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Teva Pharmaceutical Industries Ltd.
Quarterly Report • Jul 27, 2022
7082_rns_2022-07-27_eed49d46-5779-4336-a9d5-c191f0268ccf.pdf
Quarterly Report
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) July 26, 2022
TEVA PHARMACEUTICAL INDUSTRIES LIMITED
(Exact name of registrant as specified in its charter)
Israel 001-16174 00-0000000 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.)
124 Dvora Hanevi'a Street Tel Aviv 6944020, Israel (Address of Principal Executive Offices, including Zip Code)
+972-3-914-8213
(Registrant's Telephone Number, including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
| Securities registered pursuant to Section 12(b) of the Act: | ||
|---|---|---|
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered |
| American Depositary Shares, each representing one Ordinary Share |
TEVA | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02 Results of Operations and Financial Condition
On July 26, 2022, Teva Pharmaceutical Industries Ltd. issued a press release announcing its financial results for the period ended June 30, 2022. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and the information contained therein is incorporated herein by reference.
The information included in this Item 2.02 is being furnished to the Securities and Exchange Commission and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
ITEM 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. Description of Document 99.1 Teva Reports 2022 Second Quarter Financial Results
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
TEVA PHARMACEUTICAL INDUSTRIES LIMITED
Date: July 26, 2022 By:/s/ Eli Kalif
Name:Eli Kalif Title: Executive Vice President, Chief Financial Officer
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| IR Contacts | Ran Meir Yael Ashman |
(267) 468-4475 +972 (3) 914 8262 |
|---|---|---|
| PR Contacts | Kelley Dougherty Eden Klein |
(973) 832-2810 +972 (3) 906 2645 |
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+972 (3) 906 2645
| IR Contacts | Ran Meir | (267) 468-4475 |
|---|---|---|
| Yael Ashman | +972 (3) 914 8262 | |
| PR Contacts | Kelley Dougherty | (973) 832-2810 |
Eden Klein
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| IR Contacts | Ran Meir Yael Ashman |
(267) 468-4475 +972 (3) 914 8262 |
|---|---|---|
| PR Contacts | Kelley Dougherty Eden Klein |
(973) 832-2810 +972 (3) 906 2645 |
expenses were \$222 million, or 5.9% of quarterly revenues, in the second quarter of 2022, compared to \$243 million, or 6.2%, in the second quarter of 2021. Our lower R&D expenses in the second quarter of 2022, compared to the second quarter of 2021, were mainly due to a decrease in neuroscience (in the pain and migraine and headache therapeutic areas) and immunology (in the respiratory therapeutic area) as well as various generics projects, partially offset by higher R&D expenses related to our biosimilar products pipeline.
GAAP Selling and Marketing (S&M) expenses in the second quarter of 2022 were \$594 million, a decrease of 3% compared to the second quarter of 2021. Non-GAAP S&M expenses were \$563 million, or 14.9% of quarterly revenues, in the second quarter of 2022, compared to \$582 million, or 14.9%, in the second quarter of 2021.
GAAP General and Administrative (G&A) expenses in the second quarter of 2022 were \$313 million, an increase of 29% compared to the second quarter of 2021. The increase in G&A expenses in the second quarter of 2022 was related to proceeds received from Teva's insurance carriers pursuant to a settlement reached on a derivative proceeding related to the acquisition of Actavis Generics in the second quarter of 2021, as well as higher litigation fees in the second quarter of 2022. Non-GAAP G&A expenses were \$258 million, or 6.8% of quarterly revenues, in the second quarter of 2022, compared to \$231 million, or 5.9%, in the second quarter of 2021.
GAAP other income in the second quarter of 2022 was \$34 million, compared to \$43 million in the second quarter of 2021. Other income in the second quarter of 2022 was mainly related to a capital gain related to the sale of an R&D site. Other income in the second quarter of 2021 was mainly due to capital qains related to the sale of certain OTC assets. Non-GAAP other income in the second quarter of 2022 was \$3 million, compared to \$6 million in the second quarter of 2021.
GAAP operating loss in the second quarter of 2022 was \$949 million, compared to an operating income of \$582 million in the second quarter of 2021. GAAP operating loss in the second quarter of 2022 was mainly affected by goodwill impairment charges and legal settlements and loss contingencies. Non-GAAP operating income in the second quarter of 2022 was \$1,019 million, a decrease of 1%, compared to \$1,034 million in the second quarter of 2021. This decrease in non-GAAP operating income was mainly due to lower gross profit, as discussed above. Non-GAAP operating margin was 26.9% in the second quarter of 2022, compared to 26.4% in the second quarter of 2021. This increase was driven mainly by a lower spend base.
EBITDA (defined as operating income (loss), excluding amortization and depreciation expenses) was negative \$590 million in the second quarter of 2022, compared to EBITDA of \$887 million in the second quarter of 2021. Adjusted EBITDA (defined as non-GAAP operating income excluding depreciation expenses) was \$1,134 million in the second quarter of 2022, a decrease of 2% compared to \$1,162 million in the second quarter of 2021.
| R Contacts | Ran Meir Yael Ashman |
(267) 468-4475 +972 (3) 914 8262 |
|---|---|---|
| PR Contacts | Kelley Dougherty Eden Klein |
(973) 832-2810 +972 (3) 906 2645 |
Eden Klein
IR Contacts Ran Meir (267) 468-4475 Yael Ashman +972 (3) 914 8262
PR Contacts Kelley Dougherty
(973) 832-2810 +972 (3) 906 2645
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| IR Contacts | Ran Meir | (267) 468-4475 |
|---|---|---|
| Yael Ashman | +972 (3) 914 8262 | |
| PR Contacts | Kelley Dougherty | (973) 832-2810 |
| Eden Klein | +972 (3) 906 2645 |
receivables, proceeds from divestitures of businesses and other assets and cash used for acquisition of businesses, net of cash acquired) was \$301 million in the second quarter of 2022, compared to \$625 million in the second quarter of 2021. The decrease in the second quarter of 2022 resulted mainly from lower cash flow from operating activities as well as lower proceeds from sales of assets.
As of June 30, 2022, our debt was \$22,082 million, compared to \$23,043 million as of December 31, 2021. This decrease was mainly due to \$680 million from exchange rate fluctuations and \$296 million senior notes repaid at maturity. Our debt as of June 30, 2022 was effectively denominated in the following currencies: 63% in U.S. dollars, 34% in euros and 3% in Swiss francs. The portion of total debt classified as short-term as of June 30, 2022 was 8%, compared to 6% as of December 31, 2021. Our financial leverage was 69% as of June 30, 2022, compared to 67% as of December 31, 2021. Our average debt maturity was approximately 6.1 years as of June 30, 2022, compared to 6.4 years as of December 31, 2021.
In April 2022, we entered into an unsecured syndicated sustainability-linked revolving credit facility of \$1.8 billion with a maturity date of April 2026, with two one-year extension options ("RCF"). The RCF is linked to two sustainability performance targets. The RCF margin may increase or decrease depending on the Company's sustainability performance.
Segment Results for the second Quarter of 2022
North America Segment
Our North America seqment includes the United States and Canada.
