Statement Of Income
Statement Of Income (USD $) | |||||||||||||||||||
In Millions, except Per Share data | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 | ||||||||||||||||
Net sales | $13,899 | $11,085 | $9,408 | ||||||||||||||||
Cost of sales | 6,532 | 5,117 | 4,531 | ||||||||||||||||
Gross profit | 7,367 | 5,968 | 4,877 | ||||||||||||||||
Research and development expenses | 802 | 786 | 581 | ||||||||||||||||
Selling and marketing expenses | 2,676 | 1,842 | 1,264 | ||||||||||||||||
General and administrative expenses | 823 | 669 | 637 | ||||||||||||||||
Acquisition of research and development in process | 23 | 1,402 | 0 | ||||||||||||||||
Legal settlements, impairment, restructuring and acquisition costs | 638 | 124 | 0 | ||||||||||||||||
Operating income | 2,405 | 1,145 | 2,395 | ||||||||||||||||
Financial expense-net | 202 | 345 | [1] | 91 | [1] | ||||||||||||||
Income before income taxes | 2,203 | 800 | 2,304 | ||||||||||||||||
Provision for income taxes | 166 | 184 | [1] | 386 | [1] | ||||||||||||||
Income (Loss) from Continuing Operations before Noncontrolling Interest and Income (Loss) from Equity Method Investments, Total | 2,037 | 616 | 1,918 | ||||||||||||||||
Share in losses of associated companies-net | 33 | 1 | 3 | ||||||||||||||||
Net income | 2,004 | 615 | [1] | 1,915 | [1] | ||||||||||||||
Attributable to non-controlling interests | 4 | 6 | [2] | 1 | [2] | ||||||||||||||
Net income attributable to Teva | $2,000 | $609 | $1,914 | ||||||||||||||||
Earnings per share attributable to Teva: | |||||||||||||||||||
Basic | 2.29 | 0.78 | 2.49 | ||||||||||||||||
Diluted | 2.23 | 0.75 | 2.36 | ||||||||||||||||
Weighted average number of shares (in millions): | |||||||||||||||||||
Basic | 872 | 780 | 768 | ||||||||||||||||
Diluted | 896 | 820 | 830 | ||||||||||||||||
[1]After giving retroactive effect to the adoption of an accounting pronouncement which requires issuers to account separately for the liability and equity components of convertible debt instruments that may be settled in cash (including partial cash settlement), as further described in note 11. | |||||||||||||||||||
[2]Non-controlling interests reclassification. |
Statement Of Financial Position
Statement Of Financial Position Classified (USD $) | |||||||||||||||||||
In Millions | Dec. 31, 2009
| Dec. 31, 2008
| |||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $1,995 | $1,854 | |||||||||||||||||
Short-term investments | 253 | 53 | |||||||||||||||||
Accounts receivable | 5,019 | 4,653 | |||||||||||||||||
Inventories | 3,332 | 3,396 | |||||||||||||||||
Prepaid expenses and other current assets | 1,542 | 1,470 | |||||||||||||||||
Total current assets | 12,141 | 11,426 | |||||||||||||||||
Long-term investments and receivables | 534 | 425 | |||||||||||||||||
Deferred taxes, deferred charges and other assets | 642 | 492 | [1] | ||||||||||||||||
Property, plant and equipment, net | 3,766 | 3,699 | |||||||||||||||||
Identifiable intangible assets, net | 4,053 | 4,581 | |||||||||||||||||
Goodwill | 12,674 | 12,297 | |||||||||||||||||
Total assets | 33,810 | 32,920 | |||||||||||||||||
Current liabilities: | |||||||||||||||||||
Short-term debt and current maturities of long term liabilities | 1,301 | 2,906 | |||||||||||||||||
Sales reserves and allowances | 2,942 | 2,708 | |||||||||||||||||
Accounts payable and accruals | 2,680 | 2,244 | |||||||||||||||||
Other current liabilities | 679 | 623 | |||||||||||||||||
Total current liabilities | 7,602 | 8,481 | |||||||||||||||||
Long-term liabilities: | |||||||||||||||||||
Deferred income taxes | 1,741 | 1,723 | |||||||||||||||||
Other taxes and long term payables | 727 | 621 | |||||||||||||||||
Employee related obligations | 170 | 182 | |||||||||||||||||
Senior notes and loans | 3,494 | 3,654 | |||||||||||||||||
Convertible senior debentures | 817 | 1,821 | [1] | ||||||||||||||||
Total long term liabilities | 6,949 | 8,001 | |||||||||||||||||
Commitments and contingencies, see note 12 | |||||||||||||||||||
Total liabilities | 14,551 | 16,482 | |||||||||||||||||
Teva shareholders' equity: | |||||||||||||||||||
Ordinary shares as of December 31, 2009 and 2008: authorized 1,500 million shares; issued and outstanding 923 million shares and 889 million shares, respectively | 49 | 48 | |||||||||||||||||
Additional paid-in capital | 12,880 | 11,673 | [1] | ||||||||||||||||
Retained earnings | 6,662 | 5,191 | [1] | ||||||||||||||||
Accumulated other comprehensive income | 555 | 390 | |||||||||||||||||
Treasury shares-December 31, 2009 and 2008-38 million ordinary shares | (924) | (924) | |||||||||||||||||
Total Teva shareholders' equity | 19,222 | 16,378 | [1] | ||||||||||||||||
Non-controlling interests | 37 | 60 | [2] | ||||||||||||||||
Total equity | 19,259 | 16,438 | |||||||||||||||||
Total liabilities and equity | $33,810 | $32,920 | |||||||||||||||||
[1]After giving retroactive effect to the adoption of an accounting pronouncement which requires issuers to account separately for the liability and equity components of convertible debt instruments that may be settled in cash (including partial cash settlement), as further described in note 11. | |||||||||||||||||||
[2]Non-controlling interests reclassification. |
1_Statement Of Financial Positi
Statement Of Financial Position Classified (Parenthetical) (USD $) | ||
Share data in Millions | Dec. 31, 2009
| Dec. 31, 2008
|
Ordinary shares, authorized | 1,500 | 1,500 |
Ordinary shares, issued | 923 | 889 |
Ordinary shares, outstanding | 923 | 889 |
Treasury, shares | 38 | 38 |
Statement Of Shareholders Equit
Statement Of Shareholders Equity And Other Comprehensive Income (USD $) | |||||||||||||||||||
In Millions | Share capital and additional paid-in capital attributable to Teva
| Retained earnings and accumulated other comprehensive income
| Non-controlling interests
| Total
| |||||||||||||||
Balance, beginning of year at Dec. 31, 2006 | $8,098 | [1] | $4,015 | ($830) | $34 | ||||||||||||||
Issuance of shares and stock options on acquisitions | 0 | ||||||||||||||||||
Purchase of subsidiary shares from non-controlling interests and sale of subsidiary shares in non-controlling interests | 0 | ||||||||||||||||||
Increase | (152) | ||||||||||||||||||
Conversion of convertible senior debentures | 63 | ||||||||||||||||||
Acquisition of non-controlling interests | 0 | ||||||||||||||||||
Decrease | 0 | ||||||||||||||||||
Net income attributable to non-controlling interests | 1,914 | [1] | 1 | 1,914 | |||||||||||||||
Exercise of options by employees | 212 | ||||||||||||||||||
Other comprehensive income (loss), net of tax attributable to Teva: | |||||||||||||||||||
Unrealized gains (losses) from available-for-sale securities, net | (51) | ||||||||||||||||||
Non-credit other than temporary impairment losses | 0 | ||||||||||||||||||
Reclassification adjustment on available-for-sale securities | 0 | [2] | |||||||||||||||||
Currency translation adjustment | 740 | ||||||||||||||||||
Other | 26 | ||||||||||||||||||
Stock-based compensation expense | 67 | ||||||||||||||||||
Other comprehensive income | 1 | ||||||||||||||||||
Total comprehensive income (loss) | 2,629 | ||||||||||||||||||
Excess tax benefit on options exercised | 35 | ||||||||||||||||||
Dividends | (299) | ||||||||||||||||||
