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Segments
 12 Months Ended
Dec. 31, 2023
Segments
NOTE 19—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 included in other activities, 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. Based on such review, in May 2023 Teva launched its new Pivot to Growth strategy. Any additional 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 7.
In conjunction with a recent shift in executive management responsibilities and in alignment with Teva’s Pivot to Growth strategy, Teva decided that Canada will no longer be included as part of Teva’s North America segment as of January 1, 2024. From that date, Teva’s North America segment will be comprised solely of the United States, while Canada will be reported as part of the Company’s International Markets segment. Teva will align its internal financial and segment reporting and its reporting units in coordination with this shift effective January 1, 2024.
On January 31, 2024, Teva announced that it intends to divest its API business (including its R&D, manufacturing and commercial activities) through a sale, which divestment is expected to be completed in the first half of 2025. The intention to divest is in alignment with Teva’s Pivot to Growth strategy. However, there can be no assurance regarding the ultimate timing or structure of a potential divestiture or that a divestiture will be agreed or completed at all.
 
a.
Segment information:
 
    
Year ended December 31,
  
    
2023
  
    
North America
     
Europe
     
International Markets
  
    
(U.S. $ in millions)
  
Revenues
    $ 8,124      $ 4,837      $ 1,958  
Gross profit
      4,421        2,726        1,050  
R&D expenses
      625        220        83  
S&M expenses
      1,005        767        420  
G&A expenses
      403        263        118  
Other income
      (8 )       (2 )       (35 ) 
  
 
 
     
 
 
     
 
 
  
Segment profit
    $ 2,396      $ 1,478      $ 464  
  
 
 
     
 
 
     
 
 
  
 
    
Year ended December 31,
  
    
2022
  
    
North America
     
Europe
     
International Markets
  
    
(U.S. $ in millions)
  
Revenues
    $ 7,452      $ 4,525      $ 1,903  
Gross profit
      3,926        2,700        1,033  
R&D expenses
      532        213        72  
S&M expenses
      941        748        405  
G&A expenses
      474        246        119  
Other income
      (15 )       (3 )       (43 ) 
  
 
 
     
 
 
     
 
 
  
Segment profit
    $ 1,993      $ 1,496      $ 479  
  
 
 
     
 
 
     
 
 
  
 
    
Year ended December 31,
  
    
2021
  
    
North America
     
Europe
     
International Markets
  
    
(U.S. $ in millions)
  
Revenues
    $ 7,809      $ 4,886      $ 2,032  
Gross profit
      4,226        2,823        1,118  
R&D expenses
      618        244        68  
S&M expenses
      988        846        417  
G&A expenses
      427        244        109  
Other income
      (31 )       (5 )       (5 ) 
  
 
 
     
 
 
     
 
 
  
Segment profit
    $ 2,224      $ 1,494      $ 529  
  
 
 
     
 
 
     
 
 
  
 
    
Year ended December 31,
  
    
2023
    
2022
    
2021
  
    
(U.S. $ in millions)
  
North America profit
    $ 2,396     $ 1,993     $ 2,224  
Europe profit
      1,478       1,496       1,494  
International Markets profit
      464       479       529  
  
 
 
    
 
 
    
 
 
  
Total reportable segments profit
      4,338       3,968       4,246  
Profit of other activities
      24       172       154  
  
 
 
    
 
 
    
 
 
  
Total segments profit
      4,361       4,139       4,401  
Amounts not allocated to segments:
         
Amortization
      616       732       802  
Other asset impairments, restructuring and other items
(1)
      718       512       341  
Goodwill impairment
      700       2,045       —   
Intangible assets impairments
      350       355       424  
Legal settlements and loss contingencies
      1,043       2,082       717  
Other unallocated amounts
      502       610       402  
  
 
 
    
 
 
    
 
 
  
Consolidated operating income (loss)
(1)
      433       (2,197 )      1,716  
  
 
 
