Teva Reports Second Quarter 2014 Results

Teva Reports Second Quarter 2014 Results 

  • Revenues of $5.0 billion, up 2% compared to the second quarter of 2013.
  • Non GAAP operating income of $1.4 billion, an increase of 8%. GAAP operating income of $925 million.
  • Non-GAAP net income of $1.05 billion, an increase of 4%. GAAP net income of $748 million.
  • Non-GAAP diluted EPS of $1.23, an increase of 3%. GAAP diluted EPS of $0.87.
  • Strong cash flow from operations of $1.25 billion, an increase of 43%, excluding the effect of payment related to legal settlements.
  • Generic medicine revenues up 5%, with U.S. generics sales up 10% and generic medicine profitability up 41%.
  • More than half of Copaxone® prescriptions in the U.S. today are for Copaxone® 40mg/mL.
  • EPS guidance for 2014 improved to $4.90-5.10 in the exclusive Copaxone® scenario, and to $4.50-4.80 in the generic Copaxone® scenario.

JERUSALEM--(BUSINESS WIRE)--Jul. 31, 2014-- Teva Pharmaceutical Industries Ltd. (NYSE:TEVA) today reported results for the quarter ended June 30, 2014.

"We are pleased with the results of the second quarter of 2014, delivering organic growth in revenues and all profit lines over the comparable quarter last year. Our generic business delivered solid results with significantly improved profitability. In our specialty business, we have successfully converted, to date, 51% of the Copaxone® family in the U.S. to the newly-launched Copaxone® 40mg/mL, and are continuing to stably lead the global and U.S. relapsing remitting multiple sclerosis market. We are also excited about the progress we are making in our specialty pipeline, which includes, this quarter, the successful launch of DuoResp Spiromax® in Europe, the progression toward FDA submission for ER hydrocodone and the FDA acceptance of our albuterol MDPI NDA," stated Erez Vigodman, President and CEO of Teva.

Mr. Vigodman continued, "We are also making significant progress on our top priorities for 2014: solidifying the foundation of Teva, maintaining the Copaxone® franchise, driving organic growth and positioning Teva for long-term value creation. This quarter, we have announced a new organizational structure for Teva, including the formation of the Global Generics Medicines group under the leadership of Siggi Olafsson, one of the most experienced executives in the generic industry. We continued to accelerate the transformation of our operational network, and have performed a thorough review of our cost reduction program, which yielded additional net savings. We have also acquired Labrys, adding an important asset to our unique patient-centric offering in the pain area. Finally, we are progressing in defining and shaping the future strategic direction of Teva."

Generic Medicine Segment

 

 

Generics

 

 

Three Months Ended June 30,

 

 

2014

 

 

2013

 

 

U.S.$ in millions / % of Segment Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

2,515

 

 

100.0%

 

 

$

2,405

 

 

100.0%

Gross profit

 

 

1,046

 

 

41.6%

 

 

 

989

 

 

41.1%

R&D expenses

 

 

126

 

 

5.0%

 

 

 

124

 

 

5.2%

S&M expenses

 

 

388

 

 

15.4%

 

 

 

489

 

 

20.3%

Segment profitability*

 

$

532

 

 

21.2%

 

 

$

376

 

 

15.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Segment profitability consists of gross profit, less S&M and R&D expenses related to the segment.
Segment profitability does not include G&A expenses, amortization and certain other items.

We recently changed the classification of certain of our products. The data presented have beenconformed to reflect the revised classification for all periods.

 

Generic medicine revenues in the second quarter of 2014 amounted to $2.5 billion (including API sales of $182 million), an increase of 5% in both U.S. dollar and local currency terms, compared to the second quarter of 2013.

Generic revenues consisted of:

  • U.S. revenues of $1.1 billion, an increase of 10% compared to the second quarter of 2013. The increase resulted mainly from a full quarter of sales of capecitabine (the generic equivalent of Xeloda®) which was launched exclusively in March of 2014 and the launch of omega-3-acid ethyl esters (the generic equivalent of Lovaza®) for which we were first to market, as well as sales of products that were sold in the second quarter of 2014 but not sold in the second quarter of 2013, the most significant of which were raloxifene (the generic equivalent of Evista®) and tolterodine tartrate (the generic equivalent of Detrol®). These increases were partially offset by declines in other products due to loss of exclusivity or additional competition, the most significant of which was amphetamine salts (the generic equivalent of Adderall®).
  • European revenues of $814 million, a decrease of 2%, or 6% in local currency terms, compared to the second quarter of 2013. The decrease in revenues resulted mainly from our strategy of pursuing profitable and sustainable business in the region and taking a selective approach to the tender market, resulting in a notable improvement in the profitability of our European generics business.
  • ROW revenues of $633 million, an increase of 4%, or 11% in local currency terms, compared to the second quarter of 2013. The increase in local currency terms was driven by higher revenues in Canada, due to the reversal of a pricing reserve for a product sold in previous years, and in Latin America. Our ROW markets were impacted significantly by the weakening of various local currencies compared to the U.S. dollar.

API sales to third parties in the second quarter of 2014 amounted to $182 million, a decrease of 4%, or of 5% in local currency terms, compared to the second quarter of 2013. The decrease resulted from lower sales mainly in our ROW markets and in the United States.

Generic medicine revenues comprised 50% of our total revenues in the quarter, up from 49% in the second quarter of 2013.

Generic Medicine Gross Profit

Gross profit from our generic medicine segment in the second quarter of 2014 amounted to $1.0 billion, an increase of $57 million, or 6%, compared to the second quarter of 2013. Gross profit margin for our generic medicine segment in the second quarter of 2014 increased to 41.6%, from 41.1% in the second quarter of 2013. The higher gross profit was mainly a result of higher revenues in the United States and Canada, and higher gross profit due to the change in the composition of revenues in Europe, as well as the impact of our efficiency measures.

Generic Medicine Profitability

Profitability of our generic medicine segment amounted to $532 million in the second quarter of 2014, compared to $376 million in the second quarter of 2013. Generic medicine profitability as a percentage of generic medicine revenues was 21.2% in the second quarter of 2014, up from 15.6% in the second quarter of 2013. The increase was primarily due to a reduction in S&M expenses, higher revenues and higher gross profit.

