Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | |
Dec. 31, 2018 | Jun. 30, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-K | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | FY | |
Trading Symbol | TEVA | |
Entity Registrant Name | TEVA PHARMACEUTICAL INDUSTRIES LTD | |
Entity Central Index Key | 818,686 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Large Accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 1,089,388,686 | |
Entity Public Float | $ 20.7 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 1,782 | $ 963 |
Trade receivables | 5,822 | 7,128 |
Inventories | 4,731 | 4,924 |
Prepaid expenses | 899 | 1,100 |
Other current assets | 468 | 701 |
Assets held for sale | 92 | 566 |
Total current assets | 13,794 | 15,382 |
Deferred income taxes | 368 | 574 |
Other non-current assets | 731 | 932 |
Property, plant and equipment, net | 6,868 | 7,673 |
Identifiable intangible assets, net | 14,005 | 17,640 |
Goodwill | 24,917 | 28,414 |
Total assets | 60,683 | 70,615 |
Current liabilities: | ||
Short-term debt | 2,216 | 3,646 |
Sales reserves and allowances | 6,711 | 7,881 |
Trade payables | 1,853 | 2,069 |
Employee-related obligations | 870 | 549 |
Accrued expenses | 1,868 | 3,014 |
Other current liabilities | 804 | 724 |
Liabilities held for sale | 38 | |
Total current liabilities | 14,322 | 17,921 |
Long-term liabilities: | ||
Deferred income taxes | 2,140 | 3,277 |
Other taxes and long-term liabilities | 1,727 | 1,843 |
Senior notes and loans | 26,700 | 28,829 |
Total long-term liabilities | 30,567 | 33,949 |
Commitments and contingencies, see note 13 | ||
Total liabilities | 44,889 | 51,870 |
Teva shareholders' equity: | ||
Preferred shares of NIS 0.10 par value per mandatory convertible preferred share; December 31, 2018: no shares authorized or issued; December 31, 2017: authorized 5.0 million shares; issued 3.7 million shares | 3,631 | |
Ordinary shares of NIS 0.10 par value per share; December 31, 2018 and December 31, 2017: authorized 2,495 million shares; issued 1,196 million shares and 1,124 million shares, respectively | 56 | 54 |
Additional paid-incapital | 27,210 | 23,479 |
Accumulated deficit | (5,958) | (3,803) |
Accumulated other comprehensive loss | (2,459) | (1,853) |
Treasury shares as of December 31, 2018 and December 31, 2017: 106 million ordinary shares and 107 million ordinary shares, respectively | (4,142) | (4,149) |
Stockholders' equity attributable to Teva shareholders | 14,707 | 17,359 |
Non-controlling interests | 1,087 | 1,386 |
Total equity | 15,794 | 18,745 |
Total liabilities and equity | $ 60,683 | $ 70,615 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - ₪ / shares shares in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Preferred stock par or stated value per share | ₪ 0.10 | ₪ 0.10 |
Preferred stock shares, authorized | 0 | 5 |
Preferred stock shares, issued | 0 | 3.7 |
Common stock, par or stated value per share | ₪ 0.10 | ₪ 0.10 |
Ordinary shares, authorized | 2,495 | 2,495 |
Ordinary shares, issued | 1,196 | 1,124 |
Treasury shares | 106 | 107 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net revenues | $ 18,854 | $ 22,385 | $ 21,903 |
Cost of sales | 10,558 | 11,770 | 10,250 |
Gross profit | 8,296 | 10,615 | 11,653 |
Research and development expenses | 1,213 | 1,778 | 2,077 |
Selling and marketing expenses | 2,916 | 3,395 | 3,583 |
General and administrative expenses | 1,298 | 1,451 | 1,390 |
Intangible assets impairments | 1,991 | 3,238 | 589 |
Goodwill impairment | 3,027 | 17,100 | 900 |
Other asset impairments, restructuring and other items | 987 | 1,836 | 830 |
Legal settlements and loss contingencies | (1,208) | 500 | 899 |
Other income | (291) | (1,199) | (769) |
Operating (loss) income | (1,637) | (17,484) | 2,154 |
Financial expenses-net | 959 | 895 | 1,330 |
Income (loss) before income taxes | (2,596) | (18,379) | 824 |
Income taxes (benefit) | (195) | (1,933) | 521 |
Share in (profits) losses of associated companies-net | 71 | 3 | (8) |
Net income (loss) | (2,472) | (16,449) | 311 |
Net loss attributable to non-controlling interests | (322) | (184) | (18) |
Net income (loss) attributable to Teva | (2,150) | (16,265) | 329 |
Accrued dividends on preferred shares | 249 | 260 | 261 |
Net income (loss) attributable to ordinary shareholders | $ (2,399) | $ (16,525) | $ 68 |
Earnings (loss) per share attributable to ordinary shareholders: | |||
Basic | $ (2.35) | $ (16.26) | $ 0.07 |
Diluted | $ (2.35) | $ (16.26) | $ 0.07 |
Weighted average number of shares (in millions): | |||
Basic | 1,021 | 1,016 | 955 |
Diluted | 1,021 | 1,016 | 961 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Net income (loss) | $ (2,472) | $ (16,449) | $ 311 | |
Other comprehensive income (loss), net of tax: | ||||
Currency translation adjustment | [1] | (713) | 1,516 | (445) |
Unrealized gain (loss) on derivative financial instruments, net | 115 | (140) | (477) | |
Unrealized gain (loss) on available-for-sale securities, net | 3 | (319) | ||
Unrealized gain (loss) on defined benefit plans, net | 13 | (10) | (23) | |
Total other comprehensive income (loss) | (585) | 1,369 | (1,264) | |
Total comprehensive loss | (3,057) | (15,080) | (953) | |
Comprehensive loss attributable to non-controlling interests | (296) | (121) | (78) | |
Comprehensive loss attributable to Teva | $ (2,761) | $ (14,959) | $ (875) | |
[1] | In 2017 includes amount that was released from accumulated other comprehensive loss as part of the deconsolidation of the Venezuelan subsidiaries and is included in Venezuela deconsolidation charge under other asset impairment, restructuring and other items. |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) shares in Millions, $ in Millions | Total | Ordinary Shares [Member] | MCPS [Member] | [1] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Treasury Shares [Member] | Total Teva Shareholders' Equity [Member] | Non-controlling Interests [Member] | ||
Beginning balance at Jan. 06, 2016 | $ 29,927 | $ 52 | $ 3,291 | $ 17,757 | $ 14,851 | $ (1,955) | $ (4,227) | $ 29,769 | $ 158 | |||
Beginning balance, shares at Jan. 06, 2016 | 1,016 | |||||||||||
Comprehensive income (loss) | (953) | 329 | (1,204) | (875) | (78) | |||||||
Ordinary shares issuance, value | [2] | 5,391 | $ 2 | 5,389 | 5,391 | |||||||
Ordinary shares issuance, shares | [2] | 106 | ||||||||||
MCPS issuance | [2] | 329 | 329 | 329 | ||||||||
Exercise of options by employees and vested RSUs, value | 35 | 2 | 33 | 35 | ||||||||
Exercise of options by employees and vested RSUs, shares | 1 | |||||||||||
Stock-based compensation expense | 159 | 159 | 159 | |||||||||
Dividends to ordinary shareholders | (1,303) | (1,303) | (1,303) | |||||||||
Accrued dividends to preferred shareholders | (261) | (261) | (261) | |||||||||
Transactions with non-controlling interests | 1,684 | 111 | 111 | 1,573 | ||||||||
Other | (15) | (9) | (9) | (18) | 3 | |||||||
Ending balance at Dec. 31, 2016 | 34,993 | $ 54 | 3,620 | 23,409 | 13,607 | (3,159) | (4,194) | 33,337 | 1,656 | |||
Ending balance, shares at Dec. 31, 2016 | 1,123 | |||||||||||
Comprehensive income (loss) | (15,080) | (16,265) | 1,306 | (14,959) | (121) | |||||||
Exercise of options by employees and vested RSUs, value | $ 0 | [3] | (45) | 45 | ||||||||
Exercise of options by employees and vested RSUs, shares | 1 | |||||||||||
Stock-based compensation expense | 133 | 133 | 133 | |||||||||
Dividends to ordinary shareholders | (901) | (901) | (901) | |||||||||
Accrued dividends to preferred shareholders | (249) | 11 | (11) | (249) | (249) | |||||||
Transactions with non-controlling interests | (111) | (111) | ||||||||||
Other | (40) | (7) | 5 | (2) | (38) | |||||||
Ending balance at Dec. 31, 2017 | 18,745 | $ 54 | 3,631 | 23,479 | (3,803) | (1,853) | (4,149) | 17,359 | 1,386 | |||
Ending balance, shares at Dec. 31, 2017 | 1,124 | |||||||||||
Cumulative effect of new accounting standard (See Note 1) | (5) | 5 | ||||||||||
Comprehensive income (loss) | (3,057) | (2,150) | (611) | (2,761) | (296) | |||||||
Ordinary shares issuance, value | [4] | (52) | $ 2 | (3,880) | 3,826 | (52) | ||||||
Issuance of Treasury Shares | 4 | (3) | 7 | 4 | ||||||||
Ordinary shares issuance, shares | [4] | 72 | ||||||||||
Stock-based compensation expense | 155 | 155 | 155 | |||||||||
Accrued dividends to preferred shareholders | $ 249 | (249) | ||||||||||
Transactions with non-controlling interests | (1) | 2 | 2 | (3) | ||||||||
Ending balance at Dec. 31, 2018 | $ 15,794 | $ 56 | $ 27,210 | $ (5,958) | $ (2,459) | $ (4,142) | $ 14,707 | $ 1,087 | ||||
Ending balance, shares at Dec. 31, 2018 | 1,196 | |||||||||||
[1] | Mandatory convertible preferred shares. | |||||||||||
[2] | Net of issuance costs. | |||||||||||
[3] | Represents an amount less than 0.5 million. | |||||||||||
[4] | Mainly MCPS conversion, net of tax withholding. |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Equity (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Maximum [Member] | Ordinary Shares [Member] | |||
Exercise of options by employees and vested RSUs | $ 0.5 | $ 0.5 | $ 0.5 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Millions | 12 Months Ended | |||||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | ||||
Operating activities: | ||||||
Net income (loss) | $ (2,472) | $ (16,449) | $ 311 | |||
Adjustments to reconcile net income to net cash provided by operations: | ||||||
Impairment of long-lived assets | 5,621 | 20,882 | 1,645 | |||
Depreciation and amortization | 1,842 | 2,112 | 1,524 | |||
Net change in operating assets and liabilities | (1,823) | (1,645) | (116) | |||
Deferred income taxes-net and uncertain tax positions | (837) | (2,331) | 15 | |||
Stock-based compensation | 155 | 133 | 124 | |||
Other items | (135) | 13 | (14) | |||
Research and development in process | 114 | 175 | 422 | |||
Net loss from sale of long-lived assets and investments | (19) | (1,090) | (764) | |||
Venezuela deconsolidation loss | 383 | |||||
Venezuela impairment of net monetary assets | 42 | 603 | ||||
Other-than-temporary impairment | 140 | |||||
Net cash provided by operating activities | 2,446 | 2,225 | 3,890 | |||
Investing activities: | ||||||
Beneficial interest collected in exchange for securitized trade receivables | 1,735 | 1,282 | 1,335 | |||
Proceeds from sales of long-lived assets and investments | 890 | 3,477 | 2,002 | |||
Purchases of property, plant and equipment | (651) | (874) | (901) | |||
Purchases of investments and other assets | (119) | (200) | (481) | |||
Other investing activities | 11 | (282) | (212) | |||
Acquisitions of businesses, net of cash acquired | 43 | (36,148) | ||||
Net cash provided by (used in) investing activities | 1,866 | 3,446 | (34,405) | |||
Financing activities: | ||||||
Repayment of senior notes and loans and other long-term liabilities | (7,446) | (3,300) | (999) | |||
Proceeds from senior notes and loans, net of issuance costs | 4,434 | 506 | 25,252 | |||
Net change in short-term debt | (260) | (1,683) | 1,998 | |||
Other financing activities | (57) | (74) | (169) | |||
Dividends paid on ordinary shares | (12) | [1] | (901) | [1] | (1,303) | [1] |
Dividends paid on preferred shares | (10) | [1] | (260) | [1] | (255) | [1] |
Proceeds from exercise of options by employees | [2] | [2] | 35 | |||
Dividends paid to non-controlling interests | (38) | |||||
Proceeds from issuance of ordinary shares, net of issuance costs | 329 | |||||
Proceeds from issuance of mandatory convertible preferred shares, net of issuance costs | 329 | |||||
Net cash provided by (used in) financing activities | (3,351) | (5,750) | 25,217 | |||
Translation adjustment on cash and cash equivalents | (142) | 54 | (660) | |||
Net change in cash and cash equivalents | 819 | (25) | (5,958) | |||
Balance of cash and cash equivalents at beginning of year | 963 | 988 | 6,946 | |||
Balance of cash and cash equivalents at end of year | 1,782 | 963 | 988 | |||
Non-cash financing and investing activities: | ||||||
Beneficial interest obtained in exchange for securitized trade receivables | 1,716 | 1,295 | 1,365 | |||
Conversion of mandatory convertible preferred shares into ordinary shares | 3,880 | |||||
Share issuance to Allergan plc for the Actavis Generics acquisition | 5,065 | |||||
Shares transferred to Takeda as part of the establishment of Teva Takeda | 1,825 | |||||
Actavis Generics contingent consideration | 302 | |||||
Interest | 815 | 795 | 290 | |||
Income taxes, net of refunds | 420 | 106 | 341 | |||
Net change in operating assets and liabilities: | ||||||
Other current assets | (1,437) | 658 | (517) | |||
Trade payables, accrued expenses, employee-related obligations and other current liabilities | (500) | (3,083) | (695) | |||
Trade receivables net of sales reserves and allowances | 88 | 514 | 343 | |||
Inventories | 26 | 199 | 370 | |||
Inventory step-up | 67 | 383 | ||||
Net Change In Items Comprising Supplemental Disclosure Of Cash Flow Information | $ (1,823) | $ (1,645) | $ (116) | |||
[1] | In 2018, the amounts consist of tax withholding payments made on dividends paid in 2017. | |||||
[2] | Represent an amount less than 0.5 million |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Significant Accounting Policies | NOTE 1—SIGNIFICANT ACCOUNTING POLICIES: a. General: Operations Teva Pharmaceutical Industries Limited (the “Parent Company”), headquartered in Israel, together with its subsidiaries and associated companies (the “Company,” “Teva” or the “Group”), is engaged in the development, manufacturing, marketing and distribution of generics, specialty medicines and biopharmaceuticals. The majority of the Group’s revenues are in the United States and Europe. Basis of presentation and use of estimates The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). In preparing the Company’s consolidated financial statements, management is required 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 determining the valuation and recoverability of intangible assets and goodwill; assessing sales reserves and allowances, and contingent consideration; assessing compliance with debt covenants; uncertain tax positions, valuation allowances, contingencies, inventory valuation and restructuring. Accounting for Venezuelan Operations Until November 30, 2017, the financial position and results of operations of Teva’s Venezuelan business, conducted through a number of wholly-owned subsidiaries, were included in Teva’s consolidated financial statements and reported under highly-inflationary accounting principles, with the functional currency of the U.S. dollar. Effective November 30, 2017, Teva deconsolidated its Venezuelan subsidiaries and began accounting for its investments in its Venezuelan operations using the cost method of accounting under the measurement alternative. The estimated fair value of the investments was immaterial based on expected future cash flow, considering ongoing hyper-inflation and economic and political uncertainty in Venezuela. The assigned values are considered Level 3 measurements within the fair value hierarchy. Teva’s financial results include sales of finished goods to the Venezuelan subsidiaries, to the extent cash payments are received from these subsidiaries, while cost of sales is recorded when goods are imported to Venezuela. The Venezuelan subsidiaries’ results were immaterial in terms of assets, liabilities, operating results and cash flows for the eleven months ended November 30, 2017. Upon assessing the facts as of December 31, 2018, Teva continues to believe its previous conclusion regarding its lack of control or significant influence over its Venezuelan operations is appropriate. Teva will continue to monitor the conditions in Venezuela and their impact on its prospective accounting treatment and related disclosures. Functional currency A major part of the Group’s operations is carried out by the Company in the United States, Israel and certain other countries. The functional currency of these entities is the U.S. dollar (“dollar” or “$”). The functional currency of certain subsidiaries and associated companies is their local currency. The financial statements of those companies are included in the consolidated financial statements, translated into U.S. dollars. Assets and liabilities are translated at year-end In the event of a divestiture of a foreign subsidiary, the related foreign currency translation results are reversed from equity to income. Foreign currency exchange gains and losses are included in net income (loss). Principles of consolidation The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries and VIEs for which the Company is considered the primary beneficiary. For those consolidated subsidiaries where Teva owns less than 100%, the outside shareholders’ interests are shown as non-controlling For VIEs, the Company performs an analysis to determine whether the variable interests give a controlling financial interest in a VIE. The Company periodically reassesses whether it controls its VIEs. Intercompany transactions and balances are eliminated on consolidation; profits from intercompany sales, not yet realized outside the Group, are also eliminated. b. New accounting pronouncements Recently adopted accounting pronouncements On January 1, 2018, Teva adopted the new accounting standard ASC 606 “Revenue from Contracts with Customers”, and all the related amendments (“new revenue standard”) to all contracts using the modified retrospective method. The cumulative initial effect of applying the new revenue standard was immaterial. See note 9 for further discussion. In May 2017, the FASB issued ASU 2017-09 In February 2017, the FASB issued ASU 2017-05 de-recognition In August 2016, the FASB issued ASU 2016-15 In January 2016, the FASB issued ASU 2016-01 Recently issued accounting pronouncements, not yet adopted In November 2018, the FASB issued ASU 2018-18 unit-of-account In August 2018, the FASB issued ASU 2018-15 other—Internal-use 350-40): internal-use In August 2018, the FASB issued ASU 2018-13 In June 2018, the FASB issued ASU 2018-07 non-employee In February 2018, the FASB issued ASU 2018-02 In August 2017, the FASB issued ASU 2017-12 non-financial In June 2016, the FASB issued ASU 2016-13 In February 2016, the FASB issued ASU 2016-02 right-of-use The new standard provides a number of optional practical expedients in transition. Teva does not expect to elect the ‘package of practical expedients‘, which permits the Company not to reassess its prior conclusions regarding lease identification, lease classification and initial direct costs under the new standard. In addition, Teva also does not expect to elect the practical expedient pertaining to land easements. However, the Company does expect to elect the practical expedient pertaining to the use-of Teva expects that the adoption of this standard will have a material effect on Teva’s financial statements. While Teva continues to assess all the effects of adoption, Teva currently believes that the most significant impact will be reflected in: (i) the recognition of new ROU assets and lease liabilities on Teva’s balance sheet for its operating leases of real estate, vehicles and equipment, and (ii) the requirement to provide significant new disclosures regarding Teva’s leasing activities. The Company, however, does not expect a material impact to its consolidated statements of income and consolidated statements of cash flow. Following adoption of the new standard, Teva expects to recognize additional operating liabilities ranging from $560 million to $660 million, with corresponding ROU assets of approximately the same amount based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The new standard also provides practical expedients for an entity’s ongoing accounting. Teva expects to elect the short-term lease recognition exemption for all leases that qualify. This means, for those leases, Teva will not recognize ROU assets or lease liabilities, including not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. Teva also expects to elect the practical expedient to not separate lease and non-lease The Company has performed, and will continue to perform a comprehensive evaluation of the impact of this guidance on the Company, including assessing the Company’s lease portfolio, implementation of a new enterprise-wide lease management system to meet reporting requirements, assessing the impact to business processes and implementation of internal controls over financial reporting and related disclosure requirements. The Company is working closely with the software system developer, as the timely readiness of the lease software system is critical to ensure an efficient and effective adoption of the standard. c. Acquisitions: Teva’s consolidated financial statements include the operations of an acquired business from the date of the acquisition’s consummation. Acquired businesses are accounted for using the acquisition method of accounting, which requires, among other things, that most assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date and that the fair value of acquired in process research and development (“IPR&D”) be recorded on the balance sheet. Transaction costs are expensed as incurred. Any excess of the consideration transferred over the assigned values of the net assets acquired is recorded as goodwill. When Teva acquires net assets that do not constitute a business, as defined under U.S. GAAP, no goodwill is recognized and acquired IPR&D is expensed. Contingent consideration incurred in a business combination is included as part of the acquisition price and recorded at a probability weighted assessment of its fair value as of the acquisition date. The fair value of the contingent consideration is re-measured d. Collaborative arrangements: Collaborative agreements are contractual arrangements in which the parties are active participants to the arrangement and are exposed to the significant risks and rewards that are dependent on the ultimate commercial success of the endeavor. The Company recognizes revenue generated and costs incurred on sales to third parties as it relates to collaborative agreements as gross or net. If the Company is the principal participant in a transaction, revenues and costs are recorded on a gross basis; otherwise, revenues are recorded on a net basis. e. Equity investments: The Company measures equity investments at fair value with changes in fair value now recognized in net income. The Company accounts for equity investments that do not have a readily determinable fair value as cost method investments under the measurement alternative prescribed within ASU 2016-01 f. Fair 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. 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 inputs 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. g. Investment in securities: Investment in securities consists of debt securities classified as available-for-sale Unrealized gains of available for sale securities, net of taxes, are reflected in other comprehensive income. Unrealized losses considered to be temporary are reflected in other comprehensive income; unrealized losses that are considered to be other-than-temporary are charged to income as an impairment charge. Realized gains and losses for debt securities are included in financial expense, net. The Company considers available evidence in evaluating potential impairments of its investments, including the duration and extent to which fair value is less than cost. For debt securities, an other-than-temporary impairment has occurred if the Company does not expect to recover the entire amortized cost basis of the debt security. If the Company does not intend to sell the impaired debt security, and it is not more likely than not it will be required to sell the debt security before the recovery of its amortized cost basis, the amount of the other-than-temporary impairment recognized in earnings, recorded in financial expense, net, is limited to the portion attributed to credit loss. The remaining portion of the other-than-temporary impairment related to other factors is recognized in other comprehensive income. h. Cash and cash equivalents: All highly liquid investments, which include short-term bank deposits and money market instruments, that are not restricted as to withdrawal or use, and investment in short-term debentures, the period to maturity of which did not exceed three months at the time of investment, are considered to be cash equivalents. i. Trade receivables: Trade receivables are stated at their net realizable value. The allowance against gross trade receivables reflects the best estimate of losses inherent in the receivables portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available information. As of December 31, 2018, and 2017, an allowance for doubtful debts in the amount of $232 million is reflected in net trade receivables. Trade receivables are written off after all reasonable means to collect the full amount have been exhausted. j. Concentration of credit risks: Most of Teva’s cash and cash equivalents (which, along with investment in securities, totaled $1,845 million at December 31, 2018) were deposited with European, U.S. and Israeli banks and financial institutions and were comprised mainly of cash deposits. The pharmaceutical industry, particularly in the United States, has been significantly affected by consolidation among managed care providers, large pharmacy chains, wholesaling organizations and other buyer groups. The U.S. market constituted approximately 48% of Teva’s consolidated revenues in 2018. The exposure of credit risks relating to other trade receivables is limited, due to the relatively large number of group customers and their wide geographic distribution. Teva performs ongoing credit evaluations of its customers for the purpose of determining the appropriate allowance for doubtful accounts and generally does not require collateral. An appropriate allowance for doubtful accounts is included in the accounts and netted against trade receivables. k. Inventories: Inventories are valued at the lower of cost or net realizable value. Cost of raw and packaging materials, purchased products, manufactured finished products, products in process and capitalized production costs are determined predominantly on a standard cost basis, approximating average costs. Other methods which are utilized for determining the value of inventories are moving average, cost basis and the first in first out method. Teva regularly reviews its inventories for obsolescence and other impairment risks and reserves are established when necessary. Inventories acquired in a business combination are stepped-up l. Long-lived assets: Teva’s long-lived, non-current Goodwill Goodwill reflects the excess of the consideration transferred, including the fair value of any contingent consideration and any non-controlling The goodwill impairment test is performed according to the following principles: 1. An initial qualitative assessment may be performed to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. 2. If the Company concludes it is more likely than not that the fair value of the reporting unit is less than its carrying mount, a quantitative fair value test is performed. An impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value is recognized. An interim goodwill impairment test may be required in advance of the annual impairment test if events occur that indicate impairment might be present. For example, a substantial decline in the Company’s market capitalization, unexpected adverse business conditions, economic factors and unanticipated competitive activities may indicate that an interim impairment test is required. In the event that the Company’s market capitalization declines below its book value, the Company considers the length and severity of the decline and the reason for the decline when assessing whether potential goodwill impairment exists. Identifiable intangible assets Identifiable intangible assets are comprised of definite life intangible assets and indefinite life intangible assets. Definite life intangible assets consist mainly of acquired product rights and other rights relating to products for which marketing approval was received from the U.S. Food and Drug Administration (“FDA”) or the equivalent agencies in other countries. These assets are amortized mainly using the straight-line method over their estimated period of useful life, or based on economic benefit models, if more appropriate, which is determined by identifying the period and manner in which substantially all of the cash flows are expected to be generated. Amortization of acquired developed products is recorded under cost of sales. Amortization of marketing and distribution rights is recorded under selling and marketing (“S&M”) expenses when separable. Indefinite life intangible assets are mainly comprised of research and development in-process IPR&D acquired in a business combination is capitalized as an indefinite life intangible asset until the related research and development efforts are either completed or abandoned. In the reporting period where they are treated as indefinite life intangible assets, they are not amortized but rather are monitored triggering events and tested for impairment. Upon completion of the related research and development efforts, management determines the useful life of the intangible assets and amortizes them accordingly. In case of abandonment, the related research and development assets are impaired. Whenever impairment indicators are identified for definite life intangible assets, Teva reconsiders the asset’s estimated life, calculates the undiscounted value of the asset’s or asset group’s cash flows and compares such value against the asset’s or asset group’s carrying amount. If the carrying amount is greater, Teva records an impairment loss for the excess of book value over fair value based on the discounted cash flows. In determining the estimated fair value of identifiable intangible assets, Teva utilized a discounted cash flow model. The key assumptions within the model related to forecasting future revenue and operating income, an appropriate discount rate and an appropriate terminal value based on the nature of the long-lived asset. The Company’s updated forecasts of net cash flows for the impaired assets reflect, among others, the following: (i) for IPR&D assets, the impact of changes to the development programs, the projected development and regulatory timeframes and the risks associated with these assets; and (ii) for product rights, pricing and volume projections, as well as patent life and any significant changes to the competitive environment. Property, plant and equipment Property, plant and equipment are stated at cost, after deduction of the related investment grants, and depreciated using the straight-line method over the estimated useful life of the assets: buildings, mainly 40 years; machinery and equipment, mainly between 15 to 20 years; and other assets, between 5 to 10 years. For property, plant and equipment, whenever impairment indicators are identified, Teva reconsiders the asset’s estimated life, calculates the undiscounted value of the asset’s cash flows and compares such value against the asset’s carrying amount. If the carrying amount is greater, Teva records an impairment loss for the excess of book value over fair value. m. Contingencies: The Company is involved in various patent, product liability, commercial, government investigations, environmental claims and other legal proceedings that arise from time to time in the ordinary course of business. Except for income tax contingencies, contingent consideration, other contingent liabilities incurred or acquired in a business combination, Teva records accruals for these types of contingencies to the extent that Teva concludes their occurrence is probable and that the related liabilities are estimable. When accruing these costs, the Company will recognize an accrual in the amount within a range of loss that is the best estimate within the range. When no amount within the range is a better estimate than any other amount, the Company accrues for the minimum amount within the range. Teva records anticipated recoveries under existing insurance contracts that are probable of occurring at the gross amount that is expected to be collected. Legal costs are expensed as incurred. The Company recognizes gain contingencies when they are realized or when all related contingencies have been resolved. n. Treasury shares: Treasury shares are presented as a reduction of Teva shareholders’ equity and carried at their cost to Teva, under treasury shares. o. Stock-based compensation: Teva recognizes the estimated fair value of share-based awards, restricted share units (“RSUs”) and performance share units (“PSUs”) under stock-based compensation costs. The compensation expense for PSUs is recognized only if it is probable that the performance condition will be achieved. Teva measures compensation expense for share-based awards based on estimated fair values on the date of grant using the Black-Scholes option-pricing model. This option pricing model requires estimates as to the option’s expected term and the price volatility of the underlying stock. Teva amortizes the value of share-based awards to expense over the vesting period on a straight-line basis. Teva measures compensation expense for the RSUs and PSUs based on the market value of the underlying stock at the date of grant, less an estimate of dividends that will not accrue to the RSU and PSU holders prior to vesting. p. Deferred income taxes: Deferred income taxes are determined utilizing the “asset and liability” method based on the estimated future tax effects of temporary differences between the financial accounting and tax basis of assets and liabilities under the applicable tax laws, and on tax rates anticipated to be in effect when the deferred income taxes are expected to be paid or realized. A valuation allowance is provided if, based upon the weight of available evidence, it is more likely than not that a portion of the deferred income tax assets will not be realized. In determining whether a valuation allowance is needed, Teva considers all available evidence, including historical information, long range forecast of future taxable income and evaluation of tax planning strategies. Amounts recorded for valuation allowance can result from a complex series of judgments about future events and can rely on estimates and assumptions. Deferred income tax liabilities and assets are classified as non-current. Deferred tax has not been provided on the following items: 1. Taxes that would apply in the event of disposal of investments in subsidiaries, as it is generally the Company’s intention to hold these investments, not to realize them. The determination of the amount of related unrecognized deferred tax liability is not practicable. 