The following table presents revenues, expenses and profit for our North America segment for the three months ended June 30, 2022 and 2021:
| Three months ended June 30, | |||||
|---|---|---|---|---|---|
| 2022 | 2021 | ||||
| (U.S. \$ in millions / % of Segment Revenues) | |||||
| Revenues | 1,904 | 100% | 1,943 | 100% | |
| Gross profit | 1,010 | 53.0% | 1,040 | 53.5% | |
| R&D expenses | 147 | 7.7% | 162 | 8.4% | |
| S&M expenses | 256 | 13.4% | 255 | 13.1% | |
| G&A expenses | 127 | 6.7% | 106 | 5.5% | |
| Other income | (1) | ഗ്ര | (5) | ട് | |
| Segment profit* S | 481 | 25.3% \$ | 521 | 26.8% |
* Segment profit does not include amortization and certain other items.
& Represents an amount less than 0.5%.
IR
PR
| Contacts | Ran Meir | (267) 468-4475 |
|---|---|---|
| Yael Ashman | +972 (3) 914 8262 | |
| Contacts | Kelley Dougherty | (973) 832-2810 |
| Eden Klein | +972 (3) 906 2645 | |
Revenues from our North America seqment in the second quarter of 2022 were \$1,904 million, a decrease of \$39 million, or 2%, compared to the second quarter of 2021, mainly due to a decrease in revenues from COPAXONE and BENDEKA/TREANDA, partially offset by higher revenues from generic products.
Revenues in the United States, our largest market, were \$1,773 million in the second quarter of 2022, a decrease of \$46 million or 2% compared to the second quarter of 2021.
Revenues by Major Products and Activities
The following table presents revenues for our North America seqment by major products and activities for the three months ended June 30, 2022 and 2021:
| Three months ended June 30, |
Percentage Change |
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|---|---|---|---|---|---|
| North America | |||||
| 2022 | 2021 | 2022-2021 | |||
| (U.S. \$ in millions) | |||||
| Generic products | 1,026 | ರಿ51 | 8% | ||
| AJOVY | 49 | 46 | 90/0 | ||
| AUSTEDO | 204 | 174 | 17% | ||
| BENDEKA/TREANDA | 83 | 106 | (22%) | ||
| COPAXONE | 94 | 152 | (38%) | ||
| Anda | 308 | 316 | (2%) | ||
| Other | 139 | 199 | (30%) | ||
| Total | S | 1,904 | ഗ | 1,943 | (2%) |
Generic products revenues in our North America segment (including biosimilars) in the second quarter of 2022 were \$1,026 million, an increase of 8% compared to the second quarter of 2021, mainly due to revenues from lenalidomide capsules (the generic version of Revlimid®), partially offset by increased competition and loss of revenues due to the closure of our Irvine, CA site.
In the second quarter of 2022, our total prescriptions were approximately 302 million (based on trailing twelve months), representing 8.2% of total U.S. generic prescriptions according to IQVIA data.
On March 7, 2022 we announced the launch of the first generic version of Revlimid® (lenalidomide capsules), in 5mq, 10mg, 15mg, and 25mg strengths, in the United States. These lenalidomide capsules are a prescription medicine used in adults for the treatment of
| IR Contacts | Ran Meir | (267) 468-4475 | ||
|---|---|---|---|---|
| Yael Ashman | +972 (3) 914 8262 | |||
| PR Contacts | Kelley Dougherty | (973) 832-2810 | ||
| Eden Klein | +972 (3) 906 2645 |
(i) multiple myeloma in combination with the medicine dexamethasone, (ii) certain myelodysplastic syndromes, and (iii) mantle cell lymphoma following specific prior treatment.
AJOVY revenues in our North America segment in the second quarter of 2022 increased by 9% to \$49 million, compared to the second quarter of 2021, mainly due to growth in volume.
AUSTEDO revenues in our North America segment in the second quarter of 2022 increased by 17%, to \$204 million, compared to \$174 million in the second quarter of 2021, mainly due to growth in volume.
BENDEKA and TREANDA combined revenues in our North America segment in the second quarter of 2022 decreased by 22% to \$83 million, compared to the second quarter of 2021, mainly due to the availability of alternative therapies and continued competition from Belrapzo® (a ready-to-dilute bendamustine hydrochloride product from Eagle).
COPAXONE revenues in our North America segment in the second quarter of 2022 decreased by 38% to \$94 million, compared to the second quarter of 2021, mainly due to generic competition in the United States and a decrease in glatiramer acetate market share due to availability of alternative therapies.
Anda revenues in our North America segment in the second quarter of 2022 decreased by 2% to \$308 million, compared to \$316 million in the second quarter of 2021, mainly due to lower market demand.
North America Gross Profit
Gross profit from our North America segment in the second quarter of 2022 was \$1,010 million, a decrease of 3%, compared to \$1,040 million in the second quarter of 2021.
Gross profit marqin for our North America segment in the second quarter of 2022 decreased to 53.0%, compared to 53.5% in the second quarter of 2021. This decrease was mainly due to a change in mix of products.
North America Profit
Profit from our North America segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment. Segment profit does not include amortization and certain other items.
Profit from our North America segment in the second quarter of 2022 was \$481 million, a decrease of 8% compared to \$521 million in the second quarter of 2021, mainly due to lower revenues, as discussed above.
IR Contacts Ran Meir (267) 468-4475 Yael Ashman +972 (3) 914 8262 (973) 832-2810 PR Contacts Kelley Dougherty Eden Klein +972 (3) 906 2645
Europe Segment
Our Europe segment includes the European Union, the United Kingdom and certain other European countries.
The following table presents revenues, expenses and profit for our Europe segment for the three months ended June 30, 2022 and 2021:
| Three months ended June 30, | ||||||
|---|---|---|---|---|---|---|
| 2022 | 2021 | |||||
| (U.S. S in millions / % of Segment Revenues) | ||||||
| Revenues | 1,171 | 100% | 1,184 | 100% | ||
| Gross profit | 703 | 60.0% | 661 | 55.8% | ||
| R&D expenses | 56 | 4.7% | 63 | 5.3% | ||
| S&M expenses | 196 | 16.8% | 209 | 17.7% | ||
| G&A expenses | 63 | 5.4% | 47 | 4.0% | ||
| Other income | (1) | ഗ | ഗ് | ഗ | ||
| Segment profit* \$ | 389 | 33.2% | ട് | 343 | 28.9% |
* Segment profit does not include amortization and certain other items. § Represents an amount less than \$0.5 million or 0.5%, as applicable.
Revenues from our Europe segment in the second quarter of 2022 were \$1,171 million, a decrease of 1%, or \$13 million, compared to the second quarter of 2021. In local currency terms, revenues increased by 8%. In the second quarter of 2021, our lower revenues were impacted by the implications of the COVID-19 pandemic. In the second quarter of 2022, our revenues were attributed to higher demand for generic and OTC products resulting mainly from the removal of restrictions related to doctor and hospital visits by patients that were previously implemented in response to the COVID-19 pandemic, together with higher revenues from generic product launches. In the second quarter of 2022, revenues were negatively impacted by exchange rate fluctuations of \$106 million, net of hedging effects, compared to the second quarter of 2021. Revenues in the second quarter of 2022 included \$31 million from a positive hedging impact, which is included in "Other" in the table below.