Initial adoption of the uncertain tax position pronouncement | (10) | ||||||||||||||||||
Balance, end of year at Dec. 31, 2007 | 8,475 | 6,335 | (982) | 36 | 13,864 | ||||||||||||||
Issuance of shares and stock options on acquisitions | 2,928 | ||||||||||||||||||
Purchase of subsidiary shares from non-controlling interests and sale of subsidiary shares in non-controlling interests | (8) | ||||||||||||||||||
Conversion of convertible senior debentures | 31 | ||||||||||||||||||
Acquisition of non-controlling interests | 26 | ||||||||||||||||||
Decrease | 58 | ||||||||||||||||||
Net income attributable to non-controlling interests | 609 | [1] | 6 | 609 | |||||||||||||||
Exercise of options by employees | 192 | ||||||||||||||||||
Other comprehensive income (loss), net of tax attributable to Teva: | |||||||||||||||||||
Unrealized gains (losses) from available-for-sale securities, net | (319) | ||||||||||||||||||
Non-credit other than temporary impairment losses | 0 | ||||||||||||||||||
Reclassification adjustment on available-for-sale securities | 369 | ||||||||||||||||||
Currency translation adjustment | (1,011) | ||||||||||||||||||
Other | (14) | ||||||||||||||||||
Stock-based compensation expense | 63 | ||||||||||||||||||
Other comprehensive income | 0 | ||||||||||||||||||
Total comprehensive income (loss) | (366) | ||||||||||||||||||
Excess tax benefit on options exercised | 32 | ||||||||||||||||||
Dividends | (388) | ||||||||||||||||||
Initial adoption of the uncertain tax position pronouncement | 0 | ||||||||||||||||||
Balance, end of year at Dec. 31, 2008 | 11,721 | 5,581 | (924) | 60 | 16,438 | ||||||||||||||
Issuance of shares and stock options on acquisitions | 0 | ||||||||||||||||||
Purchase of subsidiary shares from non-controlling interests and sale of subsidiary shares in non-controlling interests | (42) | ||||||||||||||||||
Increase | 0 | ||||||||||||||||||
Conversion of convertible senior debentures | 965 | ||||||||||||||||||
Acquisition of non-controlling interests | 16 | ||||||||||||||||||
Decrease | 0 | ||||||||||||||||||
Net income attributable to non-controlling interests | 2,000 | 4 | 2,000 | ||||||||||||||||
Exercise of options by employees | 169 | ||||||||||||||||||
Other comprehensive income (loss), net of tax attributable to Teva: | |||||||||||||||||||
Unrealized gains (losses) from available-for-sale securities, net | 30 | ||||||||||||||||||
Non-credit other than temporary impairment losses | 7 | ||||||||||||||||||
Reclassification adjustment on available-for-sale securities | (1) | ||||||||||||||||||
Currency translation adjustment | 122 | ||||||||||||||||||
Other | 6 | ||||||||||||||||||
Stock-based compensation expense | 54 | ||||||||||||||||||
Other comprehensive income | (1) | ||||||||||||||||||
Total comprehensive income (loss) | 2,164 | ||||||||||||||||||
Excess tax benefit on options exercised | 20 | ||||||||||||||||||
Dividends | (528) | ||||||||||||||||||
Initial adoption of the uncertain tax position pronouncement | 0 | ||||||||||||||||||
Balance, end of year at Dec. 31, 2009 | $12,929 | $7,217 | ($924) | $37 | $19,259 | ||||||||||||||
[1]After giving retroactive effect to the adoption of an accounting pronouncement which requires issuers to account separately for the liability and equity components of convertible debt instruments that may be settled in cash (including partial cash settlement), as further described in note 11. | |||||||||||||||||||
[2]Represents an amount of less than $0.5 million. |
Statement Of Cash Flows Indirec
Statement Of Cash Flows Indirect (USD $) | |||||||||||||||||||
In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 | ||||||||||||||||
Operating activities: | |||||||||||||||||||
Net income | $2,004 | $615 | [1] | $1,915 | [1] | ||||||||||||||
Adjustments to reconcile net income to net cash provided by operations: | |||||||||||||||||||
Depreciation and amortization | 908 | 490 | [1] | 499 | [1] | ||||||||||||||
Decrease (increase) in working capital items | 445 | 76 | (854) | ||||||||||||||||
Deferred income taxes-net and uncertain tax positions | (140) | 25 | [1] | 100 | [1] | ||||||||||||||
Impairment of long lived assets | 110 | 107 | 17 | ||||||||||||||||
Stock-based compensation | 54 | 63 | 67 | ||||||||||||||||
Asset write off | 0 | 369 | 0 | ||||||||||||||||
Acquisition of research and development in process | 23 | 1,402 | 0 | ||||||||||||||||
Other items-net | (31) | 84 | [1] | 69 | [1] | ||||||||||||||
Net cash provided by operating activities | 3,373 | 3,231 | 1,813 | ||||||||||||||||
Investing activities: | |||||||||||||||||||
Purchase of property, plant and equipment | (719) | (681) | (542) | ||||||||||||||||
Purchase of investments and other assets | (433) | (2,155) | (5,298) | ||||||||||||||||
Proceeds from realization of investments | 236 | 3,381 | 4,520 | ||||||||||||||||
Acquisitions of subsidiaries, net of cash acquired | 0 | (4,749) | (18) | ||||||||||||||||
Other items-net | 0 | 67 | (15) | ||||||||||||||||
Net cash used in investing activities | (916) | (4,137) | (1,353) | ||||||||||||||||
Financing activities: | |||||||||||||||||||
Repayment of short term loans in connection with the acquisition of Barr | (1,750) | 0 | 0 | ||||||||||||||||
Dividends paid | (528) | (388) | (299) | ||||||||||||||||
Proceeds from exercise of options by employees | 169 | 192 | 212 | ||||||||||||||||
Proceeds from long-term loans and other long-term liabilities received | 445 | 39 | 37 | ||||||||||||||||
Discharge of long-term loans and other long-term liabilities | (325) | (156) | (66) | ||||||||||||||||
Net increase (decrease) in other short-term credit | (252) | 30 | (129) | ||||||||||||||||
Purchase of non-controlling interests in connection with the acquisition of Barr | (42) | 0 | 0 | ||||||||||||||||
Excess tax benefit on options exercised | 18 | 33 | 36 | ||||||||||||||||
Purchase of treasury shares | 0 | 0 | (152) | ||||||||||||||||
Short term loans raised in connection with the acquisition of Barr | 0 | 1,750 | 0 | ||||||||||||||||
Redemption of convertible senior debentures | 0 | (141) | 0 | ||||||||||||||||
Other items-net | 0 | (1) | (1) | ||||||||||||||||
Net cash provided by (used in) financing activities | (2,265) | 1,358 | (362) | ||||||||||||||||
Translation adjustment on cash and cash equivalents | (51) | (86) | 58 | ||||||||||||||||
Net increase in cash and cash equivalents | 141 | 366 | 156 | ||||||||||||||||
Balance of cash and cash equivalents at beginning of year | 1,854 | 1,488 | 1,332 | ||||||||||||||||
Balance of cash and cash equivalents at end of year | 1,995 | 1,854 | 1,488 | ||||||||||||||||
Supplemental disclosure of cash flow information: | |||||||||||||||||||
Interest paid | 191 | 154 | 179 | ||||||||||||||||
Income taxes paid, net of refunds | 19 | 160 | 197 | ||||||||||||||||
Net change in working capital items: | |||||||||||||||||||
Increase in accounts receivable and other current assets | (181) | (775) | (316) | ||||||||||||||||
Decrease (increase) in inventories | 163 | (548) | (421) | ||||||||||||||||
Increase (decrease) in sales reserves and allowances, accounts payable and accruals and other current liabilities | 463 | 1,399 | (117) | ||||||||||||||||
Decrease (increase) in working capital items | $445 | $76 | ($854) | ||||||||||||||||