Specialty Medicine Segment

 

 

Specialty

 

 

Three Months Ended June 30,

 

 

2014

 

 

2013

 

 

U.S.$ in millions / % of Segment Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

2,027

 

 

100%

 

 

$

2,051

 

 

100%

Gross profit

 

 

1,768

 

 

87.2%

 

 

 

1,772

 

 

86.4%

R&D expenses

 

 

214

 

 

10.6%

 

 

 

208

 

 

10.1%

S&M expenses

 

 

484

 

 

23.9%

 

 

 

450

 

 

21.9%

Segment profitability*

 

$

1,070

 

 

52.8%

 

 

$

1,114

 

 

54.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Segment profitability consists of gross profit, less S&M and R&D expenses related to the segment.
Segment profitability does not include G&A expenses, amortization and certain other items.

We recently changed the classification of certain of our products. The data presented have beenconformed to reflect the revised classification for all periods.

 

Specialty medicine revenues in the second quarter of 2014 amounted to $2.0 billion, a decrease of 1% compared to the second quarter of 2013. U.S. specialty medicine revenues amounted to $1.4 billion, a decrease of 5% compared to the second quarter of 2013. European specialty medicine revenues amounted to $501 million, an increase of 13%, or 7% in local currency terms, compared to the second quarter of 2013. ROW specialty medicine revenues amounted to $107 million, a decrease of 4%. In local currency terms, revenues increased 5% compared to the second quarter of 2013.

Specialty medicine revenues comprised 40% of our total revenues in the quarter, down from 42% in the second quarter of 2013.

The decrease in specialty medicine revenues from the second quarter of 2013 was primarily due to lower sales of Copaxone® in the U.S., which were largely offset by higher revenues from sales of specialty medicines in Europe.

The following table presents revenues by therapeutic area and key products for our specialty medicine segment for the three months ended June 30, 2014 and 2013:

Specialty Medicine Revenues Breakdown

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

June 30,

 

 

Percentage
Change

 

 

 

2014

 

 

2013

 

 

2014 - 2013

 

 

 

U.S. $ in millions

 

 

 

CNS

 

 

$

1,271

 

 

$

1,361

 

 

(7%)

Copaxone®

 

 

 

939

 

 

 

1,070

 

 

(12%)

Azilect®

 

 

 

103

 

 

 

87

 

 

18%

Nuvigil®

 

 

 

88

 

 

 

74

 

 

19%

Oncology

 

 

 

284

 

 

 

246

 

 

15%

Treanda®

 

 

 

190

 

 

 

177

 

 

7%

Respiratory

 

 

 

257

 

 

 

241

 

 

7%

ProAir®

 

 

 

133

 

 

 

115

 

 

16%

Qvar®

 

 

 

74

 

 

 

76

 

 

(3%)

Women's Health

 

 

 

128

 

 

 

118

 

 

8%

Other Branded

 

 

 

87

 

 

 

85

 

 

2%

Total Specialty Medicines

 

 

$

2,027

 

 

$

2,051

 

 

(1%)

 

 

 

 

 

 

 

 

 

 

 

 

We recently changed the classification of certain of our products. The data presented have beenconformed to reflect the revised classification for all periods.

 

Global sales of Copaxone® (20 mg/mL and 40 mg/mL), the leading multiple sclerosis therapy in the U.S. and globally, amounted to $0.9 billion, a decrease of 12% compared to the second quarter of 2013. In the United States, sales decreased 19% to $662 million. The decrease in the U.S. was mainly due to lower volume, partially offset by a price increase of 9.9% in January 2014 on Copaxone® 20 mg/mL. Our sales during the quarter were affected by higher levels of inventory created in the previous quarter following the launch of Copaxone® 40 mg/mL due to uncertainty of the prospective conversion rate between two products, as well as customers reducing inventory of the Copaxone® 20 mg/mL due to potential risk of a competing generic launch.

At the end of the second quarter of 2014, according to June 2014 IMS data, our U.S. market shares for the Copaxone® products in terms of new and total prescriptions were 32.2% and 33.2%, respectively. Copaxone® 40 mg/mL U.S. market shares in terms of new and total prescriptions were 17.3% and 15.1%, respectively, such that Copaxone® 40 mg/mL accounted for 45% of total Copaxone® prescriptions.

Sales outside the United States amounted to $277 million, an increase of 9%, or of 8% in local currency terms, compared to the second quarter of 2013. The increase is a result of lower mandatory rebates and higher demand in certain European markets.

Our global Azilect® revenues amounted to $103 million, an increase of 18% compared to the second quarter of 2013, while global in-market revenues increased 14% to $136 million. The increase in our sales reflects volume growth and price increases in the United States, as well as volume growth in Europe.

Sales of our oncology products amounted to $284 million in the second quarter of 2014, an increase of 15% compared to the second quarter of 2013. The increase resulted primarily from sales of our recently launched G-CSF products, Lonquex® and Granix®. Sales of Treanda® amounted to $190 million in the second quarter of 2014, compared to $177 million in the second quarter of 2013.

Sales of our respiratory products amounted to $257 million in the second quarter of 2014, an increase of 7% compared to the second quarter of 2013. ProAir® revenues amounted to $133 million in the second quarter of 2014, an increase of 16% compared to the second quarter of 2013, mainly due to volume growth as well as price fluctuations. Qvar® revenues amounted to $74 million in the second quarter of 2014, a decrease of 3% compared to the second quarter of 2013, due to price fluctuations. Following an April approval from the EMA, DuoResp Spiromax® for the treatment of asthma and COPD, was launched in Germany and Denmark in May and in Portugal in June.

Specialty Medicine Gross Profit

Gross profit from our specialty medicine segment amounted to $1.8 billion in the second quarter of 2014, in line with the second quarter of 2013.

Gross profit margin for our specialty medicine segment in the second quarter of 2014 was 87.2%, compared to 86.4% in the second quarter of 2013. The increase in gross margin was a result of the different product mix.

Specialty Medicine Profitability

Profitability of our specialty medicine segment amounted to $1.1 billion in the second quarter of 2014, a decrease of 4% compared to the second quarter of 2013, mainly due to higher S&M expenses in connection with new product launches.

Specialty medicine profitability as a percentage of segment revenues was 52.8% in the second quarter of 2014, down from 54.3% in the second quarter of 2013.