2. Amounts of tax-exempt q. Uncertain tax positions: Teva recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized. Teva regularly re-evaluates Provisions for uncertain tax positions, whereas Teva has net operating losses to offset additional income taxes that would result from the settlement of the tax position, are presented as a reduction of the deferred tax assets for such net operating loss. r. Derivatives and hedging: The Group carries out transactions involving derivative financial instruments (mainly forward exchange contracts, currency options, cross-currency swap contracts, interest rate swap contracts and treasury locks). The transactions are designed to hedge the Company’s currency and interest rate exposures. The Company does not enter into derivative transactions for trading purposes. Derivative instruments are recognized on the balance sheet at their fair value. For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting gain or loss on the hedged item attributable to the hedged risk is recognized in financial expenses—net in the statements of income in the period that the changes in fair value occur. For derivative instruments that are designated and qualify as a cash-flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the anticipated transaction in the same period or periods during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument (i.e., the ineffective portion), if any, is recognized in the statement of income during the current period. For derivative instruments that are designated as net-investment expenses-net. For derivative instruments that qualify for hedge accounting, the cash flows associated with these derivatives are reported in the consolidated statements of cash flows consistently with the classification of the cash flows from the underlying hedged items that these derivatives are hedging. Derivative instruments that do not qualify for hedge accounting are recognized on the balance sheet at their fair value, with changes in the fair value recognized as a component of financial expenses—net in the statements of income. The cash flows associated with these derivatives are reflected as cash flows from operating activities in the consolidated statements of cash flows. s. Revenue recognition: The Company’s revenue recognition accounting policy until December 31, 2017, prior to the adoption of the new revenue standard The Company recognizes revenues from product sales, including sales to distributors when persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fixed or determinable and collectability is reasonably assured. This generally occurs when products are shipped and title and risk and rewards for the products are transferred to the customer. Revenues from product sales are recorded net of provisions for estimated chargebacks, rebates, returns, prompt pay discounts and other deductions, such as shelf stock adjustments, which can be reasonably estimated. When sales provisions are not considered reasonably estimable by Teva, the revenue is deferred to a future period when more information is available to evaluate the impact. Provisions for chargebacks, rebates including Medicaid and other governmental program discounts and other promotional items, such as shelf stock adjustments, are included in sales reserves and allowances (“SR&A”). These provisions are recognized concurrently with the sales of products. Prompt payment discounts are netted against trade receivables. Calculations for these deductions from sales are based on historical experience and the specific terms in the individual agreements. Chargebacks and rebates are the largest components of sales reserves and allowances. Provisions for chargebacks are determined using historical chargeback experience and expected chargeback levels and wholesaler sales information for products, which are compared to externally obtained distribution channel reports for reasonableness. Rebates are recognized based on contractual obligations in place at the time of sales with consideration given to relevant factors that may affect the payment as well as historical experience for estimated market activity. Shelf-stock adjustments are granted to customers based on the existing inventory of a customer following decreases in the invoice or contract price of the related product and are estimated based on expected market performance. Teva records a reserve for estimated sales returns by applying historical experience of customer returns to the amounts invoiced and the amount of returned products to be destroyed versus products that can be placed back in inventory for resale. Revenue resulting from the achievement of milestone events stipulated in agreements is recognized when the milestone is achieved. Milestones are based on the occurrence of a substantive element specified in the contract or as a measure of substantive progress toward completion under the contract Revenues from licensees, sales of licensed products and technology are recorded in accordance with the contract terms, when third-party sales can be reliably measured and collection of the funds is reasonably assured. Royalty revenue is recognized as a component of net revenues in accordance with the terms of their respective contractual agreements when collectability is reasonably assured and when revenue can be reasonably measured. The Company’s revenue recognition accounting policy from January 1, 2018, following the adoption of the new revenue standard On January 1, 2018, Teva adopted the new revenue standard to all contracts using the modified retrospective method. The cumulative initial effect of applying the new revenue standard was immaterial. A contract with a customer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Company can identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determine the transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. Revenues are recorded in the amount of consideration to which the Company expects to be entitled in exchange for performance obligations upon transfer of control to the customer, excluding amounts collected on behalf of other third parties and sales taxes. The amount of consideration to which Teva expects to be entitled varies as a result of rebates, chargebacks, returns and other sales reserves and allowances (“SR&A”) that the Company offers to its customers and their customers, as well as the occurrence or nonoccurrence of future events, including milestone events. A minimum amount of variable consideration is recorded by the Company concurrently with the satisfaction of performance obligations to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Estimates of variable consideration are based on historical experience and the specific terms in the individual agreements (which the Company believes approximates expected value). Rebates and chargebacks are the largest components of SR&A. If a minimum can not be reasonably estimated, such revenue may be deferred to a future period when better information is available. For further description of SR&A components and how they are estimated, see “Variable Consideration”, in note 9. Shipping and handling costs, after control of the product has transferred to a customer, are accounted for as a fulfillment cost and are recorded under S&M expenses. Teva does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between the time of transfer of the promised goods or services to the customer and the time the customer pays for these goods or services to be generally one year or less, based on the practical expedient. The Company’s credit terms to customers are, on average, between thirty and ninety days. The Company generally r |
Certain transactions
Certain transactions | 12 Months Ended |
Dec. 31, 2018 | |
Certain transactions | NOTE 2—CERTAIN TRANSACTIONS: a. Business acquisitions: Actavis Generics and Anda acquisitions On August 2, 2016, Teva consummated its acquisition of Allergan plc’s (“Allergan”) worldwide generic pharmaceuticals business (“Actavis Generics”). At closing, Teva transferred to Allergan consideration of approximately $33.4 billion in cash and approximately 100.3 million Teva shares. On October 3, 2016, Teva consummated the acquisition of Anda Inc. (“Anda”), a medicines distribution business in the United States, from Allergan, for cash consideration of $500 million. This transaction was related to the Actavis Generics acquisition and, as such, the purchase price accounting and related disclosures were treated on a combined basis. The final cash consideration for the Actavis Generics acquisition was subject to certain net working capital adjustments. On January 31, 2018, Teva and Allergan entered into a settlement agreement and mutual releases for which Allergan made a one-time Rimsa On March 3, 2016, Teva completed the acquisition of Representaciones e Investigaciones Médicas, S.A. de C.V. (“Rimsa”), a pharmaceutical manufacturing and distribution company in Mexico, for $2.3 billion, in a cash free, debt free set of transactions. Teva financed the transaction using cash on hand. Following the closing of the acquisition, Teva identified issues concerning Rimsa’s pre-acquisition pre-emptive On February 15, 2018, Teva and the Rimsa sellers entered into a settlement agreement and mutual releases with respect to Teva’s breach of contract claim, pursuant to which the Rimsa sellers made a one-time b. Assets and Liabilities Held For Sale: Certain Women’s Health and Other Specialty Products On September 17, 2017, Teva entered into a definitive agreement under which CVC Capital Partners Fund VI acquired a portfolio of products for $703 million in cash. The portfolio of products, which is marketed and sold outside of the United States, includes the women’s health products OVALEAP ® ® ® ® ® As of December 31, 2017, the Company accounted for this transaction as assets and liabilities held for sale and determined that the fair value less cost to sell exceeded the carrying value of the business. The Company allocated $329 million of goodwill to the divested business. On January 31, 2018, Teva completed the sale of the portfolio of products to CVC Capital Partners Fund VI. As a result of this transaction, the Company recognized a net gain on sale of approximately $93 million in the first quarter of 2018 within other income in the consolidated statement of income. The transaction expenses for this divestiture of approximately $2 million were recognized concurrently and included as a reduction to the net gain on sale. The Company determined that the sale of its global women’s health businesses did not constitute a strategic shift and that it did not have a major effect on its operations and financial results. Accordingly, the operations associated with the transaction were not reported as discontinued operations. The table below summarizes the major classes of assets and liabilities included as held for sale as of December 31, 2018 and 2017: December 31, December 31, (U.S. $ in millions) Inventories $ — $ 39 Property, plant and equipment, net (*) 72 16 Identifiable intangible assets, net — 236 Goodwill (*) 20 275 Total assets of the disposal group classified as held for sale in the consolidated balance sheets $ 92 $ 566 Other taxes and long-term liabilities — 38 Total liabilities of the disposal group classified as held for sale in the consolidated balance sheets $ — $ 38 (*) Mainly comprised of certain facilities in Israel. c. Other significant agreements: The Company has entered into alliances and other arrangements with third parties to acquire rights to products it does not have, to access markets it does not operate in and to otherwise share development costs or business risks. The Company’s most significant agreements of this nature are summarized below. Eli Lilly and Alder BioPharmaceuticals In December 2018, Teva entered into an agreement with Eli Lilly, resolving the European Patent Office opposition they had filed against Teva’s AJOVY patents. The settlement agreement with Lilly also resolved Lilly’s action to revoke the patent protecting AJOVY in the U.K. On January 8, 2018, Teva signed a global license agreement with Alder BioPharmaceuticals (“Alder”). The agreement validates Teva’s IP and resolves Alder’s opposition to Teva’s European patent with respect to anti-calcitonin gene-related peptide (CGRP) antibodies, including the withdrawal of Alder’s appeal before the European Patent Office. Under the terms of the agreement, Alder will receive a non-exclusive PGT Healthcare Partnership In April 2018, Teva signed a separation agreement with the Procter & Gamble Company (“P&G”), to terminate Teva’s joint venture with P&G, PGT Healthcare partnership (“PGT”), which the two companies established in 2011 to market OTC medicines. Teva will continue to maintain its OTC business on an independent basis. The separation became effective on July 1, 2018. As part of the separation, Teva transferred to P&G the shares it held in New Chapter Inc. and ownership rights in an OTC plant located in India. Teva provides certain services to P&G after the separation for a transition period. During the first quarter of 2018, Teva classified the plant in India as an asset held for sale and recorded an impairment of $64 million under other asset impairments, restructuring and other items. In addition, Teva recorded a write-down of $94 million of its investment in New Chapter Inc. under share in losses of associated companies. During September 2018, Teva and P&G completed the final net asset distribution as part of the dissolution and Teva recorded a gain of $50 million to reflect the cash payment received from P&G under the dissolution agreement. AUSTEDO On September, 19, 2017, Teva entered into a partnership agreement with Nuvelution Pharma, Inc. (“Nuvelution”) for development of AUSTEDO for the treatment of Tourette syndrome in pediatric patients in the United States. Nuvelution will fund and manage clinical development, driving all operational aspects of the phase 3 program, and Teva will lead the regulatory process and be responsible for commercialization. Upon and subject to FDA approval of AUSTEDO for the treatment of Tourette syndrome, Teva will pay Nuvelution a pre-agreed Otsuka On May 12, 2017, Teva entered into a license and collaboration agreement with Otsuka Pharmaceutical Co. Ltd. (“Otsuka”), providing Otsuka with an exclusive license to conduct phase 2 and 3 clinical trials for AJOVY in Japan and, if approved, to commercialize the product in Japan. Otsuka paid Teva an upfront payment of $50 million in consideration for the transaction. Teva may receive additional milestone payments upon filing with Japanese regulatory authorities, receipt of regulatory approval and achievement of certain revenue targets. Otsuka will also pay Teva royalties on AJOVY sales in Japan. Attenukine TM In December 2016, Teva entered into a license agreement for research, development, manufacture and commercializing of Attenukine technology with a subsidiary of Takeda Pharmaceutical Company Ltd. (“Takeda”). Teva received a $30 million upfront payment. The agreement stipulates additional milestone payments to Teva of up to $280 million, as well as future royalties. Ninlaro ® In November 2016, Teva entered into an agreement to sell its royalties and other rights in Ninlaro (ixazomib) to a subsidiary of Takeda, for a $150 million upfront payment to Teva and an additional $150 million payment based on sales during 2017. Teva was entitled to these royalties pursuant to an agreement from 2014 assigning the Ninlaro patents to an affiliate of Takeda in consideration of milestone payments and sales royalties. In the first six months of 2017, Teva received payments in the amount of $150 million, which were recognized as revenue for the period. Celltrion In October 2016, Teva and Celltrion, Inc. (“Celltrion”) entered into a collaborative agreement to commercialize Truxima and Herzuma, two biosimilar products in development for the U.S. and Canadian markets. Teva paid Celltrion $160 million, of which up to $60 million is refundable or creditable under certain circumstances. Teva and Celltrion will share the profit from the commercialization of these products. Regeneron In September 2016, Teva and Regeneron Pharmaceuticals, Inc. (“Regeneron”) entered into a collaborative agreement to develop and commercialize Regeneron’s pain medication product, fasinumab. Teva and Regeneron share equally in the global commercial rights to this product, as well as ongoing associated R&D costs of approximately $1 billion. Teva made an upfront payment of $250 million to Regeneron in the third quarter of 2016 as part of the agreement. Milestone payments of $25 million, $35 million and $60 million were paid in the second quarter of 2017, the first quarter of 2018 and the fourth quarter of 2018, respectively. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurement | NOTE 3—FAIR VALUE MEASUREMENT: Financial items carried at fair value as of December 31, 2018 and 2017 are classified in the tables below in one of the three categories described in note 1f: December 31, 2018 Level 1 Level 2 Level 3 Total (U.S. $ in millions) Cash and cash equivalents: Money markets $ 203 $ — $ — $ 203 Cash, deposits and other 1,579 — — 1,579 Investment in securities: Equity securities 51 — — 51 Other, mainly debt securities 2 — 10 12 Derivatives: Asset derivatives—options and forward contracts — 18 — 18 Asset derivatives—cross-currency swaps — 58 — 58 Liabilities derivatives—options and forward contracts — (26 ) — (26 ) Liabilities derivatives—interest rate and cross-currency swaps — (50 ) — (50 ) Contingent consideration* — — (507 ) (507 ) Total $ 1,835 $ — $ (497 ) $ 1,338 December 31, 2017 Level 1 Level 2 Level 3 Total (U.S. $ in millions) Cash and cash equivalents: Money markets $ 5 $ — $ — $ 5 Cash, deposits and other 958 — — 958 Investment in securities: Equity securities 65 — — 65 Other, mainly debt securities 14 — 18 32 Derivatives: Asset derivatives—options and forward contracts — 17 — 17 Asset derivatives—cross-currency swaps — 25 — 25 Liability derivatives—options and forward contracts — (15 ) — (15 ) Liabilities derivatives—interest rate and cross-currency swaps — (98 ) — (98 ) Contingent consideration* — — (735 ) (735 ) Total $ 1,042 $ (71 ) $ (717 ) $ 254 * Contingent consideration represents liabilities recorded at fair value in connection with acquisitions. Teva determined the fair value of contingent consideration based on a probability-weighted discounted cash flow analysis. This fair value measurement is based on significant unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. The fair value of the contingent consideration is based on several factors, such as: the cash flows projected from the success of unapproved product candidates; the probability of success for product candidates including risks associated with uncertainty regarding achievement and payment of milestone events; the time and resources needed to complete the development and approval of product candidates; the life of the potential commercialized products and associated risks of obtaining regulatory approvals in the U.S. and Europe and the discount rate for fair value measurement. The contingent consideration is evaluated quarterly or more frequently if circumstances dictate. Changes in the fair value of contingent consideration are recorded in earnings under other asset impairments, restructuring and other items. Significant changes in unobservable inputs, mainly the probability of success and cash flows projected, could result in material changes to the contingent consideration liability. The following table summarizes the activity for those financial assets and liabilities where fair value measurements are estimated utilizing Level 3 inputs. December 31, December 31, 2018 2017 (U.S. $ in millions) Fair value at the beginning of the period $ (717 ) $ (811 ) Investment in debt securities (8 ) — Translation differences — (17 ) Adjustments to provisions for contingent consideration: Actavis Generics transaction — (35 ) Labrys acquisition (17 ) (40 ) Eagle transaction (40 ) (178 ) MicroDose acquisition — 89 Cephalon acquisition — 10 Settlement of contingent consideration: Labrys acquisition 151 100 Eagle transaction 134 165 Fair value at the end of the period $ (497 ) $ (717 ) Teva’s financial instruments consist mainly of cash and cash equivalents, investments in securities, current and non-current The fair value of the financial instruments included in working capital and non-current Financial instruments not measured at fair value Financial instruments measured on a basis other than fair value consist of senior notes and convertible senior debentures (see note 11), and are presented in the below table in terms of fair value: Estimated fair value* December 31, 2018 2017 (U.S. $ in millions) Senior notes included under long-term liabilities $ 23,560 $ 23,459 Senior notes and convertible senior debentures included under short-term liabilities 2,140 2,713 Fair value at the end of the period $ 25,700 $ 26,172 * The fair value was estimated based on quoted market prices, where available. |
Investment in Securities
Investment in Securities | 12 Months Ended |
Dec. 31, 2018 | |
Investment in Securities | NOTE 4—INVESTMENT IN SECURITIES: Available-for-sale In January 2016, the FASB issued guidance which requires entities to recognize changes in fair value in net income rather than in accumulated other comprehensive income. Teva adopted this update in the first quarter of 2018. At December 31, 2018 and 2017, the fair value, amortized cost and gross unrealized holding gains and losses of such securities were as follows: Fair value Amortized Gross Gross (U.S. $ in millions) December 31, 2018 $ 266 $ — $ — $ — December 31, 2017 $ 102 $ 103 $ 19 $ 20 During 2018, Teva sold and settled certain investments for cash consideration of approximately $11 million; Consequently, Teva recorded a $2 million net gain under financial expenses-net. expenses-net. In the first quarter of 2017, Teva settled the remaining balance of approximately 17 million Mylan shares for an average price of $40.2 per share for an aggregate cash consideration of approximately $702 million. Consequently, Teva recorded a $36 million net gain under financial expenses-net. Investments in securities are presented in the balance sheet as follows: December 31, 2018 2017 (U.S. $ in millions) Other current assets $ 2 $ 14 Other non-current 61 83 Money market funds 203 5 $ 266 $ 102 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2018 | |
Inventories | NOTE 5—INVENTORIES: Inventories, net of reserves, consisted of the following: December 31, 2018 2017 (U.S. $ in millions) Finished products $ 2,665 $ 2,689 Raw and packaging materials 1,328 1,454 Products in process 590 597 Materials in transit and payments on account 148 184 $ 4,731 $ 4,924 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment | NOTE 6—PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment, net, consisted of the following: December 31, 2018 2017 (U.S. $ in millions) Machinery and equipment $ 5,691 $ 5,809 Buildings 3,143 3,329 Computer equipment and other assets 2,097 2,016 Payments on account 514 634 Land* 351 390 11,796 12,178 Less—accumulated depreciation (4,928 ) (4,505 ) $ 6,868 $ 7,673 * Land includes long-term leasehold rights in various locations, with lease term of between 30 and 99 years. Depreciation expenses were $676 million, $632 million and $501 million in the years ended December 31, 2018, 2017 and 2016, respectively. During the years ended December 31, 2018, 2017 and 2016, Teva had impairments of property, plant and equipment in the amount of $500 million, $544 million and $157 million, respectively. See note 18. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill | NOTE 7—GOODWILL: The changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 were as follows: Generics Specialty Other Total North Europe International Other Total (U.S. $ in millions) (U.S. $ in millions) Balance as of January 1, 2017 (1) 32,863 9,323 2,223 44,409 — — — — — Changes during the year: Goodwill adjustments (2) 1,480 (560 ) 920 — — — — — Goodwill disposal (3) (7 ) (690 ) (697 ) — — — — — Goodwill impairment (4) (16,500 ) (600 ) (17,100 ) — — — — — Goodwill reclassified as assets to held for sale (5) — (275 ) (275 ) — — — — — Translation differences 1,028 106 23 1,157 — — — — — Balance as of December 31, 2017 (1) $ 18,864 $ 8,464 $ 1,086 $ 28,414 $ — $ — $ — $ — $ — Relative fair value allocation (18,864 ) (8,464 ) (1,086 ) (28,414 ) 11,144 9,001 5,404 2,865 28,414 Balance as of January 1, 2018 — — — — 11,144 9,001 5,404 2,865 28,414 Changes during the year: Goodwill impairment (6) — — — — — (2,834 ) (193 ) (3,027 ) Goodwill disposal (7) — — — — — (65 ) (14 ) — (79 ) Goodwill reclassified as assets to held for sale — — — — — (3 ) — (17 ) (20 ) Translation differences and Other — — — — (46 ) (280 ) (77 ) 32 (371 ) Balance as of December 31, 2018 (1) $ — $ — $ — $ — $ 11,098 $ 8,653 $ 2,479 $ 2,687 $ 24,917 (1) Accumulated goodwill impairment as of December 31, 2018, December 31, 2017 and as of January 1, 2017 was approximately $21.0 billion, $18.0 billion and $900 million, respectively. (2) Measurement period adjustments on goodwill acquired in 2016. (3) Goodwill on the divestiture of certain Teva generic products, as part of the Actavis Generics acquisition, and the U.S. women’s health business. (4) Goodwill impairment is mainly attributable to the U.S. generics reporting unit. (5) Represent amounts related to the anticipated divestitures of the non-U.S (6) Goodwill impairment mainly attributable to the International Markets, Mexico and Medis. (7) Mainly due to the divestment of the women’s health business, the sale of Actavis Brazil and other activities. In November 2017, Teva announced a new organizational structure and leadership changes to enable strategic alignment across its portfolios, regions and functions. Teva now operates its business through three segments: North America, Europe and International Markets. The purpose of the new structure is to enable stronger alignment and integration between operations, commercial regions, R&D and Teva’s global marketing and portfolio function, in order to optimize its product lifecycle across the therapeutic areas. Teva began reporting its financial results under this structure in the first quarter of 2018. In addition to these three segments, Teva has other sources of revenues, primarily the sale of APIs to third parties, certain contract manufacturing services and an out-licensing Following the announcement of its new organizational structure and leadership changes in November 2017, Teva conducted an analysis of its business segments, which led to changes in Teva’s identified reporting units, operating and reporting segments. As a result, on January 1, 2018, Teva reallocated its goodwill to the adjusted reporting units using a relative fair value allocation. In conjunction with the goodwill reallocation, Teva performed a goodwill impairment test for the balances in its adjusted reporting units, utilizing the same annual operating plan (“AOP”) and long range plan (“LRP”) model that were used in its 2017 annual impairment test; the Company concluded that the fair value of each reporting unit was in excess of its carrying value. During the first quarter of 2018, Teva identified an increase in certain components of the weighted average cost of capital (“WACC”), such as an increase in the risk free interest rate and the unlevered beta of similar companies in the industry. The Company addressed these changes in rates as an indication for impairment and performed an additional impairment test as of March 31, 2018. Based on its revised analysis, Teva recorded a goodwill impairment of $180 million related to its Rimsa reporting unit in the first quarter of 2018. The remaining goodwill allocated to this reporting unit was $706 million as of March 31, 2018. This impairment was driven by the change in fair value, as a result of the updated WACC noted above, and the change in allocated net assets to the reporting unit. See note 2. In the second quarter of 2018, the Company completed its LRP process. The LRP is part of Teva’s internal financial planning and budgeting processes and is discussed and reviewed by Teva’s management and its board of directors. Certain events and changes in circumstances, reflected in the LRP, indicated that it was more likely than not that the carrying value of certain reporting units exceeded their fair value: • Historically, Rimsa had been carved out as a separate reporting unit due to the significant operational challenges. Teva wanted to ensure that any impairment related to Rimsa would be recorded, by separating it from the International Markets reporting unit. During the second quarter of 2018, Rimsa and Teva Mexico substantially completed the integration process and as a result Teva decided to utilize the combined Mexico reporting unit for goodwill impairment testing, as opposed to “Rimsa only” in prior periods. • Following the integration, and although the remediation plan is progressing in connection with resuming operations at the Rimsa facility, Teva estimates that the recovery time will be longer than initially planned, specifically in connection with the time to regain lost market share. As a result, the Company recorded an additional goodwill impairment charge of $120 million related to its Mexico reporting unit in the second quarter of 2018. • Additionally, the Company identified further developments with respect to legislation proposed by the Russian Ministry of Health. The draft legislation includes, among other items, amendments in the mechanism of regulating prices for vital and essential medicines. The suggested amendments triggered a public discussion between authorities and pharmaceutical companies, which ended in the second quarter of 2018, followed by an internal discussion by the relevant authorities. The estimated impact of developments and uncertainties with respect to the final legislation in Russia were reflected in the LRP and triggered an impairment test for the International Markets reporting unit and related intangible assets, significantly decreasing the difference between the estimated fair value and estimated carrying value of the reporting unit, from 6% to 2%; however no impairment was recorded. • After assessing the totality of relevant events and circumstances, Teva determined that, as of the second quarter of 2018, it is not more likely than not that the fair value of its remaining reporting units is less than their carrying amount. In light of the integration and the progress toward operational remediation in Rimsa as discussed above, Teva concluded that commencing July 1, 2018, it would no longer view Mexico separately from the International Markets reporting unit and accordingly will no longer perform impairment testing on Mexico as a separate reporting unit. During the third quarter of 2018, Teva identified an increase in the risk free interest rate, which was the main cause of an increase in the WACC. In addition, certain currencies in countries included in Teva’s International Markets reporting unit experienced significant devaluations. Teva addressed these events as an indication for impairment and performed an additional impairment test for the International Markets and Europe reporting units as of September 30, 2018. Teva assumed that the currency devaluations would cause price increases of its imported goods to those countries which would not be completely offset by corresponding price adjustments to the selling price of Teva’s goods. These changes decreased the difference between the estimated fair value and estimated carrying value of the International Markets reporting unit from 2% to 1% and of the Europe reporting unit from 6% to 4%, however, no impairment charge was recorded for either reporting unit. Pursuant to the Company’s policy, Teva conducted its annual goodwill impairment test during the fourth quarter of 2018, in conjunction with the update of its 2019 AOP. The updated AOP was used as a base for an update of the 2019-2023 LRP, incorporating the 2019 changes for future years in the fair value model. Teva conducted its annual impairment test with the assistance of an independent valuation expert. Teva recorded a goodwill impairment of $2,530 million in the fourth quarter of 2018 attributable to goodwill associated with its International Markets reporting unit and $170 million attributable to goodwill associated with its Medis reporting unit, which is reported under other activities. Teva determines the fair value of its reporting units using the income approach. The income approach is a forward-looking approach for estimating fair value. Within the income approach, the method that was used is the discounted cash flow method. Teva started with a forecast of all the expected net cash flows associated with the reporting unit, which includes the application of a terminal value, and then applied a discount rate to arrive at a net present value amount. Cash flow projections are based on Teva’s estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate used is based on the WACC, adjusted for the relevant risk associated with country-specific and business-specific characteristics. If any of these expectations were to vary materially from Teva’s assumptions, Teva could face impairment of goodwill allocated to these reporting units in the future. Impaired Reporting Units International Markets In the fourth quarter of 2018, Teva noted a decrease in the fair value of its International Markets reporting unit, mainly due to changes to certain discount rate parameters and the selected Terminal Growth Rate (“TGR”), negative effect of currency fluctuations and decreased projections in its Japanese market, partially offset by lower tax expense. Decreased projections in the Japanese market were mainly due to price reductions caused by price regulation and generic competition to off-patented Due to the above factors, Teva recorded a goodwill impairment of $2,530 million related to its International Markets reporting unit in the fourth quarter of 2018. If Teva holds all other assumptions constant, a reduction in the terminal value growth rate of 0.1% or an increase in discount rate of 0.1% would result in an additional impairment of approximately $48 million and $68 million related to its International Markets reporting unit, respectively. Medis Teva’s other activities include its Medis business. In the fourth quarter of 2018, Teva noted a decrease in the fair value of its Medis reporting unit, mainly due to updated projections as a result of a revised strategy for the business. Consequently, Teva recorded a goodwill impairment of $170 million related to its Medis reporting unit. If Teva holds all other assumptions constant, a reduction in the terminal value growth rate of 0.1% or an increase in discount rate of 0.1% would, in both cases, result in an additional immaterial impairment related to its Medis reporting unit. The remaining goodwill balance assigned to the Medis reporting unit is approximately $300 million. Non-Impaired Europe Teva noted a decrease in its Europe reporting unit profit projections mainly due to projected currency translation effect and increased generics competition to COPAXONE. The percentage difference between estimated fair value and estimated carrying value for the Europe reporting unit is 6%. If Teva holds all other assumptions constant, a reduction in the terminal value growth rate of 0.1% or an increase in discount rate of 0.1% would result in a reduction in fair value of approximately $121 million and $171 million related to its Europe reporting unit, respectively. North America and TAPI The percentage difference between estimated fair value and estimated carrying value for the North America and TAPI reporting units is 28% and 47%, respectively. Market Capitalization Teva analyzed the aggregate fair value of its reporting units as compared to its market capitalization in order to assess the reasonableness of the results of its cash flow projections used for its goodwill impairment analysis. In light of the volatility in the stock markets during the month of December 2018 and the subsequent positive correction, Teva used an average share price, as it believes that it is more indicative of the fair value than the December 31, 2018 share price. Management believes that its fair value assessment is reasonably supported by the market capitalization. Management will continue to monitor business conditions and will also consider future developments in its market capitalization when assessing whether additional goodwill impairment is required in future periods. |
Identifiable Intangible Assets
Identifiable Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Identifiable Intangible Assets | NOTE 8—IDENTIFIABLE INTANGIBLE ASSETS: Identifiable intangible assets consisted of the following: Gross carrying amount Accumulated Net carrying amount December 31, 2018 2017 2018 2017 2018 2017 (U.S. $ in millions) Product rights $ 20,361 $ 21,011 $ 9,565 $ 8,276 $ 10,796 $ 12,735 Trade names 606 617 91 55 515 562 In-process 2,694 4,343 — — 2,694 4,343 Total $ 23,661 $ 25,971 $ 9,656 $ 8,331 $ 14,005 $ 17,640 Product rights and trade names Product rights and trade names are assets presented at amortized cost. Product rights and trade names represent a portfolio of pharmaceutical products from various categories with a weighted average life of approximately 12 years. Amortization of intangible assets amounted to $1,166 million, $1,444 million and $993 million in the years ended December 31, 2018, 2017 and 2016, respectively. As of December 31, 2018, the estimated aggregate amortization of intangible assets for the years 2019 to 2023 is as follows: 2019—$1,034 million; 2020—$1,019 million; 2021—$889 million; 2022—$930 million and 2023—$896 million. These estimates do not include the impact of IPR&D that is expected to be successfully completed and reclassified to product rights. IPR&D Teva’s IPR&D are assets that have not yet been approved in major markets. Teva’s IPR&D is comprised mainly of the following acquisitions and related assets: various generic products (Actavis Generics)—$2,433 million; various generic products (Rimsa) —$50 million and Austedo —$211 million. IPR&D carry intrinsic risks that the asset might not succeed in advanced phases and may be impaired in future periods. In 2018, Teva reclassified approximately $723 million relating to certain products from IPR&D to product rights following regulatory approval, mainly $444 million in connection with AJOVY and $103 million in connection with mesalamine and various other generic products. Intangible assets impairment Impairment of identifiable intangible assets amounted to $1,991 million, $3,238 million and $589 million in the years ended December 31, 2018, 2017 and 2016, respectively, and are recorded in earnings under intangible assets impairment. Impairments of long-lived intangible assets in 2018 were $1,991 million, mainly consisting of: 1. Identifiable product rights of $1,068 million, mainly due to: (a) $412 million in connection with updated market assumptions regarding price and volume of products acquired from Actavis Generics currently marketed in the United States and supply constraints; (b) $290 million in certain international markets, due to a loss of several tenders and termination of products manufacturing lines; and (c) $222 million in Japan in connection with ongoing regulatory pricing reductions and generic competition. 2. IPR&D assets of $923 million, mainly related to revaluation of generic products acquired from Actavis Generics due to development progress and changes in other key valuation indications (e.g., market size, legal landscape, launch date or discount rate). |