[1]After giving retroactive effect to the adoption of an accounting pronouncement which requires issuers to account separately for the liability and equity components of convertible debt instruments that may be settled in cash (including partial cash settlement), as further described in note 11. |
Supplemental Disclosures
Supplemental Disclosures | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Supplemental Disclosures | As disclosed in note 2a: On December23, 2008, the Company completed the acquisition of Barr Pharmaceuticals, Inc. for a total consideration of $7.5 billion. An aggregate amount of $2.9 billion of Teva shares and stock options were issued as part of the consideration for the acquisition. On July22, 2008, the Company completed the acquisition of Bentley Pharmaceuticals, Inc. The aggregate purchase price paid by Teva was $366 million in cash, including transaction costs. On February21, 2008, the Company completed the acquisition of CoGenesys, Inc. Teva paid a cash purchase price of $412 million, including transaction costs. As disclosed in note 11, in 2009, 2008 and 2007, $965 million, $89 million and $63 million, respectively, principal amount of convertible senior debentures were converted into approximately 27million, 2million and 3million Teva shares, respectively, of which the 2million shares in 2008 were treasury shares. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES: | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
SIGNIFICANT ACCOUNTING POLICIES: | NOTE 1SIGNIFICANT ACCOUNTING POLICIES: a. General: Operations Teva Pharmaceutical Industries Limited (the Company), headquartered in Israel, together with its subsidiaries and associated companies (Teva or the Group), is engaged in the development, manufacturing, marketing and distribution of pharmaceuticals. The majority of the Groups sales are in North America and Europe. The Groups main manufacturing facilities are located in Israel, Hungary, United States, Canada, Ireland, The Czech Republic, Croatia, and Poland. Accounting principles The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (US GAAP). In June 2009, the Financial Accounting Standards Board (FASB) issued the FASB Accounting Standards Codification (Codification). The Codification became the single authoritative source for USGAAP and changed the way in which the accounting literature is organized. As applicable to Teva, the Codification became effective commencing in the third quarter of 2009. The Codification does not change USGAAP and does not have an effect on our financial position or results of operations. Functional currency A major part of the Groups operations is carried out by the Company and its subsidiaries in the United States and Israel. The functional currency of these entities is the U.S. dollar (dollar or $). The functional currency of the remaining subsidiaries and associated companies in most instances is their relevant local currency. The financial statements of those companies are included in consolidation, based on translation into U.S. dollars, in accordance with standards of the FASB. Assets and liabilities are translated at year-end exchange rates, while revenues and expenses are translated at average exchange rates during the year. Differences resulting from translation are presented in equity, under accumulated other comprehensive income. The financial statements of subsidiaries in a highly inflationary economy are remeasured as if the functional currency were the reporting currency. A highly inflationary economy is one that has cumulative inflation of approximately 100 percent or more over a 3-year period. Use of estimates in the preparation of financial statements The preparation of financial statements in conformity with USGAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reported years. Actual results could differ from those estimates. As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to sales reserves and allowances, income taxes, intangible assets, purchase price allocation on acquisitions, inventories, contingencies and valuation of goodwill and investments, mainly auction rate securities. Subsequent events In May 2009, the FASB established a general standard of accounting for disclosure of events that occur after the balance sheet date but before fin |
CERTAIN TRANSACTIONS:
CERTAIN TRANSACTIONS: | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
CERTAIN TRANSACTIONS: | NOTE 2CERTAIN TRANSACTIONS: a. Acquisitions: 1) Acquisition of Barr Pharmaceuticals, Inc. On December23, 2008, Teva acquired the total shareholdings and control of Barr Pharmaceuticals, Inc. (Barr) for $4.6 billion in cash and approximately 69million shares, representing approximately 8% of the issued and outstanding share capital of Teva at that time before the transaction. For accounting purposes, the transaction was valued at $7.5 billion (including transaction costs), based on the aggregate of the cash consideration and the average of the closing price of a Teva share during the five day period commencing two trading days before the announcement date of the merger with Barr. The cash consideration of $4.6 billion was financed with Tevas own resources and bridge loans received from Israeli banks. The acquisition was accounted for by the purchase method. The results of operations were included in the consolidated financial statements of Teva commencing January1, 2009. The consideration for the acquisition was attributed to net assets on the basis of fair value of assets acquired and liabilities assumed, based on an appraisal performed by management, which included a number of factors, including the assistance of independent appraisers. Under the terms of the merger agreement, Barr shareholders received 0.6272 Teva shares and $39.90 in cash for each Barr share. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed, with reference to Barrs balance sheet as of December31, 2008: U.S. $ inmillions Current assets $ 2,447 Investments and other non-current assets 263 Property, plant and equipment 842 Identifiable intangible assets: Existing products and trade name 2,784 Research and development in-process 988 Goodwill 4,638 Total assets acquired 11,962 Current liabilities 1,594 Long-term liabilities, including deferred taxes 2,790 Non-controlling interests 42 Total liabilities assumed and non-controlling interests 4,426 Net assets acquired $ 7,536 Cost of investment Issuance of shares and stock options $ 2,928 Cash paid 4,574 Transaction costs 34 $ 7,536 An amount of $988 million of the purchase price was allocated to the estimated fair value of purchased research and development in process, which, as of the closing date of the merger, had not reached technological feasibility and had no alternative future use. This amount was charged to operating expenses upon acquisition. Research and development in-process related to approximately 40 products and product groups, having values of up to approximately $160 million, with an average value of approximately $30 million per product, and included three products with a value in excess of 10% of the total value. A probability of success factor was used to reflect inherent technological and regulatory risks. The net cash inflows were discounted to present values, using a range of discount rates of between 11% and 14% and |
FAIR VALUE MEASUREMENT:
FAIR VALUE MEASUREMENT: | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
FAIR VALUE MEASUREMENT: | NOTE 3FAIR VALUE MEASUREMENT: The Company measures fair value and discloses fair value measurements for financial assets and liabilities. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. On January1, 2009, the Company adopted a newly issued accounting standard for fair value measurement of all non-financial assets and liabilities as well. The adoption did not have a significant effect on the Companys financial statements. In April 2009, the FASB issued additional guidance on factors to consider when estimating fair value consequent to a significant decrease in market activity for a financial asset. As applicable for Teva, this guidance became effective for interim and annual periods starting April1, 2009, and did not have a material impact on the Companys consolidated financial statements. The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value. Financial items carried at fair value as of December31, 2009 are classified in the table below in one of the three categories described above: December31, 2009 U.S. $ in millions Level1 Level2 Level3 Total Cash and cash equivalents: Money markets $ 512 $ $ $ 512 Cash deposits and other 1,483 1,483 Marketable securities* Auction rate securities 75 75 Collateral debt obligations 13 1 14 Equity securities 104 104 Structures 37 37 Othermainly debt securities 240 240 Derivativesnet** (11 ) (11 ) Total $ 2,352 $ 26 $ 76 $ 2,454 December31, 2008 U.S. $ in millions Level1 Level2 Level3 Total Cash and cash equivalents $ 1,854 $ $ $ 1,854 Marketable securities* Auction rate securities 98 98 Collateral debt obligations 13 1 14 Equity securities 11 11 Structures 36 36 Other 53 53 Der |
MARKETABLE SECURITIES:
MARKETABLE SECURITIES: | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
MARKETABLE SECURITIES: | NOTE 4MARKETABLE SECURITIES: 1) Available-for-sale securities: Comprised mainly of debt securities. At December31, 2009 and 2008, the fair value, cost and gross unrealized holding gains and losses of such securities were as follows: Fair value Cost Gross unrealized holding gains Gross unrealized holdinglosses (U.S. $ in millions) December 31, 2009 $ 983 $ 1,266 $ 51 $ 14 December 31, 2008 $ 429 $ 823 $ 5 $ 9 As of December31, 2009, the gross unrealized holding losses of $14 million were comprised primarily of failed auction rate securities, which were in an unrealized loss position. The fair value for those auction rate securities, as explained in note 1f, was determined using a valuation model. 2) The marketable securities which are comprised substantially of available-for-sale debt securities, are classified as long-term or short-term based on the intended time of realizing the security. Marketable securities are presented in the balance sheets as follows: December31, 2009 2008 (U.S.$inmillions) Cash and cash equivalents $ 513 $ 217 Short-term investments 253 53 Long-term investments and receivables 217 159 $ 983 $ 429 The contractual maturities of debt securities, including treasury bills, are as follows: December31,2009 (U.S.$inmillions) 2010 $ 571 2011 94 2012 114 2013 9 2014 9 2015 and thereafter 82 $ 879 |
INVENTORIES:
INVENTORIES: | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
INVENTORIES: | NOTE 5INVENTORIES: Inventory consisted of the following: December31, 2009 2008 (U.S. $ in millions) Raw and packaging materials $ 1,072 $ 966 * Products in process 522 559 Finished products 1,658 1,841 * 3,252 3,366 Materials in transit and payments on account 80 30 $ 3,332 $ 3,396 * Reclassified. |
PROPERTY, PLANT AND EQUIPMENT:
PROPERTY, PLANT AND EQUIPMENT: | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
PROPERTY, PLANT AND EQUIPMENT: | NOTE 6PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment, net, consisted of the following: December31, 2009 2008 (U.S. $ in millions) Land* $ 366 $ 293 Buildings 1,507 1,568 Machinery and equipment 2,679 2,363 Motor vehicles, computer equipment, furniture and other assets 828 742 Payments on account 311 277 5,691 5,243 Lessaccumulated depreciation and amortization 1,925 1,544 $ 3,766 $ 3,699 * Land includes long-term leasehold rights in various locations, with useful lives of approximately 99 years. Depreciation expenses were $426 million, $308 million and $273 million in the years ended December31, 2009, 2008 and 2007, respectively. During the year ended December31, 2009, we had an impairment of property, plant and equipment amounted to $68 million. |
GOODWILL AND INTANGIBLE ASSETS:
GOODWILL AND INTANGIBLE ASSETS: | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
GOODWILL AND INTANGIBLE ASSETS: | NOTE 7GOODWILL AND INTANGIBLE ASSETS: a. Goodwill: The changes in the carrying amount of goodwill for the years ended December31, 2009 and 2008 are as follows: 2009 2008 (U.S. $ in millions) Balance as of January1, $ 12,297 $ 8,407 Changes during year: Goodwill acquired during the year* 315 4,490 Translation differences 69 (576 ) Reduction of goodwill (7 ) (24 ) Balance as of December31, $ 12,674 $ 12,297 * In 2009, represents adjustments to the goodwill of Barr (which was acquired in 2008) in respect of changes in estimates during the allocation period relating mainly to contingencies, restructuring, property, plant and equipment, intangible assets and other accruals. b. Intangible assets: 1) Intangible assets consisted of the following: Original amount Accumulated amortization Amortized balance December31, 2009 2008 2009 2008 2009 2008 (U.S. $ in millions) Product rights $ 5,212 $ 5,259 $ 1,256 $ 769 $ 3,956 $ 4,490 Trade names 97 91 97 91 Total $ 5,309 $ 5,350 $ 1,256 $ 769 $ 4,053 $ 4,581 2) Amortization of intangible assets amounted to $485 million, $180 million and $221 million in the years ended December31, 2009, 2008 and 2007, respectively. 3) Impairment of intangible assets amounted to $42 million, $107 million and $4 million in the years ended December31, 2009, 2008 and 2007, respectively. 4) As of December31, 2009, the estimated aggregate amortization of intangible assets for the years 2010 to 2014 is as follows: 2010$510 million; 2011$427 million; 2012$417 million; 2013$415million and 2014$383 million. c. As of December31, 2009, 2008 and 2007, the Company determined that there was no impairment with respect to either goodwill or other indefinite lived intangible assets. |
SHORT TERM DEBT:
SHORT TERM DEBT: | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
SHORT TERM DEBT: | NOTE 8SHORT TERM DEBT: December31, 2009 2008 (U.S. $ in millions) Banks and financial institutions $ 96 $ 2,097 Convertible debentures 641 575 Current portion of long term senior notes and loans 564 234 $ 1,301 $ 2,906 Short-term debt is comprised of loans, mainly from banks, senior convertible notes and debentures with an earliest date of redemption within 12 months, the current portion of long-term loans and bank overdrafts. Loans were obtained from banks at a weighted average interest rate of 0.9% and 1.7% at December31, 2009 and 2008, respectively. In December 2008, Teva borrowed $1.75 billion in short term loans in connection with the Barr acquisition. These loans were repaid during the course of 2009. As of December31, 2009, the Group had approximately $1,530 million available under unused lines of credit. |