Temp
Revenues by Major Products and Activities
The following table presents revenues for our Europe segment by major products and activities for the three months ended June 30, 2022 and 2021:
| Three months ended June 30, |
Percentage Change |
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|---|---|---|---|---|
| 2022 | 2021 | 2022-2021 | ||
| (U.S. \$ in millions | ||||
| Generic products | 873 | 878 | (1%) | |
| AJOVY | 29 | 19 | 52% | |
| COPAXONE | 72 | 100 | (28%) | |
| Respiratorų products | 65 | 85 | (23%) | |
| Other | 131 | 102 | 29% | |
| Total ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… | 1,171 - | Ş | (1%) |
Generic products revenues in our Europe segment in the second quarter of 2022, including OTC products, decreased by 1% to \$873 million, compared to the second quarter of 2021. In local currency terms, revenues increased by 12%, mainly due to higher demand for generic and OTC products, resulting mainly from the removal of restrictions related to doctor and hospital visits by patients that were previously implemented in response to the COVID-19 pandemic, together with higher revenues from generic product launches.
AJOVY revenues in our Europe segment in the second quarter of 2022 increased to \$29 million, compared to \$19 million in the second quarter of 2021, mainly due to growth in European countries in which AJOVY had previously been launched, as well as launches and reimbursements in additional European countries.
COPAXONE revenues in our Europe segment in the second quarter of 2022 decreased by 28% to \$72 million, compared to the second quarter of 2021. In local currency terms, revenues decreased by 18%, mainly due to price reductions and a decline in volume resulting from competing glatiramer acetate products.
Respiratory products revenues in our Europe seqment in the second quarter of 2022 decreased by 23% to \$65 million compared to the second quarter of 2021. In local currency terms, revenues decreased by 14%, mainly due to net price reductions and lower volumes.
Europe Gross Profit
Gross profit from our Europe segment in the second quarter of 2022 was \$703 million, an increase of 6% compared to \$661 million in the second quarter of 2021.
Gross profit margin for our Europe segment in the second quarter of 2022 increased to 60.0%, compared to 55.8% in the second quarter of 2021. This increase was mainly due to higher revenues from the positive impact of hedging activities discussed above, as well as lower cost of goods sold, mainly due to a better mix of products and a decrease in writeoffs.
| R Contacts | Ran Meir Yael Ashman |
(267) 468-4475 +972 (3) 914 8262 |
|---|---|---|
| PR Contacts | Kelley Dougherty Eden Klein |
(973) 832-2810 +972 (3) 906 2645 |
Europe Profit
Profit from our Europe segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment. Seqment profit does not include amortization and certain other items.
Profit from our Europe segment in the second quarter of 2022 was \$389 million, an increase of 13%, compared to \$343 million in the second quarter of 2021. This increase was mainly due to higher gross profit as discussed above.
International Markets Segment
Our International Markets segment includes all countries in which we operate other than those in our North America and Europe segments. The key markets in this segment are Japan, Russia and Israel.
In February 2022, Russia launched an invasion of Ukraine. As of the date of this press release, sustained conflict and disruption in the region is ongoing. Russia and Ukraine markets are included in our International Markets seqment results. We have no manufacturing or R&D facilities in these markets. During the second quarter of 2022, the impact of this conflict on our International Markets segment results of operations and financial condition was immaterial.
The following table presents revenues, expenses and profit for our International Markets segment for the three months ended June 30, 2022 and 2021:
| Three months ended June 30 | |||||||
|---|---|---|---|---|---|---|---|
| 2022 | 2021 | ||||||
| (U.S. \$ in millions / % of Segment Revenues) | |||||||
| Revenues | 454 | 100% | 485 | 100% | |||
| Gross profit | 242 | 53.3% | 270 | 55.7% | |||
| R&D expenses | 19 | 4.2% | 18 | 3.6% | |||
| S&M expenses | dd | 21.7% | 105 | 21.7% | |||
| G&A expenses | 30 | 6.7% | 25 | 5.1% | |||
| Other income | (1) | m | (1) | ന | |||
| Segment profit* \$ | ರಿನ | 20.9% | ই | 123 | 25.5% |
* Segment profit does not include amortization and certain other items. & Represents an amount less than 0.5%.
Revenues from our International Markets segment in the second quarter of 2022 were \$454 million, a decrease of 6% compared to the second quarter of 2021. In local currency terms, revenues increased by 3% compared to the second quarter of 2021, mainly due to higher revenues in certain markets, partially offset by lower revenues in Japan due to requlatory price reductions and generic competition to off-patented products.
| IR Contacts | Ran Meir | (267) 468-4475 |
|---|---|---|
| Yael Ashman | +972 (3) 914 8262 | |
| PR Contacts | Kelley Dougherty | (973) 832-2810 |
| Fren Klein | +972 (3) 906 2645 |
In the second quarter of 2022, revenues were negatively impacted by exchange rate fluctuations of \$45 million, including hedging effects, compared to the second quarter of 2021. Revenues in the second quarter of 2022 included \$17 million from a negative hedging impact, which is included in "Other" in the table below.
Revenues by Major Products and Activities
The following table presents revenues for our International Markets segment by major products and activities for the three months ended June 30, 2022 and 2021:
| Three months ended June 30 |
Percentage Change |
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|---|---|---|---|---|---|
| 2022 | 2021 | 2022-2021 | |||
| (U.S. \$ in millions) | |||||
| Generic products | 394 | 407 | (3%) | ||
| AJOVY | 10 | 5 | 96% | ||
| COPAXONE | ರಿ | 7 | 27% | ||
| Other | 40 | 65 | (39%) | ||
| Total | 454 | ഗ് | 485 | (6%) |
Generic products revenues in our International Markets seqment in the second quarter of 2022, which include OTC products, decreased by 3% in U.S. dollars. In local currency terms, revenues increased by 4% to \$394 million, compared to the second quarter of 2021. This increase was mainly due to higher revenues in certain markets, partially offset by lower sales in Japan due to regulatory price reductions and generic competition to off-patented products in Japan.
AJOVY was launched in certain markets in our International Markets seqment, including Japan in August 2021. We are moving forward with plans to launch AJOVY in other markets. AJOVY revenues in our International Markets segment in the second quarter of 2022 were \$10 million, compared to \$5 million in the second quarter of 2021.
COPAXONE revenues in our International Markets segment in the second quarter of 2022 were \$9 million, compared to \$7 million in the second quarter of 2021.
AUSTEDO was launched in early 2021 in China for the treatment of chorea associated with Huntington's disease and for the treatment of tardive dyskinesia, and was also launched in Israel during 2021. In October 2021, we received marketing approval for both indications in Brazil. We continue with additional submissions in various other markets.
IR Contacts Ran Meir (267) 468-4475 Yael Ashman +972 (3) 914 8262 (973) 832-2810 PR Contacts Kelley Dougherty Eden Klein +972 (3) 906 2645
International Markets Gross Profit
Gross profit from our International Markets segment in the second quarter of 2022 was \$242 million, a decrease of 10% compared to \$270 million in the second quarter of 2021.