The following tables present details of our multiple sclerosis franchise and of our other specialty medicines for the three months ended June 30, 2014 and 2013:

Multiple Sclerosis

 

Three months ended June 30,

 

2014

 

2013

 

U.S.$ in millions / % of MS Revenues

 

 

 

 

 

 

 

 

Revenues

 

939

100.0%

 

 

1,070

100.0%

Gross profit

 

840

89.5%

 

 

951

88.9%

R&D expenses

 

20

2.1%

 

 

20

1.9%

S&M expenses

 

120

12.8%

 

 

130

12.1%

MS profitability

 

700

74.5%

 

 

801

74.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Specialty

 

Three months ended June 30,

 

2014

 

2013

 

U.S.$ in millions / % of Other Specialty Revenues

 

 

 

 

 

 

 

 

Revenues

 

1,088

100.0%

 

 

981

100.0%

Gross profit

 

928

85.3%

 

 

821

83.7%

R&D expenses

 

194

17.8%

 

 

188

19.2%

S&M expenses

 

364

33.5%

 

 

320

32.6%

Other Specialty profitability

370

34.0%

 

 

313

31.9%

 

 

 

 

 

 

 

We recently changed the classification of certain of our products. The data presented havebeen conformed to reflect the revised classification for all periods.

 

Other Activities

OTC revenues amounted to $274 million in the second quarter of 2014, an increase of 7% in both U.S. dollar and local currency terms, compared to the second quarter of 2013, primarily due to higher sales in Europe.

PGT's in-market sales amounted to $350 million in the second quarter of 2014, an increase of $8 million compared to the second quarter of 2013. This increase was due to higher sales in Europe, partially offset by lower sales in Latin America and Asia.

Revenues from the sales of OTC products in the United States to P&G amounted to $48 million in the second quarter of 2014, compared to $55 million in the second quarter of 2013.

In July 2014, we sold our two U.S. OTC plants previously purchased from P&G back to P&G, in exchange for a 49% interest in New Chapter, Inc., which was previously fully owned by P&G. These plants produced substantially all of the OTC products sold to P&G in the United States. Consequently, we will no longer sell OTC products to P&G from those plants.

Other revenues amounted to $229 million in the second quarter of 2014, mostly from the distribution of third-party products in Israel and Hungary, compared to $211 million in the second quarter of 2013.

Key Metrics for the Second quarter 2014

Non-GAAP information: Net non-GAAP charges in the second quarter of 2014 amounted to $306 million, consisting mainly of amortization of purchased intangible assets. Accordingly, non-GAAP net income and non-GAAP EPS for the quarter are adjusted to exclude these and certain other items, as follows:

  • Amortization of purchased intangible assets totaling $256 million, of which $249 million is included in cost of goods sold and the remaining $7 million in selling and marketing expenses;
  • Restructuring, impairment and other expenses of $148 million;
  • Legal settlements of $26 million;
  • Regulatory actions taken in facilities of $14 million; and
  • Related tax benefit of $138 million.

Teva believes that excluding such items facilitates investors' understanding of its business. See the attached tables for a reconciliation of the U.S. GAAP results to the adjusted non-GAAP figures.

Exchange rate differences between the second quarter of 2014 and the second quarter of 2013 increased our revenues by $16 million but reduced our non-GAAP operating income by $16 million.

Non-GAAP gross profit was $2.9 billion in the second quarter of 2014, in line with results in the second quarter of 2013. Non-GAAP gross profit margin was 58.0% in the second quarter of 2014, compared to 58.7% in the second quarter of 2013. GAAP gross profit was $2.7 billion in the second quarter of 2014, compared to $2.6 billion in the second quarter of 2013. GAAP gross profit margin was 52.7% in the quarter, in line with the second quarter of 2013.

Research & Development (R&D) expenditures (excluding purchase of in-process R&D) in the second quarter of 2014 amounted to $344 million, compared to $336 million, in the second quarter of 2013. R&D expenses were 6.8% of revenues in both quarters. R&D expenses related to our generic medicine segment amounted to $126 million in the second quarter of 2014, an increase of 2% compared to $124 million in the second quarter of 2013, mainly due to higher expenses associated with the generic medicine segment in the United States. R&D expenses related to our specialty medicine segment amounted to $214 million in the second quarter of 2014, an increase of 3% compared to $208 million in the second quarter of 2013, primarily as a result of increased investment in our specialty pipeline.

Selling and Marketing (S&M) expenditures (excluding amortization of purchased intangible assets) amounted to $914 million, or 18.1% of revenues, in the second quarter of 2014, compared to $973 million, or 19.8% of revenues in the second quarter of 2013. S&M expenses related to our generic medicine segment amounted to $388 million in the second quarter of 2014, a decrease of 21% compared to $489 million in the second quarter of 2013, mainly due to lower expenses in Europe and in Russia and lower royalty expenses in the United States. S&M expenses related to our specialty medicine segment amounted to amounted to $484 million, an increase of 8% compared to $450 million in the second quarter of 2013. The increase was primarily due to higher expenditures related to our launches of DuoResp Spiromax®, Lonquex®, Granix® and Adasuve®, as well as preparation for additional product launches planned for the remainder of 2014.

General and Administrative (G&A) expenditures amounted to $302 million in the second quarter of 2014, or 6.0% of revenues, compared with $319 million, or 6.5% of revenues, in the second quarter of 2013. The decrease in G&A expenses was mainly due to other income related to a legal recovery in Canada and lower expenses related to our joint venture with P&G, partially offset by an increase in other expenses.

Quarterly non-GAAP operating income was $1.4 billion in the second quarter of 2014, an increase of 8% compared to the second quarter of 2013. Quarterly GAAP operating income was $925 million in the second quarter of 2014, compared to a loss of $586 million in the second quarter of 2013.

Non-GAAP financial expenses amounted to $76 million in the second quarter of 2014, compared to $82 million in the second quarter of 2013. GAAP financial expenses for the second quarter of 2014 amounted to $78 million, compared to $89 in the second quarter of 2013.

The provision for non-GAAP tax for the second quarter of 2014 amounted to $240 million on pre-tax non-GAAP income of $1.3 billion, for a quarterly tax rate of 18.6%. The provision for tax in the second quarter of 2013 was $161 million on pre-tax income of $1.2 billion, or 13.7%. GAAP tax expenses for the second quarter of 2014 amounted to $102 million on pre-tax income of $847 million, for a quarterly GAAP tax rate of 12.0%. In the second quarter of 2013, tax benefits amounted to $222 million on pre-tax loss of $675 million.

The increase in our quarterly tax rate mainly reflects the lapse of our tax exemptions under the previous Israeli tax incentives regime in 2013. Our profits in Israel are now generally subject to tax at 9%.

GAAP net income and GAAP diluted EPS were $748 million and $0.87 in the second quarter of 2014, compared to a loss of $452 million and a loss per share of $0.53 in the second quarter of 2013. Non-GAAP net income and non-GAAP diluted EPS were $1.05 billion and $1.23 in the second quarter of 2014, an increase of 4% and 3%, respectively, compared to $1.02 billion and $1.20 in the second quarter of 2013.

