves and Allowances
 
 
  
Reserves
included in
Accounts
Receivable,
net
 
 
Rebates
 
 
Medicaid and
other
governmental
allowances
 
 
 
Chargebacks
 
 
Returns
 
 
Other
 
 
Total
reserves
included in
Sales
Reserves
and
Allowances
 
 
Total
 
 
  
(U.S.$ in millions)
 
Balance at January 1, 2023
    $ 67      $ 1,575      $ 663        $ 991      $ 455      $ 66      $ 3,750      $ 3,817  
 
Provisions related to sales made in current year
period
      175        2,037        319          3,788        141        56        6,341        6,516  
Provisions related to sales made in prior periods
      —        (17
)
 		      (26  
)
      (17
)
 		      16        (3
)
 		      (47 )      (47 )
Credits and payments
      (178
)
 		      (2,068
)
      (431  
)
      (3,908
)
      (181
)
 		      (38
)
      (6,626 )      (6,804 )
Translation differences
      —        11        2          2        2        (2
)
 		      15        15  
    
 
 
     
 
 
     
 
 
       
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Balance at June 30, 2023
    $ 64      $ 1,538      $ 527        $ 856      $ 433      $ 79      $ 3,433      $ 3,497  
    
 
 
     
 
 
     
 
 
       
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
 
 
  
Sales Reserves and Allowances
 
 
  
Reserves
included in
Accounts
Receivable, net
 
 
Rebates
 
 
Medicaid and
other
governmental
allowances
 
 
Chargebacks
 
 
Returns
 
 
Other
 
 
Total reserves
included in
Sales Reserves
and
Allowances
 
 
Total
 
 
  
(U.S.$ in millions)
 
Balance at January 1, 2022
    $ 68     $ 1,655     $ 854     $ 1,085     $ 535     $ 112     $ 4,241     $ 4,309  
Provisions related to sales made in current year period
      181       1,889       446       3,836       147       152       6,470       6,651  
Provisions related to sales made in prior periods
      —         (102 )      20       (8 )      (16 )      (2 )      (108 )      (108 ) 
Credits and payments
      (185 )      (1,901 )      (497 )      (3,922 )      (211 )      (145 )      (6,676 )      (6,861 ) 
Translation differences
      —         (33 )      (6 )      (7 )      (4 )      3       (47 )      (47 ) 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Balance at June 30, 2022
    $ 64     $ 1,508     $ 817     $ 984     $ 451     $ 120     $ 3,880     $ 3,944  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
 
Pledged accounts receivables
Accounts receivables, net of allowance for credit losses, include $851 million and $436
 million as of
June
30, 2023
and
December 31, 2022, respectively, which are pledged to PNC Bank, National Association in connection with the U.S. securitization program entered into in November 2022. See note 8f to the consolidated financial statements on this Form 10-Q and note 10f to the consolidated financial
statements
for the year ended December 31, 2022 included in Teva’s Annual Report on Form 10-K.