Gross profit margin for our International Markets segment in the second quarter of 2022 decreased to 53.3%, compared to 55.7% in the second quarter of 2021. This decrease was mainly due to requlatory price reductions and qeneric competition to off-patented products in Japan, as well as a negative impact from hedging activity.
International Markets Profit
Profit from our International Markets segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment. Segment profit does not include amortization and certain other items.
Profit from our International Markets segment in the second quarter of 2022 was \$95 million, a decrease of 23%, compared to \$123 million in the second quarter of 2021. This decrease was mainly due to lower gross profit discussed above.
Other Activities
We have other sources of revenues, primarily the sale of active pharmaceutical ingredients ("APIs") to third parties, certain contract manufacturing services and an out-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis. Our other activities are not included in our North America, Europe or International Markets segments described above.
Our revenues from other activities in the second quarter of 2022 were \$257 million, a decrease of 14% compared to the second quarter of 2021. In local currency terms, revenues decreased by 10%.
API sales to third parties in the second quarter of 2022 were \$177 million, a decrease of 11% in both U.S. dollars and local currency terms, compared to the second quarter of 2021.
Outlook for 2022 Non-GAAP Results
\$ billions, except EPS
| Revenues | 15.0 - 15.6 | 15.4 - 16.0 | 15.9 | |
|---|---|---|---|---|
| COPAXONE (\$m) | ~700 | ~750 | 1,005 | |
| AUSTEDO (Şm) | ~1,000 | ~1,000 | 808 | |
| AJOVY (Şm) | ~400 | ~400 | 313 | |
| Operating Income | 4.2-4.5 | 4.2-4.5 | 4.4 | |
| EBITDA | 4.7-5.0 | 4.7-5.0 | 4.9 | |
| EPS (2) | 2.40-2.60 | 2.40-2.60 | 2.58 | |
| Share Count | 1,114 million shares |
1,114 million shares |
1,107 million shares |
|
| Free Cash Flow | 1.9 - 2.2 | 1.9 - 2.2 | 2.2 | |
| CAPEX | 0.5 | 0.6 | 0.6 | |
| Non-GAAP Tax Rate | 13% - 14% | 18% - 19% | 16.4% |
| IR Contacts | Ran Meir | (267) 468-4475 |
|---|---|---|
| Yael Ashman | +972 (3) 914 8262 | |
| PR Contacts | Kelley Dougherty | (973) 832-2810 |
Eden Klein
(973) 832-2810 +972 (3) 906 2645
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| IR Contacts | Ran Meir | (267) 468-4475 |
|---|---|---|
| Yael Ashman | +972 (3) 914 8262 | |
| PR Contacts | Kelley Dougherty | (973) 832-2810 |
| Eden Klein | +972 (3) 906 2645 |
;
IR Contacts Ran Meir (267) 468-4475 Yael Ashman +972 (3) 914 8262
PR Contacts Kelley Dougherty
(973) 832-2810
Eden Klein
+972 (3) 906 2645
| Three months ended | Six months ended | ||||
|---|---|---|---|---|---|
| June 30, | June 30, | ||||
| 2022 | 2021 | 2022 | 2021 | ||
| (Unaudited) (Unaudited) | (Unaudited) | (Unaudited) | |||
| Net revenues | 3,786 | 3,910 | 7,447 | 7,892 | |
| Cost of sales | 1,992 | 2,037 | 3,913 | 4,141 | |
| Gross profit | 1,794 | 1,873 | 3,534 | 3,750 | |
| Research and development expenses | 228 | 248 | 453 | 501 | |
| Selling and marketing expenses | 594 | 615 | 1,178 | 1,200 | |
| General and administrative expenses | 313 | 242 | 609 | 532 | |
| Intangible assets impairments | 51 | 195 | 199 | 274 | |
| Other asset impairments, restructuring and other items | 118 | 28 | 246 | 165 | |
| Goodwill impairment | 745 | - | 745 | - | |
| Legal settlements and loss contingencies | 729 | 6 | 1,854 | 110 | |
| Other income | (34) | (43) | (87) | (48) | |
| Operating income (loss) | (949) | 582 | (1,662) | 1,015 | |
| Financial expenses, net | 211 | 274 | 468 | 564 | |
| Income (loss) before income taxes | (1,160) | 308 | (2,131) | 451 | |
| Income taxes (benefit) | (900) | 98 | (899) | 159 | |
| Share in (profits) losses of associated companies, net | - | (11) | (21) | (14) | |
| Net income (loss) | (259) | 221 | (1,211) | 306 | |
| Net income (loss) attributable to non-controlling interests | (27) | 14 | (24) | 21 | |
| Net income (loss) attributable to Teva | (232) | 207 | (1,187) | 284 | |
| Earnings (loss) per share attributable to Teva: | Basic (\$) | (0.21) | 0.19 | (1.07) | 0.26 |
|---|---|---|---|---|---|
| Diluted (\$) | (0.21) | 0.19 | (1.07) | 0.26 | |
| Weighted average number of shares (in millions): | Basic | 1,110 | 1,103 | 1,109 | 1,101 |
| Diluted | 1,110 | 1,109 | 1,109 | 1,108 |
| Non-GAAP net income attributable to Teva:* | 754 | 651 | 1,363 | 1,350 | |
|---|---|---|---|---|---|
| Non-GAAP net income attributable to Teva for diluted earnings per share: | 754 | 651 | 1,363 | 1,350 | |
| Non-GAAP earnings per share attributable to Teva:* | Basic (\$) | 0.68 | 0.59 | 1.23 | 1.23 |
| Diluted (\$) | 0.68 | 0.59 | 1.22 | 1.22 | |
| Non-GAAP average number of shares (in millions): | Basic | 1,110 | 1,103 | 1,109 | 1,101 |
| Diluted | 1,114 | 1,109 | 1,116 | 1,108 |
Consolidated Statements of Income (U.S. dollars in millions, except share and per share data)
Condensed Consolidated Balance Sheets
(U.S. dollars in millions)
| June 30, | December 31, | |
|---|---|---|
| 2022 | 2021 | |
| ASSETS Current assets: |
(Unaudited) | (Audited) |
| Cash and cash equivalents Accounts receivables, net of allowance for credit losses of \$95 |
2,058 | 2,165 |
| million and \$90 million as of June 30, 2022 and December 31, | ||
| 2021. | 4,471 | 4,529 |
| Inventories | 4,049 | 3,818 |
| Prepaid expenses | 1,052 | 1,075 |
| Other current assets | 518 | 965 |
| Assets held for sale | 16 | 19 |
| Total current assets | 12,164 | 12,573 |
| Deferred income taxes | 1,595 | 596 |
| Other non-current assets | 454 | 515 |
| Property, plant and equipment, net | 5,740 | 5,982 |
| Operating lease right-of-use assets | 441 | 495 |
| Identifiable intangible assets, net | 6,700 | 7,466 |
| Goodwill | 18,837 | 20,040 |
| Total assets | 45,932 | 47,666 |