    
 
 
    
 
 
  
Financial expenses, net
      1,057       966       1,058  
  
 
 
    
 
 
    
 
 
  
Consolidated income (loss) before income taxes
(1)
    $ (624 )    $ (3,163 )    $ 658  
  
 
 
    
 
 
    
 
 
  
 
(1)
The data presented for 2022 have been revised to reflect a revision in relation to a contingent consideration liability and related expenses in the consolidated financial statements. See note 1b.
 
b.
Segment revenues by major products and activities:
The following tables present revenues by major products and activities for each segment for the year ended December 31, 2023, 2022 and 2021:
North America segment:
 
    
Year ended December 31,
  
    
2023
     
2022
     
2021
  
    
(U.S. $ in millions)
  
Generic products
    $ 3,475      $ 3,549      $ 3,769  
AJOVY
      230        218        176  
AUSTEDO
      1,225        963        802  
BENDEKA and TREANDA
      241        316        385  
COPAXONE
      320        387        577  
Anda
      1,577        1,471        1,323  
Other*
      1,056        549        777  
  
 
 
     
 
 
     
 
 
  
Total
    $ 8,124      $ 7,452      $ 7,809  
  
 
 
     
 
 
     
 
 
  
 
*
Other revenues were mainly comprised of a $
500 
million upfront payment received in the fourth quarter of 2023, in connection with the collaboration on Teva’s anti-TL1A asset. See note 2.
 
Europe segment:
 
    
Year ended December 31,
  
    
2023
     
2022
     
2021
  
    
(U.S. $ in millions)
  
Generic products
    $ 3,664      $ 3,466      $ 3,569  
AJOVY
      160        124        87  
COPAXONE
      231        268        391  
Respiratory products
      265        273        356  
Other*
      516        393        483  
  
 
 
     
 
 
     
 
 
  
Total
    $ 4,837      $ 4,525      $ 4,886  
  
 
 
     
 
 
     
 
 
  
 
*
Other revenues in 2023 were mainly related to the sale of certain product rights.
International Markets segment:
 
    
Year ended December 31,
  
    
2023
     
2022
     
2021
  
    
(U.S. $ in millions)
  
Generic products
    $ 1,594      $ 1,586      $ 1,649  
AJOVY
      44        35        50  
COPAXONE
      39        36        37  
Other
      281        246        295  
  
 
 
     
 
 
     
 
 
  
Total
    $ 1,958      $ 1,903      $ 2,032  
  
 
 
     
 
 
     
 
 
  
Revenues are attributable to countries based on sales to third parties in such countries. Revenues within the United States constituted 49%, 47% and 46% of Teva’s consolidated revenues for the years ended December 31, 2023, 2022 and 2021, respectively. Revenues within the Company’s country of domicile (Israel) constituted 2%, 2% and 2% of Teva’s consolidated revenues for the years ended December 31, 2023, 2022 and 2021, respectively.
 
c.
Supplemental data—major customers:
The following table represents the percentage of consolidated third party net sales to Teva’s major customers during the years ended December 31, 2023, 2022 and 2021.
 
    
Percentage of Third Party Net Sales
  
    
2023
    
2022
    
2021
  
McKesson Corporation
      9 %      10 %      11 % 
AmerisourceBergen Corporation
      9 %      10 %      11 % 
Most of Teva’s revenues from these customers were in the North America segment.
d.
Property, plant and equipment—by geographical location were as follows:
 
    
December 31,
  
    
2023
     
2022
  
    
(U.S. $ in millions)
  
Israel
    $ 1,312      $ 1,401  
Germany
      1,318        1,143  
United States
      596        625  
Croatia
      447        445  
Czech republic
      309        318  
Hungary
      279        294  
Ireland
      266        268  
Other
      1,222        1,245  
  
 
 
     
 
 
  
Total property, plant and equipment
    $ 5,750      $ 5,739