LONG-TERM EMPLOYEE-RELATED OBLI
LONG-TERM EMPLOYEE-RELATED OBLIGATIONS: | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
LONG-TERM EMPLOYEE-RELATED OBLIGATIONS: | NOTE 9LONG-TERM EMPLOYEE-RELATED OBLIGATIONS: a. Long-term employee-related obligations consisted of the following: December31, 2009 2008 (U.S.$inmillions) Accrued severance pay $ 113 $ 124 Defined benefit plans 57 58 Total $ 170 $ 182 As of December31, 2009 and 2008, the Group had $96 million and $91 million, respectively, deposited in funds managed by financial institutions that are earmarked by management to cover severance pay liability in respect of Israeli employees. Such deposits are not considered to be plan assets and are therefore included in long-term investments and receivables. The Company expects to contribute approximately $73 million in 2010 to the pension funds and insurance companies in respect of its severance and pension pay obligations. The main terms of the different arrangements with employees are described in b. below. b. Terms of arrangements: 1) Israel Israeli law generally requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain other circumstances. Pension plans for employees are under collective labor agreements. The pension liabilities with respect to that portion of 72% covered by these pension plans are not reflected in the financial statements as the pension risks have been irrevocably transferred to the pension fund. Managerial personnel generally have insurance policies which cover pension and severance liabilities. Severance pay liabilities not covered by the pension plans and insurance policies are fully provided for in the financial statements on an undiscounted basis, based upon the number of years of service and the latest monthly salary of the Groups employees in Israel. 2) Europe The majority of the employees in the European subsidiaries are entitled to a retirement grant when they leave. In the consolidated financial statements, an accrual of the liability of the subsidiaries is made, based on the length of service and remuneration of each employee at the balance sheet date. Other employees in Europe are entitled to a pension according to a defined benefit scheme providing benefits based on final or average pensionable pay or according to a hybrid pension scheme that provides retirement benefits on a defined benefit and a defined contribution basis. Independent certified actuaries value these schemes, the rates of contribution payable being determined by the actuaries. Pension costs for the defined benefit section of the scheme are accounted for on the basis of charging the expected cost of providing pensions over the period during which the subsidiaries benefit from the employees services. The Company uses December31 as the measurement date for the majority of its defined benefit plans. 3) North America The North American subsidiaries mainly provide various defined contribution plans for the benefit of their employees. Under these plans, contributions are based on specified percentages of pay. Additionally, a multi-employer plan is maintained in accordance with various union agreements. 4) Latin Am |
SENIOR NOTES AND LOANS:
SENIOR NOTES AND LOANS: | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
SENIOR NOTES AND LOANS: | NOTE 10SENIOR NOTES AND LOANS: a. Senior notes and loans consisted of the following: Interestrateas ofDecember31, 2009 December31, 2009 2008 % (U.S. $ in millions) Credit facilities (1) 1.7 $ 1,605 $ 1,885 Senior notes (2) 1,490 1,480 Loans, mainly from banks (3)(5) 0.9to2.3 948 508 Debentures (4)(5) 7.2 15 15 4,058 3,888 Lesscurrent portion (included under short-term debt) (564 ) (234 ) $ 3,494 $ 3,654 (1) In connection with the Barr acquisition. Barr had entered into an unsecured senior term and revolving credit facilities agreement with a syndicate of lending banks, arranged by Bank of America. Due to the acquisition of Barr by Teva, the agreements were amended in order to waive the lenders right to call Barrs debt upon the change in control connection with the acquisition, thereby allowing the outstanding obligations under the credit facilities to remain in place following the closing of the acquisition. As part of the amendments, Teva guaranteed Barrs obligations under the facilities. The facilities have outstanding balances of approximately $1,605 million that mature until 2013, mainly in 2011 and bear interest determined on the basis of USD LIBOR. (2) In January 2006, $1 billion principal amount of 6.15% Senior Notes due 2036 and $500 million principal amount of 5.55% Senior Notes due 2016 were issued in connection with the acquisition of Ivax Corporation. In 2008, Teva repurchased $20 million of the senior notes. In July 2009, the Company entered into three interest rate swap agreements with respect to its $493 million principal amount 5.55% Senior Notes due 2016 (see note 15). The purpose of the transactions was to change the interest rate from fixed to floating rate. As a result of these agreements, Teva is currently paying an effective interest rate of six months LIBOR plus an average spread of 1.98% on the $493 million principal amount, as compared to the original 5.55% fixed rate. The above transactions qualify for hedge accounting. (3) The balance as of December31, 2009 and 2008 is mainly composed of: (i.) A syndicated loan denominated in Euros (mainly) and British Pounds in the amount of $330 million. The loan is due in 2010 and bears interest determined on the basis of Euro LIBOR (mainly) and British Pound LIBOR. (ii.) A loan from Bank Leumi USA denominated in Canadian Dollars in the amount of $159 million and $138 million, respectively. The loan is due in 2011 and bears interest determined on the basis of Canadian Dollar LIBOR. (iii.) Loans from the European Investment Bank (EIB) denominated in Euro (mainly) and USD in the amount of $433 million. The loans are due in 2015 and bear interest determined on the basis of Euro LIBOR (mainly) and USD LIBOR. (4) The balance as of December31, 2009 and 2008 is comprised of a debenture with a principal amount of $15 million which was issued in 1998 in a private placement to institutional investors in the United State |
CONVERTIBLE SENIOR DEBENTURES:
CONVERTIBLE SENIOR DEBENTURES: | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