Cash flow from operations generated during the second quarter of 2014 amounted to $1.1 billion, compared to $0.9 billion in the second quarter of 2013, mainly due to the increase in net income and the improvement in working capital. Free cash flow, excluding net capital expenditures and dividends amounted to $583 million, an increase of $205 million from the second quarter of 2013.

Cash and marketable securities at June 30, 2014 amounted to $1.2 billion.

For the second quarter of 2014, the weighted average outstanding shares for the fully diluted earnings per share calculation was 857 million on both a GAAP and non-GAAP basis. At June 30, 2014, the outstanding shares for calculating Teva's market capitalization were approximately 853 million.

Shareholders' equity was $23.6 billion at June 30, 2014, compared to $23.0 billion at March 31, 2014. The increase primarily reflects GAAP net income of $0.75 billion and proceeds from employee stock option exercises of $0.1 billion, partially offset by dividend payments of $0.3 billion.

Dividend

The Board of Directors, at its meeting on July 29, 2014, declared a cash dividend for the second quarter of 2014 of NIS 1.21 per share (approximately 35.3 cents according to the rate of exchange on July 29, 2014).

The record date will be August 21, 2014, and the payment date will be September 4, 2014. Tax will be withheld at a rate of 15%.

Conference Call

Teva will host a live webcast and a conference call to discuss its second quarter 2014 results on Thursday, July 31, 2014, at 8:00 a.m. ET. To access the live webcast and view the accompanying slide presentation, visit the Investor Relations section of Teva's website, at http://ir.tevapharm.com, at least 15 minutes before the presentation is scheduled to begin; click on the webcast icon to register and download or install any necessary software. In addition to the webcast, the call can be accessed by dialing in to the following numbers, at least ten minutes prior to the scheduled call time: United States 1-866-904-9433; Canada 1-866-361-5782; international +44(0)1452-580111; passcode: 65239352#.

Following the conclusion of the call, a replay of the webcast will be available within 24 hours at the Company's website at www.tevapharm.com. A replay of the call will also be available until August 8, 2014, at 11:00 a.m. ET, by calling: United States 1-866-247-4222; Canada 1-866-878-9237 or international +44(0)1452-550000; passcode: 65239352#.

About Teva

Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) is a leading global pharmaceutical company, committed to increasing access to high-quality healthcare by developing, producing and marketing affordable generic drugs as well as innovative and specialty pharmaceuticals and active pharmaceutical ingredients.

Headquartered in Israel, Teva is the world's leading generic drug maker, with a global product portfolio of more than 1,000 molecules, sold in more than 100 countries, and with a direct presence in about 60 countries. Teva's specialty medicine businesses focus on CNS, including pain, respiratory, oncology, and women's health therapeutic areas as well as biologics. Teva currently employs approximately 45,000 people around the world and reached $20.3 billion in net revenues in 2013.

Teva's Safe Harbor Statement under the U. S. Private Securities Litigation Reform Act of 1995:

This release contains forward-looking statements, which are based on management's current beliefs and expectations and involve a number of known and unknown risks and uncertainties that could cause our future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating to: our ability to develop and commercialize additional pharmaceutical products; competition for our innovative products, especially Copaxone® (including competition from orally-administered alternatives, as well as from potential purported generic equivalents); the possibility of material fines, penalties and other sanctions and other adverse consequences arising out of our ongoing FCPA investigations and related matters; our ability to achieve expected results from the research and development efforts invested in our pipeline of specialty and other products; our ability to reduce operating expenses to the extent and during the timeframe intended by our cost reduction program; our ability to identify and successfully bid for suitable acquisition targets or licensing opportunities, or to consummate and integrate acquisitions; the extent to which any manufacturing or quality control problems damage our reputation for quality production and require costly remediation; our potential exposure to product liability claims that are not covered by insurance; increased government scrutiny in both the U.S. and Europe of our patent settlement agreements; our exposure to currency fluctuations and restrictions as well as credit risks; the effectiveness of our patents, confidentiality agreements and other measures to protect the intellectual property rights of our specialty medicine; the effects of reforms in healthcare regulation and pharmaceutical pricing, reimbursement and coverage; governmental investigations into sales and marketing practices, particularly for our specialty pharmaceutical products; uncertainties related to our recent management changes; the effects of increased leverage and our resulting reliance on access to the capital markets; any failure to recruit or retain key personnel, or to attract additional executive and managerial talent; adverse effects of political or economical instability, major hostilities or acts of terrorism on our significant worldwide operations; interruptions in our supply chain or problems with internal or third-party information technology systems that adversely affect our complex manufacturing processes; significant disruptions of our information technology systems or breaches of our data security; competition for our generic products, both from other pharmaceutical companies and as a result of increased governmental pricing pressures; competition for our specialty pharmaceutical businesses from companies with greater resources and capabilities; decreased opportunities to obtain U.S. market exclusivity for significant new generic products; potential liability in the U.S., Europe and other markets for sales of generic products prior to a final resolution of outstanding patent litigation; any failures to comply with complex Medicare and Medicaid reporting and payment obligations; the impact of continuing consolidation of our distributors and customers; significant impairment charges relating to intangible assets and goodwill; potentially significant increases in tax liabilities; the effect on our overall effective tax rate of the termination or expiration of governmental programs or tax benefits, or of a change in our business; variations in patent laws that may adversely affect our ability to manufacture our products in the most efficient manner; environmental risks; and other factors that are discussed in our Annual Report on Form 20-F for the year ended December 31, 2013 and in our other filings with the U.S. Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made and we assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

 

Consolidated Statements of Income

(Unaudited, U.S. dollars in millions, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

 

 

 

June 30,

 

June 30,

 

 

 

 

2014

 

2013

 

2014

 

2013

Net revenues

 

 

 

5,045

 

4,924

 

10,046

 

9,825

Cost of sales

 

 

 

2,384

 

2,331

 

4,688

 

4,642

Gross profit

 

 

 

2,661

 

2,593

 

5,358

 

5,183

Research and development expenses

 

 

 

344

 

339

 

697

 

668

Selling and marketing expenses

 

 

 

921

 

982

 

1,905

 

1,977

General and administrative expenses

 

 

 

302

 

319

 

604

 

626

Legal settlements and loss contingencies

 

 

 

26

 

1,435

 

55

 

1,462

Impairments, restructuring and others

 

