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Segments
 6 Months Ended
Jun. 30, 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 June 30,
 
 
  
2024
 
 
  
United States
 
  
Europe
 
  
International Markets
 
 
  
(U.S. $ in millions)
 
Revenues
    $ 2,110      $ 1,213      $ 593  
Gross profit
      1,167        677        286  
R&D expenses
      170        62        30  
S&M expenses
      270        209        145  
G&A expenses
      100        64        38  
Other income
      (1 )       §        §  
  
 
 
     
 
 
     
 
 
  
Segment profit
  
$
629
 
  
$
342
 
  
$
73
 
  
 
 
     
 
 
     
 
 
  
 
§
Represents an amount less than $0.5 million.
 
 
 
  
Three months ended June 30,
 
 
  
2023
 
 
  
United States
 
  
Europe
 
  
International Markets
 
 
  
(U.S. $ in millions)
 
Revenues
  
$
1,892
 
  
$
1,163
 
  
$
578
 
Gross profit
      1,017        640        283  
R&D expenses
      156        53        23  
S&M expenses
      250        194        125  
G&A expenses
      101        61        34  
Other income
      (1 )       (1 )       (31 ) 
  
 
 
     
 
 
     
 
 
  
Segment profit
  
$
511
 
  
$
334
 
  
$
132
 
  
 
 
     
 
 
     
 
 
  
 
 
  
Six month ended June 30,
 
 
  
2024
 
 
  
United States
 
  
Europe
 
  
International Markets
 
 
  
(U.S. $ in millions)
 
Revenues
    $ 3,835      $ 2,485      $ 1,190  
Gross profit
      2,025        1,415        583  
R&D expenses
      324        118        58  
S&M expenses
      530        403        263  
G&A expenses
      193        130        73  
Other income
      (1 )       §        (1 ) 
  
 
 
     
 
 
     
 
 
  
Segment profit
    $ 979      $ 764      $ 190  
  
 
 
     
 
 
     
 
 
  
 
§
Represents an amount less than $0.5 million.
 
 
  
Six month ended June 30,
 
 
  
2023
 
 
  
United States
 
  
Europe
 
  
International Markets
 
 
  
(U.S. $ in millions)
 
Revenues
  
$
3,569
 
  
$
2,347
 
  
$
1,159
 
Gross profit
      1,806        1,294        568  
R&D expenses
      305        106        51  
S&M expenses
      457        381        238  
G&A expenses
      196        130        72  
Other income
      (1 )       (1 )       (33 ) 
  
 
 
     
 
 
     
 
 
  
Segment profit
  
$
850
 
  
$
679
 
  
$
240
 
  
 
 
     
 
 
     
 
 
  
 
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 June 30, 2024 and 2023:
 
 
  
Three months ended
June 30,
 
  
Six months ended

June 30,
 
 
  
2024
 
  
2023
 
  
2024
 
  
2023
 
 
  
(U.S. $ in millions)
 
  
(U.S. $ in millions)
 
United States profit
    $ 629     $ 511     $ 979     $ 850  
Europe profit
      342       334       764       679  
International Markets profit
      73       132       190       240  
  
 
 
    
 
 
    
 
 
    
 
 
  
Total reportable segments profit
      1,043       977       1,933       1,769  
Profit (loss) of other activities
      12       33       15       27  
  
 
 
    
 
 
    
 
 
    
 
 
  
Total segments profit
      1,056       1,011       1,948       1,796  
Amounts not allocated to segments:
         
Amortization
      146       162       298       326  
Other assets impairments, restructuring and other items *
      280       108       954       218  
Goodwill impairment
      400       700       400       700  
Intangible assets impairments
      61       63       141       241  
Legal settlements and loss contingencies
      83       462       188       695  
Other unallocated amounts
      91       170       190       282  
  
 
 
    
 
 
    
 
 
    
 
 
  
Consolidated operating income (loss) *
      (5 )      (654 )      (223 )      (667 ) 
  
 
 
    
 
 
    
 
 
    
 
 
  
Financial expenses, net
      241       268       491       528  
  
 
 
    
 
 
    
 
 
    
 
 
  
Consolidated income (loss) before income taxes *
    $ (246 )    $ (923 )    $ (713 )    $ (1,195 ) 
  
 
 
    
 
 
    
 
 
    
 
 
  

*
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.
b. Segment revenues by major products and activities:
The following tables present revenues by major products and activities for the three months ended June 30, 2024 and 2023:
 
United States
   
Three months ended

June 30,
  
    
2024
     
2023
  
    
(U.S. $ in millions)
  
Generic products
    $ 1,023      $ 884  
AJOVY
®
      42        52  
AUSTEDO
      407        308  
BENDEKA
®
and TREANDA
®
      41        67  
COPAXONE
      81        56  
Anda
      373        392  
Other
      144        131  
  
 
 
     
 
 
  
Total
    $ 2,110      $ 1,892  
  
 
 
     
 
 
  
 
 
United States
  
Six months ended
June 30,
 
 
  
2024
 
  
2023
 
 
  
(U.S. $ in millions)
 
Generic products
    $ 1,831      $ 1,631  
AJOVY
      87        98  
AUSTEDO
      689        478  
BENDEKA and TREANDA
      87        129  
COPAXONE
      111        127  
Anda
      754        816  
Other
      276        289  
  
 
 
     
 
 
  
Total
    $ 3,835      $ 3,569  
  
 
 
     
 
 
  
 
Europe
  
Three months ended

June 30,
 
 
  
2024
 
  
2023
 
 
  
(U.S. $ in millions)
 
Generic products
    $ 970      $ 909  
AJOVY
      52        39  
COPAXONE
      53        60  
Respiratory products
      57        66  
Other
      81        89  
  
 
 
     
 
 
  
Total
    $ 1,213      $ 1,163  
  
 
 
     
 
 
  
 
Europe
  
Six months ended
June 30,
 
 
  
2024
 
  
2023
 
 
  
(U.S. $ in millions)
 
Generic products
    $ 1,974      $ 1,841  
AJOVY
      102        74  
COPAXONE
      110        119  
Respiratory products
      123        134  
Other
      175        178  
  
 
 
     
 
 
  
Total
    $ 2,485      $ 2,347  
  
 
 
     
 
 
  
 
International markets
  
Three months ended

June 30,
 
 
  
2024
 
  
2023
 
 
  
(U.S. $ in millions)
 
Generic products
    $ 486      $ 478  
AJOVY
      22        14  
COPAXONE
      14        17  
Other
      71        69  
  
 
 
     
 
 
  
Total
    $ 593      $ 578  
  
 
 
     
 
 
  
 
 
International markets
  
Six months ended
June 30,
 
 
  
2024
 
  
2023
 
 
  
(U.S. $ in millions)
 
Generic products
    $ 963      $ 955  
AJOVY
      39        27  
COPAXONE
      25        34  
Other
      162        142  
  
 
 
     
 
 
  
Total
    $ 1,190      $ 1,159