CONVERTIBLE SENIOR DEBENTURES: | NOTE 11CONVERTIBLE SENIOR DEBENTURES: As detailed below, Teva issued convertible senior debentures unconditionally guaranteed by the Company as to payment of all principal, interest, premium and additional amounts (as defined), if any. Interest on each of the debentures is payable on a semi-annual basis. Unless previously redeemed or repurchased, under certain circumstances set forth in the related offering document, holders of the debentures may convert them into shares at the conversion prices detailed below. As further described in the below table, Teva may redeem some or all of its debentures from and after a certain date. Similarly, holders of Tevas debentures may require Teva to repurchase their debentures on certain dates, as described below, as well as upon the occurrence of certain events specified in the relevant offering document. With respect to its debentures due 2024, Teva may elect to pay the required repurchase price either in cash or Teva shares (as set forth in the related offering document); with respect to its debentures due 2026, Teva must pay the repurchase price in cash. Convertible senior debentures issued during the year ended December31, 2006 have no contingent feature and are convertible at any time. The main terms of these debentures are summarized in the following table: Monthissued Issuer Footnote Annual interest rate Initial principal amount Principal amount at December31, 2009 Year due Conversion price Number of Tevaordinary sharesissuable uponfull conversionat December31, 2009 Earliestfuturedateof redemption at issuers option/repurchase at holders option % (U.S. $ inmillions) (U.S. $ in millions) $ (in millions) January2004 Teva Pharmaceutical FinanceII,LLC Series A (1 ) 0.50 $ 460 $ 37 2024 36.98 1 Redemptionondemand by issuer/ February 1, 2014 by holders Series B (1 ) 0.25 $ 634 $ 67 2024 34.40 2 February1,2010 by both issuer and holders January2006 Teva Pharmaceutical Finance Company B.V. 1.75 $ 818 $ 814 2026 50.56 16 February 1,2011 by both issuer and holders January2006 Teva Pharmaceutical Finance Company, LLC (2 ) 0.25 $ 575 $ 575 2026 46.51 (Seefootnote2 ) On demand by issuer/ February 1, 2011 by holders (1) Holders of the debentures issued in 2004 may convert the debentures into Teva shares under certain conditions detailed in the related offering document; inter alia, holders of these debentures may surrender their debentures for conversion into Teva shares during any conversion period (as defined) if the trading prices of Teva shares were more than 130% of the conversion price for twenty trading days within the first thirty trading days of each quarter (price threshold condition). (2) These convertible senior debentures due 2026 include a net share settlement feature according to which |
COMMITMENTS AND CONTINGENCIES:
COMMITMENTS AND CONTINGENCIES: | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
COMMITMENTS AND CONTINGENCIES: | NOTE 12COMMITMENTS AND CONTINGENCIES: a. Commitments: 1) Operating leases: As of December31, 2009, minimum future rentals under operating leases of buildings, machinery and equipment for periods in excess of one year were as follows: 2010$64 million; 2011$54 million; 2012$41 million; 2013$22 million; 2014$16 million; 2015 and thereafter$55 million. The lease fees expensed in each of the years ended December31, 2009, 2008 and 2007 were $67 million, $45 million and $51 million, respectively, of which an amount of less than $0.5 million, $1 million and $2 million were to related parties in the years ended December31, 2009, 2008 and 2007, respectively. 2) Royalty commitments: a) The Company is committed to pay royalties to owners of know-how, partners in alliances and other certain arrangements and to parties that financed research and development, at a wide range of rates as a percentage of sales of certain products, as defined in the agreements. In some cases, the royalty period is not defined; in other cases, royalties will be paid over various periods, not exceeding 20 years, commencing on the date of the first royalty payment. The Company has also undertaken to pay royalties to the Government of Israel, at the rates of 2% to 5% of sales relating to certain products, the development of which was funded by the Office of the Chief Scientist. The royalties due to the Government are linked to the amount of participation, in dollar terms (in respect of research grants commencing 1999with the addition of dollar LIBOR interest). At the time the grants were received, successful development of the related projects was not assured. In the case of failure of a project that was partly financed as above, the Company is not obligated to pay any such royalties. The maximum amount of the contingent liability in respect of royalties to the Government as of December31, 2009 amounted to $1 million. b) Royalty expense included in cost of sales for the years ended December31, 2009, 2008 and 2007 was $402 million, $231 million and $186 million, respectively. b. Contingent liabilities: General From time to time, Teva and its subsidiaries are subject to legal claims for damages and/or equitable relief arising in the ordinary course of business. In addition, as described below, in large part as a result of the nature of its business, Teva is frequently subject to patent litigation. Teva believes it has meritorious defenses to the actions to which it is a party and expects to pursue vigorously the defense of each of such actions, including those described below. Based upon the status of these cases, the advice of counsel, managements assessment of such cases and potential exposure involved relative to insurance coverage, no provision has been made in Tevas financial statements for any of such actions except as otherwise noted below under accounts payable and accruals. Furthermore, based on currently available information, Teva believes that none of the proceedings described below will have a material adverse effect on its financial condition; however, if one or more of such proceedings were to result in judgments again |
EQUITY:
EQUITY: | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
EQUITY: | NOTE 13EQUITY: a. Share capital: As of December31, 2009, there were 923million ordinary shares issued and outstanding (December 31, 2008889 million). Teva shares are traded on the Tel-Aviv Stock Exchange (TASE) and, in the form of American Depository Shares, each of which represents one ordinary share, on the Nasdaq Global Select Market in the United States. In addition, as at December31, 2009 and 2008, there were five million outstanding special shares, issued by a subsidiary, that are exchangeable at any time at the discretion of their holders into ordinary shares of the Company at a 1:1 ratio. A reconciliation of opening and closing balances of the number of ordinary shares (in millions) is presented below: 2009 2008 2007 Balance outstanding at beginning of year 889 808 793 Increase of shares on Barr acquisition (see note 2a): 69 Conversion of convertible senior debentures 27 2 3 Exercise of options by employees 7 9 12 Other 1 Balance outstanding at end of year 923 889 808 During the year ended December31, 2007, Teva spent $152 million to repurchase four million of its shares pursuant to repurchase plans. During the year ended December31, 2008, Teva utilized $86 million, or two million treasury shares, in connection with the conversion of its 4.5% convertible notes. Ordinary shares net of treasury shares at December31, 2009 and 2008 amounted to 885million and 851million shares, respectively. b. Registered offerings: In December 2008, the Company filed a shelf registration statement with the U.S. Securities and Exchange Commission. Under this registration statement, Teva may, from time to time, sell shares, debt securities and/or any other securities described in the registration statement in one or more offerings. c. Stock-based compensation plans: Stock-based compensation plans comprise employee stock option plans and restricted stock units (RSUs) and other equity-based awards to employees, officers and directors. The purpose of the plans is to enable the Company to attract and retain qualified personnel and to motivate such persons by providing them with an equity participation in the Company. The Companys major plan, the Omnibus Long Term Share Incentive Plan, was approved by the shareholders on July27, 2005, under which 50million equivalent stock units, which include both options exercisable into ordinary shares and RSUs, were approved for grants. As of December31, 2009, 11million equivalent stock units remain available for future awards. The vesting period of the options and RSUs is generally 2 to 4 years from the date of grant. The rights of the ordinary shares obtained from the exercise of options or RSUs are identical to those of the other ordinary shares of the Company. The contractual term of these options is primarily for seven years. Status of options A summary of the status of the option plans as of December31, 2009, 2008 and 2007, and changes during the years ended on those dates, is presented below (the number of options represents ordinary shares exercisable in respe |