 

 

143

 

104

 

200

 

162

Operating income (loss)

 

 

 

925

 

(586)

 

1,897

 

288

Financial expenses – net

 

 

 

78

 

89

 

159

 

264

Income (loss) before income taxes

 

 

 

847

 

(675)

 

1,738

 

24

Income taxes

 

 

 

102

 

(222)

 

245

 

(169)

Share in losses of associated companies – net

 

 

 

-

 

3

 

8

 

23

Net income (loss)

 

 

 

745

 

(456)

 

1,485

 

170

Net loss attributable to non-controlling interests

 

 

 

(3)

 

(4)

 

(7)

 

(8)

Net income (loss) attributable to Teva

 

 

 

748

 

(452)

 

1,492

 

178

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share attributable to Teva:

 

Basic ($)

 

0.88

 

(0.53)

 

1.75

 

0.21

 

 

Diluted ($)

 

0.87

 

(0.53)

 

1.75

 

0.21

Weighted average number of shares (in millions):

 

Basic

 

852

 

849

 

851

 

852

 

 

Diluted

 

857

 

849

 

855

 

853

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income attributable to Teva:*

 

 

 

1,054

 

1,018

 

2,092

 

1,978

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP earnings per share attributable to Teva:

 

Basic ($)

 

1.24

 

1.20

 

2.46

 

2.32

 

 

Diluted ($)

 

1.23

 

1.20

 

2.45

 

2.32

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares (in millions):

 

Basic

 

852

 

849

 

851

 

852

 

 

Diluted

 

857

 

850

 

855

 

853

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* See reconciliation attached.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets

(U.S. dollars in millions)

(Unaudited)

 

 

 

 

 

 

 

June 30,

 

December 31,

 

 

2014

 

2013

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

949

 

1,038

Accounts receivable

 

5,389

 

5,338

Inventories

 

4,940

 

5,053

Deferred income taxes

 

1,066

 

1,084

Other current assets

 

1,202

 

1,207

Total current assets

 

13,546

 

13,720

Other non-current assets

 

1,469

 

1,696

Property, plant and equipment, net

 

6,709

 

6,635

Identifiable intangible assets, net

 

6,062

 

6,476

Goodwill

 

18,948

 

18,981

Total assets

 

46,734

 

47,508

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Short-term debt

 

2,048

 

1,804

Sales reserves and allowances

 

5,348

 

4,918

Accounts payable and accruals

 

3,026

 

3,317

Other current liabilities

 

1,432

 

1,926

Total current liabilities

 

11,854

 

11,965

 

 

 

 

 

Long-term liabilities:

 

 

 

 

Deferred income taxes

 

1,169

 

1,247

Other taxes and long-term liabilities

 

1,000

 

1,273

Senior notes and loans

 

9,122

 

10,387

Total long term liabilities

 

11,291

 

12,907

Equity:

 

 

 

 

Teva shareholders' equity

 

23,540

 

22,565

Non-controlling interests

 

49

 

71

Total equity

 

23,589

 

22,636

Total liabilities and equity

 

46,734

 

47,508

 

 

 

 

 

 

Condensed Consolidated Cash Flow

(Unaudited, U.S. Dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

 

June 30,

 

June 30,

 

 

2014

 

 

2013

 

 

2014

 

 

2013

 

Operating activities:

 

 

 

 

 

 

 

 

Net income (loss)

 

745

 

 

(456

)

 

1,485

 

 

170

 

Net change in operating assets and liabilities

 

(89

)

 

1,150

 

 

(337

)

 

1,210

 

Items not involving cash flow

 

397

 

 

181

 

 

803

 

 

597

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

1,053

 

 

875

 

 

1,951

 

 

1,977

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

(187

)

 

(266

)

 

(575

)

 

(532

)

 

 

 

 

 

 

 

 

 

Net cash used in financing activities

 

(819

)

 

(748

)

 

(1,453

)

 

(3,008

)

 

 

 

 

 

 

 

 

 

Translation adjustment on cash and cash equivalents

 

1

 

 

(10

)

 

(12

)

 

(71

)

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

48

 

 

(149

)

 

(89

)

 

(1,634

)

 

 

 

 

 

 

 

 

 

Balance of cash and cash equivalents at beginning of period

 

901

 

 

1,394

 

 

1,038

 

 

2,879

 

 

 

 

 

 

 

 

 

 

Balance of cash and cash equivalents at end of period

 

949

 

 

1,245

 

 

949

 

 

1,245

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non GAAP reconciliation items

(Unaudited, U.S. Dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

 

June 30,

 

June 30,

 

 

2014

 

2013

 

2014

 

2013

Amortization of purchased intangible assets - under cost of sales

 

249

 

279

 

517

 

548

Restructuring and other expenses

 

87

 

55

 

143

 

98

Impairment of long-lived assets

 

56

 

49

 

57

 

64

Expense in connection with legal settlements and reserves

 

26

 

1,435

 

55

 

1,462

Costs related to regulatory actions taken in facilities - under cost of
sales

 

14

 

16

 

32

 

28

Amortization of purchased intangible assets - under selling and
marketing expenses

 

7

 

9

 

24

 

19

Accelerated Depreciation

 

3

 

-

 

7

 

-

Purchase of research and development in process

 

-

 

3

 

-

 

3

Financial (income) expense

 

2

 

7

 

(1)

 

101

Tax benefit

 

(138)

 

(383)

 

(234)

 

(523)

 

 

 

 

 

 

 

 

 

 

Reconciliation between reported Net Income attributable to Teva and Earnings per share as reported under US GAAP to Non-GAAP Net Income attributable to Teva and Earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 30, 2014

 

Six months ended June 30, 2013

 

 

 

 

U.S. dollars and shares in millions (except per share amounts)

 

 

 

 

GAAP

 

Non-GAAP
Adjustments

 

Non-
GAAP

 

% of Net
Revenues

 

GAAP

 

Non-GAAP
Adjustments

 

Non-
GAAP

 

% of Net
Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit (1)

 

5,358

 

556

 

 

5,914

 

58.9

%

 

5,183

 

576

 

 

5,759

 

58.6

%

 

 

Operating income (1)(2)

 

1,897

 

835

 

 

2,732

 

27.2

%

 

288

 

2,222

 

 

2,510

 

25.5

%

 

 

Net income attributable to Teva (1)(2)(3)

 

1,492

 

600

 

 

2,092

 

20.8

%

 

178

 

1,800

 

 

1,978

 

20.1

%

 

 