Revenue from contracts with cus
Revenue from contracts with customers | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from contracts with customers | NOTE 9—REVENUE FROM CONTRACTS WITH CUSTOMERS: On January 1, 2018, Teva adopted the new revenue standard to all contracts using the modified retrospective method. The cumulative initial effect of applying the new revenue standard was immaterial. Revenue recognition prior to the adoption of the new revenue standard See note 1 for a summary of the significant accounting policies. Revenue recognition following the adoption of the new revenue standard A contract with a customer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Company can identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determine the transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. Revenues are recorded in the amount of consideration to which the Company expects to be entitled in exchange for performance obligations upon transfer of control to the customer, excluding amounts collected on behalf of other third parties and sales taxes. The amount of consideration to which Teva expects to be entitled varies as a result of rebates, chargebacks, returns and other sales reserve and allowances (“SR&A”) the Company offers its customers and their customers, as well as the occurrence or nonoccurrence of future events, including milestone events. A minimum amount of variable consideration is recorded concurrently with the satisfaction of performance obligations to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Estimates of variable consideration are based on historical experience and the specific terms of the individual agreements (which the Company believes approximates expected value). Rebates and chargebacks are the largest components of SR&A. For further description of SR&A components and how they are estimated, see “Variable Consideration” below. Shipping and handling costs, after control of a product has transferred to a customer, are accounted for as a fulfillment cost and are recorded under S&M expenses. Teva does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between the time of transfer of the promised goods or services to the customer and the time the customer pays for these goods or services to be generally one year or less, based on the practical expedient. The Company’s credit terms to customers are on average between thirty and ninety days. The Company generally recognizes the incremental costs of obtaining contracts as an expense since the amortization period of the assets that the Company otherwise would have recognized is one year or less. The costs are recorded under S&M expenses. Similarly, Teva does not disclose the value of unsatisfied performance obligations for contracts with original expected duration of one year or less. Disaggregation of revenue The following table disaggregates Teva’s revenues by major revenue streams. For additional information on disaggregation of revenues, see note 20. Year ended December 31, 2018 North Europe International Other Total (U.S.$ in millions) Sale of goods 7,838 5,153 2,151 739 15,881 Licensing arrangements 111 23 22 9 165 Distribution 1,347 7 602 — 1,956 Other 1 3 230 618 852 $ 9,297 $ 5,186 $ 3,005 $ 1,366 $ 18,854 Year ended December 31, 2017 North Europe International Other Total (U.S.$ in millions) Sale of goods 10,706 5,244 2,558 748 19,256 Licensing arrangements 281 3 38 5 327 Distribution 1,153 214 549 — 1,916 Other 1 5 250 630 886 $ 12,141 $ 5,466 $ 3,395 $ 1,383 $ 22,385 Year ended December 31, 2016 North Europe International Other Total (U.S.$ in millions) Sale of goods 11,186 4,751 3,286 766 19,989 Licensing arrangements 291 7 8 8 314 Distribution 301 204 458 — 963 Other — 7 263 367 637 $ 11,778 $ 4,969 $ 4,015 $ 1,141 $ 21,903 Nature of revenue streams Revenue from sales of goods, including sales to distributors is recognized when the customer obtains control of the product. This generally occurs when products are shipped once the Company has a present right to payment and legal title, and risk and rewards of ownership are obtained by the customer. Licensing arrangements performance obligations generally include intellectual property (“IP”) rights, certain R&D and contract manufacturing services. The Company accounts for IP rights and services separately if they are distinct—i.e. if they are separately identifiable from other items in the arrangement and if the customer can benefit from them on their own or with other resources that are readily available to the customer. The consideration is allocated between IP rights and services based on their relative stand-alone selling prices. Revenue for distinct IP rights is accounted for based on the nature of the promise to grant the license. In determining whether the Company’s promise is to provide a right to access its IP or a right to use its IP, the Company considers the nature of the IP to which the customer will have rights. IP is either functional IP which has significant standalone functionality or symbolic IP which does not have significant standalone functionality. Revenue from functional IP is recognized at the point in time when control of the distinct license is transferred to the customer, the Company has a present right to payment and risks and rewards of ownership are transferred to the customer. Revenue from symbolic IP is recognized over the access period to the Company’s IP. Revenue from sales based milestones and royalties promised in exchange for a license of IP is recognized only when, or as, the later of subsequent sale or the performance obligation to which some or all of the sales-based royalty has been allocated, is satisfied. Revenues from licensing arrangements included royalty income of $165 million, $327 million and $314 million for the years ended December 31, 2018, 2017 and 2016, respectively. The amounts recognized in 2017 include royalty income resulting from the Ninlaro ® Distribution revenues are derived from sales of third-party products for which the Company acts as distributor, mostly in the United States via Anda and in Israel. The Company is the principal in these arrangements and therefore records revenue on a gross basis as it controls the promised goods before transferring these goods to the customer. Revenue is recognized when the customer obtains control of the products. This generally occurs when products are shipped once the Company has a present right to payment and legal title and risk and rewards of ownership are obtained by the customer. Other revenues are primarily comprised of contract manufacturing services, sales of medical devices and other miscellaneous items. Revenue is recognized when the customer obtains control of the products. This generally occurs when products are shipped once the Company has a present right to payment and legal title and risk and rewards of ownership are obtained by the customer. Contract assets and liabilities Contract assets are mainly comprised of trade receivables net of allowance for doubtful debts, which includes amounts billed and currently due from customers. Contract liabilities are mainly comprised of deferred revenues which were immaterial as of December 31, 2018 and 2017. Variable consideration Variable consideration mainly includes SR&A, comprised of rebates (including Medicaid and other governmental program discounts), chargebacks, returns and other promotional (including shelf stock adjustments) items. Provisions for prompt payment discounts are netted against trade receivables. The Company recognizes these provisions at the time of sale and adjusts them if the actual amounts differ from the estimated provisions. The following describes the nature of each deduction and how provisions are estimated: Rebates Rebates are primarily related to volume incentives and are offered to key customers to promote loyalty. These rebate programs provide that, upon the attainment of pre-established Medicaid and Other Governmental Rebates Pharmaceutical manufacturers whose products are covered by the Medicaid program are required to provide a rebate to each state as a percentage of their average manufacturer’s price for the products dispensed. Many states have also implemented supplemental rebate programs that obligate manufacturers to pay rebates in excess of those required under federal law. The Company estimates these rebates based on historical trends of rebates paid, as well as on changes in wholesaler inventory levels and increases or decreases in sales. Chargebacks The Company has arrangements with various third parties, such as managed care organizations and drug store chains, establishing prices for certain of Teva’s products. While these arrangements are made between the Company and the customers, the customers independently select a wholesaler from which they purchase the products. Alternatively, certain wholesalers may enter into agreements with the customers, with Teva’s concurrence, which establish the pricing for certain products which the wholesalers provide. Under either arrangement, Teva will issue a credit (referred to as a “chargeback”) to the wholesaler for the difference between the invoice price to the wholesaler and the customer’s contract price. Provisions for chargebacks involve estimates of contract prices of over 2,000 products and multiple contracts with multiple wholesalers. The provision for chargebacks varies in relation to changes in product mix, pricing and the level of inventory at the wholesalers and, therefore, will not necessarily fluctuate in proportion to an increase or decrease in sales. Provisions for estimating chargebacks are calculated using historical chargeback experience and/or expected chargeback levels for new products and anticipated pricing changes. Teva considers current and expected price competition when evaluating the provision for chargebacks. Chargeback provisions are compared to externally obtained distribution channel reports for reasonableness. The Company regularly monitors the provision for chargebacks and makes adjustments when the Company believes that actual chargebacks may differ from estimated provisions. Other Promotional Arrangements Other promotional or incentive arrangements are periodically offered to customers, specifically related to the launch of products or other targeted promotions. Provisions are made in the period for which the Company can estimate the incentive earned by the customer, in accordance with the contractual terms. The Company regularly monitors the provision for other promotional arrangements and makes adjustments when it believes that the actual provision may differ from the estimated provisions. Shelf Stock Adjustments The custom in the pharmaceutical industry is generally to grant customers a shelf stock adjustment based on the customers’ existing inventory contemporaneously with decreases in the market price of the related product. The most significant of these relate to products for which an exclusive or semi-exclusive period exists. Provisions for price reductions depend on future events, including price competition, new competitive launches and the level of customer inventories at the time of the price decline. Teva regularly monitors the competitive factors that influence the pricing of its products and customer inventory levels and adjust these estimates where appropriate. Returns Returns primarily relate to customer returns of expired products which, the customer has the right to return up to one year following the expiration date. Such returned products are destroyed and credits and/or refunds are issued to the customer for the value of the returns. Accordingly, no returned assets are recoded in connection with those products. The returns provision is estimated by applying a historical return rate to the amounts of revenue estimated to be subject to returns. Revenue subject to returns is estimated based on the lag time from time of sale to date of return. The estimated lag time is developed by analyzing historical experience. Additionally, The Company considers specific factors, such as levels of inventory in the distribution channel, product dating and expiration, size and maturity of launch, entrance of new competitors, changes in formularies or packaging and any changes to customer terms, for determining the overall expected levels of returns. Prompt Pay Discounts Prompt pay discounts are offered to most customers to encourage timely payment. Discounts are estimated at the time of invoice based on historical discounts in relation to sales. Prompt pay discounts are almost always utilized by customers. As a result, the actual discounts do not vary significantly from the estimated amount. SR&A to U.S. customers comprised approximately 85% of the Company’s total SR&A as of December 31, 2018, with the remaining balance primarily in Canada and Germany. The changes in SR&A for third-party sales for the period ended December 31, 2018 were as follows: Sales Reserves and Allowances Reserves Rebates Medicaid and Chargebacks Returns Other Total Total (U.S.$ in millions) Balance at January 1, 2018 $ 196 $ 3,077 $ 1,908 $ 1,849 $ 780 $ 267 $ 7,881 $ 8,077 Provisions related to sales made in current year period 514 6,572 1,284 10,206 442 417 18,899 $ 19,413 Provisions related to sales made in prior periods 3 (14 ) 24 — 28 (30 ) (62 ) $ (59 ) Credits and payments (538 ) (6,596 ) (1,850 ) (10,519 ) (606 ) (463 ) (19,942 ) $ (20,480 ) Translation differences — (33 ) (5 ) (6 ) (6 ) (15 ) (65 ) $ (65 ) Balance at December 31, 2018 $ 175 3,006 $ 1,361 $ 1,530 $ 638 $ 176 $ 6,711 $ 6,886 |
Long-term Employee-related Obli
Long-term Employee-related Obligations | 12 Months Ended |
Dec. 31, 2018 | |
Long-term Employee-related Obligations | NOTE 10—LONG-TERM EMPLOYEE-RELATED OBLIGATIONS: a. Long-term employee-related obligations consisted of the following December 31, 2018 2017 (U.S. $ in millions) Accrued severance obligations $ 75 $ 91 Defined benefit plans 146 182 Total $ 221 $ 273 As of December 31, 2018 and 2017, the Group had $137 million and $149 million, respectively, deposited in funds managed by financial institutions that are earmarked by management to cover severance pay liability mainly in respect of Israeli employees. Such deposits are not considered to be “plan assets” and are therefore included in long-term investments and receivables. Most of the change resulted from actuarial updates, as well as from exiting from several defined benefit plans in several countries. The Company expects to expense an approximate contribution of $106 million in 2019 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 below. b. Terms of arrangements: Israel Israeli law generally requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain other circumstances. The Parent Company and its Israeli subsidiaries make ongoing deposits into employee pension plans to fund their severance liabilities. According to the general collective pension agreement in Israel, Company deposits with respect to employees who were employed by the Company after the agreement took effect are made in lieu of the Company’s severance liability; therefore no obligation is provided for in the financial statements. Severance pay liabilities with respect to employees who were employed by the Parent Company and its Israeli subsidiaries prior to the collective pension agreement effective date, as well as employees who have special contractual arrangements, are provided for in the financial statements based upon the number of years of service and the latest monthly salary. Europe Many of the employees in the Company’s European subsidiaries are entitled to a retirement grant when they leave the Company. In the consolidated financial statements, the liability of the European subsidiaries is accrued, 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 and determine the rates of contribution payable. 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 December 31 as the measurement date for defined benefit plans. North America The Company’s 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. Latin America The majority of the employees in Latin America are entitled to severance under local law. The severance payments are calculated based on service term and employee remuneration, and accruals are maintained to reflect these amounts. In some Latin American countries it is Teva’s practice to offer retirement health benefits to qualifying employees. Based on the specific plan requirements, benefits accruals are maintained to reflect the estimated amounts or adjusted if future plans are modified. The Company expects to pay the following future minimum benefits to its employees: $6 million in 2019; $6 million in 2020; $7 million in 2021; $8 million in 2022; $8 million in 2023 and $42 million between 2024 to 2028. These amounts do not include amounts that may be paid to employees who cease working with the Company before their normal retirement age. |
Debt Obligations
Debt Obligations | 12 Months Ended |
Dec. 31, 2018 | |
Debt Obligations | NOTE 11—DEBT OBLIGATIONS: a. Short-term debt: December 31, Weighted average Maturity 2018 2017 (U.S. $ in millions) Term loan JPY 28.3 billion JPY LIBOR+0.25 % 2018 $ — 251 Bank and financial institutions 6.79% — 2 1 Convertible debentures 0.25% 2026 514 514 Current maturities of long-term liabilities 1,700 2,880 Total short term debt $ 2,216 $ 3,646 Line of credit: In November 2015, the Company entered into a $3 billion five-year unsecured syndicated credit facility (which was increased to $4.5 billion upon closing of the Actavis Generics acquisition, see note 2). In February 2018, the facility was decreased to $3 billion. This revolving line of credit was not utilized as of December 31, 2018. Convertible senior debentures Teva 0.25% convertible senior debentures, due 2026, principal amount as of December 31, 2018 and 2017 were $514 million. These convertible senior debentures include a “net share settlement” feature according to which the principal amount will be paid in cash and in case of conversion, only the residual conversion value above the principal amount will be paid in Teva shares. Due to the “net share settlement” feature, exercisable at any time, these convertible senior debentures are classified in the balance sheet under short-term debt. Holders of the convertible debentures will be able to cause Teva to redeem the debentures on February 1, 2021. b. Long-term debt: Weighted average Maturity December 31, December 31, % (U.S. $ in millions) Senior notes EUR 1,660 million (8) 0.38% 2020 $ 1,897 $ 2,095 Senior notes EUR 1,500 million 1.13% 2024 1,707 1,788 Senior notes EUR 1,300 million 1.25% 2023 1,480 1,550 Senior notes EUR 1,000 million (3) 2.88% 2019 — 1,199 Senior notes EUR 900 million (1) 4.50% 2025 1,029 — Senior notes EUR 750 million 1.63% 2028 850 891 Senior notes EUR 700 million (1) 3.25% 2022 801 — Senior notes EUR 700 million 1.88% 2027 798 837 Senior notes USD 3,500 million 3.15% 2026 3,493 3,492 Senior notes USD 3,000 million 2.20% 2021 2,997 2,996 Senior notes USD 3,000 million 2.80% 2023 2,993 2,992 Senior notes USD 1,700 million (8) 1.70% 2019 1,700 2,000 Senior notes USD 2,000 million 4.10% 2046 1,985 1,984 Senior notes USD 1,500 million (3) 1.40% 2018 — 1,500 Senior notes USD 1,250 million (2) 6.00% 2024 1,250 — Senior notes USD 1,250 million (2) 6.75% 2028 1,250 — Senior notes USD 844 million 2.95% 2022 860 864 Senior notes USD 789 million 6.15% 2036 782 781 Senior notes USD 700 million 2.25% 2020 700 700 Senior notes USD 613 million 3.65% 2021 621 624 Senior notes USD 588 million 3.65% 2021 587 587 Senior notes CHF 450 million (10) 1.50% 2018 — 461 Senior notes CHF 350 million 0.50% 2022 356 360 Senior notes CHF 350 million 1.00% 2025 356 360 Senior notes CHF 300 million (9) 0.13% 2018 — 308 Fair value hedge accounting adjustments (9 ) (2 ) Total senior notes 28,483 28,367 Term loan USD 2.5 billion (4) LIBOR +1.1375% 2018 — 285 Term loan USD 2.5 billion (4) LIBOR +1.50% 2017-2020 — 2,000 Term loan JPY 58.5 billion (5) JPY LIBOR +0.55% 2022 — 519 Term loan JPY 35 billion (6) 1.42% 2019 — 311 Term loan JPY 35 billion (6) JPY LIBOR +0.3% 2018 — 311 Total loans — 3,426 Debentures USD 15 million (7) 7.20% 2018 — 15 Other 4.79% 2026 12 5 Total debentures and others 12 20 Less current maturities (1,700 ) (2,880 ) Derivative instruments 9 2 Less debt issuance costs (104 ) (106 ) Total senior notes and loans $ 26,700 $ 28,829 (1) In March 2018, Teva Pharmaceutical Finance Netherlands II B.V., a Teva finance subsidiary, issued senior notes in an aggregate principal amount of €1.6 billion. (2) In March 2018, Teva Pharmaceutical Finance Netherlands III B.V., a Teva finance subsidiary, issued senior notes in an aggregate principal amount of $2.5 billion. (3) In March 2018, Teva redeemed in full its $1.5 billion 1.4% senior notes due in July 2018 and its €1.0 billion 2.88% senior notes due in April 2019. (4) During the first quarter of 2018, Teva prepaid approximately $2.3 billion principal amount of the remaining term loan facilities. (5) During the first quarter of 2018, Teva prepaid in full JPY 86.8 billion principal amount of the outstanding term loan facilities of which JPY 28.3 billion were in short-term debt as of December 31, 2017. (6) During the first quarter of 2018, Teva prepaid in full JPY 70 billion of its 1.42% and JPY LIBOR+0.3% outstanding term loans. (7) During the first quarter of 2018, Teva prepaid in full $15 million of its outstanding debentures. (8) In September 2018, Teva consummated a cash tender offer for certain of its outstanding senior notes. As a result of the offer, Teva redeemed $300 million aggregate principal amount of its 1.7% senior notes and €90 million principal amount of its 0.38% senior notes. (9) In July 2018, Teva repaid at maturity CHF 300 million of its 0.13% senior notes. (10) In October 2018, Teva repaid at maturity CHF 450 million of its 1.5% senior notes. Long term debt was issued by several indirect wholly-owned subsidiaries of the Company and is fully and unconditionally guaranteed by the Company as to payment of all principal, interest, discount and additional amounts (as defined), if any. Long term debt as of December 31, 2018 is effectively denominated (taking into consideration cross currency swap agreements) in the following currencies: U.S. dollar 63%, euro 34% and Swiss franc 3%. Teva’s principal sources of short-term liquidity are its existing cash investments, liquid securities and available credit facilities, primarily its $3 billion syndicated revolving credit facility (“RCF”), which was not utilized as of December 31, 2018, as well as internally generated funds. In connection with the requirements of the RCF, the Company entered into negative pledge agreements with certain banks and institutional investors. Under the agreements, the Company and its subsidiaries have undertaken not to register floating charges on assets in favor of any third parties without the prior consent of the banks, to maintain certain financial ratios, including the requirement to maintain compliance with a net debt to EBITDA ratio, which becomes more restrictive over time, and to fulfill other restrictions, as stipulated by the agreements. As of December 31, 2018, the Company did not have any outstanding debt under the RCF, which is its only debt subject to the net debt to EBITDA covenant, and met all financial covenants thereunder. Teva expects that it will continue to have sufficient cash resources to support its debt service payments and all other financial obligations for at least twelve months from the date of this report, without utilizing the RCF. If Teva experiences lower than required cash flows to support its debt service payments, it may need to draw additional debt under the RCF. Under such circumstances, Teva will need to maintain compliance with its net debt to EBITDA ratio covenant. If such covenant will not be met, Teva believes it will be able to renegotiate and amend the covenants, or refinance the debt with different repayment terms to address such situation as circumstances warrant. Assuming utilization of the RCF, and under specified circumstances, including non-compliance with such covenants and the unavailability of any waiver, amendment or other modification thereto and the expiration of any applicable grace period thereto, substantially all of the Company’s debt could be negatively impacted by non-compliance with such covenants. Although Teva has been successful in the past in obtaining financing and renegotiating debt covenants at commercially acceptable terms, there are no guarantees it will be able to do so in the future. If such efforts could not be successfully completed on commercially acceptable terms, Teva may curtail additional planned spending or divest additional assets in order to generate enough cash to meet its debt requirements and all other financial obligations. The required annual principal payments of long-term debt, excluding debt issuance cost as of December 31, 2018, starting with the year 2020, are as follows: December 31, (U.S. $ in millions) 2020 $ 2,596 2021 4,205 2022 2,017 2023 4,473 2024 and thereafter 13,513 $ 26,804 |
Other Income
Other Income | 12 Months Ended |
Dec. 31, 2018 | |
Other Income | NOTE 12 OTHER INCOME: Year ended December 31, 2018 2017 2016 (U.S. $ in millions) Gain on divestitures, net of divestitures related costs (1) $ 67 1,083 720 Section 8 and similar payments (2) 195 83 20 Gain on sale of assets 9 11 10 Other, net 20 22 19 Total other income $ 291 $ 1,199 $ 769 (1) Mainly related to the divestment of the women’s health business. See note 2. (2) Section 8 of the Patented Medicines (Notice of Compliance) Regulation relates to recoveries of lost revenue related to patent infringement proceedings in Canada. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies | NOTE 13—COMMITMENTS AND CONTINGENCIES: a. Commitments: Operating leases: As of December 31, 2018, minimum future rentals under operating leases of buildings, machinery and equipment for periods in excess of one year were as follows: 2019—$193 million; 2020—$154 million; 2021—$118 million; 2022—$91 million; 2023—$66 million; 2024 and thereafter—$283 million. The lease fees expensed in each of the years ended December 31, 2018, 2017 and 2016 were $175 million, $200 million and $164 million, respectively. Royalty commitments: The Company is committed to pay royalties to owners of know-how, Until September 30, 2018, royalty expenses were reported in cost of goods sold if related to the acquisition of a product, and if not, such expenses are included in S&M expenses. Commencing October 1, 2018, royalty expenses are retroactively reported entirely under cost of goods sold. Royalty expenses in each of the years ended December 31, 2018, 2017 and 2016 were $536 million, $956 million and $814 million, respectively. See note 1bb. Milestone commitments: Teva has committed to make potential future milestone payments to third parties under various agreements. These payments are contingent upon the occurrence of certain future events and, given the nature of these events, it is unclear when, if ever, Teva may be required to pay such amounts. As of December 31, 2018, if all milestones and targets, for compounds in phase 2 and more advanced stages of development, are achieved, the total contingent payments could reach an aggregate amount of up to $420 million. b. Contingencies: General From time to time, Teva and/or its subsidiaries are subject to 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 litigation. Teva generally believes that it has meritorious defenses to the actions brought against it and vigorously pursues the defense or settlement of each such action. Except as described below, Teva does not currently have a reasonable basis to estimate the loss, or range of loss, that is reasonably possible with respect to matters disclosed in this note. Teva records a provision in its financial statements to the extent that it concludes that a contingent liability is probable and the amount thereof is estimable. Based upon the status of the cases described below, management’s assessments of the likelihood of damages, and the advice of counsel, no provisions have been made regarding the matters disclosed in this note, except as noted below. Litigation outcomes and contingencies are unpredictable, and excessive verdicts can occur. Accordingly, management’s assessments involve complex judgments about future events and often rely heavily on estimates and assumptions. Teva continuously reviews the matters described below and may, from time to time, remove previously disclosed matters that the Company has determined no longer meet the materiality threshold for disclosure. If one or more of such proceedings described below were to result in final judgments against Teva, such judgments could be material to its results of operations and cash flows in a given period. In addition, Teva incurs significant legal fees and related expenses in the course of defending its positions even if the facts and circumstances of a particular litigation do not give rise to a provision in the financial statements. In connection with third-party agreements, Teva may under certain circumstances be required to indemnify, and may be indemnified by, in unspecified amounts, the parties to such agreements against third-party claims. Among other things, Teva’s agreements with third parties may require Teva to indemnify them, or require them to indemnify Teva, for the costs and damages incurred in connection with product liability claims, in specified or unspecified amounts. Except as otherwise noted, all of the litigation matters disclosed below involve claims arising in the United States. Except as otherwise noted, all third party sales figures given below are based on IQVIA (formerly IMS Health Inc.) data. For income tax contingencies, see note 15 to our consolidated financial statements. Intellectual Property Litigation From time to time, Teva seeks to develop generic versions of patent-protected pharmaceuticals for sale prior to patent expiration in various markets. In the United States, to obtain approval for most generics prior to the expiration of the originator’s patents, Teva must challenge the patents under the procedures set forth in the Hatch-Waxman Act of 1984, as amended. To the extent that Teva seeks to utilize such patent challenge procedures, Teva is and expects to be involved in patent litigation regarding the validity, enforceability or infringement of the originator’s patents. Teva may also be involved in patent litigation involving the extent to which its product or manufacturing process techniques may infringe other originator or third-party patents. Additionally, depending upon a complex analysis of a variety of legal and commercial factors, Teva may, in certain circumstances, elect to market a generic version even though litigation is still pending. To the extent Teva elects to proceed in this manner, it could face substantial liability for patent infringement if the final court decision is adverse to Teva, which could be material to its results of operations and cash flows in a given period. The general rule for damages in patent infringement cases in the United States is that the patentee should be compensated by no less than a reasonable royalty and it may also be able, in certain circumstances, to be compensated for its lost profits. The amount of a reasonable royalty award would generally be calculated based on the sales of Teva’s product. The amount of lost profits would generally be based on the lost sales of the patentee’s product. In addition, the patentee may seek consequential damages as well as enhanced damages of up to three times the profits lost by the patent holder for willful infringement, although courts have typically awarded much lower multiples. Teva is also involved in litigation regarding patents in other countries where it does business, particularly in Europe. The laws concerning generic pharmaceuticals and patents differ from country to country. Damages for patent infringement in Europe may include lost profits or a reasonable royalty, but enhanced damages for willful infringement are generally not available. In July 2014, GlaxoSmithKline (“GSK”) sued Teva in Delaware federal court for infringement of a patent expiring in June 2015 directed to using carvedilol in a specified manner to decrease the risk of mortality in patients with congestive heart failure. Teva and eight other generic producers began selling their carvedilol tablets (the generic version of GSK’s Coreg ® pre- In 2014, Teva Canada succeeded in its challenge of the bortezomib (the generic equivalent of Velcade ® On July 8, 2011, Helsinn sued Teva over its filing of an ANDA to market a generic version of palonosetron IV solution (the generic equivalent of Aloxi ® ® In July 2015, Janssen sued Actavis and Teva (along with 10 other filers) over their filing of an ANDA to market their abiraterone acetate tablets, 250mg (generic versions of Zytiga ® inter partes Product Liability Litigation Teva’s business inherently exposes it to potential product liability claims. Teva maintains a program of insurance, which may include commercial insurance, self-insurance (including direct risk retention), or a combination of both approaches, in amounts and on terms that it believes are reasonable and prudent in light of its business and related risks. However, Teva sells, and will continue to sell, pharmaceuticals that are not covered by its product liability insurance; in addition, it may be subject to claims for which insurance coverage is denied as well as claims that exceed its policy limits. Product liability coverage for pharmaceutical companies is becoming more expensive and increasingly difficult to obtain. As a result, Teva may not be able to obtain the type and amount of insurance it desires, or any insurance on reasonable terms, in all of its markets. Competition Matters As part of its generic pharmaceuticals business, Teva has challenged a number of patents covering branded pharmaceuticals, some of which are among the most widely-prescribed and well-known drugs on the market. Many of Teva’s patent challenges have resulted in litigation relating to Teva’s attempts to market generic versions of such pharmaceuticals under the federal Hatch-Waxman Act. Some of this litigation has been resolved through settlement agreements in which Teva obtained a license to market a generic version of the drug, often years before the patents expire. Teva and its subsidiaries have increasingly been named as defendants in cases that allege antitrust violations arising from such settlement agreements. The plaintiffs in these cases, which are usually direct and indirect purchasers of pharmaceutical products, and often assert claims on behalf of classes of all direct and indirect purchasers, typically allege that (1) Teva received something of value from the innovator in exchange for an agreement to delay generic entry, and (2) significant savings could have been realized if there had been no settlement agreement and generic competition had commenced earlier. These class action cases seek various forms of injunctive and monetary relief, including damages based on the difference between the brand price and what the generic price allegedly would have been and disgorgement of profits, which are automatically tripled under the relevant statutes, plus attorneys’ fees and costs. The alleged damages generally depend on the size of the branded market and the length of the alleged delay, and can be substantial—potentially measured in multiples of the annual brand sales—particularly where the alleged delays are lengthy or branded drugs with annual sales in the billions of dollars are involved. Teva believes that its settlement agreements are lawful and serve to increase competition, and has defended them vigorously. In Teva’s experience to date, these cases have typically