INCOME TAXES:
INCOME TAXES: | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
INCOME TAXES: | NOTE 14INCOME TAXES: a. Income before income taxes is composed of the following: Year ended December31, 2009 2008 2007 (U.S. $ in millions) The Company and its Israeli subsidiaries $ 1,353 $ 2,350 $ 1,273 Non-Israeli subsidiaries* 628 (1,019 ) 1,462 Unrealized profit eliminated on consolidation** 222 (531 ) (431 ) $ 2,203 $ 800 $ 2,304 * The loss before tax in 2008 is mainly attributable to the acquisition of research and development in process which amounted to $1,402 million. ** The unrealized profit eliminated on consolidation arose primarily from goods supplied by Group companies in Israel. b. The provision for income taxes: Year ended December31, 2009 2008 2007 (U.S. $ in millions) In Israel $ 65 $ 155 $ 11 Outside Israel 148 46 341 Unrealized profit eliminated on consolidation* (47 ) (17 ) 34 $ 166 $ 184 $ 386 Current $ 408 $ 490 $ 286 Deferred (242 ) (306 ) 100 $ 166 $ 184 $ 386 * The unrealized profit eliminated on consolidation arose primarily from goods supplied by Group companies in Israel. Reconciliation of the statutory tax rate of the Company in Israel to the effective consolidated tax rate: YearendedDecember31, 2009 2008 2007 Statutory tax rate in Israel 26 % 27 % 29 % Increase (decrease) in effective tax rate due to: Different effective tax rates applicable to non-Israeli subsidiaries (3 )% (15 )% (3 )% The Company and its Israeli subsidiariesmainly tax benefits arising from reduced tax rates under benefit programs (19 )% (69 )% (11 )% Increase in uncertain tax positionsnet 4 % 34 % 2 % Othermainly acquisition of research and development in process and release of prior years provisions 46 % Effective consolidated tax rate 8 % 23 % 17 % * The large component percentages in 2008 reflect the lower income before taxation in this year, which is primarily due to the write-off of research and development in process, as a result of the acquisitions consummated in this year, which amounted to $1,402 million. c. Deferred income taxes: December31, 2009 2008 (U.S. $ in millions) Short-term deferred tax assetsnet: Inventory related $ 56 $ (34 ) Sales reserves and allowances 125 112 Provisions for employee-related obligations 42 77 Unrealized profit from intercompany sales 144 97 Carryforward losses and deductions 30 115 Provision for legal settlements 126 Other 85 72 608 439 Valuation allowancein respect of carryforward losses and deductions |
FINANCIAL INSTRUMENTS AND RISK
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT: | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT: | NOTE 15FINANCIAL INSTRUMENTS AND RISK MANAGEMENT: 1) Foreign exchange risk management: The Group enters into forward exchange contracts in non-functional currencies and purchases and writes non-functional currency options in order to hedge the currency exposure on identifiable balance sheet items. In addition, the Group takes steps to reduce exposure by using natural hedging. The Company also acts to offset risks in opposite directions among the companies in the Group. The currency hedged items are usually denominated in the following main currencies: European (mainly the Euro (EUR), Hungarian Forint (HUF) and British Pound (GBP)), New Israeli Shekel (NIS) and Canadian Dollar (CAD). The writing of options is part of a comprehensive currency hedging strategy. These transactions are for periods of less than one year. The counterparties to the derivatives comprised mainly of major banks and, in view of the current financial environment, the Company is monitoring the associated inherent credit risks. 2) Interest rate swaps: In July 2009, the Company entered into three interest rate swap agreements with respect to its $493 million principal amount 5.55% Senior Notes due 2016. The purpose of the transactions was to change the interest rate from fixed to floating rate. As a result of these agreements, Teva is currently paying an effective interest rate of six months LIBOR plus an average 1.98% on the $493 million principal amount, as compared to the original 5.55% fixed rate. The above transactions qualify for hedge accounting. 3) Derivative instrument disclosure: Effective January1, 2009, the Company adopted an accounting pronouncement which requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation. The fair value of derivative instruments is comprised of: 1. Asset derivatives, comprising foreign exchange contracts, designated as hedging instruments. These are reported under prepaid expenses and other current assets, and the fair value amounted to $13 million at December31, 2008. 2. Asset derivatives, comprising interest rate swap agreements, designated as hedging instruments. These are reported under long-term investments and receivables, and the fair value amounted to $10 million at December31, 2009. 3. Asset derivatives, comprising primarily foreign exchange contracts, not designated as hedging instruments. These are reported under prepaid expenses and other current assets, and the fair value amounted to $20 million and $52 million at December31, 2009 and December31, 2008, respectively. 4. Liability derivatives, comprising foreign exchange contracts, not designated as hedging instruments. These are reported under accounts payable, and the fair value amounted to $31 million and $126 million at December31, 2009 and December31, 2008, respectively. Derivatives on foreign exchange contracts hedge Tevas balance sheet items from currency exposure but are not designated as hedging instruments. With respect to such derivatives, a loss of $57 million and a gain of $33 million were recognized under financial expensesnet |
FINANCIAL EXPENSES- NET:
FINANCIAL EXPENSES- NET: | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
FINANCIAL EXPENSES- NET: | NOTE 16FINANCIAL EXPENSES- NET: YearendedDecember31, 2009 2008 2007 (U.S. $ in millions) Interest expense $ 230 $ 201 * $ 249 * Income from investments (58 ) (127 ) (136 ) Foreign exchange gainnet 24 (5 ) (22 ) Settlement** (100 ) Other than temporary impairment of securities 6 376 Total finance expense $ 202 $ 345 $ 91 * After giving retroactive effect to the adoption of an accounting pronouncement which requires issuers to account separately for the liability and equity components of convertible debt instruments that may be settled in cash (including partial cash settlement), as further described in note 11. ** Financial income in 2008 included a $100 million cash payment received in connection with a settlement agreement with an institution regarding Tevas auction rate securities portfolio, which Teva continues to hold. |