| LIABILITIES & EQUITY | ||
| Current liabilities: | ||
| Short-term debt | 1,719 | 1,426 |
| Sales reserves and allowances | 3,880 | 4,241 |
| Accounts payables | 1,901 | 1,686 |
| Employee-related obligations | 467 | 563 |
| Accrued expenses | 2,112 | 2,208 |
| Other current liabilities | 916 | 903 |
| Total current liabilities | 10,996 | 11,027 |
| Long-term liabilities: | ||
| Deferred income taxes | 532 | 784 |
| Other taxes and long-term liabilities | 3,842 | 2,578 |
| Senior notes and loans | 20,363 | 21,617 |
| Operating lease liabilities | 371 | 416 |
| Total long-term liabilities | 25,107 | 25,395 |
| Equity: | ||
| Teva shareholders' equity | 9,037 | 10,278 |
| Non-controlling interests | 791 | 966 |
| Total equity | 9,828 | 11,244 |
| Total liabilities and equity | 45,932 | 47,666 |
| June 30, June 30, 2022 2021 2022 2021 Operating activities: Net income (loss) \$ (1,211) \$ 306 \$ (259) \$ 222 Adjustments to reconcile net income (loss) to net cash provided by operations: Depreciation and amortization 681 681 358 305 Impairment of goodwill, long-lived assets and assets held for sale 975 354 810 226 Net change in operating assets and liabilities 913 (1,679) 354 (603) Deferred income taxes – net and uncertain tax positions (1,258) 5 (1,083) 16 Stock-based compensation 63 60 39 29 Other items (77) (7) (107) 4 Net loss (gain) from investments and from sale of long lived assets (12) 93 11 19 Net cash provided by (used in) operating activities 74 (187) 123 218 Investing activities: Beneficial interest collected in exchange for securitized accounts receivables 592 881 287 405 Proceeds from sale of business and long-lived assets 43 254 18 116 Acquisition of businesses, net of cash acquired (7) - - - Purchases of property, plant and equipment (284) (263) (127) (113) Purchases of investments and other assets (4) (36) - (34) Proceeds from sale of investments 3 153 3 107 Other investing activities (2) - (2) - Net cash provided by (used in) investing activities 341 989 179 481 Financing activities: Repayment of senior notes and loans and other long-term liabilities (296) - (296) - Redemption of convertible senior notes - (491) - - Other financing activities (40) (3) (42) (1) Net cash provided by (used in) financing activities (336) (494) (338) (1) Translation adjustment on cash and cash equivalents (185) (49) (123) (5) Net change in cash, cash equivalents and restricted cash (107) 259 (159) 693 Balance of cash, cash equivalents and restricted cash at beginning of period 2,198 2,177 2,250 1,743 \$ 2,091 \$ \$ 2,091 \$ Balance of cash, cash equivalents and restricted cash at end of period 2,436 2,436 Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheets: Cash and cash equivalents 2,058 2,436 2,058 2,436 Restricted cash included in other current assets 33 - 33 - Total cash, cash equivalents and restricted cash shown in the statements of cash flows 2,091 2,436 2,091 2,436 Non-cash financing and investing activities: Beneficial interest obtained in exchange for securitized accounts receivables \$ 590 \$ 878 \$ 290 \$ 390 |
Six months ended | Three months ended | |||||
|---|---|---|---|---|---|---|---|
TEVA PHARMACEUTICAL INDUSTRIES LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in millions)
| U.S. \$ and shares in millions (except per share amounts) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| GAAP | Excluded for non-GAAP measurement | Non-GAAP | |||||||||||
| Amortization of purchased intangible assets |
Legal settlements and loss contingencies |
Goodwill impairment |
Impairment of long lived assets |
Restructuring costs |
Costs related to regulatory actions taken in facilities |
Equity compensation |
Contingent consideration |
Other non GAAP items* |
Accelerated Depreciation |
Other items | |||
| Net revenues | 3,786 | 3,786 | |||||||||||
| Cost of sales | 1,992 | 191 | 3 | 6 | 34 | 32 | 1,726 | ||||||
| Gross profit | 1,794 | 191 | 3 | 6 | 34 | 32 | 2,059 | ||||||
| Gross profit margin | 47.4% | 54.4% | |||||||||||
| R&D expenses | 228 | 5 | 222 | ||||||||||
| S&M expenses | 594 | 21 | 9 | - | 563 | ||||||||
| G&A expenses | 313 | 18 | 37 | 258 | |||||||||
| Other (income) expense | (34) | (31) | (3) | ||||||||||
| Legal settlements and loss contingencies | 729 | 729 | - | ||||||||||
| Other assets impairments, restructuring and other items |
118 | 14 35 |
61 | 8 | - | ||||||||
| Intangible assets impairments | 51 | 51 | - | ||||||||||
| Goodwill Impairment | 745 | 745 | |||||||||||
| Operating income (loss) | (949) | 212 | 729 | 745 | 65 | 35 3 |
39 | 61 | 48 | 32 | 1,019 | ||
| Financial expenses, net | 211 | 23 | 188 | ||||||||||
| Income (loss) before income taxes | (1,160) | 212 | 729 | 745 | 65 | 35 3 |
39 | 61 | 48 | 32 | 23 | 831 | |
| Income taxes | (900) | ** (965) | 64 | ||||||||||
| Net income (loss) | (259) | 212 | 729 | 745 | 65 | 35 3 |
39 | 61 | 48 | 32 | (942) | 767 | |
| Net income (loss) attributable to non controlling interests |
(27) | (39) | 13 | ||||||||||
| Net income (loss) attributable to Teva | (232) | 212 | 729 | 745 | 65 | 35 3 |
39 | 61 | 48 | 32 | (981) | 754 | |
| EPS - Basic | (0.21) | 0.89 | 0.68 |
Three Months Ended June 30, 2022
| Adjusted EBITDA reconciliation Operating income (loss) |
(949) |
|---|---|
| Add: | |
| Depreciation | 147 |
| Amortization | 212 |
| EBITDA | (590) |
| Legal settlements and loss contingencies | 729 |
| Goodwill impairment | 745 |
| Impairment of long lived assets | 65 |
| Restructuring costs | 35 |
| Costs related to regulatory actions taken in facilities |
3 |
| Equity compensation | 39 |
| Contingent consideration | 61 |
| Other non-GAAP items | 48 |
| Adjusted EBITDA | 1,134 |
* Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, such as certain accelerated depreciation expenses and inventory write offs, primarily related to the rationalization of our plants and other unusual events.