settled for a fraction of the high end of the damages sought, although there can be no assurance that such outcomes will continue. In June 2013, the United States Supreme Court held, in Federal Trade Commission v. Actavis, Inc. (the “AndroGel case”), that a rule of reason test should be applied in analyzing whether such settlements potentially violate the federal antitrust laws. The Supreme Court held that a trial court must analyze each agreement in its entirety in order to determine whether it violates the antitrust laws. This new test has resulted in increased scrutiny of Teva’s patent settlements, additional action by the FTC and state and local authorities, and an increased risk of liability in Teva’s currently pending antitrust litigations. In April 2006, certain subsidiaries of Teva were named in a class action lawsuit filed in the U.S. District Court for the Eastern District of Pennsylvania. The case alleges that the settlement agreements entered into between Cephalon, Inc., now a Teva subsidiary (“Cephalon”), and various generic pharmaceutical companies in late 2005 and early 2006 to resolve patent litigation involving certain finished modafinil products (marketed as PROVIGIL ® In May 2015, Cephalon entered into a consent decree with the FTC under which the FTC dismissed its claims against Cephalon in the FTC Modafinil Action in exchange for payment of $1.2 billion (less set-offs Additionally, following an investigation initiated by the European Commission in April 2011 regarding a modafinil patent settlement in Europe, the Commission issued a Statement of Objections in July 2017 against both Cephalon and Teva alleging that the 2005 settlement agreement between the parties had the object and effect of hindering the entry of generic modafinil. No final decision regarding infringement has yet been taken by the Commission. The sales of modafinil in the European Economic Area during the last full year of the alleged infringement amounted to EUR 46.5 million. In January 2009, the FTC and the State of California filed a complaint for injunctive relief in California federal court alleging that a September 2006 patent lawsuit settlement between Watson Pharmaceuticals, Inc. (“Watson”), now a Teva subsidiary, and Solvay Pharmaceuticals, Inc. (“Solvay”) relating to AndroGel ® ® ® In December 2011, three groups of plaintiffs sued Wyeth and Teva for alleged violations of the antitrust laws in connection with their settlement of patent litigation involving extended release venlafaxine (generic Effexor XR ® ® ® In February 2012, two purported classes of direct-purchaser plaintiffs sued GSK and Teva in New Jersey federal court for alleged violations of the antitrust laws in connection with their settlement of patent litigation involving lamotrigine (generic Lamictal ® ® ® In April 2013, purported classes of direct purchasers of, and end payers for, Niaspan ® opt-out ® ® In November 2013, a putative class action was filed in Pennsylvania federal court against Actavis, Inc. and certain of its affiliates, alleging that Watson’s 2012 patent lawsuit settlement with Endo Pharmaceuticals Inc. relating to Lidoderm ® end-payer ® ® Since November 2013, numerous lawsuits have been filed in various federal courts by purported classes of end payers for, and direct purchasers of, Aggrenox ® ® opt-out opt-out Opt-outs ® ® Since January 2014, numerous lawsuits have been filed in the U.S. District Court for the Southern District of New York by purported classes of end payers for, and direct purchasers of, Actos ® ® ® ® In September 2014, the FTC sued AbbVie Inc. and certain of its affiliates (“AbbVie”) as well as Teva in the U.S. District Court for the Eastern District of Pennsylvania alleging that they violated the antitrust laws when they entered into a settlement agreement to resolve the AndroGel ® ® In May 2015, a purported class of end payers for Namenda IR ® ® ® ® On December 16, 2016, the U.K. Competition and Markets Authority (“CMA”) issued a statement of objections (a provisional finding of infringement of the Competition Act) in respect of certain allegations against Allergan, Actavis UK and certain Auden Mckenzie entities alleging competition law breaches in connection with the supply of 10mg and 20mg hydrocortisone tablets in the U.K. On December 18, 2017, the CMA issued a Statement of Draft Penalty Calculation. No final decision regarding infringement of competition law has yet been issued. On March 3, 2017, the CMA issued a second statement of objections in respect of certain additional allegations (relating to the same products and covering part of the same time period as in the first statement of objections) against Actavis UK, Allergan and certain Auden Mckenzie entities. On January 9, 2017, Teva completed the sale of Actavis UK to Accord Healthcare Limited, pursuant to which Teva will indemnify Accord Healthcare for potential fines imposed by the CMA and/or damages awarded by a court against Actavis UK as a result of the conduct prior to the closing date of the sale. In addition, Teva agreed to indemnify Allergan against losses arising from this matter, pursuant to the agreement the parties entered into on January 31, 2018. See note 3. In the event of any such fines or damages, Teva expects to assert claims, including claims for breach of warranty, against the sellers of Auden Mckenzie. The terms of the purchase agreement may preclude a full recovery by Teva. A liability for this matter has been recorded in purchase accounting related to the acquisition of Actavis Generics. Since November 2016, several putative indirect purchaser and direct purchaser class actions were filed in federal courts in Wisconsin, Massachusetts and Florida against Shire U.S., Inc. and Shire LLC (collectively, “Shire”), Actavis and Teva, alleging that Shire’s 2013 patent litigation settlement with Actavis related to the ADHD drug Intuniv ® ® ® Government Investigations and Litigation Relating to Pricing and Marketing Teva is involved in government investigations and litigation arising from the marketing and promotion of its pharmaceutical products in the United States. Many of these investigations originate through what are known as qui tam A number of state attorneys general have filed various actions against Teva and/or certain of its subsidiaries relating to reimbursements or drug price reporting under Medicaid or other programs. Such price reporting is alleged to have caused states and others to pay inflated reimbursements for covered drugs. Teva and its subsidiaries have reached settlements in most of these cases. On October 4, 2018, Teva settled longstanding litigation filed by the State of Illinois against subsidiaries of Teva and Watson for a total settlement amount of $135 million, the majority of which was paid in December of 2018. Teva accepted the settlement while denying any liability with respect to the claims made by the state. Pending the final settlement payment, the Illinois litigation is stayed. In August 2013, judgment was entered in a separate case brought by the State of Mississippi against Watson, pursuant to which Watson was ordered to pay compensatory damages amounting to $12.4 million. In March 2014, the Mississippi court amended the judgment to also include punitive damages in the amount of $17.9 million. The judgment was affirmed in all respects by the Mississippi Supreme Court in January 2018 and has since been satisfied in full. Certain Actavis subsidiaries remain parties to active litigation in Utah where previously dismissed claims against Watson are now on appeal. A provision for these cases has been included in the financial statements. Several qui tam qui tam In January 2014, Teva received a civil investigative demand from the U.S. Attorney for the Southern District of New York seeking documents and information from January 1, 2006 related to sales, marketing and promotion of COPAXONE and AZILECT ® qui tam In January 2014, a qui tam qui tam In May 2017, a qui tam qui tam in-kind Since May 2014, approximately 1,500 complaints have been filed with respect to opioid sales and distribution against various Teva affiliates, along with several other pharmaceutical companies, by a number of cities, counties, states, other governmental agencies and private plaintiffs in both state and federal courts. Most of the federal cases have been consolidated into a multidistrict litigation in the Northern District of Ohio (“MDL Opioid Proceeding”) and many of the cases filed in state court have been removed to federal court and consolidated into the MDL Opioid Proceeding. Complaints asserting claims under similar provisions of different state law, generally contend that the defendants allegedly engaged in improper marketing and distribution of opioids, including ACTIQ ® ® On June 21, 2016, Teva USA received a subpoena from the DOJ Antitrust Division seeking documents and other information relating to the marketing and pricing of certain Teva USA generic products and communications with competitors about such products. Actavis received a similar subpoena in June 2015. Teva and Actavis are cooperating with the DOJ subpoena requests. On July 12, 2016, Teva USA received a subpoena from the Connecticut Attorney General seeking documents and other information relating to potential state antitrust law violations. In 2015, Actavis received a similar subpoena from the Connecticut Attorney General. On December 15, 2016, a civil action was brought by the attorneys general of twenty states against Teva USA and several other companies asserting claims under federal antitrust law alleging price fixing of generic products in the United States. An amended complaint was filed on March 1, 2017 adding twenty additional states to the named plaintiffs and adding supplemental state law claims. The states seek a finding that the defendants’ actions violated federal antitrust law and state antitrust and consumer protection laws, as well as injunctive relief, disgorgement, damages on behalf of various state and governmental entities and consumers, civil penalties and costs. On August 3, 2017, the action was transferred to the generic drug multidistrict litigation in the Eastern District of Pennsylvania (“Pennsylvania MDL”). On July 17, 2017, a new complaint was filed in the District Court of Connecticut on behalf of four additional states with the same factual allegations and claims that are at issue in the Pennsylvania MDL case. The complaint was subsequently transferred to the Pennsylvania MDL. On October 31, 2017, the attorneys general of 45 states plus Puerto Rico and the District of Columbia filed a motion for leave to file an amended complaint in this action. The proposed amended complaint names Actavis and Teva as defendants, and adds new allegations and claims to those appearing in the prior complaints. Defendants have opposed the motion. On June 5, 2018, the District Court for the Eastern District of Pennsylvania granted the attorneys general’s motion to amend. Beginning on March 2, 2016, numerous complaints have been filed in the United States on behalf of putative classes of direct and indirect purchasers of several generic drug products, as well as several individual direct purchaser opt-out In May 2018, Teva received a civil investigative demand from the DOJ Civil Division, pursuant to the federal False Claims Act, seeking documents and information produced since January 1, 2009 relevant to the Civil Division’s investigation concerning allegations that generic pharmaceutical manufacturers, including Teva, engaged in market allocation and price-fixing agreements, paid illegal remuneration, and caused false claims to be submitted in violation of the False Claims Act. Teva is cooperating with this subpoena. On March 21, 2017, Teva received a subpoena from the U.S. Attorney’s office in Boston, Massachusetts requesting documents related to Teva’s donations to patient assistance programs. Teva is cooperating in responding to the subpoena. In December 2016, Teva resolved certain claims under the U.S. Foreign Corrupt Practices Act (“FCPA”) with the SEC and the DOJ, as more fully described in Teva’s 2017 Annual Report. The settlement included a fine, disgorgement and prejudgment interest; a three-year deferred prosecution agreement (“DPA”) for Teva and the retention of an independent compliance monitor for a period of three years. If, during the term of the DPA (approximately three years unless extended), the DOJ determines that Teva has committed a felony under federal law, provided deliberately false or misleading information or otherwise breached the DPA, Teva could be subject to prosecution and additional fines or penalties, including the deferred charges. Following the above resolution with the SEC and DOJ, Teva has had requests for documents and information from various Russian government entities. In addition, on January 14, 2018, Teva entered into an arrangement for the Contingent Cessation of Proceedings pursuant to the Israeli Securities Law with the Government of Israel that ended the investigation of the Israeli government into the conduct that was subject to the FCPA investigation, and provided a payment of approximately $22 million. Shareholder Litigation On November 6, 2016 and December 27, 2016, two putative securities class actions were filed in the U.S. District Court for the Central District of California against Teva and certain of its current and former officers and directors. After those two lawsuits were consolidated and transferred to the U.S. District Court for the District of Connecticut, the court appointed the Ontario Teachers’ Pension Plan Board as lead plaintiff (the “Ontario Teachers Securities Litigation”). The lead plaintiff then filed a consolidated amended complaint. On April 3, 2018, the court dismissed the case without prejudice. Lead plaintiff filed a second amended complaint on June 22, 2018, purportedly on behalf of purchasers of Teva’s securities between February 6, 2014 and August 3, 2017. The second complaint asserts that Teva and certain of its current and former officers and directors violated federal securities laws in connection with Teva’s alleged failure to disclose pricing strategies for various drugs in its generic drug portfolio and by making allegedly false or misleading statements in certain offering materials issued during the class period. The second complaint seeks unspecified damages, legal fees, interest, and costs. Teva and the current and former officer and director defendants filed motions to dismiss the second complaint on September 14, 2018. Those motions are pending before the court. On July 17, 2017, a lawsuit was filed in the U.S. District Court for the Southern District of Ohio derivatively on behalf of the Teva Employee Stock Purchase Plan, and alternatively as a putative class action lawsuit on behalf of individuals who purchased Teva stock through that plan. That lawsuit seeks unspecified damages, legal fees, interest and costs. The complaint alleges that Teva failed to maintain adequate financial controls based on the facts underpinning Teva’s FCPA DPA and also based on allegations substantially similar to those in the Ontario Teachers Securities Litigation. On November 29, 2017, the court granted Teva’s motion to transfer the litigation to the U.S. District Court for the District of Connecticut where the Ontario Teachers Securities Litigation is pending. On February 12, 2018, the district court stayed the case pending resolution of the motions to dismiss filed in the consolidated putative securities class action described above. On August 3, 2017, a securities lawsuit was filed in the U.S. District Court for the District of Connecticut by OZ ELS Master Fund, Ltd. and related entities. The complaint asserts that Teva and certain of its current and former officers violated the federal securities laws in connection with Teva’s alleged failure to disclose Teva’s participation in an alleged anticompetitive scheme to fix prices and allocate markets for generic drugs in the United States. On August 30, 2017, the court entered an order deferring all deadlines pending the resolution of the motions to dismiss filed in the Ontario Teachers Securities Litigation described above. On August 21 and 30, 2017, Elliot Grodko and Barry Baker filed putative securities class actions in the U.S. District Court for the Eastern District of Pennsylvania purportedly on behalf of purchasers of Teva’s securities between November 15, 2016 and August 2, 2017 seeking unspecified damages, legal fees, interest, and costs. The complaints allege that Teva and certain of its current and former officers violated the federal securities laws and Israeli securities laws by making false and misleading statements in connection with Teva’s acquisition and integration of Actavis Generics. On November 1, 2017, the court consolidated the Baker and Grodko cases. On April 10, 2018, the court granted Teva’s motion to transfer the consolidated action to the District of Connecticut where the Ontario Teachers Securities Litigation is currently pending. Between August 2018 and February 2019, nine complaints were filed against Teva and current and former officer and director defendants seeking unspecified compensatory and rescissory damages, legal fees, costs and expenses. The allegations in these complaints are substantially similar to the allegations in the Ontario Teachers Securities Litigation, but have been brought on behalf of plaintiffs that have “opted out” of the putative class in the Ontario Teachers Securities Litigation. The plaintiffs in these “opt-out” cases filed their complaints in the Court of Common Pleas of Montgomery County, Pennsylvania, the U.S. District Court for the Eastern District of Pennsylvania and the U.S. District Court for the District of Connecticut. Teva and the current and former officer and director defendants filed or will file motions to transfer the cases filed in Pennsylvania to the U.S. District Court for the District of Connecticut, where the Ontario Teachers Securities Litigation is pending. The cases filed in Connecticut have been or will request to be stayed pending resolution of the motions to dismiss filed in the consolidated putative securities class action described above. Motions to approve derivative actions against certain past and present directors and officers have been filed in Israel alleging negligence and recklessness with respect to the acquisition of the Rimsa business and the acquisition of Actavis Generics. Motions for document disclosure prior to initiating derivative actions were filed with respect to dividend distribution, executive compensation, several patent settlement agreements and the U.S. price-fixing investigations. Motions to approve securities class actions against Teva and certain of its current and former directors and officers were filed in Israel based on allegations of improper disclosure of the above-mentioned pricing investigation, as well as lack of disclosure of negative developments in the generic sector, including price erosion with respect to Teva’s products. Other motions were filed in Israel to approve a derivative action, discovery and a class action related to claims regarding Teva’s above-mentioned FCPA resolution with the SEC and DOJ. Environmental Matters Teva or its subsidiaries are party to a number of environmental proceedings, or have received claims, including under the federal Superfund law or other federal, provincial or state and local laws, imposing liability for alleged noncompliance, or for the investigation and remediation of releases of hazardous substances and for natural resource damages. Many of these proceedings and claims seek to require the generators of hazardous wastes disposed of at a third party-owned site, or the party responsible for a release of hazardous substances that impacted a site, to investigate and clean the site or to pay or reimburse others for such activities, including for oversight by governmental authorities and any related damages to natural resources. Teva or its subsidiaries have received claims, or been made a party to these proceedings, along with others, as an alleged generator of wastes that were disposed of or treated at third-party waste disposal sites, or as a result of an alleged release from one of Teva’s facilities or former facilities. Although liability among the responsible parties, under certain circumstances, may be joint and several, these proceedings are frequently resolved so that the allocation of clean-up clean-up clean-up Other Matters On February 1, 2018, former shareholders of Ception Therapeutics, Inc., a company that was acquired by and merged into Cephalon in 2010, prior to Cephalon’s acquisition by Teva, filed breach of contract and other related claims against the Company, Teva USA and Cephalon in the Delaware Court of Chancery. Among other things, the plaintiffs allege that Cephalon breached the terms of the 2010 Ception-Cephalon merger agreement by failing to exercise commercially reasonable efforts to develop and commercialize CINQAIR ® |
Equity
Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity | NOTE 14—EQUITY: a. Ordinary shares and ADSs As of December 31, 2018 and 2017, Teva had approximately 1.2 billion and 1.1 billion ordinary shares issued, respectively. Teva ordinary shares are traded on the Tel-Aviv On December 8, 2015, Teva completed an offering of 54 million ADSs at $62.50 per share. On January 6, 2016, Teva sold an additional 5.4 million ADSs, pursuant to the underwriters’ exercise in full of their overallotment option. As a result, Teva received an additional $329 million in net proceeds, for an aggregate of approximately $3.62 billion, including the initial closing. On August 2, 2016, Teva issued approximately 100.3 million Teva shares to Allergan in connection with the closing of the Actavis Generics acquisition. On December 17, 2018, the mandatory convertible preferred shares automatically converted into ordinary shares. As a result of this conversion, Teva issued 70.6 million ADSs. b. Mandatory convertible preferred shares On December 8, 2015, Teva completed an offering of 3,375,000 of its 7% mandatory convertible preferred shares. The mandatory convertible preferred shares had no voting rights and ranked senior to Teva’s ordinary shares with respect to dividends and distributions upon liquidation, winding-up On January 6, 2016, Teva sold an additional 337,500 mandatory convertible preferred shares pursuant to the underwriters exercise in full of their overallotment option. As a result, Teva received an additional $329 million in net proceeds, for an aggregate of approximately $3.62 billion including the initial closing. On December 17, 2018, the mandatory convertible preferred shares automatically converted into ordinary shares at a ratio of 1 mandatory convertible preferred share to 16 ADSs, and all of the accumulated and unpaid dividends on the mandatory convertible preferred shares were paid in ADSs, at a ratio of 3.0262 ADSs per mandatory convertible preferred share, all in accordance with the conversion mechanism set forth in the terms of the mandatory convertible preferred shares. Share repurchase program In December 2011, Teva’s Board of Directors authorized it to repurchase up to an aggregate amount of $3.0 billion of its ordinary shares/ADSs, of which $1.3 billion remained available for purchase. In October 2014, the Board of Directors authorized Teva to increase its share repurchase program by $1.7 billion to $3.0 billion, of which $2.1 billion remained available as of December 31, 2018. Teva did not repurchase any of its shares during 2018 and currently cannot do so due to its accumulated deficit. The repurchase program has no time limit. Repurchases may be commenced or suspended at any time, subject to applicable law. c. Stock-based compensation plans: Stock-based compensation plans are comprised of employee stock options, RSUs, PSUs, 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 equity participation in the Company. On June 29, 2010, the Teva 2010 Long-Term Equity-Based Incentive Plan was approved by Teva’s shareholders, under which 70 million equivalent share units, including options exercisable into ordinary shares, RSUs and PSUs, were approved for grant. The 2010 Plan expired on June 28, 2015 (except with respect to awards outstanding on that date), and no additional awards under the 2010 Plan may be made. On September 3, 2015, the Teva 2015 Long-Term Equity-Based Incentive Plan was approved by Teva’s shareholders, under which 43.7 million equivalent share units, including options exercisable into ordinary shares, RSUs and PSUs, were approved for grant. On April 18, 2016, Teva’s shareholders approved an increase of an additional 33.3 million equivalent share units to the share reserve of Teva’s 2015 Long-Term Equity-Based Incentive Plan, so that 77 million equivalent share units, including options exercisable into ordinary shares, RSUs and PSUs, are approved for grant. On July 13, 2017, Teva’s shareholders approved an increase of an additional 65 million equivalent share units to the share reserve of Teva’s 2015 Long-Term Equity-Based Incentive Plan, so that 142 million equivalent share units, including options exercisable into ordinary shares, RSUs and PSUs, are approved for grant. As of December 31, 2018, 76.6 million equivalent share units remain available for future awards. In the past, Teva had various employee stock and incentive plans under which stock options and other share-based awards were granted. Stock options and other share-based awards granted under such prior plans continue in accordance with the terms of the respective plans. The vesting period of the outstanding options, RSUs and PSUs is generally from 1 to 4 years from the date of grant. The rights of the ordinary shares obtained from the exercise of options, RSUs or PSUs are identical to those of the other ordinary shares of the Company. The contractual term of these options is primarily for seven years in prior plans and ten years for options granted under the 2010 and 2015 plans described above. Status of options A summary of the status of the options as of December 31, 2018, 2017 and 2016, and changes during the years ended on those dates, is presented below (the number of options represents ordinary shares exercisable in respect thereof). Year ended December 31, 2018 2017 2016 Number (in thousands) Weighted Number (in thousands) Weighted Number (in thousands) Weighted Balance outstanding at beginning of year 43,121 $ 44.32 32,789 $ 50.71 25,233 $ 49.69 Changes during the year: Granted 12,401 19.12 15,467 32.08 10,895 53.21 Exercised (84 ) 17.01 (7 ) 17.44 (766 ) 44.24 Forfeited (7,040 ) 39.38 (4,953 ) 47.92 (1,382 ) 54.09 Expired (5 ) 50.65 (175 ) 59.81 (1,191 ) 52.79 Balance outstanding at end of year 48,393 38.62 43,121 44.32 32,789 50.71 Balance exercisable at end of year 24,086 46.89 19,129 47.94 14,468 46.06 The weighted average fair value of options granted during the years was generally estimated by using the Black-Scholes option-pricing model as follows: Year ended December 31, 2018 2017 2016 Weighted average fair value $ 7.4 $ 5.7 $ 9.4 The fair value of these options was estimated on the date of grant, based on the following weighted average assumptions: Year ended December 31, 2018 2017 2016 Dividend yield 0 % 3.7 % 2.6 % Expected volatility 40 % 29 % 25 % Risk-free interest rate 2.6 % 2.1 % 1.4 % Expected term 5 years 5 years 5 years The expected term was estimated based on the weighted average period for which the options granted are expected to be outstanding, taking into consideration the current vesting of options and the historical exercise patterns of existing options. The expected volatility assumption used is based on a blend of the historical and implied volatility of the Company’s stock. The risk-free interest rate used is based on the yield of U.S. Treasuries with a maturity closest to the expected term of the options granted. The dividend yield assumption reflects the expected dividend yield based on historical dividends and expected dividend growth. The following tables summarize information at December 31, 2018 regarding the number of ordinary shares issuable upon (1) outstanding options and (2) vested options: (1) Number of ordinary shares issuable upon exercise of outstanding options Range of exercise prices Balance at end of Weighted average Weighted average Aggregate intrinsic Number of shares $ Years $ Lower than $15.01 593 11.40 8.85 2.4 $15.01 - $25.00 12,398 18.92 9.13 * $25.01 - $35.00 9,615 34.63 8.17 — $35.01 - $45.00 6,703 40.57 3.58 — $45.01 - $55.00 12,908 50.84 5.64 — $55.01 - $65.00 6,167 59.34 6.30 — $65.01 - $70.00 9 66.85 0.03 — Total 48,393 38.62 6.87 2.4 (2) Number of ordinary shares issuable upon exercise of vested options Range of exercise prices Balance at end of Weighted average Weighted average Aggregate intrinsic Number of shares $ Years $ $15.01 - $25.00 548 16.99 8.68 * $25.01 - $35.00 2,464 34.60 8.18 — $35.01 - $45.00 6,655 40.59 3.55 — $45.01 - $55.00 10,041 50.17 5.17 — $55.01 - $65.00 4,369 59.58 6.25 — $65.01 - $70.00 9 66.85 0.03 — Total 24,086 46.89 5.30 * * Represents an amount less than 0.5 million. The aggregate intrinsic value in the above tables represents the total pre-tax in-the-money. The total intrinsic value of options exercised during the years ended December 31, 2018 and 2017 were immaterial, based on the Company’s average stock price of $20.92 and $25.62, for the years then ended, respectively. The total intrinsic value of options exercised during the year ended December 31, 2016 was $5 million based on the Company’s average stock price of $50.96. Status of non-vested The fair value of RSUs and PSUs is estimated based on the market value of the Company’s stock on the date of award grant, less an estimate of dividends that will not accrue to RSU and PSU holders prior to vesting. The following table summarizes information about the number of RSUs and PSUs issued and outstanding: Year ended December 31, 2018 2017 2016 Number (in thousands) Weighted Number (in thousands) Weighted Number (in thousands) Weighted Balance outstanding at beginning of year 7,468 $ 27.95 4,636 $ 45.15 2,551 $ 51.43 Granted 5,900 18.80 5,461 20.10 3,193 40.78 Vested (1,638 ) 37.30 (1,884 ) 39.63 (830 ) 45.79 Forfeited (1,327 ) 32.5 (745 ) 42.84 (278 ) 46.08 Balance outstanding at end of year 10,403 20.93 7,468 27.95 4,636 45.15 The Company expenses compensation costs based on the grant-date fair value. For the years ended December 31, 2018, 2017 and 2016, the Company recorded stock-based compensation costs as follows: Year ended December 31, 2018 2017 2016 (U.S. $ in millions) Employee stock options $ 74 $ 64 $ 56 RSUs and PSUs 81 69 66 Total stock-based compensation expense 155 133 122 Tax effect on stock-based compensation expense 18 24 26 Net effect $ 137 $ 109 $ 96 At December 31, 2018, the total unrecognized compensation cost before tax on employee stock options and RSU/PSUs amounted to $112 million and $138 million, respectively, and is expected to be recognized over a weighted average period of approximately 2.5 years. d. Dividends: Commencing in April 2015, dividends on Teva’s ordinary shares were declared in U.S. dollars. Dividends paid per share in the years ended December 31, 2018, 2017 and 2016 were $0, $0.85 and $1.36, respectively. In addition, dividends paid on Teva’s mandatory convertible preferred shares per share in the years ended December 31, 2018 and 2017 were $0 and $70 million, respectively. In December 2017, Teva announced an immediate suspension of dividends on its ordinary shares and ADSs. Teva suspended cash dividends on its mandatory convertible preferred shares in the fourth quarter of 2017, due to its accumulated deficit. The mandatory conversion date of the mandatory convertible preferred shares was in December 2018. All of the accumulated and unpaid dividends on the mandatory convertible preferred shares were paid in ADSs, at a ratio of 3.0262 ADSs per mandatory convertible preferred share, according to the conversion mechanism set forth in the terms of the mandatory convertible preferred shares. e. Accumulated other comprehensive loss: The components of accumulated other comprehensive loss attributable to Teva are presented in the table below: Net Unrealized Gains/(Losses) Benefit Plans Foreign Available-for- Derivative Actuarial Total Balance, January 1, 2016 (2,384 ) 312 175 (58 ) (1,955 ) Other comprehensive loss before reclassifications (355 ) (456 ) (491 ) (26 ) (1,328 ) Amounts reclassified to the statements of income 3 140 14 (6 ) 151 Net other comprehensive loss before tax (352 ) (316 ) (477 ) (32 ) (1,177 ) Corresponding income tax (33 ) (3 ) — 9 (27 ) Net other comprehensive loss after tax* (385 ) (319 ) (477 ) (23 ) (1,204 ) Balance, December 31, 2016 (2,769 ) (7 ) (302 ) (81 ) (3,159 ) Other comprehensive income/(loss) before reclassifications 1,075 64 (167 ) (3 ) 969 Amounts reclassified to the statements of income 378 (66 ) 27 (5 ) 334 Net other comprehensive income/(loss) before tax 1,453 (2 ) (140 ) (8 ) 1,303 Corresponding income tax — 5 — (2 ) 3 Net other comprehensive income/(loss) after tax* 1,453 3 (140 ) (10 ) 1,306 Balance, December 31, 2017 (1,316 ) (4 ) (442 ) (91 ) (1,853 ) Cumulative effect of new accounting standard (See Note 1) — 5 — — 5 Other comprehensive income/(loss) before reclassifications (739 ) (1 ) 87 4 (649 ) Amounts reclassified to the statements of income 1 28 13 42 Net other comprehensive income/(loss) before tax (739 ) — 115 17 (607 ) Corresponding income tax — — — (4 ) (4 ) Net other comprehensive income/(loss) after tax* (739 ) — 115 13 (611 ) Balance, December 31, 2018 (2,055 ) 1 (327 ) (78 ) (2,459 ) * Amounts do not include foreign currency translation adjustments attributable to non-controlling |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | NOTE 15—INCOME TAXES: a. Income before income taxes: Year ended December 31, 2018 2017 2016 (U.S. $ in millions) Parent Company and its Israeli subsidiaries $ 1,022 $ 1,451 $ 1,516 Non-Israeli (3,618 ) (19,830 ) (692 ) $ (2,596 ) $ (18,379 ) $ 824 b. Income taxes: Year ended December 31, 2018 2017 2016 (U.S. $ in millions) In Israel $ 131 $ 96 $ 209 Outside Israel (326 ) (2,029 ) 312 $ (195 ) $ (1,933 ) $ 521 Current $ 700 $ 373 $ 481 Deferred (895 ) (2,306 ) 40 $ (195 ) $ (1,933 ) $ 521 Year ended December 31, 2018 2017 2016 (U.S. $ in millions) Income (loss) before income taxes $ (2,596 ) $ (18,379 ) $ 824 Statutory tax rate in Israel 23.0 % 24.0 % 25.0 % Theoretical provision for income taxes $ (597 ) $ (4,411 ) $ 206 Increase (decrease) in effective tax rate due to: The Parent Company and its Israeli subsidiaries— Mainly tax benefits arising from reduced tax rates under benefit programs (134 ) (253 ) (212 ) Non-Israeli 381 3,817 546 U.S. Tax Cuts and Jobs Act effect 97 (1,061 ) — Increase (decrease) in other uncertain tax positions—net 58 (25 ) (19 ) Effective consolidated income taxes $ (195 ) $ (1,933 ) $ 521 * Income before income taxes includes goodwill impairment in non-Israeli The effective tax rate is the result of a variety of factors, including the geographic mix and type of products sold during the year, different effective tax rates applicable to non-Israeli c. Deferred income taxes: December 31, 2018 2017 (U.S. $ in millions) Long-term deferred tax assets (liabilities)—net: Inventory related $ 113 $ 40 Sales reserves and allowances 199 201 Provision for legal settlements 42 171 Intangible assets (*) (2,282 ) (3,132 ) Carryforward losses and deductions and credits (**) 1,340 1,485 Property, plant and equipment (167 ) (231 ) Deferred interest (***) 391 — Provisions for employee related obligations 102 142 Other 123 125 (139 ) (1,199 ) Valuation allowance—in respect of carryforward losses and deductions that may not be utilized (**) (1,633 ) (1,504 ) $ (1,772 ) $ (2,703 ) * The decrease in deferred tax liability is mainly due to impairment and amortization. ** The amounts are shown after reduction for unrecognized tax benefits of $35 million and $26 million as of December 31, 2018 and 2017, respectively. This amount represents the tax effect of gross carryforward losses and deductions with the following expirations: 2019-2021—$206 million; 2022-2028—$448 million; 2029 and thereafter—$280 million. The remaining balance—$441 million—can be utilized with no expiration date. *** The increase in deferred tax asset is mainly due to the interest expense limitation following the enactment of the Tax Cuts and Jobs Act. The deferred income taxes are reflected in the balance sheets among: December 31, 2018 2017 (U.S. $ in millions) Long-term assets—deferred income taxes 368 574 Long-term liabilities—deferred income taxes (2,140 ) (3,277 ) $ (1,772 ) $ (2,703 ) Balances are presented under long term deferred taxes, due to the implementation of ASU 2015-17. d. Uncertain tax