LEGAL SETTLEMENTS, IMPAIRMENT,
LEGAL SETTLEMENTS, IMPAIRMENT, RESTRUCTURING AND ACQUISITION COSTS: | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
LEGAL SETTLEMENTS, IMPAIRMENT, RESTRUCTURING AND ACQUISITION COSTS: | NOTE 17LEGAL SETTLEMENTS, IMPAIRMENT, RESTRUCTURING AND ACQUISITION COSTS: Legal settlements, impairment and restructuring charges consisted of the following: YearendedDecember31, 2009 2008 2007 (U.S. $ in millions) Legal settlements $ 434 $ 17 Impairment of long lived assets (see also notes 6 and 7) 110 107 Restructuring charges and acquisition costs 94 Total $ 638 $ 124 Legal settlements for the year ended December31, 2009 includes mainly settlement in connection with drug pricing and intellectual property lawsuits. The consolidated statement of income for the year ended December31, 2009 includes restructuring expenses in a total amount of $90 million. These expenses relate to cost reduction initiatives to meet the challenges of the Companys dynamic business environment and future opportunities. The cost reduction program comprises of closure of certain manufacturing and RD facilities, and streamlining the staff functions and work force to achieve these goals. The restructuring expense of $90 million is comprised of one-time termination benefits of $75 million, contract termination costs of $3 million and associated costs of $12 million. |
ENTITY-WIDE DISCLOSURES:
ENTITY-WIDE DISCLOSURES: | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
ENTITY-WIDE DISCLOSURES: | NOTE 18ENTITY-WIDE DISCLOSURES: a.) Net sales by geographical areas were as follows: Year ended December31, 2009 2008 2007 (U.S. $ in millions) North America $ 8,585 $ 6,413 $ 5,428 Europe 3,271 2,976 2,645 International* 2,043 1,696 1,335 $ 13,899 $ 11,085 $ 9,408 * Of which Israel $ 500 $ 476 $ 382 b.) Net sales to one major customer of total consolidated sales for the years ended December31, 2009, 2008 and 2007 were 16%, 13% and 10%, respectively. The balance due from the Companys largest customer accounted for 31% of the gross trade accounts receivable at December31, 2009. Sales reserves and allowances on these balances are recorded in current liabilities (refer to note 1p). Accordingly, the net balance of the Companys largest customer is much lower. c.) Net sales of Copaxone were approximately 18%, 16% and 10% of total net sales for the years ended December31, 2009, 2008 and 2007, respectively. d.) Net sales by product lines were as follows: Year ended December31, 2009 2008 2007 (U.S. $ in millions) Generics and other $ 9,340 $ 7,719 $ 7,024 Innovative products 2,665 1,922 1,031 Speciality respiratory products 898 778 742 Active pharmaceutical ingredients 565 603 561 Proprietary womens health products in the U.S. 357 BioGenerics 74 63 50 $ 13,899 $ 11,085 $ 9,408 e.) Net sales by therapeutic category, as a percentage of total sales, were as follows: YearendedDecember31, 2009 2008 2007 Anticancer and autoimmune 22 % 20 % 15 % Central nervous system 16 % 24 % 24 % Cardiovascular 11 % 13 % 14 % Gastrointestinal and metabolism 10 % 12 % 10 % Genito urinary system and sex hormones 10 % 2 % 2 % Respiratory 8 % 10 % 10 % Anti-infectives (includes antibiotics) 6 % 6 % 7 % Musculoskeletal 3 % 3 % 4 % Other* 14 % 10 %** 14 %** 100 % 100 % 100 % * Includes eight other therapeutic categories. ** Reclassified. f.) Property, plant and equipmentby geographical location were as follows: December31, 2009 2008 (U.S.$ in millions) Israel $ 1,084 $ 977 United States 712 734 Croatia 339 425 Hungary 299 257 United Kingdom 293 273 Other 1,039 1,033 $ 3,766 $ 3,699 |
EARNINGS PER SHARE:
EARNINGS PER SHARE: | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
EARNINGS PER SHARE: | NOTE 19EARNINGS PER SHARE: The net income and the weighted average number of shares used in computation of basic and diluted earnings per share for the years ended December31, 2009, 2008 and 2007 are as follows: Year ended December31, 2009 2008 2007 (U.S.$ in millions) Net income attributable to Teva $ 2,000 $ 609 * $ 1,914 * Interest expense on convertible senior debentures, and issuance costs, net of tax benefits 1 5 * 47 * Net income used for the computation of diluted earnings per share $ 2,001 $ 614 $ 1,961 Weighted average number of shares used in the computation of basic earnings per share 872 780 768 Add: Additional shares from the assumed exercise of employee stock options and unvested RSUs 7 10 12 Weighted average number of additional shares issued upon the assumed conversion of convertible senior debentures 17 30 50 Weighted average number of shares used in the computation of diluted earnings per share 896 820 830 * After giving retroactive effect to the adoption of an accounting pronouncement which requires issuers to account separately for the liability and equity components of convertible debt instruments that may be settled in cash (including partial cash settlement), as further described in note 11. In computing diluted earnings per share for the years ended December31, 2009 and December31, 2008, no account was taken of the potential dilution of convertible senior debentures and convertible senior subordinated notes, issuable upon assumed conversion, amounting to 16million and 17million weighted average shares, respectively, since they had an anti-dilutive effect on earnings per share. The following table details the number of ordinary shares and special shares less treasury shares as of each balance sheet date: December31, 2009 2008 2007 (Number of shares, in millions) Ordinary sharesissued and outstanding 923 889 808 Special sharesexchangeable into ordinary shares (see note 13a) 5 5 7 928 894 815 Treasury shares (38 ) (38 ) (40 ) 890 856 775 |
SCHEDULE II-VALUATION AND QUALI
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | TEVA PHARMACEUTICAL INDUSTRIES LIMITED SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS Three Years Ended December31, 2009 (U.S. $ in millions) Column A ColumnB Column C Column D ColumnE Balanceat beginning of period Charged to costs andexpenses Chargedto other accounts Deductions Balanceat endofperiod Allowance for doubtful accounts: Year ended December31, 2009 $ 112 $ 13 $ (20 ) $ (6 ) $ 99 Year ended December31, 2008 $ 83 $ 7 $ 30 $ (8 ) $ 112 Year ended December31, 2007 $ 66 $ 19 $ (1 ) $ (1 ) $ 83 Allowance in respect of carryforward tax losses: Year ended December31, 2009 $ 108 $ 16 $ (8 ) $ 5 $ 121 Year ended December31, 2008 $ 78 $ 14 $ 25 $ (9 ) $ 108 Year ended December31, 2007 $ 108 $ (7 ) $ (20 ) $ (3 ) $ 78 |
Document Information
Document Information | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | 2009-12-31 |
Entity Information
Entity Information (USD $) | |
12 Months Ended
Dec. 31, 2009 | |
Trading Symbol | TEVA |
Entity Registrant Name | TEVA PHARMACEUTICAL INDUSTRIES LTD |
Entity Central Index Key | 0000818686 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | Yes |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 923,400,051 |