| GAAP | Excluded for non-GAAP measurement | Non-GAAP | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Amortization of purchased intangible assets |
Legal settlements and loss contingencies |
Goodwill impairment |
Impairment of long lived assets |
Restructuring costs |
Costs related to regulatory actions taken in facilities |
Equity compensation |
Contingent consideration |
Other non GAAP items* |
Accelerated Depreciation |
Other items | |||
| Net revenues | 3,786 | 3,786 | |||||||||||
| Cost of sales | 1,992 | 191 | 3 | 6 | 34 | 32 | 1,726 | ||||||
| Gross profit | 1,794 | 191 | 3 | 6 | 34 | 32 | 2,059 | ||||||
| Gross profit margin | 47.4% | 54.4% | |||||||||||
| R&D expenses | 228 | 5 | 222 | ||||||||||
| S&M expenses | 594 21 |
9 | - | 563 | |||||||||
| G&A expenses | 313 | 18 | 37 | 258 | |||||||||
| Other (income) expense | (34) | (31) | (3) | ||||||||||
| Legal settlements and loss contingencies | 729 | 729 | - | ||||||||||
| Other assets impairments, restructuring and other items |
118 | 14 35 |
61 | 8 | - | ||||||||
| Intangible assets impairments | 51 | 51 | - | ||||||||||
| Goodwill Impairment | 745 | 745 | |||||||||||
| Operating income (loss) | (949) | 212 | 729 | 745 | 65 35 |
3 | 39 | 61 | 48 | 32 | 1,019 | ||
| Financial expenses, net | 211 | 23 | 188 | ||||||||||
| Income (loss) before income taxes | (1,160) | 212 | 729 | 745 | 65 35 |
3 | 39 | 61 | 48 | 32 | 23 | 831 | |
| Income taxes | (900) | ** (965) | 64 | ||||||||||
| Net income (loss) | (259) | 212 | 729 | 745 | 65 35 |
3 | 39 | 61 | 48 | 32 | (942) | 767 | |
| Net income (loss) attributable to non controlling interests |
(27) | (39) | 13 | ||||||||||
| Net income (loss) attributable to Teva | (232) | 212 | 729 | 745 | 65 35 |
3 | 39 | 61 | 48 | 32 | (981) | 754 | |
| EPS - Basic | (0.21) | 0.89 | 0.68 | ||||||||||
| EPS - Diluted | (0.21) | 0.89 | 0.68 |
** Includes a portion of the realization of losses related to an investment in one of our U.S. subsidiaries as well as corresponding tax effects on non-GAAP items.
The non-GAAP diluted weighted average number of shares was 1,114 million for the three months ended June 30, 2022. Non-GAAP income taxes for the three months ended June 30, 2022 were 8% on pre-tax non-GAAP income.
| GAAP | Excluded for non-GAAP measurement | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Amortization of Legal settlements purchased and loss intangible assets contingencies |
Goodwill impairment |
Impairment of long-lived assets |
Restructuring costs |
Costs related to regulatory actions taken in facilities |
Equity compensation |
Contingent consideration |
Accelerated depreciation |
Other non GAAP items* |
Other items |
|||||
| Net revenue | 7,447 | 7,447 | ||||||||||||
| Cost of sales | 3,913 | 368 | 4 | 11 | 33 | 95 | 3,401 | |||||||
| Gross profit | 3,534 | 368 | 4 | 11 | 33 | 95 | 4,045 | |||||||
| Gross profit margin | 47.5% | 54.3% | ||||||||||||
| R&D expenses | 453 | 10 | 443 | |||||||||||
| S&M expenses | 1,178 | 43 | 16 | 3 | 1,115 | |||||||||
| G&A expenses | 609 | 26 | 73 | 510 | ||||||||||
| Other (income) expense | (87) | (31) | (55) | |||||||||||
| Legal settlements and loss contingencies | 1,854 | 1,854 | 0 | |||||||||||
| Other assets impairments, restructuring | ||||||||||||||
| and other items | 246 | 30 | 92 | 94 | 30 | (0) | ||||||||
| Intangible assets impairment | 199 | 199 | (0) | |||||||||||
| Goodwill impairment | 745 | 745 | ||||||||||||
| Operating income (loss) | (1,662) | 412 | 1,854 | 745 230 |
92 | 4 | 63 | 94 | 33 | 170 | 2,033 | |||
| Financial expenses, net | 468 | 33 | 435 | |||||||||||
| Income (loss) before income taxes | (2,131) | 412 | 1,854 | 745 230 |
92 | 4 | 63 | 94 | 33 | 170 | 33 | 1,597 | ||
| Income taxes | (899) | ** | (1,105) | 206 | ||||||||||
| Share in (profits) losses of associated companies – net |
(21) | (22) | 1 | |||||||||||
| Net income (loss) | (1,211) | 412 | 1,854 | 745 230 |
92 | 4 | 63 | 94 | 33 | 170 | (1,094) | 1,390 | ||
| Net income (loss) attributable to non controlling interests |
(24) | (50) | 26 | |||||||||||
| Net income (loss) attributable to Teva | (1,187) | 412 | 1,854 | 745 230 |
92 | 4 | 63 | 94 | 33 | 170 | (1,144) | 1,363 | ||
| EPS - Basic EPS - Diluted |
(1.07) (1.07) |
2.30 2.29 |
1.23 1.22 |
Six Months Ended June 30, 2022 U.S. \$ and shares in millions (except per share amounts)
** Includes a portion of the realization of losses related to an investment in one of our U.S. subsidiaries as well as corresponding tax effects on non-GAAP items
| Adjusted EBITDA reconciliation | |
|---|---|
| Operating income (loss) | (1,662) |
| Add: | |
| Depreciation | 270 |
| Amortization | 412 |
| EBITDA | (981) |
| Legal settlements and loss contingencies | 1,854 |
| Goodwill impairment | 745 |
| Impairment of long lived assets | 230 |
| Restructuring costs | 92 |
| Costs related to regulatory actions taken in | |
| facilities | 4 |
| Equity compensation | 63 |
| Contingent consideration | 94 |
| Other non-GAAP items | 170 |
| Adjusted EBITDA | 2,269 |
* Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, such as certain accelerated depreciation expenses and inventory write offs, primarily related to the rationalization of our plants and other unusual events.
The non-GAAP diluted weighted average number of shares was 1,116 million for the six months ended June 30, 2022.
Non-GAAP income taxes for the six months ended June 30, 2022 were 13% on pre-tax non-GAAP income.
| U.S. \$ and shares in millions (except per share amounts) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| GAAP | Excluded for non-GAAP measurement | ||||||||||||
| Amortization of purchased intangible assets |
Legal settlements and loss contingencies |
Impairment of long lived assets |
Restructuring costs |
Costs related to regulatory actions taken in facilities |
Equity compensation |
Contingent consideration |
Other non GAAP items* |
Other items | |||||
| Net revenues | 3,910 | 3,910 | |||||||||||
| Cost of sales | 2,037 | 148 | 8 | 6 | 50 | 1,826 | |||||||
| Gross profit | 1,873 | 148 | 8 | 6 | 50 | 2,084 | |||||||
| Gross profit margin | 47.9% | 53.3% | |||||||||||
| R&D expenses | 248 | 5 | 243 | ||||||||||
| S&M expenses | 615 | 25 | 8 | 582 | |||||||||
| G&A expenses | 242 | 11 | 231 | ||||||||||
| Other (income) expense | (43) | (37) | (6) | ||||||||||
| Legal settlements and loss contingencies | |||||||||||||
| 6 | 6 | - | |||||||||||
| Other assets impairments, restructuring and other | |||||||||||||
| items | 28 | 32 | (13) | (19) 28 |
- | ||||||||
| Intangible assets impairments | 195 | 195 | - | ||||||||||
| Operating income (loss) | 582 | 173 | 6 | 226 | (13) | 8 | 29 | (19) 42 |
1,034 | ||||
| Financial expenses, net | 274 | 34 | 240 | ||||||||||
| Income (loss) before income taxes | 308 | 173 | 6 | 226 | (13) | 8 | 29 | (19) 42 |
34 | 794 | |||
| Income taxes | 98 | (36) | 133 | ||||||||||
| Share in (profit) losses of associated | |||||||||||||
| companies – net | (11) | (3) | (8) | ||||||||||
| Net income (loss) | 221 | 173 | 6 | 226 | (13) | 8 | 29 | (19) 42 |
(5) | 669 | |||
| Net income (loss) attributable to non-controlling interests |
14 | (3) | 18 | ||||||||||
| Net income (loss) attributable to Teva | 207 | 173 | 6 | 226 | (13) | 8 | 29 | (19) 42 |
(8) | 651 | |||
| EPS - Basic | 0.19 | 0.40 | 0.59 | ||||||||||
| EPS - Diluted | 0.19 | 0.40 | 0.59 |
Adjusted EBITDA reconciliation
| Operating income (loss) | 582 |
|---|---|
| Add: | |
| Depreciation | 134 |
| Amortization | 173 |
| EBITDA | 887 |
| Legal settlements and loss contingencies | 6 |
| Impairment of long lived assets | 226 |
| Restructuring costs | (13) |
| Costs related to regulatory actions taken in facilities |
8 |
| Equity compensation | 29 |
| Contingent consideration | (19) |
| Other non-GAAP items (excluding | |
| accelerated depreciation of \$4 million)* | 37 |
| Adjusted EBITDA | 1,162 |
* Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, such as certain accelerated depreciation expenses and inventory write offs, primarily related to the rationalization of our plants and other unusual events.