Earnings per share attributable to Teva - Diluted (4)

 

1.75

 

0.70

 

 

2.45

 

 

 

0.21

 

2.11

 

 

2.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

Amortization of purchased intangible assets

 

 

 

517

 

 

 

 

 

 

 

 

548

 

 

 

 

 

 

 

 

Costs related to regulatory actions taken in facilities

 

 

 

32

 

 

 

 

 

 

 

 

28

 

 

 

 

 

 

 

 

Accelerated depreciation

 

 

 

7

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

Gross profit adjustments

 

 

 

556

 

 

 

 

 

 

 

 

576

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2

)

 

Restructuring, acquisition and other expenses

 

 

 

143

 

 

 

 

 

 

 

 

101

 

 

 

 

 

 

 

 

Impairment of long-lived assets

 

 

 

57

 

 

 

 

 

 

 

 

64

 

 

 

 

 

 

 

 

Expense in connection with legal settlements and reserves

 

 

 

55

 

 

 

 

 

 

 

 

1,462

 

 

 

 

 

 

 

 

Amortization of purchased intangible assets

 

 

 

24

 

 

 

 

 

 

 

 

19

 

 

 

 

 

 

 

 

 

 

 

 

279

 

 

 

 

 

 

 

 

1,646

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit adjustments

 

 

 

835

 

 

 

 

 

 

 

 

2,222

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3

)

 

Financial (income) expense

 

 

 

(1

)

 

 

 

 

 

 

 

101

 

 

 

 

 

 

 

 

Tax benefit

 

 

 

(234

)

 

 

 

 

 

 

 

(523

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income adjustments

 

 

 

600

 

 

 

 

 

 

 

 

1,800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4

)

 

The weighted average number of shares was 855 and 853 million for the six months ended June 30, 2014 and 2013, respectively. Non-GAAP earnings per share can be reconciled with GAAP earnings per share by dividing each of the amounts included in footnotes 1-3 above by the applicable weighted average share number.

 

 

 

 

 

 

 

Reconciliation between reported Net Income attributable to Teva and Earnings per share as reported under US GAAP to Non-GAAP Net Income attributable to Teva and Earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended June 30, 2014

 

Three months ended June 30, 2013

 

 

 

U.S. dollars and shares in millions (except per share amounts)

 

 

 

GAAP

 

Non-GAAP
Adjustments

 

Non-GAAP

 

% of Net
Revenues

 

GAAP

 

Non-GAAP
Adjustments

 

Non-GAAP

 

% of Net
Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit (1)

2,661

 

266

 

 

2,927

 

58.0

%

 

2,593

 

 

295

 

 

2,888

 

58.7

%

 

 

Operating income (loss) (1)(2)

925

 

442

 

 

1,367

 

27.1

%

 

(586

)

 

1,846

 

 

1,260

 

25.6

%

 

 

Net income (loss) attributable to Teva (1)(2)(3)

748

 

306

 

 

1,054

 

20.9

%

 

(452

)

 

1,470

 

 

1,018

 

20.7

%

 

 

Earnings (loss) per share attributable to Teva - Diluted (4)

0.87

 

0.36

 

 

1.23

 

 

 

(0.53

)

 

1.73

 

 

1.20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

Amortization of purchased intangible assets

 

 

249

 

 

 

 

 

 

 

 

279

 

 

 

 

 

 

 

Costs related to regulatory actions taken in facilities

 

 

14

 

 

 

 

 

 

 

 

16

 

 

 

 

 

 

 

Accelerated depreciation

 

 

3

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

Gross profit adjustments

 

 

266

 

 

 

 

 

 

 

 

295

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2

)

 

Restructuring and other expenses

 

 

87

 

 

 

 

 

 

 

 

58

 

 

 

 

 

 

 

Impairment of long-lived assets

 

 

56

 

 

 

 

 

 

 

 

49

 

 

 

 

 

 

 

Expense in connection with legal settlements and reserves

 

 

26

 

 

 

 

 

 

 

 

1,435

 

 

 

 

 

 

 

Amortization of purchased intangible assets

 

 

7

 

 

 

 

 

 

 

 

9

 

 

 

 

 

 

 

 

 

 

176

 

 

 

 

 

 

 

 

1,551

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income adjustments

 

 

442

 

 

 

 

 

 

 

 

1,846

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3

)

 

Financial expense

 

 

2

 

 

 

 

 

 

 

 

7

 

 

 

 

 

 

 

Tax benefit

 

 

(138

)

 

 

 

 

 

 

 

(383

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income adjustments

 

 

306

 

 

 

 

 

 

 

 

1,470

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4

)

 

The weighted average number of shares was 857 million and 850 million for the three months ended June 30, 2014 and 2013, respectively. Non-GAAP earnings per share can be reconciled with GAAP earnings per share by dividing each of the amounts included in footnotes 1-3 above by the applicable weighted average share number.

 

 

 

 

 

Segment Information

 

Generics

 

Specialty

 

Three months ended June 30,

 

Percentage Change

 

Three months ended June 30,

 

Percentage Change

 

2014

 

2013

 

2014 - 2013

 

2014

 

2013

 

2014 - 2013

 

U.S.$ in millions / % of Segment Revenues

 

 

 

 

U.S.$ in millions / % of Segment Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

2,515

 

100%

 

 

2,405

 

100%

 

5%

 

 

 

2,027

 

100%

 

 

2,051

 

100%

 

(1%)

Gross Profit

 

1,046

 

41.6%

 

 

989

 

41.1%

 

6%

 

 

 

1,768

 

87.2%

 

 

1,772

 

86.4%

 

§

R&D Expenses

 

126

 

5.0%

 

 

124

 

5.2%

 

2%

 

 

 

214

 

10.6%

 

 

208

 

10.1%

 

3%

S&M Expenses

 

388

 

15.4%

 

 

489

 

20.3%

 

(21%)

 

 

 

484

 

23.9%

 

 

450

 

21.9%

 

8%

Segment Profitability*

532

 

21.2%

 

 

376

 

15.6%

 

41%

 

 

 

1,070

 

52.8%

 

 

1,114

 

54.3%

 

(4%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Segment profitability consists of gross profit, less S&M and R&D expenses related to the segment. Segment profitability does not include G&A expenses, amortization and certain other items.

We recently changed the classification of certain of our products. The data presented has been conformed to reflect the revised classification for all periods.

§ Less than 0.5%.