positions: The following table summarizes the activity of Teva’s gross unrecognized tax benefits: Year ended December 31, 2018 2017 2016 (U.S. $ in millions) Balance at the beginning of the year $ 1,034 $ 734 $ 648 Increase related to prior year tax positions, net 76 56 23 Increase related to current year tax positions 11 26 71 Decrease related to settlements with tax authorities and lapse of applicable statutes of limitations (49 ) (56 ) (103 ) Liabilities assumed in acquisitions — 273 101 Other — 1 (6 ) Balance at the end of the year $ 1,072 $ 1,034 $ 734 Uncertain tax positions, mainly of a long-term nature, included accrued potential penalties and interest of $131 million, $112 million and $83 million as of December 31, 2018, 2017 and 2016, respectively. The total amount of interest and penalties reflected in the consolidated statements of income was a net increase of $19 million for the year ended December 31, 2018, a net increase of $29 million for the year ended December 31, 2017 and a net decrease of $18 million for the year ended December 31, 2016. Substantially all the above uncertain tax benefits, if recognized, would reduce Teva’s annual effective tax rate. Teva does not expect uncertain tax positions to change significantly over the next 12 months, except in the case of settlements with tax authorities, the likelihood and timing of which is difficult to estimate. e. Tax assessments: Teva files income tax returns in various jurisdictions with varying statutes of limitations. The Parent Company and its subsidiaries in Israel have received final tax assessments through tax year 2007. In 2013, Teva settled the 2005-2007 income tax assessment with the Israeli tax authorities, paying $213 million. No further taxes are due in relation to these years. Certain guidelines which were set pursuant to the agreement reached in relation to the 2005-2007 assessment have been implemented in the audit of tax years 2008-2011, and are reflected in the provisions. The Israeli tax authorities issued tax assessment decrees for 2008-2012 and a tax assessment for 2013-2016, challenging the Company’s positions on several issues. Teva has protested the 2008-2012 decrees before the Central District Court in Israel and intends to challenge the tax assessment for 2013-2016 as well. The Company believes it has adequately provided for these items and that any adverse results would have an immaterial impact on Teva’s financial statements. The Company’s subsidiaries in North America and Europe have received final tax assessments mainly through tax year 2008. f. Basis of taxation: The Company and its subsidiaries are subject to tax in many jurisdictions, and a certain degree of estimation is required in recording the assets and liabilities related to income taxes. The Company believes that its accruals for tax liabilities are adequate for all open years. The Company considers various factors in making these assessments, including past history, recent interpretations of tax law, and the specifics of each matter. Because tax regulations are subject to interpretation and tax litigation is inherently uncertain, these assessments can involve a series of complex judgments regarding future events. Incentives Applicable until 2013 Under the incentives regime applicable to the Company until 2013, industrial projects of Teva and certain of its Israeli subsidiaries were eligible for “Approved Enterprise” status. Most of the projects in Israel have been granted Approved Enterprise status under the “alternative” tax benefit track which offered tax exemption on undistributed income for a period of two to ten years, depending on the location of the enterprise. Upon distribution of such exempt income, the distributing company is subject to corporate tax at the rate ordinarily applicable to the Approved Enterprise’s income. Amendment 69 to the Investment Law Pursuant to Amendment 69 to the Investment Law (“Amendment 69”), a company that elected by November 11, 2013 to pay a corporate tax rate as set forth in that amendment (rather than the tax rate applicable to Approved Enterprise income) with respect to undistributed exempt income accumulated by the company up until December 31, 2011 is entitled to distribute a dividend from such income without being required to pay additional corporate tax with respect to such dividend. A company that has so elected must make certain qualified investments in Israel over the five-year period commencing in 2013. Teva invested the entire required amount in 2013. During 2013, Teva applied the provisions of Amendment 69 to certain exempt profits Teva accrued prior to 2012. Consequently, Teva paid $577 million in corporate tax on exempt income of $9.4 billion. Part of this income was distributed as dividends during 2013-2018, while the remainder is available to be distributed as dividends in future years with no additional corporate tax liability. Incentives Applicable starting 2014: The Incentives Regime—Amendment 68 to the Investment Law Under Amendment 68 to the Investment Law, which Teva started applying in 2014, upon an irrevocable election made by a company, a uniform corporate tax rate will apply to all qualifying industrial income of such company (“Preferred Enterprise”), as opposed to the previous law’s incentives, which were limited to income from Approved Enterprises during the benefits period. Under the law, when the election is made, the uniform tax rate for 2014 until 2016 was 9% in areas in Israel designated as Development Zone A and 16% elsewhere in Israel. The uniform tax rate for Development Zone A, as of January 1, 2017, is 7.5% (as part of changes enacted in Amendment 73, as described below). The profits of these “Preferred Enterprise” will be freely distributable as dividends, subject to a 20% or lower withholding tax, under an applicable tax treaty. Certain “Special Preferred Enterprises” that meet more stringent criteria (significant investment, R&D or employment thresholds) will enjoy further reduced tax rates of 5% in Zone A and 8% elsewhere. In order to be classified as a “Special Preferred Enterprises,” the approval of three governmental authorities in Israel is required. The New Technological Enterprise Incentives Regime—Amendment 73 to the Investment Law Starting 2017, part of the Company taxable income in Israel is entitled to a preferred 6% tax rate under Amendment 73 to the Investment Law. The new incentives regime applies to “Preferred Technological Enterprises” or “Special Preferred Technological Enterprises”. A “Preferred Technological Enterprise” is an enterprise that meet certain conditions, including, inter alia: 1. Investment of at least 7% of income, or at least NIS 75 million (approximately $19 million) in R&D activities; and 2. One of the following: a. At least 20% of the workforce (or at least 200 employees) are employed in R&D; b. A venture capital investment approximately equivalent to at least $2 million was previously made in the company; or c. Growth in sales or workforce by an average of 25% over the three years preceding the tax year. A “Special Preferred Technological Enterprise” is an enterprise that meets, inter alia conditions 1 and 2 above, and in addition has total annual consolidated revenues above NIS 10 billion (approximately $2.8 billion). Preferred Technological Enterprises are subject to a corporate tax rate of 7.5% on their income derived from intellectual property in areas in Israel designated as Zone A and 12% elsewhere, while Special Preferred Technological Enterprises are subject to 6% on such income. The withholding tax on dividends from these enterprises is 4% to foreign companies (or a lower rate under a tax treaty, if applicable). Income not eligible for Preferred Technological Enterprise benefits is taxed at the regular corporate tax rate, which is 23%, or the preferred tax rate, as the case may be. The Parent Company and its Israeli subsidiaries elected to compute their taxable income in accordance with Income Tax Regulations (Rules for Accounting for Foreign Investors Companies and Certain Partnerships and Setting their Taxable Income), 1986. Accordingly, the taxable income or loss is calculated in U.S. dollars. Applying these regulations reduces the effect of U.S. dollar – NIS exchange rate on the Company’s Israeli taxable income. Non-Israeli U.S. Tax reform On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”), which among other provisions, reduced the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018, and imposed a one-time The year ended December 31, 2017 includes a one-time re-measure The one-time one-time |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities | NOTE 16—DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES: a. Foreign exchange risk management: In 2018, approximately 48% of Teva’s revenues were denominated in currencies other than the U.S. dollar. As a result, Teva is subject to significant foreign currency risks. The Company enters into forward exchange contracts, purchases and writes options in order to hedge the currency exposure on balance sheet items. In addition, the Company takes measures 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: the new Israeli shekel (NIS), the euro (EUR), the Swiss franc (CHF), the Japanese yen (JPY), the British pound (GBP), Canadian dollar (CAD), the Polish zloty (PLN), the Indian rupee (INR) and other European and Latin American currencies. Depending on market conditions, foreign currency risk also is managed through the use of foreign currency debt. The Company hedges against possible fluctuations in foreign subsidiaries net assets (“net investment hedge”) and entered into cross currency swaps and forward contracts in order to hedge such an exposure. The counterparties to the derivatives are comprised mainly of major banks and the Company is monitoring the associated inherent credit risks. The Company does not enter into derivative transactions for trading purposes. b. Interest risk management: The Company raises capital through various debt instruments, including straight notes that bear a fixed or variable interest rate, bank loans, securitizations and convertible debentures. In some cases, the Company has swapped from a fixed to a floating interest rate (“fair value hedge”) and from a fixed to a fixed interest rate with an exchange from a currency other than the functional currency (“cash flow hedge”), thereby reducing overall interest expenses or hedging risks associated with interest rate fluctuations. c. Derivative instrument disclosure: The following table summarizes the notional amounts for hedged items, when transactions are designated as hedge accounting: December 31, 2018 2017 (U.S. $ in millions) Cross-currency swap—cash flow hedge $ 588 $ 588 Interest rate swap—fair value hedge 500 500 Cross-currency swap—net investment hedge 1,000 1,000 The following table summarizes the classification and fair values of derivative instruments: Fair value Designated as hedging instruments Not designated as hedging instruments December 31, December 31, December 31, 2018 December 31, 2017 Reported under (U.S. $ in millions) Asset derivatives: Other current assets: Option and forward contracts $ $ $ 18 $ 17 Other non-current Cross-currency swaps—cash flow hedge 58 25 Liability derivatives: Other current liabilities: Option and forward contracts (26 ) (15 ) Other taxes and long-term liabilities: Cross currency swaps—net investment hedge (41 ) (96 ) Senior notes and loans: Interest rate swaps—fair value hedge (9 ) (2 ) Teva uses foreign exchange contracts (mainly option and forward contracts) to hedge balance sheet items from currency exposure. These foreign exchange contracts are not designated as hedging instruments for accounting purposes. In connection with these foreign exchange contracts, Teva recognized a gain of $12 million, a loss of $82 million and $7 million under financial expenses—net for the years ended December 31, 2018, 2017 and 2016, respectively. Such losses and gains offset the revaluation of the balance sheet items also recorded under financial expenses—net. With respect to the interest rate and cross-currency swap agreements, Teva recognized gains of $2 million, $6 million and $15 million under financial expenses—net for the years ended December 31, 2018, 2017 and 2016, respectively. Such gains mainly reflect the differences between the fixed interest rate and the floating interest rate. Commencing in the third quarter of 2015, Teva entered into forward starting interest rate swap and treasury lock agreements designated as cash flow hedges of the U.S. dollar debt issuance in July 2016, with respect to $3.75 billion and $1.5 billion notional amounts, respectively. These agreements hedged the variability in anticipated future interest payments due to possible changes in the benchmark interest rate between the date the agreements were entered into and the actual date of the U.S. dollar debt issuance in July 2016 (in connection with the closing of the Actavis Generics acquisition). See note 11. Certain of the forward starting interest rate swaps and treasury lock agreements matured during the first half of 2016. In July 2016, in connection with the debt issuances, Teva terminated the remaining forward starting interest rate swaps and treasury lock agreements. The termination of these transactions resulted in a loss position of $493 million, of which $242 million were settled on October 7, 2016 and the remaining amount was settled in January 2017. The change in fair value of these instruments recorded in other comprehensive income (loss) will be amortized under financial expenses-net With respect to the forward starting interest rate swaps and treasury lock agreements, losses of $28 million, $27 million and $12 million were recognized under financial expenses-net In the third quarter of 2016, Teva terminated interest rate swap agreements designated as fair value hedge relating to its 2.95% senior notes due 2022 with respect to $844 million notional amount and its 3.65% senior notes due 2021 with respect to $450 million notional amount. Settlement of these transactions resulted in a gain position of $41 million. The fair value hedge accounting adjustments of these instruments, which are recorded under senior notes and loans, are amortized under financial expenses-net With respect to the interest rate swap agreements, gains of $6 million, $7 million and $2 million were recognized under financial expenses-net In the fourth quarter of 2016, Teva entered into interest rate swap agreement designated as fair value hedge relating to its 2.8% senior notes due 2023 with respect to $500 million notional amount of outstanding debt. In each of the first and second quarters of 2017, Teva entered into a cross currency swap agreement with a notional amount of $500 million maturing in 2020. These cross currency swaps were designated as a net investment hedge of Teva’s foreign subsidiaries euro denominated net assets, in order to reduce the risk of adverse exchange rate fluctuations. With respect to these cross currency swap agreements, Teva recognized gains of $31 million under financial expenses-net d. Securitization: In April 2011, Teva established a trade receivables securitization program to sell trade receivables to BNP Paribas Bank (“BNP”). Under the program Teva (on a consolidated basis) receives, as purchase price for the receivables sold by it, an initial cash purchase price and the right to receive a deferred purchase price (“DPP”). On an individual seller basis, each Teva subsidiary sells receivables to BNP for an amount equal to their nominal amount. BNP then immediately on-sells on-sells The SPE is a VIE for which Teva is considered to be the primary beneficiary. The SPE’s sole business consists of the purchase of receivables from Teva subsidiaries and the subsequent transfer of such receivables to the conduit. Although the SPE is included in Teva’s consolidated financial statements, it is a separate legal entity with separate creditors. The conduit and other designated creditors of the SPE are entitled, both before and upon the SPE’s liquidation, to be paid out of the SPE’s assets prior to the DPP payable to Teva. The assets of the SPE are not available to pay creditors of Teva or its subsidiaries. This program expires on August 23, 2019 but can be renewed with consent from the parties to the program up to August 31, 2021 or any other date agreed between the parties. Once sold to BNP, the relevant Teva subsidiary as seller has no retained interests in the receivables sold and they are unavailable to the relevant seller should the relevant seller become insolvent. The conduit has all the rights in the securitized trade receivables, including the right to pledge or dispose of such receivables. Consequently, receivables sold under this agreement are de-recognized The portion of the purchase price for the receivables which is not paid in cash by the conduit is a DPP asset. The conduit pays the SPE the DPP from collections received by the conduit from the securitized trade receivables (after paying senior costs and expenses, including the conduit’s debt service obligations), which the SPE then pays to Teva. The DPP asset represents a beneficial interest in the transferred financial assets and is recognized at fair value as part of the sale transaction. The DPP asset is included in other current assets on Teva’s consolidated balance sheet. Teva has collection and administrative responsibilities for the sold receivables. The fair value of these servicing arrangements as well as the fees earned was immaterial. DPP asset as of December 31, 2018 and 2017 was $231 million and $261 million, respectively. As of December 31, 2018 and 2017, the balance of Teva’s securitized assets sold were $686 million and $799 million, respectively. The following table summarizes the sold receivables outstanding balance net of DPP asset under the outstanding securitization program: As of and for the year 2018 2017 (U.S. $ in millions) Sold receivables at the beginning of the year $ 799 $ 621 Proceeds from sale of receivables 5,071 4,944 Cash collections (remitted to the owner of the receivables) (5,151 ) (4,863 ) Effect of currency exchange rate changes (33 ) 97 Sold receivables at the end of the year $ 686 $ 799 |
Financial Expenses-Net
Financial Expenses-Net | 12 Months Ended |
Dec. 31, 2018 | |
Financial Expenses-Net | NOTE 17—FINANCIAL EXPENSES—NET: Year ended December, 31 2018 2017 2016 (U.S. $ in millions) Venezuela devaluation (1) $ — $ 42 $ 746 Interest expenses and other bank charges 920 875 546 Income from investments (39 ) (84 ) (51 ) Foreign exchange (gains) losses—net 13 65 (49 ) Other, net (2) 65 (3 ) 2 Other-than-temporary impairment (3) — — 136 Total finance expense—net $ 959 $ 895 $ 1,330 (1) For further information regarding the Venezuela devaluation, refer to note 1a. (2) Other, net comprised mainly of a make-whole payment of $46 million following early redemption of senior notes during 2018. (3) Other-than-temporary impairment relates mainly to equity securities. |
Other Assets Impairments, Restr
Other Assets Impairments, Restructuring and Other Items | 12 Months Ended |
Dec. 31, 2018 | |
Other Assets Impairments, Restructuring and Other Items | NOTE 18—OTHER ASSETS IMPAIRMENTS, RESTRUCTURING AND OTHER ITEMS: Year ended December 31, 2018 2017 2016 (U.S. $ in millions) Impairment of long-lived tangible assets (1) $ 500 $ 544 $ 157 Contingent consideration (see note 3) 57 154 83 Acquisition, integration and related costs 13 105 261 Restructuring 488 535 245 Venezuela deconsolidation charge (see note 1) — 396 — Other (71 ) 102 84 Total $ 987 $ 1,836 $ 830 (1) Including impairments related to exit and disposal activities As a result of Teva’s plant rationalization acceleration, following the two year restructuring plan that was announced in December 2017, to the extent the Company changes its plans on any given asset and/or the assumptions underlying such plan, additional impairments may be recorded in the future. Impairments • Impairments of property, plant and equipment for the year ended 2018 were $500 million, mainly consisting of: a) $245 million mainly due to: (a) $180 million machinery and equipment impairment in Japan in connection with ongoing regulatory pricing reductions and generic competition; and (b) $28 million impairment related to a plant in China; b) $155 million related to the restructuring plan, including: • $113 million related to site closures in Israel; and • $42 million related to the consolidation of headquarters and distribution sites in the United States. c) Other impairment costs, mainly $64 million related to a plant located in India in connection with the P&G separation agreement. See note 2. Contingent consideration In 2018, Teva recorded $57 million of contingent consideration expenses, compared to $154 million in 2017. The expenses in 2018 consisted mainly of $40 million related to an increase in the expected future royalty payments to Eagle Pharmaceuticals due to the orphan drug status granted to BENDEKA. Restructuring In 2018, Teva recorded $488 million of restructuring expenses, compared to $535 million in 2017. The expenses in 2018 were primarily related to headcount reductions across all functions, as part of the restructuring plan announced in 2017. In December 2017, Teva announced a comprehensive restructuring plan intended to significantly reduce its cost base, unify and simplify its organization and improve business performance, profitability, cash flow generation and productivity. Since the announcement of its restructuring plan, Teva reduced its global headcount by approximately 10,300 full-time-equivalent employees. The following tables provide the components of costs associated with Teva’s restructuring plan, including other costs associated with Teva’s restructuring plan and recorded under different items: Year ended December 31, 2018 2017 2016 (U.S. $ in millions) Restructuring Employee termination $ 410 $ 443 $ 211 Other 78 92 34 Total $ 488 $ 535 $ 245 The following table provides the components of and changes in the Company’s restructuring accruals: Employee Other Total (U.S. $ in millions ) Balance as of January 1, 2017 $ (144 ) $ (9 ) $ (153 ) Provision (443 ) (92 ) (535 ) Utilization and other* 293 84 377 Balance as of December 31, 2017 $ (294 ) $ (17 ) $ (311 ) Provision (410 ) (78 ) (488 ) Utilization and other* 500 66 566 Balance as of December 31, 2018 $ (204 ) $ (29 ) $ (233 ) * Includes adjustments for foreign currency translation. Significant regulatory events In July 2018, the FDA completed an inspection of Teva’s manufacturing plant in Davie, Florida in the United States, and issued a Form FDA-483 In July 2018, Teva announced the voluntary recall of valsartan and certain combination valsartan medicines in various countries due to the detection of trace amounts of a previously unknown impurity called NDMA found in valsartan API supplied to Teva by Zhejiang Huahai Pharmaceutical. Since July 2018, Teva has been actively engaged with regulatory agencies around the world in reviewing its valsartan and other sartan products for NDMA and other related impurities and, where necessary, has initiated additional voluntary recalls. The impact of this recall on Teva’s 2018 financial statements was $51 million, primarily related to inventory reserves. Teva expects to continue to experience loss of revenues and profits in connection with this matter. In addition, multiple lawsuits have been filed in connection with this matter, for which litigation costs are currently being incurred. Teva may also incur customer penalties, impairments and litigation costs going forward. |
Legal Settlements and Loss Cont
Legal Settlements and Loss Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Legal Settlements and Loss Contingencies | NOTE 19—LEGAL SETTLEMENTS AND LOSS CONTINGENCIES: Legal settlements and loss contingencies for 2018 amounted to an income of $1,208 million, compared to a loss of $500 million and $899 million in 2017 and 2016, respectively. The 2018 income primarily consisted of the working capital adjustment with Allergan, the Rimsa settlement and reversal of the reserve recorded in the second quarter of 2017 with respect to the carvedilol patent litigation. The expenses in 2017 primarily consisted of the reserve recorded in the second quarter of 2017 following the jury trial loss in connection with the carvedilol patent litigation. As of December 31, 2018 and 2017, accrued amounts for legal settlements and loss contingencies of $562 million and $1,232 million, respectively, are recorded in accrued expenses. |
Segments
Segments | 12 Months Ended |
Dec. 31, 2018 | |
Segments | NOTE 20—SEGMENTS: In November 2017, Teva announced a new organizational structure and leadership changes to enable strategic alignment across its portfolios, regions and functions. Teva now operates its business through three segments: North America, Europe and International Markets. Since 2013 and until December 31, 2017, Teva had two reportable segments: generic and specialty medicines. The generic medicines segment included Teva’s OTC and API businesses. Teva’s other activities included distribution activities, sales of medical devices and certain contract manufacturing operation (“CMO”) services. Teva now operates its business and reports its financial results in three segments: (a) North America segment, which includes the United States and Canada. (b) Europe segment, which includes the European Union and certain other European countries. (c) International Markets segment, which includes all countries other than those in the North America and Europe segments. The purpose of the new structure is to enable stronger alignment and integration between operations, commercial regions, R&D and Teva’s global marketing and portfolio function, in order to optimize its product lifecycle across all therapeutic areas. The Company began reporting its financial results under this structure in the first quarter of 2018. In addition to these three segments, Teva has other sources of revenues, primarily the sale of APIs to third parties, certain contract manufacturing services and an out-licensing All the above changes were reflected through retroactive revision of prior period segment information. Teva’s Chief Executive Officer (“CEO”), who is the chief operating decision maker (“CODM”), reviews financial information prepared on a consolidated basis, accompanied by disaggregated information about revenues and contributed profit by the three identified reportable segments, namely North America, Europe and International Markets, to make decisions about resources to be allocated to the segments and assess their performance. Segment profit is comprised of gross profit for the segment less R&D expenses, S&M expenses, G&A expenses and other income related to the segment. Segment profit does not include amortization and certain other items. Teva manages its assets on a company basis, not by segments, as many of its assets are shared or commingled. Teva’s CODM does not regularly review asset information by reportable segment and, therefore, Teva does not report asset information by reportable segment. Teva’s CEO may review its strategy and organizational structure. Any changes in strategy may lead to a reevaluation of the Company’s segments and goodwill allocation to reporting units, as well as fair value attributable to its reporting units. See note 7. a. Segment information: North America Europe International Year ended December 31, 2018 (U.S. $ in millions) Revenues $ 9,297 $ 5,186 $ 3,005 Gross profit 4,979 2,884 1,254 R&D expenses 713 283 96 S&M expenses 1,154 1,003 518 G&A expenses 484 325 153 Other income (loss) (209 ) — (11 ) Segment profit $ 2,837 $ 1,273 $ 498 North America Europe International Year ended December 31, 2017 (U.S. $ in millions) Revenues $ 12,141 $ 5,466 $ 3,395 Gross profit 7,322 2,887 1,433 R&D expenses 969 390 154 S&M expenses 1,288 1,130 672 G&A expenses 533 354 189 Other income (loss) (92 ) (16 ) (8 ) Segment profit $ 4,624 $ 1,029 $ 426 North America Europe International Year ended December 31, 2016 (U.S. $ in millions) Revenues $ 11,778 $ 4,969 $ 4,015 Gross profit 8,404 2,685 1,811 R&D expenses 1,040 383 205 S&M expenses 1,362 1,267 754 G&A expenses 496 377 226 Other income (loss) (30 ) (9 ) (10 ) Segment profit $ 5,536 $ 667 $ 636 Year ended December 31, 2018 2017 2016 (U.S.$ in millions) North America profit $ 2,837 $ 4,624 $ 5,536 Europe profit 1,273 1,029 667 International Markets profit 498 426 636 Total segment profit 4,608 6,079 6,839 Profit (loss) of other activities 115 (6 ) 8 4,723 6,073 6,847 Amounts not allocated to segments: Amortization 1,166 1,444 993 Other asset impairments, restructuring and other items 987 1,836 830 Goodwill impairment 3,027 17,100 900 Intangible asset impairments 1,991 3,238 589 Gain on divestitures, net of divestitures related costs (66 ) (1,083 ) (720 ) Inventory step-up — 67 383 Other R&D expenses 83 221 426 Costs related to regulatory actions taken in facilities 14 47 153 Legal settlements and loss contingencies (1,208 ) 500 899 Other unallocated amounts 366 187 240 Consolidated operating income (loss) (1,637 ) (17,484 ) 2,154 Financial expenses, net 959 895 1,330 Consolidated income (loss) before income taxes $ (2,596 ) $ (18,379 ) $ 824 b. Segment revenues by major products and activities: The following tables present revenues by major products and activities for each segment for the year ended December 31, 2018, 2017 and 2016: North America segment: Year ended December 31, 2018 2017 2016 (U.S.$ in millions) Generic products $ 4,056 $ 5,203 $ 4,654 COPAXONE 1,759 3,116 3,543 BENDEKA / TREANDA 642 656 661 ProAir 397 501 565 QVAR 182 313 409 AUSTEDO 204 24 — Anda 1,347 1,153 301 The table above does not include revenues from other products and activities amounting to $710 million, $1,175 million and $1,645 million for the years ended December 31, 2018, 2017 and 2016, respectively. Europe segment: Year ended December 31, 2018 2017 2016 (U.S.$ in millions) Generic products $ 3,593 $ 3,471 $ 3,155 COPAXONE 535 595 585 Respiratory products 402 368 239 The table above does not include revenues from other products and activities amounting to $656 million, $1,032 million and $990 million for the years 2018, 2017 and 2016, respectively. International Markets segment: Year ended December 31, 2018 2017 2016 (U.S.$ in millions) Generic products $ 2,022 $ 2,370 $ 3,129 COPAXONE 72 91 95 Distribution 602 550 458 The table above does not include revenues from other products and activities amounting to $309 million, $384 million and $333 million for the years 2018, 2017 and 2016, respectively. Teva revenues from external customers attributed to Israel were less than 5% of the consolidated revenues in the years ended December 31, 2018, 2017 and 2016, respectively. c. Supplemental data—major customers: The following table represents the percentage of consolidated third party net sales to Teva’s major customers during the years ended December 31, 2018, 2017 and 2016. Percentage of Third Party Net Sales 2018 2017 2016 McKesson Corporation 12 % 16 % 15 % AmerisourceBergen Corporation 14 % 15 % 19 % Most of Teva’s revenues from these customers were in the United States. d. Property, plant and equipment—by geographical location were as follows: December 31, 2018 2017 (U.S. $ in millions) Israel $ 1,987 $ 2,180 United States 950 1,109 Croatia 538 561 Germany 518 423 Czech republic 352 347 Hungary 343 368 Japan 188 376 Other 1,992 2,309 Total property, plant and equipment $ 6,868 $ 7,673 |
Earnings (Loss) per Share
Earnings (Loss) per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings (Loss) per Share | NOTE 21—EARNINGS (LOSS) PER SHARE: The net income attributable to Teva and the weighted average number of ordinary shares used in computation of basic and diluted earnings per share for the years ended December 31, 2018, 2017 and 2016 are as follows: 2018 2017 2016 (U.S. $ in millions, except share data) Net income (loss) used for the computation of diluted earnings per share $ (2,399 ) $ (16,525 ) $ 68 Weighted average number of shares used in the computation of basic earnings per share 1,021 1,016 955 Add: Additional shares from the assumed exercise of employee stock options and unvested RSUs — — 3 Weighted average number of additional shares issued upon the assumed conversion of convertible senior debentures — — 3 Weighted average number of shares used in the computation of diluted earnings per share 1,021 1,016 961 Basic earnings and loss per share are computed by dividing net results attributable to Teva’s ordinary shareholders by the weighted average number of ordinary shares outstanding (including fully vested restricted share units (“RSUs”)) during the period, net of treasury shares. In computing dilutive loss per share for the years ended December 31, 2018 and 2017, no account was taken of the potential dilution of the assumed exercise of employee stock options, RSUs and PSUs, amounting to 51 million and 38 million weighted average shares, respectively, and convertible senior debentures, since they had an anti-dilutive effect on earnings per share. Diluted earnings per share for the year ended 2016, take into account the potential dilution that could occur upon the exercise of options and non-vested Additionally, in computing dilutive earnings per share for the period between January 1, 2018 and December 17, 2018 and for the years ended December 31, 2017 and 2016, no account was taken of the potential dilution of the mandatory convertible preferred shares amounting to 74 million, 59 million and 59 million weighted average shares, respectively, since they had an anti-dilutive effect on earnings (loss) per share. On December 17, 2018, the mandatory convertible preferred shares automatically converted into ordinary shares at a ratio of 1 mandatory convertible preferred share to 16 ADSs, and all of the accumulated and unpaid dividends on the mandatory convertible preferred shares were paid in ADSs, at a ratio of 3.0262 ADSs per mandatory convertible preferred share, all in accordance with the conversion mechanism set forth in the terms of the mandatory convertible preferred shares. As a result of this conversion, Teva issued 70.6 million ADSs. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Selected Quarterly Financial Data (Unaudited) | NOTE 22—SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED): The following table presents selected unaudited quarterly financial data for 2018 and 2017: 2018* 4th quarter** 3rd quarter** 2nd 1st (U.S. $ in millions, except per share amounts) Net revenues 4,559 4,529 4,701 5,065 Gross profit 1,971 1,977 2,033 2,315 Net income (loss) (3,243 ) (197 ) (166 ) 1,134 Net income (loss) attributable to Teva (2,886 ) (208 ) (176 ) 1,120 Net income (loss) attributable to ordinary shareholders (2,940 ) (273 ) (241 ) 1,055 Earnings per share attributable to ordinary shareholders: Basic (2.85 ) (0.27 ) (0.24 ) 1.04 Diluted (2.85 ) (0.27 ) (0.24 ) 1.03 2017* 4th quarter** 3rd quarter** 2nd 1st (U.S. $ in millions, except per share amounts) Net revenues 5,398 5,617 5,720 5,650 Gross profit 2,444 2,599 2,802 2,770 Net income (loss) (11,730 ) 610 (5,970 ) 641 Net income (loss) attributable to Teva (11,535 ) 595 (5,970 ) 645 Net income (loss) attributable to ordinary shareholders (11,600 ) 530 (6,035 ) 580 Earnings per share attributable to ordinary shareholders: Basic (11.41 ) 0.52 (5.94 ) 0.57 Diluted (11.41 ) 0.52 (5.94 ) 0.57 * Certain comparative figures have been reclassified to conform to the fourth quarter presentation. ** Losses in the second and fourth quarters of 2017 were primarily due to goodwill impairments of $6.1 billion and $11 billion, respectively. During the fourth quarter of 2018, the Company changed its accounting policy for the presentation of royalty payments to third parties (see note 1 bb). The impact of the change in accounting policy for the first, second, third and fourth quarters of 2018 was an increase in cost of sales of $33 million, $28 million, $44 million and $37 million, respectively, with a corresponding decrease in S&M expenses. The Company has retrospectively adjusted prior periods to reflect this change in the first, second, third and fourth quarters of 2017, increasing cost of sales by $69 million, $53 million, $51 million and $37 million, respectively, with a corresponding decrease in S&M expenses. |
Schedule of Valuation and Quali
Schedule of Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Valuation and Qualifying Accounts | TEVA PHARMACEUTICAL INDUSTRIES LIMITED Three Years Ended December 31, 2018 (U.S. $ in millions) Column A Column B Column C Column D Column E Balance at Charged to Charged to Deductions Balance at Allowance for doubtful accounts: Year ended December 31, 2018 $ 232 $ 13 $ (9 ) $ (4 ) $ 232 Year ended December 31, 2017 $ 191 $ 12 $ 51 $ (22 ) $ 232 Year ended December 31, 2016 $ 146 $ 5 $ 61 $ (21 ) $ 191 Allowance in respect of carryforward tax losses: Year ended December 31, 2018 $ 1,504 $ 407 $ 5 $ (283 ) $ 1,633 Year ended December 31, 2017 $ 1,690 $ 173 $ 390 $ (749 ) $ 1,504 Year ended December 31, 2016 $ 760 $ 135 $ 1,137 $ (342 ) $ 1,690 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