Three Months Ended June 30, 2021
The non-GAAP diluted weighted average number of shares was 1,109 million for the three months ended June 30, 2021.
Non-GAAP income taxes for the three months ended June 30, 2021 were 17% on pre-tax non-GAAP income.
| U.S. \$ and shares in millions (except per share amounts) | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| GAAP | Excluded for non-GAAP measurement | Non-GAAP | |||||||||
| Amortization of purchased intangible assets |
Legal settlements and loss contingencies |
Impairment of long-lived assets |
Restructuring costs |
Costs related to regulatory actions taken in facilities |
Equity compensation |
Contingent consideration |
Other non GAAP items* |
Other items | |||
| Net revenue | 7,892 | 7,892 | |||||||||
| Cost of sales | 4,141 | 363 | 13 | 12 | 91 | 3,663 | |||||
| Gross profit | 3,750 | 363 | 13 | 12 | 91 | 4,228 | |||||
| Gross profit margin | 47.5% | 53.6% | |||||||||
| R&D expenses | 501 | 10 | 5 | 487 | |||||||
| S&M expenses | 1,200 | 52 | 18 | 1,131 | |||||||
| G&A expenses | 532 | 21 | - | 510 | |||||||
| Other (income) expense | (48) | (37) | (11) | ||||||||
| Legal settlements and loss contingencies | 110 | 110 | - | ||||||||
| Other assets impairments, restructuring and | |||||||||||
| other items | 165 | 80 | 69 | (16) | 33 | - | |||||
| Intangible assets impairment | 274 | 274 | - | ||||||||
| Operating income (loss) | 1,015 | 414 | 110 | 354 | 69 | 13 | 60 | (16) | 92 - |
2,111 | |
| Financial expenses, net | 564 | 98 | 467 | ||||||||
| Income (loss) before income taxes | 451 | 414 | 110 | 354 | 69 | 13 | 60 | (16) | 92 98 |
1,644 | |
| Income taxes | 159 | (120) | 280 | ||||||||
| Share in losses of associated companies – | |||||||||||
| net | (14) | (1) | (13) | ||||||||
| Net income (loss) attributable to Teva Net income (loss) attributable to non |
306 | 414 | 110 | 354 | 69 | 13 | 60 | (16) | 92 (24) |
1,377 | |
| controlling interests | 21 | (6) | 28 | ||||||||
| Net income (loss) | 284 | 414 | 110 | 354 | 69 | 13 | 60 | (16) | 92 (30) |
1,350 | |
| EPS - Basic | 0.26 | 0.97 | 1.23 | ||||||||
| EPS - Diluted | 0.26 | 0.96 | 1.22 |
Adjusted EBITDA reconciliation
| Operating income (loss) | 1,015 |
|---|---|
| Add: | |
| Depreciation | 266 |
| Amortization | 414 |
| EBITDA | 1,696 |
| Legal settlements and loss contingencies | 110 |
| Impairment of long lived assets | 354 |
| Restructuring costs | 69 |
| Costs related to regulatory actions taken in facilities |
13 |
| Equity compensation | 60 |
| Contingent consideration | (16) |
| Other non-GAAP items (excluding | |
| accelerated depreciation of \$9 million)* | 83 |
| Adjusted EBITDA | 2,368 |
| - | ||
|---|---|---|
| 7,892 3,663 4,228 53.6% 487 1,131 ર 10 (11) |
|---|
| 2,111 467 |
| 1,644 280 |
| (13) |
| 1,377 |
| 28 |
| 1,350 |
| 1.23 1.22 |
* Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, such as certain accelerated depreciation expenses and inventory write offs, primarily related to the rationalization of our plants and other unusual events.
Six months ended June 30, 2021
The non-GAAP diluted weighted average number of shares was 1,108 million for the six months ended June 30, 2021.
Non-GAAP income taxes for the six months ended June 30, 2021 were 17% on pre-tax non-GAAP income.
Segment Information
| North America | Europe | International Markets | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended June 30, | Three months ended June 30, | Three months ended June 30, | ||||||||||
| 2022 2021 (U.S. \$ in millions) |
2022 | 2021 | 2022 2021 |
|||||||||
| (U.S. \$ in millions) | (U.S. \$ in millions) | |||||||||||
| \$ Revenues |
1,904 | \$ | 1,943 | \$ | 1,171 | \$ | 1,184 | \$ | 454 | \$ | 485 | |
| Gross profit | 1,010 | 1,040 | 703 | 661 | 242 | 270 | ||||||
| R&D expenses | 147 | 162 | 56 | 63 | 19 | 18 | ||||||
| S&M expenses | 256 | 255 | 196 | 209 | 99 | 105 | ||||||
| G&A expenses | 127 | 106 | 63 | 47 | 30 | 25 | ||||||
| Other income | (1) | (5) | (1) | § | (1) | (1) | ||||||
| \$ Segment profit |
481 | \$ | 521 | \$ | 389 | \$ | 343 | \$ | 95 | \$ | 123 |
§ Represents an amount less than \$1 million.