 

 

Segment Information

 

 

Generics

 

Specialty

 

 

Six months ended June 30,

 

Percentage Change

 

Six months ended June 30,

 

Percentage Change

 

 

2014

 

2013

 

2014 - 2013

 

2014

 

2013

 

2014 - 2013

 

 

U.S.$ in millions / % of Segment Revenues

 

 

 

 

U.S.$ in millions / % of Segment Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

4,913

 

100%

 

 

4,733

 

100%

 

4%

 

 

 

4,141

 

100%

 

 

4,103

 

100%

 

1%

Gross Profit

 

 

2,088

 

42.5%

 

 

1,940

 

41.0%

 

8%

 

 

 

3,611

 

87.2%

 

 

3,558

 

86.7%

 

1%

R&D Expenses

 

 

250

 

5.1%

 

 

232

 

4.9%

 

8%

 

 

 

441

 

10.6%

 

 

409

 

10.0%

 

8%

S&M Expenses

 

 

807

 

16.4%

 

 

950

 

20.1%

 

(15%)

 

 

 

983

 

23.7%

 

 

903

 

22.0%

 

9%

Segment Profitability*

 

 

1,031

 

21.0%

 

 

758

 

16.0%

 

36%

 

 

 

2,187

 

52.8%

 

 

2,246

 

54.7%

 

(3%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Segment profitability consists of gross profit, less S&M and R&D expenses related to the segment. Segment profitability does not include G&A expenses, amortization and certain other items.

We recently changed the classification of certain of our products. The data presented has been conformed to reflect the revised classification for all periods.

 

 

Additional Information

 

 

 

Multiple Sclerosis

 

Three months ended June 30,

 

 

Percentage Change

 

2014

 

2013

 

 

2014 - 2013

 

U.S.$ in millions / % of MS Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

939

100%

 

 

1,070

100%

 

 

(12%)

Gross profit

 

840

89.5%

 

 

951

88.9%

 

 

(12%)

R&D expenses

 

20

2.1%

 

 

20

1.9%

 

 

§

S&M expenses

 

120

12.8%

 

 

130

12.1%

 

 

(8%)

MS profitability

 

700

74.5%

 

 

801

74.9%

 

 

(13%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Specialty

 

Three months ended June 30,

 

 

Percentage Change

 

2014

 

2013

 

 

2014 - 2013

 

U.S.$ in millions / % of Other Specialty Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

1,088

100%

 

 

981

100%

 

 

11%

Gross profit

 

928

85.3%

 

 

821

83.7%

 

 

13%

R&D expenses

 

194

17.8%

 

 

188

19.2%

 

 

3%

S&M expenses

 

364

33.5%

 

 

320

32.6%

 

 

14%

Other Specialty profitability

 

370

34.0%

 

 

313

31.9%

 

 

18%

 

 

 

 

 

 

 

 

 

 

 

We recently changed the classification of certain of our products.

The data presented has been conformed to reflect the revised classification for all periods.

§ Less than 0.5%.

 

 

Additional information

 

 

Multiple Sclerosis

 

Six months ended June 30,

 

 

Percentage Change

 

2014

 

2013

 

 

2014 - 2013

 

U.S.$ in millions / % of MS Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

2,009

100%

 

$

2,134

100%

 

 

(6%)

Gross profit

 

1,801

89.6%

 

 

1,907

89.4%

 

 

(6%)

R&D expenses

 

42

2.1%

 

 

41

1.9%

 

 

2%

S&M expenses

 

285

14.2%

 

 

240

11.2%

 

 

19%

MS profitability

 

1,474

73.4%

 

 

1,626

76.2%

 

 

(9%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Specialty

 

Six months ended June 30,

 

 

Percentage Change

 

2014

 

2013

 

 

2014 - 2013

 

U.S.$ in millions / % of Other Specialty Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

2,132

100%

 

$

1,969

100%

 

 

8%

Gross profit

 

1,810

84.9%

 

 

1,651

83.8%

 

 

10%

R&D expenses

 

399

18.7%

 

 

368

18.7%

 

 

8%

S&M expenses

 

698

32.7%

 

 

663

33.7%

 

 

5%

Other Specialty profitability

 

713

33.4%

 

 

620

31.5%

 

 

15%

 

 

 

 

 

 

 

 

 

 

 

We recently changed the classification of certain of our products.

The data presented has been conformed to reflect the revised classification for all periods.

 

 

Reconciliation of our segment profitability to Teva's consolidated income before income taxes

 

 

 

Three months ended June 30,

 

 

2014

 

2013

 

 

U.S.$ in millions

 

Generic medicine profitability

 

 

532

 

 

376

Specialty medicine profitability

 

 

1,070

 

 

1,114

Total segment profitability

 

 

1,602

 

 

1,490

Profitability of other activities

 

 

67

 

 

89

Total profitability

 

 

1,669

 

 

1,579

Amounts not allocated to segments:

 

 

 

 

 

 

Amortization

 

 

256

 

 

288

General and administrative expenses

 

 

302

 

 

319

Legal settlements and loss contingencies

 

 

26

 

 

1435

Impairments, restructuring and others

 

 

143

 

 

104

Other unallocated amounts

 

 

17

 

 

19

 

 

 

 

 

 

 

Consolidated operating income (loss)

 

 

925

 

 

(586)

Financial expenses - net

 

 

78

 

 

89

Consolidated income (loss) before income taxes

 

 

847

 

 

(675)

 

 

 

 

 

 

 

 

Reconciliation of our segment profitability to Teva's consolidated income before income taxes

 

 

Six months ended June 30,

 

2014

 

2013

 

U.S.$ in millions

 

Generic medicines profitability

 

1,031

 

 

758

Specialty medicines profitability

 

2,187

 

 

2,246

Total segment profitability

 

3,218

 

 

3,004

Profitability of other activities

 

118

 

 

132

Total profitability

 

3,336

 

 

3,136

Amounts not allocated to segments:

 

 

 

 

 

Amortization

 

541

 

 

567

General and administrative expenses

 

604

 

 

626

Legal settlements and loss contingencies

 

55

 

 

1,462

Impairments, restructuring and others

 

200

 

 

162

Other unallocated amounts

 

39

 

 

31

 

 

 

 

 

 

Consolidated operating income

 

1,897

 

 

288

Financial expenses - net

 

159

 

 

264

Consolidated income before income taxes

 

1,738

 

 

24

 

 

 

 

 

 

 

Revenues by Activity and Geographical Area

(Unaudited)

 

 

 

 

Three Months Ended

June 30,

 

 

Percentage
Change

 

Percentage
Change

 

 

2014

 

2013

 

 

2014 - 2013

 

2014 - 2013

 

 

U.S. $ in millions

 

 

 

 

in local
currencies

Generic Medicine

 

 

 

 

 

 

 

 

 

 

 

United States

 

$

1,068

 

$

967

 

 

10%

 

10%

Europe*

 

 

814

 

 

827

 

 

(2%)

 

(6%)

Rest of the World.