General | a. General: Operations Teva Pharmaceutical Industries Limited (the “Parent Company”), headquartered in Israel, together with its subsidiaries and associated companies (the “Company,” “Teva” or the “Group”), is engaged in the development, manufacturing, marketing and distribution of generics, specialty medicines and biopharmaceuticals. The majority of the Group’s revenues are in the United States and Europe. Basis of presentation and use of estimates The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). In preparing the Company’s consolidated financial statements, management is required 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 determining the valuation and recoverability of intangible assets and goodwill; assessing sales reserves and allowances, and contingent consideration; assessing compliance with debt covenants; uncertain tax positions, valuation allowances, contingencies, inventory valuation and restructuring. Accounting for Venezuelan Operations Until November 30, 2017, the financial position and results of operations of Teva’s Venezuelan business, conducted through a number of wholly-owned subsidiaries, were included in Teva’s consolidated financial statements and reported under highly-inflationary accounting principles, with the functional currency of the U.S. dollar. Effective November 30, 2017, Teva deconsolidated its Venezuelan subsidiaries and began accounting for its investments in its Venezuelan operations using the cost method of accounting under the measurement alternative. The estimated fair value of the investments was immaterial based on expected future cash flow, considering ongoing hyper-inflation and economic and political uncertainty in Venezuela. The assigned values are considered Level 3 measurements within the fair value hierarchy. Teva’s financial results include sales of finished goods to the Venezuelan subsidiaries, to the extent cash payments are received from these subsidiaries, while cost of sales is recorded when goods are imported to Venezuela. The Venezuelan subsidiaries’ results were immaterial in terms of assets, liabilities, operating results and cash flows for the eleven months ended November 30, 2017. Upon assessing the facts as of December 31, 2018, Teva continues to believe its previous conclusion regarding its lack of control or significant influence over its Venezuelan operations is appropriate. Teva will continue to monitor the conditions in Venezuela and their impact on its prospective accounting treatment and related disclosures. Functional currency A major part of the Group’s operations is carried out by the Company in the United States, Israel and certain other countries. The functional currency of these entities is the U.S. dollar (“dollar” or “$”). The functional currency of certain subsidiaries and associated companies is their local currency. The financial statements of those companies are included in the consolidated financial statements, translated into U.S. dollars. Assets and liabilities are translated at year-end In the event of a divestiture of a foreign subsidiary, the related foreign currency translation results are reversed from equity to income. Foreign currency exchange gains and losses are included in net income (loss). Principles of consolidation The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries and VIEs for which the Company is considered the primary beneficiary. For those consolidated subsidiaries where Teva owns less than 100%, the outside shareholders’ interests are shown as non-controlling For VIEs, the Company performs an analysis to determine whether the variable interests give a controlling financial interest in a VIE. The Company periodically reassesses whether it controls its VIEs. Intercompany transactions and balances are eliminated on consolidation; profits from intercompany sales, not yet realized outside the Group, are also eliminated. |
New accounting pronouncements | b. New accounting pronouncements Recently adopted accounting pronouncements On January 1, 2018, Teva adopted the new accounting standard ASC 606 “Revenue from Contracts with Customers”, and all the related amendments (“new revenue standard”) to all contracts using the modified retrospective method. The cumulative initial effect of applying the new revenue standard was immaterial. See note 9 for further discussion. In May 2017, the FASB issued ASU 2017-09 In February 2017, the FASB issued ASU 2017-05 de-recognition In August 2016, the FASB issued ASU 2016-15 In January 2016, the FASB issued ASU 2016-01 Recently issued accounting pronouncements, not yet adopted In November 2018, the FASB issued ASU 2018-18 unit-of-account In August 2018, the FASB issued ASU 2018-15 other—Internal-use 350-40): internal-use In August 2018, the FASB issued ASU 2018-13 In June 2018, the FASB issued ASU 2018-07 non-employee In February 2018, the FASB issued ASU 2018-02 In August 2017, the FASB issued ASU 2017-12 non-financial In June 2016, the FASB issued ASU 2016-13 In February 2016, the FASB issued ASU 2016-02 right-of-use The new standard provides a number of optional practical expedients in transition. Teva does not expect to elect the ‘package of practical expedients‘, which permits the Company not to reassess its prior conclusions regarding lease identification, lease classification and initial direct costs under the new standard. In addition, Teva also does not expect to elect the practical expedient pertaining to land easements. However, the Company does expect to elect the practical expedient pertaining to the use-of Teva expects that the adoption of this standard will have a material effect on Teva’s financial statements. While Teva continues to assess all the effects of adoption, Teva currently believes that the most significant impact will be reflected in: (i) the recognition of new ROU assets and lease liabilities on Teva’s balance sheet for its operating leases of real estate, vehicles and equipment, and (ii) the requirement to provide significant new disclosures regarding Teva’s leasing activities. The Company, however, does not expect a material impact to its consolidated statements of income and consolidated statements of cash flow. Following adoption of the new standard, Teva expects to recognize additional operating liabilities ranging from $560 million to $660 million, with corresponding ROU assets of approximately the same amount based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The new standard also provides practical expedients for an entity’s ongoing accounting. Teva expects to elect the short-term lease recognition exemption for all leases that qualify. This means, for those leases, Teva will not recognize ROU assets or lease liabilities, including not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. Teva also expects to elect the practical expedient to not separate lease and non-lease The Company has performed, and will continue to perform a comprehensive evaluation of the impact of this guidance on the Company, including assessing the Company’s lease portfolio, implementation of a new enterprise-wide lease management system to meet reporting requirements, assessing the impact to business processes and implementation of internal controls over financial reporting and related disclosure requirements. The Company is working closely with the software system developer, as the timely readiness of the lease software system is critical to ensure an efficient and effective adoption of the standard. |
Acquisitions | c. Acquisitions: Teva’s consolidated financial statements include the operations of an acquired business from the date of the acquisition’s consummation. Acquired businesses are accounted for using the acquisition method of accounting, which requires, among other things, that most assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date and that the fair value of acquired in process research and development (“IPR&D”) be recorded on the balance sheet. Transaction costs are expensed as incurred. Any excess of the consideration transferred over the assigned values of the net assets acquired is recorded as goodwill. When Teva acquires net assets that do not constitute a business, as defined under U.S. GAAP, no goodwill is recognized and acquired IPR&D is expensed. Contingent consideration incurred in a business combination is included as part of the acquisition price and recorded at a probability weighted assessment of its fair value as of the acquisition date. The fair value of the contingent consideration is re-measured |
Collaborative arrangements | d. Collaborative arrangements: Collaborative agreements are contractual arrangements in which the parties are active participants to the arrangement and are exposed to the significant risks and rewards that are dependent on the ultimate commercial success of the endeavor. The Company recognizes revenue generated and costs incurred on sales to third parties as it relates to collaborative agreements as gross or net. If the Company is the principal participant in a transaction, revenues and costs are recorded on a gross basis; otherwise, revenues are recorded on a net basis. |
Equity investments | e. Equity investments: The Company measures equity investments at fair value with changes in fair value now recognized in net income. The Company accounts for equity investments that do not have a readily determinable fair value as cost method investments under the measurement alternative prescribed within ASU 2016-01 |
Fair value measurement | f. Fair 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. 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 inputs 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. |
Investment in securities | g. Investment in securities: Investment in securities consists of debt securities classified as available-for-sale Unrealized gains of available for sale securities, net of taxes, are reflected in other comprehensive income. Unrealized losses considered to be temporary are reflected in other comprehensive income; unrealized losses that are considered to be other-than-temporary are charged to income as an impairment charge. Realized gains and losses for debt securities are included in financial expense, net. The Company considers available evidence in evaluating potential impairments of its investments, including the duration and extent to which fair value is less than cost. For debt securities, an other-than-temporary impairment has occurred if the Company does not expect to recover the entire amortized cost basis of the debt security. If the Company does not intend to sell the impaired debt security, and it is not more likely than not it will be required to sell the debt security before the recovery of its amortized cost basis, the amount of the other-than-temporary impairment recognized in earnings, recorded in financial expense, net, is limited to the portion attributed to credit loss. The remaining portion of the other-than-temporary impairment related to other factors is recognized in other comprehensive income. |
Cash and cash equivalents | h. Cash and cash equivalents: All highly liquid investments, which include short-term bank deposits and money market instruments, that are not restricted as to withdrawal or use, and investment in short-term debentures, the period to maturity of which did not exceed three months at the time of investment, are considered to be cash equivalents. |
Trade receivables | i. Trade receivables: Trade receivables are stated at their net realizable value. The allowance against gross trade receivables reflects the best estimate of losses inherent in the receivables portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available information. As of December 31, 2018, and 2017, an allowance for doubtful debts in the amount of $232 million is reflected in net trade receivables. Trade receivables are written off after all reasonable means to collect the full amount have been exhausted. |
Concentration of credit risks | j. Concentration of credit risks: Most of Teva’s cash and cash equivalents (which, along with investment in securities, totaled $1,845 million at December 31, 2018) were deposited with European, U.S. and Israeli banks and financial institutions and were comprised mainly of cash deposits. The pharmaceutical industry, particularly in the United States, has been significantly affected by consolidation among managed care providers, large pharmacy chains, wholesaling organizations and other buyer groups. The U.S. market constituted approximately 48% of Teva’s consolidated revenues in 2018. The exposure of credit risks relating to other trade receivables is limited, due to the relatively large number of group customers and their wide geographic distribution. Teva performs ongoing credit evaluations of its customers for the purpose of determining the appropriate allowance for doubtful accounts and generally does not require collateral. An appropriate allowance for doubtful accounts is included in the accounts and netted against trade receivables. |
Inventories | k. Inventories: Inventories are valued at the lower of cost or net realizable value. Cost of raw and packaging materials, purchased products, manufactured finished products, products in process and capitalized production costs are determined predominantly on a standard cost basis, approximating average costs. Other methods which are utilized for determining the value of inventories are moving average, cost basis and the first in first out method. Teva regularly reviews its inventories for obsolescence and other impairment risks and reserves are established when necessary. Inventories acquired in a business combination are stepped-up |
Long-lived assets | l. Long-lived assets: Teva’s long-lived, non-current Goodwill Goodwill reflects the excess of the consideration transferred, including the fair value of any contingent consideration and any non-controlling The goodwill impairment test is performed according to the following principles: 1. An initial qualitative assessment may be performed to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. 2. If the Company concludes it is more likely than not that the fair value of the reporting unit is less than its carrying mount, a quantitative fair value test is performed. An impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value is recognized. An interim goodwill impairment test may be required in advance of the annual impairment test if events occur that indicate impairment might be present. For example, a substantial decline in the Company’s market capitalization, unexpected adverse business conditions, economic factors and unanticipated competitive activities may indicate that an interim impairment test is required. In the event that the Company’s market capitalization declines below its book value, the Company considers the length and severity of the decline and the reason for the decline when assessing whether potential goodwill impairment exists. Identifiable intangible assets Identifiable intangible assets are comprised of definite life intangible assets and indefinite life intangible assets. Definite life intangible assets consist mainly of acquired product rights and other rights relating to products for which marketing approval was received from the U.S. Food and Drug Administration (“FDA”) or the equivalent agencies in other countries. These assets are amortized mainly using the straight-line method over their estimated period of useful life, or based on economic benefit models, if more appropriate, which is determined by identifying the period and manner in which substantially all of the cash flows are expected to be generated. Amortization of acquired developed products is recorded under cost of sales. Amortization of marketing and distribution rights is recorded under selling and marketing (“S&M”) expenses when separable. Indefinite life intangible assets are mainly comprised of research and development in-process IPR&D acquired in a business combination is capitalized as an indefinite life intangible asset until the related research and development efforts are either completed or abandoned. In the reporting period where they are treated as indefinite life intangible assets, they are not amortized but rather are monitored triggering events and tested for impairment. Upon completion of the related research and development efforts, management determines the useful life of the intangible assets and amortizes them accordingly. In case of abandonment, the related research and development assets are impaired. Whenever impairment indicators are identified for definite life intangible assets, Teva reconsiders the asset’s estimated life, calculates the undiscounted value of the asset’s or asset group’s cash flows and compares such value against the asset’s or asset group’s carrying amount. If the carrying amount is greater, Teva records an impairment loss for the excess of book value over fair value based on the discounted cash flows. In determining the estimated fair value of identifiable intangible assets, Teva utilized a discounted cash flow model. The key assumptions within the model related to forecasting future revenue and operating income, an appropriate discount rate and an appropriate terminal value based on the nature of the long-lived asset. The Company’s updated forecasts of net cash flows for the impaired assets reflect, among others, the following: (i) for IPR&D assets, the impact of changes to the development programs, the projected development and regulatory timeframes and the risks associated with these assets; and (ii) for product rights, pricing and volume projections, as well as patent life and any significant changes to the competitive environment. Property, plant and equipment Property, plant and equipment are stated at cost, after deduction of the related investment grants, and depreciated using the straight-line method over the estimated useful life of the assets: buildings, mainly 40 years; machinery and equipment, mainly between 15 to 20 years; and other assets, between 5 to 10 years. For property, plant and equipment, whenever impairment indicators are identified, Teva reconsiders the asset’s estimated life, calculates the undiscounted value of the asset’s cash flows and compares such value against the asset’s carrying amount. If the carrying amount is greater, Teva records an impairment loss for the excess of book value over fair value. |
Contingencies | m. Contingencies: The Company is involved in various patent, product liability, commercial, government investigations, environmental claims and other legal proceedings that arise from time to time in the ordinary course of business. Except for income tax contingencies, contingent consideration, other contingent liabilities incurred or acquired in a business combination, Teva records accruals for these types of contingencies to the extent that Teva concludes their occurrence is probable and that the related liabilities are estimable. When accruing these costs, the Company will recognize an accrual in the amount within a range of loss that is the best estimate within the range. When no amount within the range is a better estimate than any other amount, the Company accrues for the minimum amount within the range. Teva records anticipated recoveries under existing insurance contracts that are probable of occurring at the gross amount that is expected to be collected. Legal costs are expensed as incurred. The Company recognizes gain contingencies when they are realized or when all related contingencies have been resolved. |
Treasury shares | n. Treasury shares: Treasury shares are presented as a reduction of Teva shareholders’ equity and carried at their cost to Teva, under treasury shares. |
Stock-based compensation | o. Stock-based compensation: Teva recognizes the estimated fair value of share-based awards, restricted share units (“RSUs”) and performance share units (“PSUs”) under stock-based compensation costs. The compensation expense for PSUs is recognized only if it is probable that the performance condition will be achieved. Teva measures compensation expense for share-based awards based on estimated fair values on the date of grant using the Black-Scholes option-pricing model. This option pricing model requires estimates as to the option’s expected term and the price volatility of the underlying stock. Teva amortizes the value of share-based awards to expense over the vesting period on a straight-line basis. Teva measures compensation expense for the RSUs and PSUs based on the market value of the underlying stock at the date of grant, less an estimate of dividends that will not accrue to the RSU and PSU holders prior to vesting. |
Deferred income taxes | p. Deferred income taxes: Deferred income taxes are determined utilizing the “asset and liability” method based on the estimated future tax effects of temporary differences between the financial accounting and tax basis of assets and liabilities under the applicable tax laws, and on tax rates anticipated to be in effect when the deferred income taxes are expected to be paid or realized. A valuation allowance is provided if, based upon the weight of available evidence, it is more likely than not that a portion of the deferred income tax assets will not be realized. In determining whether a valuation allowance is needed, Teva considers all available evidence, including historical information, long range forecast of future taxable income and evaluation of tax planning strategies. Amounts recorded for valuation allowance can result from a complex series of judgments about future events and can rely on estimates and assumptions. Deferred income tax liabilities and assets are classified as non-current. Deferred tax has not been provided on the following items: 1. Taxes that would apply in the event of disposal of investments in subsidiaries, as it is generally the Company’s intention to hold these investments, not to realize them. The determination of the amount of related unrecognized deferred tax liability is not practicable. 2. Amounts of tax-exempt |
Uncertain tax positions | q. Uncertain tax positions: Teva recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized. Teva regularly re-evaluates Provisions for uncertain tax positions, whereas Teva has net operating losses to offset additional income taxes that would result from the settlement of the tax position, are presented as a reduction of the deferred tax assets for such net operating loss. |
Derivatives and hedging | r. Derivatives and hedging: The Group carries out transactions involving derivative financial instruments (mainly forward exchange contracts, currency options, cross-currency swap contracts, interest rate swap contracts and treasury locks). The transactions are designed to hedge the Company’s currency and interest rate exposures. The Company does not enter into derivative transactions for trading purposes. Derivative instruments are recognized on the balance sheet at their fair value. For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting gain or loss on the hedged item attributable to the hedged risk is recognized in financial expenses—net in the statements of income in the period that the changes in fair value occur. For derivative instruments that are designated and qualify as a cash-flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the anticipated transaction in the same period or periods during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument (i.e., the ineffective portion), if any, is recognized in the statement of income during the current period. For derivative instruments that are designated as net-investment expenses-net. For derivative instruments that qualify for hedge accounting, the cash flows associated with these derivatives are reported in the consolidated statements of cash flows consistently with the classification of the cash flows from the underlying hedged items that these derivatives are hedging. Derivative instruments that do not qualify for hedge accounting are recognized on the balance sheet at their fair value, with changes in the fair value recognized as a component of financial expenses—net in the statements of income. The cash flows associated with these derivatives are reflected as cash flows from operating activities in the consolidated statements of cash flows. |
Revenue recognition | s. Revenue recognition: The Company’s revenue recognition accounting policy until December 31, 2017, prior to the adoption of the new revenue standard The Company recognizes revenues from product sales, including sales to distributors when persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fixed or determinable and collectability is reasonably assured. This generally occurs when products are shipped and title and risk and rewards for the products are transferred to the customer. Revenues from product sales are recorded net of provisions for estimated chargebacks, rebates, returns, prompt pay discounts and other deductions, such as shelf stock adjustments, which can be reasonably estimated. When sales provisions are not considered reasonably estimable by Teva, the revenue is deferred to a future period when more information is available to evaluate the impact. Provisions for chargebacks, rebates including Medicaid and other governmental program discounts and other promotional items, such as shelf stock adjustments, are included in sales reserves and allowances (“SR&A”). These provisions are recognized concurrently with the sales of products. Prompt payment discounts are netted against trade receivables. Calculations for these deductions from sales are based on historical experience and the specific terms in the individual agreements. Chargebacks and rebates are the largest components of sales reserves and allowances. Provisions for chargebacks are determined using historical chargeback experience and expected chargeback levels and wholesaler sales information for products, which are compared to externally obtained distribution channel reports for reasonableness. Rebates are recognized based on contractual obligations in place at the time of sales with consideration given to relevant factors that may affect the payment as well as historical experience for estimated market activity. Shelf-stock adjustments are granted to customers based on the existing inventory of a customer following decreases in the invoice or contract price of the related product and are estimated based on expected market performance. Teva records a reserve for estimated sales returns by applying historical experience of customer returns to the amounts invoiced and the amount of returned products to be destroyed versus products that can be placed back in inventory for resale. Revenue resulting from the achievement of milestone events stipulated in agreements is recognized when the milestone is achieved. Milestones are based on the occurrence of a substantive element specified in the contract or as a measure of substantive progress toward completion under the contract Revenues from licensees, sales of licensed products and technology are recorded in accordance with the contract terms, when third-party sales can be reliably measured and collection of the funds is reasonably assured. Royalty revenue is recognized as a component of net revenues in accordance with the terms of their respective contractual agreements when collectability is reasonably assured and when revenue can be reasonably measured. The Company’s revenue recognition accounting policy from January 1, 2018, following the adoption of the new revenue standard On January 1, 2018, Teva adopted the new revenue standard to all contracts using the modified retrospective method. The cumulative initial effect of applying the new revenue standard was immaterial. A contract with a customer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Company can identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determine the transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. Revenues are recorded in the amount of consideration to which the Company expects to be entitled in exchange for performance obligations upon transfer of control to the customer, excluding amounts collected on behalf of other third parties and sales taxes. The amount of consideration to which Teva expects to be entitled varies as a result of rebates, chargebacks, returns and other sales reserves and allowances (“SR&A”) that the Company offers to its customers and their customers, as well as the occurrence or nonoccurrence of future events, including milestone events. A minimum amount of variable consideration is recorded by the Company concurrently with the satisfaction of performance obligations to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Estimates of variable consideration are based on historical experience and the specific terms in the individual agreements (which the Company believes approximates expected value). Rebates and chargebacks are the largest components of SR&A. If a minimum can not be reasonably estimated, such revenue may be deferred to a future period when better information is available. For further description of SR&A components and how they are estimated, see “Variable Consideration”, in note 9. Shipping and handling costs, after control of the product has transferred to a customer, are accounted for as a fulfillment cost and are recorded under S&M expenses. Teva does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between the time of transfer of the promised goods or services to the customer and the time the customer pays for these goods or services to be generally one year or less, based on the practical expedient. The Company’s credit terms to customers are, on average, between thirty and ninety days. The Company generally recognizes the incremental costs of obtaining contracts as an expense since the amortization period of the assets that the Company otherwise would have recognized is one year or less. The costs are recorded under S&M expenses. Similarly, Teva does not disclose the value of unsatisfied performance obligations for contracts with original expected duration of one year or less. |
Research and development | t. Research and development: Research and development expenses are charged to income as incurred. Participations and grants in respect of research and development expenses are recognized as a reduction of research and development expenses as the related costs are incurred, or as the related milestone is met. Upfront fees received in connection with cooperation agreements are deferred and recognized over the period of the applicable agreements as a reduction of research and development expenses. Advance payments for goods or services that will be used or rendered for future research and development activities are deferred. Such amounts are recognized as an expense as the related goods are delivered or the services are performed. Research and development in-process |
Shipping and handling costs | u. Shipping and handling costs: Shipping and handling costs, which are included in S&M expenses, were $159 million, $164 million and $134 million for the years ended December 31, 2018, 2017 and 2016, respectively. |
Advertising costs | v. Advertising costs: Advertising costs are expensed as incurred. Advertising costs for the years ended December 31, 2018, 2017 and 2016 were $256 million, $318 million and $312 million, respectively. |
Restructuring | w. Restructuring: Restructuring provisions are recognized for the direct expenditures arising from restructuring initiatives, where the plans are sufficiently detailed and where appropriate communication to those affected has been made. Costs for one-time Contractual termination benefits are provided to employees when employment is terminated due to an event specified in the provisions of an existing plan or agreement. A liability is recorded and the expense is recognized when it is probable that employees will be entitled to the benefits and the amount is reasonably estimable. Special termination benefits arise when the Company offers, for a short period of time, to provide certain additional benefits to employees electing voluntary termination. A liability is recorded and the expense is recognized in the period the employees irrevocably accept the offer and the amount of the termination liability is reasonably estimable. |
Segment reporting | x. Segment reporting: The Company’s business includes three reporting segments based on three geographical areas: (a) North America segment, which includes the United States and Canada. (b) Europe segment, which includes the European Union and certain other European countries. (c) International Markets segment, which includes all countries in which Teva operates other than those in the North America and Europe segments. Each business segment manages the entire product portfolio in its region, including generics, specialty and over-the-counter In addition to these three segments, Teva has other sources of revenues, primarily the sale of APIs to third parties, certain contract manufacturing services and an out-licensing |
Earnings per share | y. Earnings per share: Basic earnings per share are computed by dividing the net income attributable to ordinary shareholders by the weighted average number of ordinary shares (including fully vested RSUs and PSUs) outstanding during the year, net of treasury shares. In computing diluted earnings per share, basic earnings per share are adjusted to take into account the potential dilution that could occur upon: (i) the exercise of options and non-vested “if-converted” “if-converted” On December 17, 2018, the mandatory convertible preferred shares automatically converted into ordinary shares. As a result of this conversion, Teva issued 70.6 million ADSs. See note 14. |
Securitization | z. Securitization Teva accounts for transfers of certain of its trade receivable as sales when it has surrendered control over the related assets in accordance with ASC Topic 860 “Transfer and Servicing” of Financial Assets. Whether control has been relinquished requires, among other things, an evaluation of relevant legal considerations and an assessment of the nature and extent of the Company’s continuing involvement with the assets transferred. Assets obtained and liabilities incurred in connection with transfers reported as sales are initially recognized in the balance sheet at fair value. Refer to note 16d. |
Divestitures | aa. Divestitures: The Company nets the proceeds on the divestitures of products with the carrying amount of the related assets and records gain or loss on sale within other income. Any contingent payments that are potentially due to the Company as a result of these divestitures are recorded when realizable. For divestures of businesses, including divestitures of products that qualify as a business, the Company reflects the relative fair value of goodwill associated with the businesses in the determination of gain or loss on sale. |
Reclassifications | bb. Reclassifications: During the fourth quarter of 2018, the Company changed its accounting policy for the presentation of royalty payments to third parties that are not involved in the production of products. Teva previously accounted for royalty payments to such third parties in S&M expenses. Royalties paid to a party that is involved in the production process are classified as cost of sales. The Company believes this change in accounting policy is preferable in order to be aligned with industry practice of classifying all royalty payments related to currently marketed products in cost of sales. The Company now reports all royalty payments as cost of sales. The Company has retrospectively adjusted prior periods to reflect this change and the impact was a $210 million and $206 million increase in cost of sales with an offsetting decrease in S&M for the years ended December 31, 2017 and 2016, respectively. The impact of the change in accounting policy for the year ended December 31, 2018 was an increase in cost of sales of $142 million with an offsetting decrease in S&M. Certain other comparative figures have been reclassified to conform to the current year presentation. |
Debt instruments | cc. Debt instruments Debt instruments are initially recognized at the fair value of the consideration received. Debt issuance costs are recorded on the consolidated balance sheet as a reduction of liability. They are subsequently recognized at amortized cost using the effective interest method. Debt may be considered extinguished when it has been modified and the terms of the new debt instruments and old debt instruments are “substantially different” (as defined in the debt modification guidance in ASC 470-50 non-current 470-50 |
