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Fair value measurement | 9 Months Ended
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Sep. 30, 2025
Fair value measurement | NOTE 16 – Fair value measurement: Financial items carried at fair value on a recurring basis as of September 30, 2025 and December 31, 2024 are classified in the tables below in one of the three categories of fair value levels:
|  | September 30, 2025 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
|  | (U.S. $ in millions) |
Cash and cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money markets |  | $ | 1,165 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,165 |
Cash, deposits and other |  |  | 1,038 |  |  |  | — |  |  |  | — |  |  |  | 1,038 |
Investment in securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities |  |  | 16 |  |  |  | — |  |  |  | — |  |  |  | 16 |
Other |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | 3 |
Derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Options and forward contracts |  |  | — |  |  |  | 64 |  |  |  | — |  |  |  | 64 |
Liability derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Options and forward contracts |  |  | — |  |  |  | (35 | ) |  |  | — |  |  |  | (35 | )
Cross currency interest rate swap |  |  | — |  |  |  | (18 | ) |  |  | — |  |  |  | (18 | )
Bifurcated embedded derivatives |  |  | — |  |  |  | — |  |  | § |  |  |  |  | — |
Contingent consideration* |  |  | — |  |  |  | — |  |  |  | (198 | ) |  |  | (198 | )
Total |  | $ | 2,222 |  |  | $ | 11 |  |  | $ | (198 | ) |  | $ | 2,035 |
|  | December 31, 2024 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
|  | (U.S. $ in millions) |
Cash and cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money markets |  | $ | 2,005 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,005 |
Cash, deposits and other |  |  | 1,295 |  |  |  | — |  |  |  | — |  |  |  | 1,295 |
Investment in securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities |  |  | 12 |  |  |  | — |  |  |  | — |  |  |  | 12 |
Other |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | 3 |
Derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Options and forward contracts |  |  | — |  |  |  | 71 |  |  |  | — |  |  |  | 71 |
Liability derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Options and forward contracts |  |  | — |  |  |  | (24 | ) |  |  | — |  |  |  | (24 | )
Bifurcated embedded derivatives |  |  | — |  |  |  | — |  |  | § |  |  |  |  | — |
Contingent consideration* |  | $ | — |  |  |  | — |  |  |  | (401 | ) |  |  | (401 | )
Total |  |  | 3,315 |  |  | $ | 47 |  |  | $ | (401 | ) |  | $ | 2,961 |
§ | Represents an amount less than $0.5 million.
* | Contingent consideration represents liabilities recorded at fair value in connection with acquisitions.
Teva determined the fair value of the liabilities for contingent consideration based on a probability-weighted discounted cash flow analysis. This fair value measurement is based on significant unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. The fair value of contingent consideration is based on several factors, such as cash flows projected from the success of unapproved product candidates; probability of success of product candidates, including risks associated with uncertainty regarding achievement and payment of milestone events; time and resources required to complete the development and approval of product candidates; life of the potential commercialized products and associated risks with obtaining regulatory approvals in the United States and Europe, and the risk adjusted discount rate for fair value measurement. The discount rate applied ranged from 8.25% to 11%. The weighted average discount rate, calculated based on the relative fair value of Teva’s contingent consideration liabilities, was 8.8%. Contingent consideration is evaluated quarterly, or more frequently, if circumstances dictate. Changes in the fair value of contingent consideration are recorded in the consolidated statements of income. Significant changes in unobservable inputs, mainly the probability of success and cash flows projected, could result in material changes to the contingent consideration liabilities. A change of the discount rate by 1% would not have resulted in material changes to the contingent consideration liabilities. The following table summarizes the activity for the financial assets and liabilities where fair value measurements are estimated utilizing Level 3 inputs:
|  | Nine months ended September 30, 2025 |  |  | Nine months ended September 30, 2024 |
|  | (U.S. $ in millions) |
Fair value at the beginning of the period |  | $ | (401 | ) |  |  | (477 | )
Redemption of convertible bond security* |  |  | — |  |  |  | (40 | )
Bifurcated embedded derivatives |  |  | § |  |  |  | § |
Adjustments to provisions for contingent consideration: |  |  |  |  |  |  |  |
Allergan transaction |  |  | (25 | ) |  |  | (267 | )
Eagle transaction |  |  | (20 | ) |  |  | (37 | )
Novetide transaction |  |  | (1 | ) |  |  | (1 | )
Settlement of contingent consideration: |  |  |  |  |  |  |  |
Allergan transaction |  |  | 212 |  |  |  | 227 |
Eagle transaction |  |  | 35 |  |  |  | 41 |
Novetide transaction |  |  | 2 |  |  |  | 2 |
Fair value at the end of the period |  | $ | (198 | ) |  | $ | (552 | )
§ | Represents an amount less than $0.5 million.
* | On September 29, 2023, Teva purchased $40 million of subordinated convertible bonds of Alvotech. On June 26, 2024, Alvotech announced its intention to exercise its redemption rights and redeemed the convertible bonds, which were paid to Teva in July 2024 (see note 2).
Financial instruments not measured at fair value Financial instruments measured on a basis other than fair value mostly consist of senior notes, sustainability-linked senior notes and convertible senior debentures (see note 7) and are presented in the table below in terms of fair value (level 1 inputs):
|  | Estimated fair value* |
|  | September 30, 2025 |  |  | December 31, 2024 |
|  | (U.S. $ in millions) |
Senior notes and sustainability-linked senior notes included under senior notes and loans |  | $ | 16,808 |  |  | $ | 15,717 |
Senior notes and convertible senior debentures included under short-term debt |  |  | 23 |  |  |  | 1,779 |
Total |  | $ | 16,831 |  |  | $ | 17,496 |
* | The fair value was estimated based on quoted market prices.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (bbb)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 3: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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