| North America | Europe Six months ended June 30, |
International Markets Six months ended June 30, |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Six months ended June 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||
| (U.S. \$ in millions) | (U.S. \$ in millions) | (U.S. \$ in millions) | |||||||||
| Revenues \$ | 3,641 | \$ | 3,932 | \$ | 2,327 | \$ | 2,398 | \$ | 946 | \$ | 975 |
| Gross profit | 1,899 | 2,114 | 1,397 | 1,349 | 528 | 530 | |||||
| R&D expenses | 289 | 322 | 114 | 129 | 39 | 35 | |||||
| S&M expenses | 501 | 483 | 393 | 424 | 196 | 201 | |||||
| G&A expenses | 239 | 218 | 122 | 117 | 60 | 51 | |||||
| Other income | (12) | (7) | (1) | (1) | (41) | (3) | |||||
| Segment profit \$ | 883 | \$ | 1,098 | \$ | 769 | \$ | 680 | \$ | 274 | \$ | 245 |
Segment Information
Reconciliation of our segment profit to consolidated income before income taxes
| Three months ended June 30, |
||||||
|---|---|---|---|---|---|---|
| 2022 | 2021 | |||||
| (U.S.\$ in millions) | ||||||
| North America profit | \$ | 481 | \$ | 521 | ||
| Europe profit | 389 | 343 | ||||
| International Markets profit | 95 | 123 | ||||
| Total reportable segment profit | 964 | 987 | ||||
| Profit of other activities | 55 | 47 | ||||
| 1,019 | 1,034 | |||||
| Amounts not allocated to segments: | ||||||
| Amortization | 212 | 173 | ||||
| Other asset impairments, restructuring and other items | 118 | 28 | ||||
| Goodwill impairment | 745 | - | ||||
| Intangible asset impairments | 51 | 195 | ||||
| Legal settlements and loss contingencies | 729 | 6 | ||||
| Other unallocated amounts | 113 | 50 | ||||
| Consolidated operating income (loss) | (949) | 582 | ||||
| Financial expenses - net | 211 | 274 | ||||
| Consolidated income (loss) before income taxes | \$ | (1,160) | \$ | 308 |
Reconciliation of our segment profit to consolidated income before income taxes
| Six months ended June 30, |
||||
|---|---|---|---|---|
| 2022 | 2021 | |||
| (U.S.\$ in millions) | ||||
| North America profit | \$ | 883 | \$ | 1,098 |
| Europe profit | 769 | 680 | ||
| International Markets profit | 274 | 245 | ||
| Total reportable segment profit | 1,926 | 2,023 | ||
| Profit of other activities | 107 | 87 | ||
| Total segment profit | 2,032 | 2,111 | ||
| Amounts not allocated to segments: | ||||
| Amortization | 412 | 414 | ||
| Other asset impairments, restructuring and other items | 246 | 165 | ||
| Goodwill impairment | 745 | - | ||
| Intangible asset impairments | 199 | 274 | ||
| Legal settlements and loss contingencies | 1,854 | 110 | ||
| Other unallocated amounts | 240 | 132 | ||
| Consolidated operating income (loss) | (1,662) | 1,015 | ||
| Financial expenses - net | 468 | 564 | ||
| Consolidated income (loss) before income taxes | \$ | (2,131) | \$ | 451 |
Segment revenues by major products and activities
| Percentage Change |
|||||
|---|---|---|---|---|---|
| 2022 | 2021-2022 | ||||
| \$ | 1,026 | \$ | 951 | 8% | |
| 49 | 46 | 9% | |||
| 204 | 174 | 17% | |||
| 83 | 106 | (22%) | |||
| 94 | 152 | (38%) | |||
| 308 | 316 | (2%) | |||
| 139 | 199 | (30%) | |||
| 1,904 | 1,943 | (2%) | |||
| June 30, | Three months ended 2021 (U.S.\$ in millions) |
| Three months ended | Percentage Change 2021-2022 |
|||
|---|---|---|---|---|
| June 30, | ||||
| 2022 2021 |
||||
| (U.S.\$ in millions) | ||||
| Europe segment | ||||
| Generic products | \$ 873 |
\$ | 878 | (1%) |
| AJOVY | 29 | 19 | 52% | |
| COPAXONE | 72 | 100 | (28%) | |
| Respiratory products | 65 | 85 | (23%) | |
| Other | 131 | 102 | 29% | |
| Total | 1,171 | 1,184 | (1%) |
| Three months ended | |||||||
|---|---|---|---|---|---|---|---|
| June 30, | Percentage Change |
||||||
| 2022 2021 |
2021-2022 | ||||||
| (U.S.\$ in millions) | |||||||
| International Markets segment | |||||||
| Generic products | \$ | 394 | \$ | 407 | (3%) | ||
| AJOVY | 10 | 5 | 96% | ||||
| COPAXONE | 9 | 7 | 27% | ||||
| Other | 40 | 65 | (39%) | ||||
| Total | 454 | 485 | (6%) |
Revenues by Activity and Geographical Area
| Six months ended | ||||||
|---|---|---|---|---|---|---|
| June 30, | Percentage Change |
|||||
| 2022 2021 |
2021-2022 | |||||
| (U.S.\$ in millions) | ||||||
| North America segment | ||||||
| Generic products | \$ | 1,925 | \$ | 2,004 | (4%) | |
| AJOVY | 86 | 77 | 12% | |||
| AUSTEDO | 358 | 320 | 12% | |||
| BENDEKA / TREANDA | 165 | 197 | (16%) | |||
| COPAXONE | 180 | 315 | (43%) | |||
| Anda | 650 | 605 | 7% | |||
| Other | 278 | 414 | (33%) | |||
| Total | 3,641 | 3,932 | (7%) |
| Six months ended | |||||||
|---|---|---|---|---|---|---|---|
| June 30, | Percentage Change |
||||||
| 2022 | 2021 | 2021-2022 | |||||
| (U.S.\$ in millions) | |||||||
| Europe segment | |||||||
| Generic products | \$ | 1,749 | \$ | 1,742 | 0% | ||
| AJOVY | 60 | 35 | 71% | ||||
| COPAXONE | 144 | 201 | (28%) | ||||
| Respiratory products | 137 | 179 | (24%) | ||||
| Other | 238 | 242 | (2%) | ||||
| Total | 2,327 | 2,398 | (3%) |
| Six months ended | ||||||
|---|---|---|---|---|---|---|
| June 30, | Percentage Change |
|||||
| 2022 | 2021 | 2021-2022 | ||||
| (U.S.\$ in millions) | ||||||
| International Markets segment | ||||||
| Generic products | \$ 782 |
\$ | 799 | (2%) | ||
| AJOVY | 16 | 7 | 143% | |||
| COPAXONE | 20 | 19 | 4% | |||
| Other | 128 | 150 | (15%) | |||
| Total | 946 | 975 | (3%) |
Free cash flow reconciliation
| Three months ended June 30, | |||||
|---|---|---|---|---|---|
| 2022 | 2021 | ||||
| (U.S. \$ in millions) | |||||
| Net cash provided by (used in) operating activities | 123 | 218 | |||
| Beneficial interest collected in exchange for securitized accounts receivables | 287 | 405 | |||
| Purchases of property, plant and equipment | (127) | (113) | |||
| Proceeds from sale of business and long lived assets | 18 | 116 | |||
| Free cash flow \$ | 301 | \$ | 625 |
Free cash flow reconciliation
| Six months ended June 30, | ||||
|---|---|---|---|---|
| 2022 | 2021 | |||
| (U.S. \$ in millions) | ||||
| Net cash provided by (used in) operating activities Beneficial interest collected in exchange for securitized accounts |
74 | (187) | ||
| receivables | 592 | 881 | ||
| Purchases of property, plant and equipment | (284) | (263) | ||
| Proceeds from sale of business and long lived assets | 43 | 254 | ||
| Acquisition of businesses, net of cash acquired | (7) | - | ||
| Free cash flow \$ | 418 | \$ | 684 |