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Segments
 3 Months Ended
Mar. 31, 2024
Segments
NOTE 15 – Segments:
Teva operates its business and reports its financial results in three segments:
 
  (a)
United States segment.
 
  (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 the United States and countries
 included
in the Europe segment.
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 United States, 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 3 and note 6.
In conjunction with a recent shift in executive management responsibilities and in alignment with Teva’s Pivot to Growth strategy, Teva decided that Canada is no longer included as part of Teva’s North America segment as of January 1, 2024. From that date Canada is reported as part of the Company’s International Markets segment and Teva’s North America segment has been renamed the United States segment. Teva aligned its internal financial and segment reporting and its reporting units in accordance with this change effective January 1, 2024. Prior period amounts have been recast to conform to the reporting structure for the current year.
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:
 
    
Three months ended March 31,
  
    
2024
  
    
United States
     
Europe
     
International Markets
  
    
(U.S. $ in millions)
  
Revenues
    $ 1,725      $ 1,272      $ 597  
Gross profit
      858        738        297  
R&D expenses
      154        56        28  
S&M expenses
      261        194        118  
G&A expenses
      93        65        35  
Other income
      1        1        § 
  
 
 
     
 
 
     
 
 
  
Segment profit
    $ 350      $ 423      $ 117  
  
 
 
     
 
 
     
 
 
  
 
§
Represents an amount less than $0.5 million.
 
 
                                          
                                          
                                          
    
Three months ended March 31,
  
    
2023
  
    
United States
     
Europe
     
International Markets
  
    
(U.S. $ in millions)
  
Revenues
   
$
1,677
 
   
$
1,184
 
   
$
581
 
Gross profit
   
 
789
 
   
 
655
 
   
 
285
 
R&D expenses
   
 
149
 
   
 
53
 
   
 
27
 
S&M expenses
   
 
207
 
   
 
187
 
   
 
113
 
G&A expenses
   
 
95
 
   
 
70
 
   
 
38
 
Other income
   
 
§ 
   
 
§ 
   
 
(1
) 
  
 
 
     
 
 
     
 
 
  
Segment profit
   
$
338
 
   
$
345
 
   
$
108
 
  
 
 
     
 
 
     
 
 
  
 
§
Represents an amount less than $0.5 million.
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 months ended March 31, 2024 and 2023:
 
                                 
                                 
    
Three months ended
March 31,
  
    
2024
     
2023
  
    
(U.S. $ in millions)
  
United States profit
   
$
350
 
   
$
338
 
Europe profit
   
 
423
 
   
 
345
 
International Markets profit
   
 
117
 
   
 
108
 
  
 
 
     
 
 
  
Total reportable segments profit
   
 
890
 
   
 
791
 
Profit (loss) of other activities
   
 
2
 
   
 
(6
) 
  
 
 
     
 
 
  
Total segments profit
   
 
892
 
   
 
785
 
Amounts not allocated to segments:
      
Amortization
   
 
152
 
   
 
165
 
Other assets impairments, restructuring and other items *
   
 
673
 
   
 
110
 
Intangible assets impairments
   
 
80
 
   
 
178
 
Legal settlements and loss contingencies
   
 
106
 
   
 
233
 
Other unallocated amounts
   
 
99
 
   
 
112
 
  
 
 
     
 
 
  
Consolidated operating income (loss) *
   
 
(218
) 
   
 
(13
) 
  
 
 
     
 
 
  
Financial expenses, net
   
 
250
 
   
 
260
 
  
 
 
     
 
 
  
Consolidated income (loss) before income taxes *
   
$
(467
) 
   
$
(272
) 
  
 
 
     
 
 
  
 
*
The data presented for the prior period have been revised to reflect a revision in the presentation of these items in the consolidated financial statements. For additional information see note 1c.
 
 
 
b.
Segment revenues by major products and activities:
The following tables present revenues by major products and activities for the three months ended March 31, 2024 and 2023:
 
United States   
Three months ended

March 31,
  
    
2024
     
2023
  
    
(U.S. $ in millions)
  
Generic products
    $ 808      $ 747  
AJOVY
®
      45        46  
AUSTEDO
      282        170  
BENDEKA
®
and TREANDA
®
      46        62  
COPAXONE
      30        71  
Anda
      381        424  
Other
      133        158  
  
 
 
     
 
 
  
Total
    $ 1,725      $ 1,677  
  
 
 
     
 
 
  
 
Europe   
Three months ended

March 31,
  
    
2024
     
2023
  
    
(U.S. $ in millions)
  
Generic products
    $ 1,004      $ 932  
AJOVY
      51        36  
COPAXONE
      57        59  
Respiratory products
      66        68  
Other
      94        89  
  
 
 
     
 
 
  
Total
    $ 1,272      $ 1,184  
  
 
 
     
 
 
  
 
International markets   
Three months ended

March 31,
  
    
2024
     
2023
  
    
(U.S. $ in millions)
  
Generic products
    $ 477      $ 477  
AJOVY
      17        13  
COPAXONE
      12        17  
Other
      91        74  
  
 
 
     
 
 
  
Total
    $ 597      $ 581