 

 

633

 

 

611

 

 

4%

 

11%

Total Generic Medicine

 

 

2,515

 

 

2,405

 

 

5%

 

5%

Specialty Medicine

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

1,419

 

 

1,497

 

 

(5%)

 

(5%)

Europe*

 

 

501

 

 

443

 

 

13%

 

7%

Rest of the World.

 

 

107

 

 

111

 

 

(4%)

 

5%

Total Specialty Medicine

 

 

2,027

 

 

2,051

 

 

(1%)

 

(2%)

Other Revenues

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

50

 

 

58

 

 

(14%)

 

(14%)

Europe*

 

 

206

 

 

187

 

 

10%

 

6%

Rest of the World.

 

 

247

 

 

223

 

 

11%

 

12%

Total Other Revenues

 

 

503

 

 

468

 

 

7%

 

6%

Total Revenues

 

$

5,045

 

$

4,924

 

 

2%

 

2%

 

 

 

 

 

 

 

 

 

 

 

 

* All members of the European Union, Switzerland, Norway, Albania and the countries of former Yugoslavia.

We recently changed the classification of certain of our products.

The data presented has been conformed to reflect the revised classification for all periods.

 

 

Revenues by Activity and Geographical Area

(Unaudited)

 

 

 

 

Six Months Ended June 30,

 

 

Percentage
Change

 

Percentage
Change

 

 

 

 

2014

 

 

2013

 

 

2014 - 2013

 

2014 - 2013

 

 

 

 

U.S. $ in millions

 

 

 

 

in local
currencies

Generic Medicines

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

$ 2,116

 

 

$ 1,860

 

 

14%

 

14%

Europe*

 

 

1,632

 

 

1,676

 

 

(3%)

 

(7%)

Rest of the World

 

 

1,165

 

 

1,197

 

 

(3%)

 

6%

Total Generic Medicines

 

 

4,913

 

 

4,733

 

 

4%

 

5%

Specialty Medicines

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

2,949

 

 

2,977

 

 

(1%)

 

(1%)

Europe*

 

 

983

 

 

891

 

 

10%

 

6%

Rest of the World

 

 

209

 

 

235

 

 

(11%)

 

(2%)

Total Specialty

 

 

4,141

 

 

4,103

 

 

1%

 

§

Other Revenues

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

101

 

 

126

 

 

(20%)

 

(20%)

Europe*

 

 

413

 

 

384

 

 

8%

 

5%

Rest of the World

 

 

478

 

 

479

 

 

§

 

2%

Total Other Revenues

 

 

992

 

 

989

 

 

§

 

§

Total Revenues

 

 

$ 10,046

 

 

$ 9,825

 

 

2%

 

2%

 

 

 

 

 

 

 

 

 

 

 

 

 

* All members of the European Union, Switzerland, Norway, Albania and the countries of former Yugoslavia.

We recently changed the classification of certain of our products.

The data presented has been conformed to reflect the revised classification for all periods.

§ Less than 0.5%.

 

 

Revenues by Product line

(Unaudited)

 

 

 

Three Months Ended

June 30,

 

Percentage
Change

 

 

2014

 

2013

 

2014 - 2013

 

 

U.S. $ in millions

 

 

 

 

 

 

 

 

 

Generic Medicine

 

$ 2,515

 

$ 2,405

 

5%

API

 

182

 

190

 

(4%)

Specialty Medicine

 

2,027

 

2,051

 

(1%)

CNS

 

1,271

 

1,361

 

(7%)

Copaxone®

 

939

 

1,070

 

(12%)

Azilect®

 

103

 

87

 

18%

Nuvigil®

 

88

 

74

 

19%

Oncology

 

284

 

246

 

15%

Treanda®

 

190

 

177

 

7%

Respiratory

 

257

 

241

 

7%

ProAir®

 

133

 

115

 

16%

Qvar®

 

74

 

76

 

(3%)

Women's Health

 

128

 

118

 

8%

Other Specialty

 

87

 

85

 

2%

All Others

 

503

 

468

 

7%

OTC

 

274

 

257

 

7%

Other Revenues

 

229

 

211

 

9%

Total

 

$ 5,045

 

$ 4,924

 

2%

 

 

 

 

 

 

 

We recently changed the classification of certain of our products.

The data presented has been conformed to reflect the revised classification for all periods.

 

 

Revenues by Product line

(Unaudited)

 

 

 

Six Months Ended
June 30,

 

 

Percentage
Change

 

 

2014

 

2013

 

 

2014 - 2013

 

 

U.S. $ in millions

 

 

 

 

 

 

 

 

 

 

 

Generic Medicines

 

$ 4,913

 

$ 4,733

 

 

4%

API

 

361

 

382

 

 

(5%)

Specialty Medicines

 

4,141

 

4,103

 

 

1%

CNS

 

2,684

 

2,720

 

 

(1%)

Copaxone®

 

2,009

 

2,134

 

 

(6%)

Azilect®

 

217

 

180

 

 

21%

Nuvigil®

 

189

 

157

 

 

20%

Oncology

 

546

 

485

 

 

13%

Treanda®

 

370

 

348

 

 

6%

Respiratory

 

487

 

475

 

 

3%

ProAir®

 

247

 

203

 

 

22%

Qvar®

 

145

 

170

 

 

(15%)

Women's Health

 

252

 

242

 

 

4%

Other Specialty

 

172

 

181

 

 

(5%)

All Others

 

992

 

989

 

 

§

OTC

 

543

 

563

 

 

(4%)

Other Revenues

 

449

 

426

 

 

5%

Total

 

$ 10,046

 

$ 9,825

 

 

2%

 

 

 

 

 

 

 

 

We recently changed the classification of certain of our products.

The data presented has been conformed to reflect the revised classification for all periods.

§ Less than 0.5%.

 

 

Source: Teva Pharmaceutical Industries Ltd.

Teva
IR:
United States
Kevin C. Mannix, 215-591-8912
or
Ran Meir, 215-591-3033
or
Israel
Tomer Amitai, 972 (3) 926-7656
or
PR:
Israel
Iris Beck Codner, 972 (3) 926-7246
or
United States
Denise Bradley, 215-591-8974

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