Certain transactions (Tables)
Certain transactions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Major Classes of Assets and Liabilities Included as Held for Sale | The table below summarizes the major classes of assets and liabilities included as held for sale as of December 31, 2018 and 2017: December 31, December 31, (U.S. $ in millions) Inventories $ — $ 39 Property, plant and equipment, net (*) 72 16 Identifiable intangible assets, net — 236 Goodwill (*) 20 275 Total assets of the disposal group classified as held for sale in the consolidated balance sheets $ 92 $ 566 Other taxes and long-term liabilities — 38 Total liabilities of the disposal group classified as held for sale in the consolidated balance sheets $ — $ 38 (*) Mainly comprised of certain facilities in Israel. |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Financial Items Carried at Fair Value | Financial items carried at fair value as of December 31, 2018 and 2017 are classified in the tables below in one of the three categories described in note 1f: December 31, 2018 Level 1 Level 2 Level 3 Total (U.S. $ in millions) Cash and cash equivalents: Money markets $ 203 $ — $ — $ 203 Cash, deposits and other 1,579 — — 1,579 Investment in securities: Equity securities 51 — — 51 Other, mainly debt securities 2 — 10 12 Derivatives: Asset derivatives—options and forward contracts — 18 — 18 Asset derivatives—cross-currency swaps — 58 — 58 Liabilities derivatives—options and forward contracts — (26 ) — (26 ) Liabilities derivatives—interest rate and cross-currency swaps — (50 ) — (50 ) Contingent consideration* — — (507 ) (507 ) Total $ 1,835 $ — $ (497 ) $ 1,338 December 31, 2017 Level 1 Level 2 Level 3 Total (U.S. $ in millions) Cash and cash equivalents: Money markets $ 5 $ — $ — $ 5 Cash, deposits and other 958 — — 958 Investment in securities: Equity securities 65 — — 65 Other, mainly debt securities 14 — 18 32 Derivatives: Asset derivatives—options and forward contracts — 17 — 17 Asset derivatives—cross-currency swaps — 25 — 25 Liability derivatives—options and forward contracts — (15 ) — (15 ) Liabilities derivatives—interest rate and cross-currency swaps — (98 ) — (98 ) Contingent consideration* — — (735 ) (735 ) Total $ 1,042 $ (71 ) $ (717 ) $ 254 * Contingent consideration represents liabilities recorded at fair value in connection with acquisitions. |
Summary of Fair Value of Financial Liabilities Measured Using Level 3 Inputs | The following table summarizes the activity for those financial assets and liabilities where fair value measurements are estimated utilizing Level 3 inputs. December 31, December 31, 2018 2017 (U.S. $ in millions) Fair value at the beginning of the period $ (717 ) $ (811 ) Investment in debt securities (8 ) — Translation differences — (17 ) Adjustments to provisions for contingent consideration: Actavis Generics transaction — (35 ) Labrys acquisition (17 ) (40 ) Eagle transaction (40 ) (178 ) MicroDose acquisition — 89 Cephalon acquisition — 10 Settlement of contingent consideration: Labrys acquisition 151 100 Eagle transaction 134 165 Fair value at the end of the period $ (497 ) $ (717 ) |
Summary of Financial Instrument Measured on a Basis Other Than Fair Value | Financial instruments not measured at fair value Financial instruments measured on a basis other than fair value consist of senior notes and convertible senior debentures (see note 11), and are presented in the below table in terms of fair value: Estimated fair value* December 31, 2018 2017 (U.S. $ in millions) Senior notes included under long-term liabilities $ 23,560 $ 23,459 Senior notes and convertible senior debentures included under short-term liabilities 2,140 2,713 Fair value at the end of the period $ 25,700 $ 26,172 * The fair value was estimated based on quoted market prices, where available. |
Investment in Securities (Table
Investment in Securities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Fair Value, Amortized Cost and Gross Unrealized Holding Gains and Losses of Securities | At December 31, 2018 and 2017, the fair value, amortized cost and gross unrealized holding gains and losses of such securities were as follows: Fair value Amortized Gross Gross (U.S. $ in millions) December 31, 2018 $ 266 $ — $ — $ — December 31, 2017 $ 102 $ 103 $ 19 $ 20 |
Summary of Investment in Securities | Investments in securities are presented in the balance sheet as follows: December 31, 2018 2017 (U.S. $ in millions) Other current assets $ 2 $ 14 Other non-current 61 83 Money market funds 203 5 $ 266 $ 102 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Inventories | Inventories, net of reserves, consisted of the following: December 31, 2018 2017 (U.S. $ in millions) Finished products $ 2,665 $ 2,689 Raw and packaging materials 1,328 1,454 Products in process 590 597 Materials in transit and payments on account 148 184 $ 4,731 $ 4,924 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Property, Plant and Equipment, Net | Property, plant and equipment, net, consisted of the following: December 31, 2018 2017 (U.S. $ in millions) Machinery and equipment $ 5,691 $ 5,809 Buildings 3,143 3,329 Computer equipment and other assets 2,097 2,016 Payments on account 514 634 Land* 351 390 11,796 12,178 Less—accumulated depreciation (4,928 ) (4,505 ) $ 6,868 $ 7,673 * Land includes long-term leasehold rights in various locations, with lease term of between 30 and 99 years. |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Changes in the Carrying Amount of Goodwill by Segment | The changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 were as follows: Generics Specialty Other Total North Europe International Other Total (U.S. $ in millions) (U.S. $ in millions) Balance as of January 1, 2017 (1) 32,863 9,323 2,223 44,409 — — — — — Changes during the year: Goodwill adjustments (2) 1,480 (560 ) 920 — — — — — Goodwill disposal (3) (7 ) (690 ) (697 ) — — — — — Goodwill impairment (4) (16,500 ) (600 ) (17,100 ) — — — — — Goodwill reclassified as assets to held for sale (5) — (275 ) (275 ) — — — — — Translation differences 1,028 106 23 1,157 — — — — — Balance as of December 31, 2017 (1) $ 18,864 $ 8,464 $ 1,086 $ 28,414 $ — $ — $ — $ — $ — Relative fair value allocation (18,864 ) (8,464 ) (1,086 ) (28,414 ) 11,144 9,001 5,404 2,865 28,414 Balance as of January 1, 2018 — — — — 11,144 9,001 5,404 2,865 28,414 Changes during the year: Goodwill impairment (6) — — — — — (2,834 ) (193 ) (3,027 ) Goodwill disposal (7) — — — — — (65 ) (14 ) — (79 ) Goodwill reclassified as assets to held for sale — — — — — (3 ) — (17 ) (20 ) Translation differences and Other — — — — (46 ) (280 ) (77 ) 32 (371 ) Balance as of December 31, 2018 (1) $ — $ — $ — $ — $ 11,098 $ 8,653 $ 2,479 $ 2,687 $ 24,917 (1) Accumulated goodwill impairment as of December 31, 2018, December 31, 2017 and as of January 1, 2017 was approximately $21.0 billion, $18.0 billion and $900 million, respectively. (2) Measurement period adjustments on goodwill acquired in 2016. (3) Goodwill on the divestiture of certain Teva generic products, as part of the Actavis Generics acquisition, and the U.S. women’s health business. (4) Goodwill impairment is mainly attributable to the U.S. generics reporting unit. (5) Represent amounts related to the anticipated divestitures of the non-U.S (6) Goodwill impairment mainly attributable to the International Markets, Mexico and Medis. (7) Mainly due to the divestment of the women’s health business, the sale of Actavis Brazil and other activities. |
Identifiable Intangible Assets
Identifiable Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Identifiable Intangible Assets | Identifiable intangible assets consisted of the following: Gross carrying amount Accumulated Net carrying amount December 31, 2018 2017 2018 2017 2018 2017 (U.S. $ in millions) Product rights $ 20,361 $ 21,011 $ 9,565 $ 8,276 $ 10,796 $ 12,735 Trade names 606 617 91 55 515 562 In-process 2,694 4,343 — — 2,694 4,343 Total $ 23,661 $ 25,971 $ 9,656 $ 8,331 $ 14,005 $ 17,640 |
Revenue from contracts with c_2
Revenue from contracts with customers (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of disaggregates revenues by major revenue streams | The following table disaggregates Teva’s revenues by major revenue streams. For additional information on disaggregation of revenues, see note 20. Year ended December 31, 2018 North Europe International Other Total (U.S.$ in millions) Sale of goods 7,838 5,153 2,151 739 15,881 Licensing arrangements 111 23 22 9 165 Distribution 1,347 7 602 — 1,956 Other 1 3 230 618 852 $ 9,297 $ 5,186 $ 3,005 $ 1,366 $ 18,854 Year ended December 31, 2017 North Europe International Other Total (U.S.$ in millions) Sale of goods 10,706 5,244 2,558 748 19,256 Licensing arrangements 281 3 38 5 327 Distribution 1,153 214 549 — 1,916 Other 1 5 250 630 886 $ 12,141 $ 5,466 $ 3,395 $ 1,383 $ 22,385 Year ended December 31, 2016 North Europe International Other Total (U.S.$ in millions) Sale of goods 11,186 4,751 3,286 766 19,989 Licensing arrangements 291 7 8 8 314 Distribution 301 204 458 — 963 Other — 7 263 367 637 $ 11,778 $ 4,969 $ 4,015 $ 1,141 $ 21,903 |
Summary of Sales Reserves and Allowances | The changes in SR&A for third-party sales for the period ended December 31, 2018 were as follows: Sales Reserves and Allowances Reserves Rebates Medicaid and Chargebacks Returns Other Total Total (U.S.$ in millions) Balance at January 1, 2018 $ 196 $ 3,077 $ 1,908 $ 1,849 $ 780 $ 267 $ 7,881 $ 8,077 Provisions related to sales made in current year period 514 6,572 1,284 10,206 442 417 18,899 $ 19,413 Provisions related to sales made in prior periods 3 (14 ) 24 — 28 (30 ) (62 ) $ (59 ) Credits and payments (538 ) (6,596 ) (1,850 ) (10,519 ) (606 ) (463 ) (19,942 ) $ (20,480 ) Translation differences — (33 ) (5 ) (6 ) (6 ) (15 ) (65 ) $ (65 ) Balance at December 31, 2018 $ 175 3,006 $ 1,361 $ 1,530 $ 638 $ 176 $ 6,711 $ 6,886 |
Long-term Employee-related Ob_2
Long-term Employee-related Obligations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Long Term Employee Related Obligation | a. Long-term employee-related obligations consisted of the following December 31, 2018 2017 (U.S. $ in millions) Accrued severance obligations $ 75 $ 91 Defined benefit plans 146 182 Total $ 221 $ 273 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Short-term Debt | a. Short-term debt: December 31, Weighted average Maturity 2018 2017 (U.S. $ in millions) Term loan JPY 28.3 billion JPY LIBOR+0.25 % 2018 $ — 251 Bank and financial institutions 6.79% — 2 1 Convertible debentures 0.25% 2026 514 514 Current maturities of long-term liabilities 1,700 2,880 Total short term debt $ 2,216 $ 3,646 |
Schedule of Senior Notes and Loans | b. Long-term debt: Weighted average Maturity December 31, December 31, % (U.S. $ in millions) Senior notes EUR 1,660 million (8) 0.38% 2020 $ 1,897 $ 2,095 Senior notes EUR 1,500 million 1.13% 2024 1,707 1,788 Senior notes EUR 1,300 million 1.25% 2023 1,480 1,550 Senior notes EUR 1,000 million (3) 2.88% 2019 — 1,199 Senior notes EUR 900 million (1) 4.50% 2025 1,029 — Senior notes EUR 750 million 1.63% 2028 850 891 Senior notes EUR 700 million (1) 3.25% 2022 801 — Senior notes EUR 700 million 1.88% 2027 798 837 Senior notes USD 3,500 million 3.15% 2026 3,493 3,492 Senior notes USD 3,000 million 2.20% 2021 2,997 2,996 Senior notes USD 3,000 million 2.80% 2023 2,993 2,992 Senior notes USD 1,700 million (8) 1.70% 2019 1,700 2,000 Senior notes USD 2,000 million 4.10% 2046 1,985 1,984 Senior notes USD 1,500 million (3) 1.40% 2018 — 1,500 Senior notes USD 1,250 million (2) 6.00% 2024 1,250 — Senior notes USD 1,250 million (2) 6.75% 2028 1,250 — Senior notes USD 844 million 2.95% 2022 860 864 Senior notes USD 789 million 6.15% 2036 782 781 Senior notes USD 700 million 2.25% 2020 700 700 Senior notes USD 613 million 3.65% 2021 621 624 Senior notes USD 588 million 3.65% 2021 587 587 Senior notes CHF 450 million (10) 1.50% 2018 — 461 Senior notes CHF 350 million 0.50% 2022 356 360 Senior notes CHF 350 million 1.00% 2025 356 360 Senior notes CHF 300 million (9) 0.13% 2018 — 308 Fair value hedge accounting adjustments (9 ) (2 ) Total senior notes 28,483 28,367 Term loan USD 2.5 billion (4) LIBOR +1.1375% 2018 — 285 Term loan USD 2.5 billion (4) LIBOR +1.50% 2017-2020 — 2,000 Term loan JPY 58.5 billion (5) JPY LIBOR +0.55% 2022 — 519 Term loan JPY 35 billion (6) 1.42% 2019 — 311 Term loan JPY 35 billion (6) JPY LIBOR +0.3% 2018 — 311 Total loans — 3,426 Debentures USD 15 million (7) 7.20% 2018 — 15 Other 4.79% 2026 12 5 Total debentures and others 12 20 Less current maturities (1,700 ) (2,880 ) Derivative instruments 9 2 Less debt issuance costs (104 ) (106 ) Total senior notes and loans $ 26,700 $ 28,829 (1) In March 2018, Teva Pharmaceutical Finance Netherlands II B.V., a Teva finance subsidiary, issued senior notes in an aggregate principal amount of €1.6 billion. (2) In March 2018, Teva Pharmaceutical Finance Netherlands III B.V., a Teva finance subsidiary, issued senior notes in an aggregate principal amount of $2.5 billion. (3) In March 2018, Teva redeemed in full its $1.5 billion 1.4% senior notes due in July 2018 and its €1.0 billion 2.88% senior notes due in April 2019. (4) During the first quarter of 2018, Teva prepaid approximately $2.3 billion principal amount of the remaining term loan facilities. (5) During the first quarter of 2018, Teva prepaid in full JPY 86.8 billion principal amount of the outstanding term loan facilities of which JPY 28.3 billion were in short-term debt as of December 31, 2017. (6) During the first quarter of 2018, Teva prepaid in full JPY 70 billion of its 1.42% and JPY LIBOR+0.3% outstanding term loans. (7) During the first quarter of 2018, Teva prepaid in full $15 million of its outstanding debentures. (8) In September 2018, Teva consummated a cash tender offer for certain of its outstanding senior notes. As a result of the offer, Teva redeemed $300 million aggregate principal amount of its 1.7% senior notes and €90 million principal amount of its 0.38% senior notes. (9) In July 2018, Teva repaid at maturity CHF 300 million of its 0.13% senior notes. (10) In October 2018, Teva repaid at maturity CHF 450 million of its 1.5% senior notes. |
Required Annual Principal Payments of Long-term Debt, Excluding Debt Issuance Cost | The required annual principal payments of long-term debt, excluding debt issuance cost as of December 31, 2018, starting with the year 2020, are as follows: December 31, (U.S. $ in millions) 2020 $ 2,596 2021 4,205 2022 2,017 2023 4,473 2024 and thereafter 13,513 $ 26,804 |
Other Income (Tables)
Other Income (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Other Income | Year ended December 31, 2018 2017 2016 (U.S. $ in millions) Gain on divestitures, net of divestitures related costs (1) $ 67 1,083 720 Section 8 and similar payments (2) 195 83 20 Gain on sale of assets 9 11 10 Other, net 20 22 19 Total other income $ 291 $ 1,199 $ 769 (1) Mainly related to the divestment of the women’s health business. See note 2. (2) Section 8 of the Patented Medicines (Notice of Compliance) Regulation relates to recoveries of lost revenue related to patent infringement proceedings in Canada. |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Stock Option Activity | A summary of the status of the options as of December 31, 2018, 2017 and 2016, and changes during the years ended on those dates, is presented below (the number of options represents ordinary shares exercisable in respect thereof). Year ended December 31, 2018 2017 2016 Number (in thousands) Weighted Number (in thousands) Weighted Number (in thousands) Weighted Balance outstanding at beginning of year 43,121 $ 44.32 32,789 $ 50.71 25,233 $ 49.69 Changes during the year: Granted 12,401 19.12 15,467 32.08 10,895 53.21 Exercised (84 ) 17.01 (7 ) 17.44 (766 ) 44.24 Forfeited (7,040 ) 39.38 (4,953 ) 47.92 (1,382 ) 54.09 Expired (5 ) 50.65 (175 ) 59.81 (1,191 ) 52.79 Balance outstanding at end of year 48,393 38.62 43,121 44.32 32,789 50.71 Balance exercisable at end of year 24,086 46.89 19,129 47.94 14,468 46.06 |
Summary of Weighted Average Fair Value of Options Granted | The weighted average fair value of options granted during the years was generally estimated by using the Black-Scholes option-pricing model as follows: Year ended December 31, 2018 2017 2016 Weighted average fair value $ 7.4 $ 5.7 $ 9.4 |
Summary of Fair Value of Options Estimated on Date of Grant Based on Weighted Average Assumptions | The fair value of these options was estimated on the date of grant, based on the following weighted average assumptions: Year ended December 31, 2018 2017 2016 Dividend yield 0 % 3.7 % 2.6 % Expected volatility 40 % 29 % 25 % Risk-free interest rate 2.6 % 2.1 % 1.4 % Expected term 5 years 5 years 5 years |
Schedule of Ordinary Shares Issued Upon Outstanding Options | The following tables summarize information at December 31, 2018 regarding the number of ordinary shares issuable upon (1) outstanding options and (2) vested options: (1) Number of ordinary shares issuable upon exercise of outstanding options Range of exercise prices Balance at end of Weighted average Weighted average Aggregate intrinsic Number of shares $ Years $ Lower than $15.01 593 11.40 8.85 2.4 $15.01 - $25.00 12,398 18.92 9.13 * $25.01 - $35.00 9,615 34.63 8.17 — $35.01 - $45.00 6,703 40.57 3.58 — $45.01 - $55.00 12,908 50.84 5.64 — $55.01 - $65.00 6,167 59.34 6.30 — $65.01 - $70.00 9 66.85 0.03 — Total 48,393 38.62 6.87 2.4 |
Schedule of Ordinary Shares Issued Upon Vested Options | (2) Number of ordinary shares issuable upon exercise of vested options Range of exercise prices Balance at end of Weighted average Weighted average Aggregate intrinsic Number of shares $ Years $ $15.01 - $25.00 548 16.99 8.68 * $25.01 - $35.00 2,464 34.60 8.18 — $35.01 - $45.00 6,655 40.59 3.55 — $45.01 - $55.00 10,041 50.17 5.17 — $55.01 - $65.00 4,369 59.58 6.25 — $65.01 - $70.00 9 66.85 0.03 — Total 24,086 46.89 5.30 * * Represents an amount less than 0.5 million. |
Schedule of the Number of RSUs Issued and Outstanding | The following table summarizes information about the number of RSUs and PSUs issued and outstanding: Year ended December 31, 2018 2017 2016 Number (in thousands) Weighted Number (in thousands) Weighted Number (in thousands) Weighted Balance outstanding at beginning of year 7,468 $ 27.95 4,636 $ 45.15 2,551 $ 51.43 Granted 5,900 18.80 5,461 20.10 3,193 40.78 Vested (1,638 ) 37.30 (1,884 ) 39.63 (830 ) 45.79 Forfeited (1,327 ) 32.5 (745 ) 42.84 (278 ) 46.08 Balance outstanding at end of year 10,403 20.93 7,468 27.95 4,636 45.15 |
Summary of Company Expenses Compensation Costs Based on Grant Date Fair Value | The Company expenses compensation costs based on the grant-date fair value. For the years ended December 31, 2018, 2017 and 2016, the Company recorded stock-based compensation costs as follows: Year ended December 31, 2018 2017 2016 (U.S. $ in millions) Employee stock options $ 74 $ 64 $ 56 RSUs and PSUs 81 69 66 Total stock-based compensation expense 155 133 122 Tax effect on stock-based compensation expense 18 24 26 Net effect $ 137 $ 109 $ 96 |
Accumulated Other Comprehensive Income/(Loss) (Net of Tax) | The components of accumulated other comprehensive loss attributable to Teva are presented in the table below: Net Unrealized Gains/(Losses) Benefit Plans Foreign Available-for- Derivative Actuarial Total Balance, January 1, 2016 (2,384 ) 312 175 (58 ) (1,955 ) Other comprehensive loss before reclassifications (355 ) (456 ) (491 ) (26 ) (1,328 ) Amounts reclassified to the statements of income 3 140 14 (6 ) 151 Net other comprehensive loss before tax (352 ) (316 ) (477 ) (32 ) (1,177 ) Corresponding income tax (33 ) (3 ) — 9 (27 ) Net other comprehensive loss after tax* (385 ) (319 ) (477 ) (23 ) (1,204 ) Balance, December 31, 2016 (2,769 ) (7 ) (302 ) (81 ) (3,159 ) Other comprehensive income/(loss) before reclassifications 1,075 64 (167 ) (3 ) 969 Amounts reclassified to the statements of income 378 (66 ) 27 (5 ) 334 Net other comprehensive income/(loss) before tax 1,453 (2 ) (140 ) (8 ) 1,303 Corresponding income tax — 5 — (2 ) 3 Net other comprehensive income/(loss) after tax* 1,453 3 (140 ) (10 ) 1,306 Balance, December 31, 2017 (1,316 ) (4 ) (442 ) (91 ) (1,853 ) Cumulative effect of new accounting standard (See Note 1) — 5 — — 5 Other comprehensive income/(loss) before reclassifications (739 ) (1 ) 87 4 (649 ) Amounts reclassified to the statements of income 1 28 13 42 Net other comprehensive income/(loss) before tax (739 ) — 115 17 (607 ) Corresponding income tax — — — (4 ) (4 ) Net other comprehensive income/(loss) after tax* (739 ) — 115 13 (611 ) Balance, December 31, 2018 (2,055 ) 1 (327 ) (78 ) (2,459 ) * Amounts do not include foreign currency translation adjustments attributable to non-controlling |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Income Before Income Taxes | a. Income before income taxes: Year ended December 31, 2018 2017 2016 (U.S. $ in millions) Parent Company and its Israeli subsidiaries $ 1,022 $ 1,451 $ 1,516 Non-Israeli (3,618 ) (19,830 ) (692 ) $ (2,596 ) $ (18,379 ) $ 824 |
Schedule of the Provision for Income Taxes | b. Income taxes: Year ended December 31, 2018 2017 2016 (U.S. $ in millions) In Israel $ 131 $ 96 $ 209 Outside Israel (326 ) (2,029 ) 312 $ (195 ) $ (1,933 ) $ 521 Current $ 700 $ 373 $ 481 Deferred (895 ) (2,306 ) 40 $ (195 ) $ (1,933 ) $ 521 |
Accumulated Other Comprehensive Income/(Loss) (Net of Tax) | Year ended December 31, 2018 2017 2016 (U.S. $ in millions) Income (loss) before income taxes $ (2,596 ) $ (18,379 ) $ 824 Statutory tax rate in Israel 23.0 % 24.0 % 25.0 % Theoretical provision for income taxes $ (597 ) $ (4,411 ) $ 206 Increase (decrease) in effective tax rate due to: The Parent Company and its Israeli subsidiaries— Mainly tax benefits arising from reduced tax rates under benefit programs (134 ) (253 ) (212 ) Non-Israeli 381 3,817 546 U.S. Tax Cuts and Jobs Act effect 97 (1,061 ) — Increase (decrease) in other uncertain tax positions—net 58 (25 ) (19 ) Effective consolidated income taxes $ (195 ) $ (1,933 ) $ 521 * Income before income taxes includes goodwill impairment in non-Israeli |
Schedule of Deferred Income Taxes | c. Deferred income taxes: December 31, 2018 2017 (U.S. $ in millions) Long-term deferred tax assets (liabilities)—net: Inventory related $ 113 $ 40 Sales reserves and allowances 199 201 Provision for legal settlements 42 171 Intangible assets (*) (2,282 ) (3,132 ) Carryforward losses and deductions and credits (**) 1,340 1,485 Property, plant and equipment (167 ) (231 ) Deferred interest (***) 391 — Provisions for employee related obligations 102 142 Other 123 125 (139 ) (1,199 ) Valuation allowance—in respect of carryforward losses and deductions that may not be utilized (**) (1,633 ) (1,504 ) $ (1,772 ) $ (2,703 ) * The decrease in deferred tax liability is mainly due to impairment and amortization. ** The amounts are shown after reduction for unrecognized tax benefits of $35 million and $26 million as of December 31, 2018 and 2017, respectively. This amount represents the tax effect of gross carryforward losses and deductions with the following expirations: 2019-2021—$206 million; 2022-2028—$448 million; 2029 and thereafter—$280 million. The remaining balance—$441 million—can be utilized with no expiration date. *** The increase in deferred tax asset is mainly due to the interest expense limitation following the enactment of the Tax Cuts and Jobs Act. |
Schedule of Deferred Tax Assets and Liabilities By Report Caption | The deferred income taxes are reflected in the balance sheets among: December 31, 2018 2017 (U.S. $ in millions) Long-term assets—deferred income taxes 368 574 Long-term liabilities—deferred income taxes (2,140 ) (3,277 ) $ (1,772 ) $ (2,703 ) |
Schedule of Unrecognized Tax Benefits | The following table summarizes the activity of Teva’s gross unrecognized tax benefits: Year ended December 31, 2018 2017 2016 (U.S. $ in millions) Balance at the beginning of the year $ 1,034 $ 734 $ 648 Increase related to prior year tax positions, net 76 56 23 Increase related to current year tax positions 11 26 71 Decrease related to settlements with tax authorities and lapse of applicable statutes of limitations (49 ) (56 ) (103 ) Liabilities assumed in acquisitions — 273 101 Other — 1 (6 ) Balance at the end of the year $ 1,072 $ 1,034 $ 734 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Notional Amounts for Hedged Items, Designated as Hedge Accounting | The following table summarizes the notional amounts for hedged items, when transactions are designated as hedge accounting: December 31, 2018 2017 (U.S. $ in millions) Cross-currency swap—cash flow hedge $ 588 $ 588 Interest rate swap—fair value hedge 500 500 Cross-currency swap—net investment hedge 1,000 1,000 |
Summary of Classification and Fair Values of Derivative Instruments | The following table summarizes the classification and fair values of derivative instruments: Fair value Designated as hedging instruments Not designated as hedging instruments December 31, December 31, December 31, 2018 December 31, 2017 Reported under (U.S. $ in millions) Asset derivatives: Other current assets: Option and forward contracts $ $ $ 18 $ 17 Other non-current Cross-currency swaps—cash flow hedge 58 25 Liability derivatives: Other current liabilities: Option and forward contracts (26 ) (15 ) Other taxes and long-term liabilities: Cross currency swaps—net investment hedge (41 ) (96 ) Senior notes and loans: Interest rate swaps—fair value hedge (9 ) (2 ) |
Summary of Sold Receivables Outstanding Balance Net of DPP Asset under Outstanding Securitization Program | The following table summarizes the sold receivables outstanding balance net of DPP asset under the outstanding securitization program: As of and for the year 2018 2017 (U.S. $ in millions) Sold receivables at the beginning of the year $ 799 $ 621 Proceeds from sale of receivables 5,071 4,944 Cash collections (remitted to the owner of the receivables) (5,151 ) (4,863 ) Effect of currency exchange rate changes (33 ) 97 Sold receivables at the end of the year $ 686 $ 799 |
Financial Expenses-Net (Tables)
Financial Expenses-Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Financial Expenses | Year ended December, 31 2018 2017 2016 (U.S. $ in millions) Venezuela devaluation (1) $ — $ 42 $ 746 Interest expenses and other bank charges 920 875 546 Income from investments (39 ) (84 ) (51 ) Foreign exchange (gains) losses—net 13 65 (49 ) Other, net (2) 65 (3 ) 2 Other-than-temporary impairment (3) — — 136 Total finance expense—net $ 959 $ 895 $ 1,330 (1) For further information regarding the Venezuela devaluation, refer to note 1a. (2) Other, net comprised mainly of a make-whole payment of $46 million following early redemption of senior notes during 2018. (3) Other-than-temporary impairment relates mainly to equity securities. |
Other Assets Impairments, Res_2
Other Assets Impairments, Restructuring and Other Items (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Other Assets Impairments, Restructuring and Other Items | Year ended December 31, 2018 2017 2016 (U.S. $ in millions) Impairment of long-lived tangible assets (1) $ 500 $ 544 $ 157 Contingent consideration (see note 3) 57 154 83 Acquisition, integration and related costs 13 105 261 Restructuring 488 535 245 Venezuela deconsolidation charge (see note 1) — 396 — Other (71 ) 102 84 Total $ 987 $ 1,836 $ 830 (1) Including impairments related to exit and disposal activities |
Summary of Restructuring Plan Including Costs Related to Exit and Disposal | The following tables provide the components of costs associated with Teva’s restructuring plan, including other costs associated with Teva’s restructuring plan and recorded under different items: Year ended December 31, 2018 2017 2016 (U.S. $ in millions) Restructuring Employee termination $ 410 $ 443 $ 211 Other 78 92 34 Total $ 488 $ 535 $ 245 |
Summary of Restructuring Accruals | The following table provides the components of and changes in the Company’s restructuring accruals: Employee Other Total (U.S. $ in millions ) Balance as of January 1, 2017 $ (144 ) $ (9 ) $ (153 ) Provision (443 ) (92 ) (535 ) Utilization and other* 293 84 377 Balance as of December 31, 2017 $ (294 ) $ (17 ) $ (311 ) Provision (410 ) (78 ) (488 ) Utilization and other* 500 66 566 Balance as of December 31, 2018 $ (204 ) $ (29 ) $ (233 ) * Includes adjustments for foreign currency translation. |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Segment Profit | a. Segment information: North America Europe International Year ended December 31, 2018 (U.S. $ in millions) Revenues $ 9,297 $ 5,186 $ 3,005 Gross profit 4,979 2,884 1,254 R&D expenses 713 283 96 S&M expenses 1,154 1,003 518 G&A expenses 484 325 153 Other income (loss) (209 ) — (11 ) Segment profit $ 2,837 $ 1,273 $ 498 North America Europe International Year ended December 31, 2017 (U.S. $ in millions) Revenues $ 12,141 $ 5,466 $ 3,395 Gross profit 7,322 2,887 1,433 R&D expenses 969 390 154 S&M expenses 1,288 1,130 672 G&A expenses 533 354 189 Other income (loss) (92 ) (16 ) (8 ) Segment profit $ 4,624 $ 1,029 $ 426 North America Europe International Year ended December 31, 2016 (U.S. $ in millions) Revenues $ 11,778 $ 4,969 $ 4,015 Gross profit 8,404 2,685 1,811 R&D expenses 1,040 383 205 S&M expenses 1,362 1,267 754 G&A expenses 496 377 226 Other income (loss) (30 ) (9 ) (10 ) Segment profit $ 5,536 $ 667 $ 636 |
Schedule Of Consolidated Income Before Income Tax | Year ended December 31, 2018 2017 2016 (U.S.$ in millions) North America profit $ 2,837 $ 4,624 $ 5,536 Europe profit 1,273 1,029 667 International Markets profit 498 426 636 Total segment profit 4,608 6,079 6,839 Profit (loss) of other activities 115 (6 ) 8 4,723 6,073 6,847 Amounts not allocated to segments: Amortization 1,166 1,444 993 Other asset impairments, restructuring and other items 987 1,836 830 Goodwill impairment 3,027 17,100 900 Intangible asset impairments 1,991 3,238 589 Gain on divestitures, net of divestitures related costs (66 ) (1,083 ) (720 ) Inventory step-up — 67 383 Other R&D expenses 83 221 426 Costs related to regulatory actions taken in facilities 14 47 153 Legal settlements and loss contingencies (1,208 ) 500 899 Other unallocated amounts 366 187 240 Consolidated operating income (loss) (1,637 ) (17,484 ) 2,154 Financial expenses, net 959 895 1,330 Consolidated income (loss) before income taxes $ (2,596 ) $ (18,379 ) $ 824 |
Schedule of Net Sales by Product Line | b. Segment revenues by major products and activities: The following tables present revenues by major products and activities for each segment for the year ended December 31, 2018, 2017 and 2016: North America segment: Year ended December 31, 2018 2017 2016 (U.S.$ in millions) Generic products $ 4,056 $ 5,203 $ 4,654 COPAXONE 1,759 3,116 3,543 BENDEKA / TREANDA 642 656 661 ProAir 397 501 565 QVAR 182 313 409 AUSTEDO 204 24 — Anda 1,347 1,153 301 The table above does not include revenues from other products and activities amounting to $710 million, $1,175 million and $1,645 million for the years ended December 31, 2018, 2017 and 2016, respectively. Europe segment: Year ended December 31, 2018 2017 2016 (U.S.$ in millions) Generic products $ 3,593 $ 3,471 $ 3,155 COPAXONE 535 595 585 Respiratory products 402 368 239 The table above does not include revenues from other products and activities amounting to $656 million, $1,032 million and $990 million for the years 2018, 2017 and 2016, respectively. International Markets segment: Year ended December 31, 2018 2017 2016 (U.S.$ in millions) Generic products $ 2,022 $ 2,370 $ 3,129 COPAXONE 72 91 95 Distribution 602 550 458 The table above does not include revenues from other products and activities amounting to $309 million, $384 million and $333 million for the years 2018, 2017 and 2016, respectively. |
Schedule of Sales Percentage by Therapeutic Category | The following table represents the percentage of consolidated third party net sales to Teva’s major customers during the years ended December 31, 2018, 2017 and 2016. Percentage of Third Party Net Sales 2018 2017 2016 McKesson Corporation 12 % 16 % 15 % AmerisourceBergen Corporation 14 % 15 % 19 % |
Schedule of Property, Plant and Equipment by Geographic Location | d. Property, plant and equipment—by geographical location were as follows: December 31, 2018 2017 (U.S. $ in millions) Israel $ 1,987 $ 2,180 United States 950 1,109 Croatia 538 561 Germany 518 423 Czech republic 352 347 Hungary 343 368 Japan 188 376 Other 1,992 2,309 Total property, plant and equipment $ 6,868 $ 7,673 |
Earnings (Loss) per Share (Tabl
Earnings (Loss) per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Earnings per Share | The net income attributable to Teva and the weighted average number of ordinary shares used in computation of basic and diluted earnings per share for the years ended December 31, 2018, 2017 and 2016 are as follows: 2018 2017 2016 (U.S. $ in millions, except share data) Net income (loss) used for the computation of diluted earnings per share $ (2,399 ) $ (16,525 ) $ 68 Weighted average number of shares used in the computation of basic earnings per share 1,021 1,016 955 Add: Additional shares from the assumed exercise of employee stock options and unvested RSUs — — 3 Weighted average number of additional shares issued upon the assumed conversion of convertible senior debentures — — 3 Weighted average number of shares used in the computation of diluted earnings per share 1,021 1,016 961 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Selected Quarterly Financial Data | The following table presents selected unaudited quarterly financial data for 2018 and 2017: 2018* 4th quarter** 3rd quarter** 2nd 1st (U.S. $ in millions, except per share amounts) Net revenues 4,559 4,529 4,701 5,065 Gross profit 1,971 1,977 2,033 2,315 Net income (loss) (3,243 ) (197 ) (166 ) 1,134 Net income (loss) attributable to Teva (2,886 ) (208 ) (176 ) 1,120 Net income (loss) attributable to ordinary shareholders (2,940 ) (273 ) (241 ) 1,055 Earnings per share attributable to ordinary shareholders: Basic (2.85 ) (0.27 ) (0.24 ) 1.04 Diluted (2.85 ) (0.27 ) (0.24 ) 1.03 2017* 4th quarter** 3rd quarter** 2nd 1st (U.S. $ in millions, except per share amounts) Net revenues 5,398 5,617 5,720 5,650 Gross profit 2,444 2,599 2,802 2,770 Net income (loss) (11,730 ) 610 (5,970 ) 641 Net income (loss) attributable to Teva (11,535 ) 595 (5,970 ) 645 Net income (loss) attributable to ordinary shareholders (11,600 ) 530 (6,035 ) 580 Earnings per share attributable to ordinary shareholders: Basic (11.41 ) 0.52 (5.94 ) 0.57 Diluted (11.41 ) 0.52 (5.94 ) 0.57 * Certain comparative figures have been reclassified to conform to the fourth quarter presentation. ** Losses in the second and fourth quarters of 2017 were primarily due to goodwill impairments of $6.1 billion and $11 billion, respectively. |
Significant Accounting Polici_3
Significant Accounting Policies - Additional information (Detail) - USD ($) shares in Millions, $ in Millions | Dec. 31, 2018 | Dec. 17, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Depreciation Amortization Impairment [Line Items] | |||||
Net cash provided by operating activities | $ 2,446 | $ 2,225 | $ 3,890 | ||
Net cash provided by investing activities | 1,866 | 3,446 | (34,405) | ||
Allowance For Doubtful Accounts Receivable | $ 232 | 232 | 232 | ||
Cash deposited with financially sound European us and Israeli banks and financial institutions | $ 1,845 | $ 1,845 | |||
Percentage of consolidated sales in North America | 48.00% | ||||
Shipping and handling costs, which are included in selling and marketing expenses | $ 159 | 164 | 134 | ||
Advertising expense | 256 | 318 | 312 | ||
Ordinary shares issued upon mandatory conversion of preferred shares | 70.6 | 70.6 | |||
Accounting Standards Update 2016-15 [Member] | |||||
Depreciation Amortization Impairment [Line Items] | |||||
Net cash provided by operating activities | (1,735) | (1,282) | (1,335) | ||
Net cash provided by investing activities | 1,735 | 1,282 | 1,335 | ||
Accounting Standards Update 2016-01 [Member] | AOCI Attributable to Parent [Member] | |||||
Depreciation Amortization Impairment [Line Items] | |||||
New accounting principle adoption | (5) | ||||
Accounting Standards Update 2016-01 [Member] | Retained Earnings [Member] | |||||
Depreciation Amortization Impairment [Line Items] | |||||
New accounting principle adoption | 5 | ||||
Cost of Sales [Member] | |||||
Depreciation Amortization Impairment [Line Items] | |||||
Prior periods adjustments | 142 | 210 | 206 | ||
Selling and Marketing Expenses [Member] | |||||
Depreciation Amortization Impairment [Line Items] | |||||
Prior periods adjustments | $ (142) | $ (210) | $ (206) | ||
Building [Member] | |||||
Depreciation Amortization Impairment [Line Items] | |||||
Property plant and equipment useful life | 40 years | ||||
Minimum [Member] | |||||
Depreciation Amortization Impairment [Line Items] | |||||
Credit terms to customers | 30 days | ||||
Minimum [Member] | Accounting Standards Update 2016-02 [Member] | |||||
Depreciation Amortization Impairment [Line Items] | |||||
Additional operating liabilities expected to be recognized | $ 560 | $ 560 | |||
Minimum [Member] | Other Machinery and Equipment [Member] | |||||
Depreciation Amortization Impairment [Line Items] | |||||
Property plant and equipment useful life | 15 years | ||||
Minimum [Member] | Other Capitalized Property Plant and Equipment [Member] | |||||
Depreciation Amortization Impairment [Line Items] | |||||
Property plant and equipment useful life | 5 years | ||||
Maximum [Member] | |||||
Depreciation Amortization Impairment [Line Items] | |||||
Credit terms to customers | 90 days | ||||
Maximum [Member] | Accounting Standards Update 2016-02 [Member] | |||||
Depreciation Amortization Impairment [Line Items] | |||||
Additional operating liabilities expected to be recognized | $ 660 | $ 660 | |||
Maximum [Member] | Other Machinery and Equipment [Member] | |||||
Depreciation Amortization Impairment [Line Items] | |||||
Property plant and equipment useful life | 20 years | ||||
Maximum [Member] | Other Capitalized Property Plant and Equipment [Member] | |||||
Depreciation Amortization Impairment [Line Items] | |||||
Property plant and equipment useful life | 10 years |
Certain Transactions - Business
Certain Transactions - Business Transactions - Additional Information (Detail) - USD ($) shares in Millions, $ in Millions | Jan. 31, 2018 | Oct. 03, 2016 | Aug. 02, 2016 |
Allergan plc [Member] | |||
Business Acquisition [Line Items] | |||
Allergan one time payment to Teva | $ 703 | ||
Actavis [Member] | |||
Business Acquisition [Line Items] | |||
Cash consideration | $ 33,400 | ||
Shares issued as consideration for the acquisition | 100.3 | ||
Anda [Member] | |||
Business Acquisition [Line Items] | |||
Cash consideration | $ 500 |
Certain Transactions - Other Tr
Certain Transactions - Other Transactions - Additional Information (Detail) $ in Millions | Jan. 08, 2018USD ($) | Sep. 17, 2017USD ($) | May 12, 2017USD ($) | Mar. 03, 2016USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2016USD ($) | Nov. 30, 2016USD ($) | Sep. 30, 2016USD ($)Lawsuit | Dec. 31, 2018USD ($) | Mar. 31, 2018USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Oct. 31, 2016USD ($) |
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||||||||
Goodwill written off allocated to divested business | $ 79 | $ 697 | |||||||||||||
Other asset impairments, restructuring and other items | 987 | 1,836 | $ 830 | ||||||||||||
Net (gain) loss from sale of long-lived assets and investments | $ 19 | 1,090 | 764 | ||||||||||||
Women Health [Member] | |||||||||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||||||||
Goodwill written off allocated to divested business | $ 329 | ||||||||||||||
CVC Capital Partners Fund VI [Member] | |||||||||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||||||||
Net gain on sale of portfolio of products | $ 93 | ||||||||||||||
Transaction expenses for divestitures | 2 | ||||||||||||||
PGT Healthcare Partnership [Member] | |||||||||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||||||||
Other asset impairments, restructuring and other items | 64 | ||||||||||||||
Write-down of investment | (94) | ||||||||||||||
Net (gain) loss from sale of long-lived assets and investments | $ 50 | ||||||||||||||
Women Health [Member] | CVC Capital Partners Fund VI [Member] | |||||||||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||||||||
Sale agreement with CVC capital partners fund VI | $ 703 | ||||||||||||||
Rimsa [Member] | |||||||||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||||||||
Cash consideration | $ 2,300 | ||||||||||||||
Number of lawsuits filed | Lawsuit | 2 | ||||||||||||||
Alder [Member] | |||||||||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||||||||
Upfront payment | $ 25 | ||||||||||||||
Collaborative agreement milestone payments | $ 175 | ||||||||||||||
Otsuka [Member] | |||||||||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||||||||
Upfront payment | $ 50 | ||||||||||||||
Attenukine [Member] | |||||||||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||||||||
Upfront payment | $ 30 | ||||||||||||||
Additional considerations | $ 280 | $ 280 | |||||||||||||
Ninlaro [Member] | |||||||||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||||||||
Upfront payment | $ 150 | ||||||||||||||
Payment | $ 150 | ||||||||||||||
Celltrion [Member] | |||||||||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||||||||
Refundable payment | $ 60 | ||||||||||||||
Total associated cost | $ 160 | ||||||||||||||
Regeneron [Member] | |||||||||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||||||||
Upfront payment | $ 250 | ||||||||||||||
Collaborative agreement milestone payments | $ 60 | $ 35 | $ 25 | ||||||||||||
Research and development costs | $ 1,000 |
Certain Transactions - Busine_2
Certain Transactions - Business Acquisitions - Summary of Major Classes of Assets and Liabilities Included as Held for Sale (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Inventories | $ 4,731 | $ 4,924 | |
Property, plant and equipment, net | 6,868 | 7,673 | |
Goodwill | 24,917 | 28,414 | $ 44,409 |
Total assets | 60,683 | 70,615 | |
Total liabilities of the disposal group classified as held for sale in the consolidated balance sheets | 44,889 | 51,870 | |
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Inventories | 39 | ||
Property, plant and equipment, net | 72 | 16 | |
Identifiable intangible assets, net | 236 | ||
Goodwill | 20 | 275 | |
Total assets | $ 92 | 566 | |
Other taxes and long-term liabilities | 38 | ||
Total liabilities of the disposal group classified as held for sale in the consolidated balance sheets | $ 38 |
Fair Value Measurement - Summar
Fair Value Measurement - Summary of Financial Items Carried at Fair Value (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration | [1] | $ (507) | $ (735) |
Total | 1,338 | 254 | |
Asset Derivatives - Options and Forward Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivatives | 18 | 17 | |
Liabilities Derivatives - Interest Rate and Cross Currency Swaps [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivatives | (50) | (98) | |
Liabilities Derivatives Options and Forward Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivatives | (26) | (15) | |
Money Markets [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 203 | 5 | |
Cash, Deposits and Other [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 1,579 | 958 | |
Equity Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment in securities | 51 | 65 | |
Other, Mainly Debt Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment in securities | 12 | 32 | |
Asset Derivatives - Cross Currency Swaps [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivatives | 58 | 25 | |
Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total | 1,835 | 1,042 | |
Level 1 [Member] | Money Markets [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 203 | 5 | |
Level 1 [Member] | Cash, Deposits and Other [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 1,579 | 958 | |
Level 1 [Member] | Equity Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment in securities | 51 | 65 | |
Level 1 [Member] | Other, Mainly Debt Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment in securities | 2 | 14 | |
Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total | (71) | ||
Level 2 [Member] | Asset Derivatives - Options and Forward Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivatives | 18 | 17 | |
Level 2 [Member] | Liabilities Derivatives - Interest Rate and Cross Currency Swaps [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivatives | (50) | (98) | |
Level 2 [Member] | Liabilities Derivatives Options and Forward Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivatives | (26) | (15) | |
Level 2 [Member] | Asset Derivatives - Cross Currency Swaps [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivatives | 58 | 25 | |
Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration | [1] | (507) | (735) |
Total | (497) | (717) | |
Level 3 [Member] | Other, Mainly Debt Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment in securities | $ 10 | $ 18 | |
[1] | Contingent consideration represents liabilities recorded at fair value in connection with acquisitions. |
Fair Value Measurement - Summ_2
Fair Value Measurement - Summary of Fair Value of Financial Liabilities Measured Using Level 3 Inputs (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value at the beginning of the period | $ (717) | $ (811) |
Investment in debt securities | (8) | |
Translation differences | (17) | |
Fair value at the end of the period | (497) | (717) |
MicroDose Acquisition [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Adjustments to provisions for contingent consideration | 89 | |
Cephalon Acquisition [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Adjustments to provisions for contingent consideration | 10 | |
Actavis Generics [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Actavis Generics transaction | (35) | |
Labrys Acquisition [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Adjustments to provisions for contingent consideration | (17) | (40) |
Settlement of contingent consideration | 151 | 100 |
Eagle Transaction [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Adjustments to provisions for contingent consideration | (40) | (178) |
Settlement of contingent consideration | $ 134 | $ 165 |
Fair Value Measurement - Summ_3
Fair Value Measurement - Summary of Financial Instrument Measured on a Basis Other Than Fair Value (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 25,700 | $ 26,172 |
Senior Notes [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 23,560 | 23,459 |
Senior Notes and Convertible Senior Debentures Included Under Short-Term Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 2,140 | $ 2,713 |
Investment in Securities - Summ
Investment in Securities - Summary of Fair Value, Amortized Cost and Gross Unrealized Holding Gains and Losses of Securities (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | |
Available For Sale Securities [Line Items] | ||
Available-for sale securities - fair value | $ 102 | $ 266 |
Amortized cost | 103 | |
Gross unrealized holding gains | 19 | |
Gross unrealized holding losses | 20 | |
Other Current Assets [Member] | ||
Available For Sale Securities [Line Items] | ||
Available-for sale securities - fair value | 14 | 2 |
Other Non-current Assets [Member] | ||
Available For Sale Securities [Line Items] | ||
Available-for sale securities - fair value | 83 | 61 |
Money Markets [Member] | ||
Available For Sale Securities [Line Items] | ||
Available-for sale securities - fair value | $ 5 | $ 203 |
Investment in Securities - Addi
Investment in Securities - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Available For Sale Securities [Line Items] | ||||
Company average share price | $ 25.62 | $ 20.92 | $ 25.62 | |
Net gain on sale | $ 67 | $ 1,083 | $ 720 | |
Mylan [Member] | ||||
Available For Sale Securities [Line Items] | ||||
Company average share price | $ 40.2 | $ 11 | $ 40.2 | |
Net gain (loss) mylan | $ 2 | |||
Net gain on sale | $ 36 | $ 10 | ||
Sale of shares | 17 | |||
Cash consideration | $ 702 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Inventories [Line Items] | ||
Finished products | $ 2,665 | $ 2,689 |
Raw and packaging materials | 1,328 | 1,454 |
Products in process | 590 | 597 |
Materials in transit and payments on account | 148 | 184 |
Inventories | $ 4,731 | $ 4,924 |
Property, Plant and Equipment -
Property, Plant and Equipment - Summary of Property, Plant and Equipment, Net (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Machinery and equipment | $ 5,691 | $ 5,809 |
Buildings | 3,143 | 3,329 |
Computer equipment and other assets | 2,097 | 2,016 |
Payments on account | 514 | 634 |
Land | 351 | 390 |
Subtotal | 11,796 | 12,178 |
Less-accumulated depreciation | (4,928) | (4,505) |
Property, Plant and Equipment, Net, Total | $ 6,868 | $ 7,673 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Summary of Property, Plant and Equipment, Net (Parenthetical) (Detail) - Leasehold Improvements [Member] | 12 Months Ended |
Dec. 31, 2018 | |
Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Capitalized land lease estimated useful lives maximum | 30 years |
Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Capitalized land lease estimated useful lives maximum | 99 years |
Property, Plant and Equipment_3
Property, Plant and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense for the year | $ 676 | $ 632 | $ 501 |
Impairment charge during the year on property, plant and equipment | $ 500 | $ 544 | $ 157 |
Goodwill - Summary of Changes i
Goodwill - Summary of Changes in the Carrying Amount of Goodwill by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Line Items] | |||||||
Beginning balance | $ 28,414 | $ 44,409 | |||||
Goodwill adjustments | 920 | ||||||
Goodwill disposal | (79) | (697) | |||||
Goodwill impairment | $ (11,000) | $ (6,100) | (3,027) | (17,100) | $ (900) | ||
Goodwill reclassified as assets to held for sale | (20) | (275) | |||||
Translation differences | (371) | 1,157 | |||||
Ending balance | $ 24,917 | 28,414 | 24,917 | 28,414 | 44,409 | ||
Relative fair value allocation | (28,414) | ||||||
Generics [Member] | |||||||
Goodwill [Line Items] | |||||||
Beginning balance | 18,864 | 32,863 | |||||
Goodwill adjustments | 1,480 | ||||||
Goodwill disposal | (7) | ||||||
Goodwill impairment | (16,500) | ||||||
Translation differences | 1,028 | ||||||
Ending balance | 18,864 | 18,864 | 32,863 | ||||
Relative fair value allocation | (18,864) | ||||||
Specialty [Member] | |||||||
Goodwill [Line Items] | |||||||
Beginning balance | 8,464 | 9,323 | |||||
Goodwill disposal | (690) | ||||||
Goodwill reclassified as assets to held for sale | (275) | ||||||
Translation differences | 106 | ||||||
Ending balance | 8,464 | 8,464 | 9,323 | ||||
Relative fair value allocation | (8,464) | ||||||
Other Segments [Member] | |||||||
Goodwill [Line Items] | |||||||
Beginning balance | 1,086 | 2,223 | |||||
Goodwill adjustments | (560) | ||||||
Goodwill impairment | (600) | ||||||
Translation differences | 23 | ||||||
Ending balance | 1,086 | 1,086 | $ 2,223 | ||||
Relative fair value allocation | (1,086) | ||||||
North America [Member] | |||||||
Goodwill [Line Items] | |||||||
Beginning balance | 11,144 | ||||||
Translation differences | (46) | ||||||
Ending balance | 11,098 | 11,144 | 11,098 | 11,144 | |||
Relative fair value allocation | 11,144 | ||||||
Europe [Member] | |||||||
Goodwill [Line Items] | |||||||
Beginning balance | 9,001 | ||||||
Goodwill disposal | (65) | ||||||
Goodwill reclassified as assets to held for sale | (3) | ||||||
Translation differences | (280) | ||||||
Ending balance | 8,653 | 9,001 | 8,653 | 9,001 | |||
Relative fair value allocation | 9,001 | ||||||
International Markets [Member] | |||||||
Goodwill [Line Items] | |||||||
Beginning balance | 5,404 | ||||||
Goodwill disposal | (14) | ||||||
Goodwill impairment | (2,530) | $ 0 | (2,834) | ||||
Translation differences | (77) | ||||||
Ending balance | 2,479 | 5,404 | 2,479 | 5,404 | |||
Relative fair value allocation | 5,404 | ||||||
Other [Member] | |||||||
Goodwill [Line Items] | |||||||
Beginning balance | 2,865 | ||||||
Goodwill impairment | (193) | ||||||
Goodwill reclassified as assets to held for sale | (17) | ||||||
Translation differences | 32 | ||||||
Ending balance | $ 2,687 | $ 2,865 | $ 2,687 | 2,865 | |||
Relative fair value allocation | $ 2,865 |
Goodwill - Summary of Changes_2
Goodwill - Summary of Changes in the Carrying Amount of Goodwill by Segment (Parenthetical) (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill [Line Items] | |||
Accumulated goodwill impairment | $ 21,000 | $ 18,000 | $ 900 |
Goodwill - Additional Informati
Goodwill - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | |
Goodwill [Line Items] | |||||||||
Goodwill impairment | $ 11,000 | $ 6,100 | $ 3,027 | $ 17,100 | $ 900 | ||||
Goodwill | $ 24,917 | 28,414 | 24,917 | 28,414 | $ 44,409 | ||||
MEXICO | |||||||||
Goodwill [Line Items] | |||||||||
Goodwill impairment | $ 120 | ||||||||
International Markets [Member] | |||||||||
Goodwill [Line Items] | |||||||||
Goodwill impairment | 2,530 | $ 0 | 2,834 | ||||||
Goodwill | 2,479 | 5,404 | 2,479 | 5,404 | |||||
International Markets [Member] | Reduction in the terminal value growth rate of 0.1% [Member] | |||||||||
Goodwill [Line Items] | |||||||||
Goodwill impairment | 48 | ||||||||
International Markets [Member] | Increase in discount rate of 0.1% [Member] | |||||||||
Goodwill [Line Items] | |||||||||
Goodwill impairment | 68 | ||||||||
International Markets [Member] | Maximum [Member] | |||||||||
Goodwill [Line Items] | |||||||||
Decrease in estimated difference between fair value and carrying value, percent | 6.00% | 2.00% | |||||||
International Markets [Member] | Minimum [Member] | |||||||||
Goodwill [Line Items] | |||||||||
Decrease in estimated difference between fair value and carrying value, percent | 2.00% | 1.00% | |||||||
Europe [Member] | |||||||||
Goodwill [Line Items] | |||||||||
Goodwill | 8,653 | 9,001 | 8,653 | 9,001 | |||||
Decrease in estimated difference between fair value and carrying value, percent | 6.00% | ||||||||
Europe [Member] | Reduction in the terminal value growth rate of 0.1% [Member] | |||||||||
Goodwill [Line Items] | |||||||||
Goodwill impairment | 121 | ||||||||
Europe [Member] | Increase in discount rate of 0.1% [Member] | |||||||||
Goodwill [Line Items] | |||||||||
Goodwill impairment | 171 | ||||||||
Europe [Member] | Maximum [Member] | |||||||||
Goodwill [Line Items] | |||||||||
Decrease in estimated difference between fair value and carrying value, percent | 6.00% | ||||||||
Europe [Member] | Minimum [Member] | |||||||||
Goodwill [Line Items] | |||||||||
Decrease in estimated difference between fair value and carrying value, percent | 4.00% | ||||||||
North America [Member] | |||||||||
Goodwill [Line Items] | |||||||||
Goodwill | $ 11,098 | $ 11,144 | $ 11,098 | $ 11,144 | |||||
Decrease in estimated difference between fair value and carrying value, percent | 28.00% | 28.00% | |||||||
Rimsa [Member] | |||||||||
Goodwill [Line Items] | |||||||||
Goodwill impairment | $ 180 | ||||||||
Goodwill | $ 706 | ||||||||
Medis [Member] | |||||||||
Goodwill [Line Items] | |||||||||
Goodwill impairment | $ 170 | ||||||||
Goodwill | $ 300 | $ 300 | |||||||
TAPI [Member] | North America [Member] | |||||||||
Goodwill [Line Items] | |||||||||
Decrease in estimated difference between fair value and carrying value, percent | 47.00% | 47.00% |
Identifiable Intangible Asset_2
Identifiable Intangible Assets - Summary of Identifiable Intangible Assets (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount net of impairment | $ 23,661 | $ 25,971 |
Accumulated amortization | 9,656 | 8,331 |
Net carrying amount | 14,005 | 17,640 |
Identifiable product rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount net of impairment | 20,361 | 21,011 |
Accumulated amortization | 9,565 | 8,276 |
Net carrying amount | 10,796 | 12,735 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount net of impairment | 606 | 617 |
Accumulated amortization | 91 | 55 |
Net carrying amount | 515 | 562 |
In Process Research and Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount net of impairment | 2,694 | 4,343 |
Net carrying amount | $ 2,694 | $ 4,343 |
Identifiable Intangible Asset_3
Identifiable Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets useful life | 12 years | ||
Amortization of intangible assets | $ 1,166 | $ 1,444 | $ 993 |
2,018 | 1,034 | ||
2,019 | 1,019 | ||
2,020 | 889 | ||
2,021 | 930 | ||
2,022 | 896 | ||
IPR&D to product rights | 723 | ||
Impairment of intangible assets excluding goodwill | 1,991 | $ 3,238 | $ 589 |
In Process Research and Development [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of intangible assets excluding goodwill | 923 | ||
Identifiable product rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of intangible assets excluding goodwill | 1,068 | ||
Actavis [Member] | In Process Research and Development [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Business combination recognized identifiable assets | 2,433 | ||
Actavis [Member] | Identifiable product rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of intangible assets excluding goodwill | 412 | ||
Rimsa [Member] | In Process Research and Development [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Business combination recognized identifiable assets | 50 | ||
AUSTEDO [Member] | In Process Research and Development [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Business combination recognized identifiable assets | 211 | ||
Fremanezumab [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
IPR&D to product rights | 444 | ||
Mesalamine [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
IPR&D to product rights | 103 | ||
International Markets [Member] | Identifiable product rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of intangible assets excluding goodwill | 290 | ||
Japan [Member] | Identifiable product rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of intangible assets excluding goodwill | $ 222 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue Recognition [Line Items] | ||||
Royalty income | $ 165 | $ 327 | $ 314 | |
Minimum [Member] | ||||
Revenue Recognition [Line Items] | ||||
Credit terms to customers | 30 days | |||
Maximum [Member] | ||||
Revenue Recognition [Line Items] | ||||
Credit terms to customers | 90 days | |||
United States [Member] | ||||
Revenue Recognition [Line Items] | ||||
Percentage sales reserves and allowances to U.S. customers | 85.00% |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Summary of Disaggregation of Revenues by Major Revenue Streams (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | $ 4,559 | $ 4,529 | $ 4,701 | $ 5,065 | $ 5,398 | $ 5,617 | $ 5,720 | $ 5,650 | $ 18,854 | $ 22,385 | $ 21,903 |
Sale of Goods [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 15,881 | 19,256 | 19,989 | ||||||||
Licensing Arrangements [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 165 | 327 | 314 | ||||||||
Distribution [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 1,956 | 1,916 | 963 | ||||||||
Other [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 852 | 886 | 637 | ||||||||
International Markets [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 3,005 | 3,395 | 4,015 | ||||||||
International Markets [Member] | Sale of Goods [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 2,151 | 2,558 | 3,286 | ||||||||
International Markets [Member] | Licensing Arrangements [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 22 | 38 | 8 | ||||||||
International Markets [Member] | Distribution [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 602 | 549 | 458 | ||||||||
International Markets [Member] | Other [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 230 | 250 | 263 | ||||||||
Other Activities [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 1,366 | 1,383 | 1,141 | ||||||||
Other Activities [Member] | Sale of Goods [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 739 | 748 | 766 | ||||||||
Other Activities [Member] | Licensing Arrangements [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 9 | 5 | 8 | ||||||||
Other Activities [Member] | Other [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 618 | 630 | 367 | ||||||||
North America [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 9,297 | 12,141 | 11,778 | ||||||||
North America [Member] | Sale of Goods [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 7,838 | 10,706 | 11,186 | ||||||||
North America [Member] | Licensing Arrangements [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 111 | 281 | 291 | ||||||||
North America [Member] | Distribution [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 1,347 | 1,153 | 301 | ||||||||
North America [Member] | Other [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 1 | 1 | |||||||||
Europe [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 5,186 | 5,466 | 4,969 | ||||||||
Europe [Member] | Sale of Goods [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 5,153 | 5,244 | 4,751 | ||||||||
Europe [Member] | Licensing Arrangements [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 23 | 3 | 7 | ||||||||
Europe [Member] | Distribution [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | 7 | 214 | 204 | ||||||||
Europe [Member] | Other [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenue | $ 3 | $ 5 | $ 7 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Schedule of Sales Reserves and Allowances (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Revenue Recognition [Line Items] | |
Balance at beginning of period | $ 8,077 |
Provisions related to sales made in current year period | 19,413 |
Provisions related to sales made in prior periods | (59) |
Credits and payments | (20,480) |
Translation differences | (65) |
Balance at end of period | 6,886 |
Reserves Included in Accounts Receivable, Net [Member] | |
Revenue Recognition [Line Items] | |
Balance at beginning of period | 196 |
Provisions related to sales made in current year period | 514 |
Provisions related to sales made in prior periods | 3 |
Credits and payments | (538) |
Balance at end of period | 175 |
Rebates [Member] | |
Revenue Recognition [Line Items] | |
Balance at beginning of period | 3,077 |
Provisions related to sales made in current year period | 6,572 |
Provisions related to sales made in prior periods | (14) |
Credits and payments | (6,596) |
Translation differences | (33) |
Balance at end of period | 3,006 |
Medicaid and Other Governmental Allowances [Member] | |
Revenue Recognition [Line Items] | |
Balance at beginning of period | 1,908 |
Provisions related to sales made in current year period | 1,284 |
Provisions related to sales made in prior periods | 24 |
Credits and payments | (1,850) |
Translation differences | (5) |
Balance at end of period | 1,361 |
Chargebacks [Member] | |
Revenue Recognition [Line Items] | |
Balance at beginning of period | 1,849 |
Provisions related to sales made in current year period | 10,206 |
Credits and payments | (10,519) |
Translation differences | (6) |
Balance at end of period | 1,530 |
Returns [Member] | |
Revenue Recognition [Line Items] | |
Balance at beginning of period | 780 |
Provisions related to sales made in current year period | 442 |
Provisions related to sales made in prior periods | 28 |
Credits and payments | (606) |
Translation differences | (6) |
Balance at end of period | 638 |
Other [Member] | |
Revenue Recognition [Line Items] | |
Balance at beginning of period | 267 |
Provisions related to sales made in current year period | 417 |
Provisions related to sales made in prior periods | (30) |
Credits and payments | (463) |
Translation differences | (15) |
Balance at end of period | 176 |
Total Reserves Included in Sales Reserves and Allowances [Member] | |
Revenue Recognition [Line Items] | |
Balance at beginning of period | 7,881 |
Provisions related to sales made in current year period | 18,899 |
Provisions related to sales made in prior periods | (62) |
Credits and payments | (19,942) |
Translation differences | (65) |
Balance at end of period | $ 6,711 |
Long-term Employee-related Ob_3
Long-term Employee-related Obligations - Schedule of Long Term Employee Related Obligation (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plan Disclosure [Line Items] | ||
Accrued severance obligations | $ 75 | $ 91 |
Defined benefit plans | 146 | 182 |
Total | $ 221 | $ 273 |
Long-term Employee-related Ob_4
Long-term Employee-related Obligations - Additional Information (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plan Disclosure [Line Items] | ||
Long-term investments earmarked for severance pay liabilities in Israel | $ 137 | $ 149 |
Expected contributions to pension funds | 106 | |
2,019 | 6 | |
2,020 | 6 | |
2,021 | 7 | |
2,022 | 8 | |
2,023 | 8 | |
2024 to 2028 | $ 42 |
Debt Obligations - Schedule of
Debt Obligations - Schedule of Short-term Debt (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Current maturities of long-term liabilities | $ 1,700 | $ 2,880 |
Total short term debt | $ 2,216 | 3,646 |
Term loan JPY 28.3 billion [Member] | ||
Debt Instrument [Line Items] | ||
Maturity | 2,018 | |
Short-term borrowings | 251 | |
Term loan JPY 28.3 billion [Member] | London Interbank Offered Rate (LIBOR) [Member] | Japan, Yen | ||
Debt Instrument [Line Items] | ||
Description of variable rate basis | JPY LIBOR+0.25 % | |
Basis spread on variable rate | 0.25% | |
Banks And Financial Institutions [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 6.79% | |
Short-term borrowings | $ 2 | 1 |
Convertible debentures [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 0.25% | |
Maturity | 2,026 | |
Short-term borrowings | $ 514 | $ 514 |
Debt Obligations - Schedule o_2
Debt Obligations - Schedule of Short-term Debt (Parenthetical) (Detail) ¥ in Billions | Dec. 31, 2018JPY (¥) |
Term loan JPY 28.3 billion [Member] | |
Debt Instrument [Line Items] | |
Debt instrument face amount | ¥ 28.3 |
Debt - Additional Information (
Debt - Additional Information (Detail) € in Millions, SFr in Millions, $ in Millions, ¥ in Billions | 1 Months Ended | 3 Months Ended | ||||||||||
Oct. 31, 2018CHF (SFr) | Jul. 31, 2018CHF (SFr) | Nov. 30, 2015USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2018JPY (¥) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018EUR (€) | Mar. 31, 2018EUR (€) | Feb. 28, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Debt Instrument [Line Items] | ||||||||||||
Senior notes | $ 28,483 | $ 28,367 | ||||||||||
Long term debt currency portion USD | 63.00% | |||||||||||
Long term debt currency portion EUR | 34.00% | |||||||||||
Long term debt currency portion CHF | 3.00% | |||||||||||
Netherlands II B.V. [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Senior notes | € | € 1,600 | |||||||||||
Netherlands III B.V. [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Senior notes | $ 2,500 | |||||||||||
Senior notes CHF 450 million [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Senior notes | 461 | |||||||||||
Weighted average interest rate | 1.50% | 1.50% | ||||||||||
Repayments of debt | SFr | SFr 450 | |||||||||||
Senior notes CHF 300 million [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Senior notes | 308 | |||||||||||
Weighted average interest rate | 0.13% | 0.13% | ||||||||||
Repayments of debt | SFr | SFr 300 | |||||||||||
Senior notes USD 1,500 million [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Senior notes | 1,500 | |||||||||||
Debt instrument redeemed amount | $ 1,500 | |||||||||||
Weighted average interest rate | 1.40% | 1.40% | 1.40% | |||||||||
Senior notes EUR 1,000 million [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Senior notes | 1,199 | |||||||||||
Debt instrument redeemed amount | € | € 1,000 | |||||||||||
Weighted average interest rate | 2.88% | 2.88% | 2.88% | |||||||||
Term loan USD 2.5 billion [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Repayments of debt | $ 2,300 | |||||||||||
Term loan JPY 58.5 billion [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Repayments of debt | ¥ | ¥ 86.8 | |||||||||||
Term loan JPY 28.3 billion [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Repayments of short-term debt | ¥ | 28.3 | |||||||||||
Term loan JPY 35 billion due 2018 and 2019 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Repayments of debt | ¥ | ¥ 70 | |||||||||||
Debentures USD 15 million [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Weighted average interest rate | 7.20% | |||||||||||
Senior notes | $ 15 | |||||||||||
'Senior notes USD 1,700 million [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Senior notes | $ 1,700 | 2,000 | ||||||||||
Debt instrument redeemed amount | $ 300 | |||||||||||
Weighted average interest rate | 1.70% | 1.70% | 1.70% | |||||||||
Senior notes EUR 1,660 million [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Senior notes | $ 1,897 | 2,095 | ||||||||||
Debt instrument redeemed amount | € | € 90 | |||||||||||
Weighted average interest rate | 0.38% | 0.38% | 0.38% | |||||||||
Convertible Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Weighted average interest rate | 0.25% | |||||||||||
Principal amount currently outstanding on the debt instruments | $ 514 | $ 514 | ||||||||||
Revolving Credit Facility [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Revolving credit facility | $ 3,000 | $ 3,000 | $ 3,000 | $ 4,500 | ||||||||
Debt instrument term | 5 years |
Debt Obligations - Schedule o_3
Debt Obligations - Schedule of Senior Notes and Loans (Detail) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2018 | Oct. 31, 2018 | Sep. 30, 2018 | Jul. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||||||
Total senior notes | $ 28,483 | $ 28,367 | ||||
Total loans | 3,426 | |||||
Total debentures and others | 12 | 20 | ||||
Less current maturities | (1,700) | (2,880) | ||||
Derivative instruments | 9 | 2 | ||||
Less debt issuance costs | (104) | (106) | ||||
Total senior notes and loans | $ 26,700 | 28,829 | ||||
Senior notes EUR 1,660 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 0.38% | 0.38% | ||||
Maturity | 2,020 | |||||
Total senior notes | $ 1,897 | 2,095 | ||||
Senior notes EUR 1,500 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 1.13% | |||||
Maturity | 2,024 | |||||
Total senior notes | $ 1,707 | 1,788 | ||||
Senior notes EUR 1,300 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 1.25% | |||||
Maturity | 2,023 | |||||
Total senior notes | $ 1,480 | 1,550 | ||||
Senior notes EUR 1,000 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 2.88% | 2.88% | ||||
Maturity | 2,019 | |||||
Total senior notes | 1,199 | |||||
Senior notes EUR 900 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 4.50% | |||||
Maturity | 2,025 | |||||
Total senior notes | $ 1,029 | |||||
Senior notes EUR 750 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 1.63% | |||||
Maturity | 2,028 | |||||
Total senior notes | $ 850 | 891 | ||||
Senior notes EUR 700 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 3.25% | |||||
Maturity | 2,022 | |||||
Total senior notes | $ 801 | |||||
Senior notes EUR 700 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 1.88% | |||||
Maturity | 2,027 | |||||
Total senior notes | $ 798 | 837 | ||||
Senior notes USD 3,500 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 3.15% | |||||
Maturity | 2,026 | |||||
Total senior notes | $ 3,493 | 3,492 | ||||
Senior notes USD 3,000 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 2.20% | |||||
Maturity | 2,021 | |||||
Total senior notes | $ 2,997 | 2,996 | ||||
Senior notes USD 3,000 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 2.80% | |||||
Maturity | 2,023 | |||||
Total senior notes | $ 2,993 | 2,992 | ||||
'Senior notes USD 1,700 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 1.70% | 1.70% | ||||
Maturity | 2,019 | |||||
Total senior notes | $ 1,700 | 2,000 | ||||
Senior notes USD 2,000 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 4.10% | |||||
Maturity | 2,046 | |||||
Total senior notes | $ 1,985 | 1,984 | ||||
Senior notes USD 1,500 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 1.40% | 1.40% | ||||
Maturity | 2,018 | |||||
Total senior notes | 1,500 | |||||
Senior notes USD 1,250 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 6.00% | |||||
Maturity | 2,024 | |||||
Total senior notes | $ 1,250 | |||||
Senior notes USD 1,250 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 6.75% | |||||
Maturity | 2,028 | |||||
Total senior notes | $ 1,250 | |||||
Senior notes USD 844 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 2.95% | |||||
Maturity | 2,022 | |||||
Total senior notes | $ 860 | 864 | ||||
Senior notes USD 789 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 6.15% | |||||
Maturity | 2,036 | |||||
Total senior notes | $ 782 | 781 | ||||
Senior notes USD 700 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 2.25% | |||||
Maturity | 2,020 | |||||
Total senior notes | $ 700 | 700 | ||||
Senior notes USD 613 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 3.65% | |||||
Maturity | 2,021 | |||||
Total senior notes | $ 621 | 624 | ||||
Senior notes USD 588 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 3.65% | |||||
Maturity | 2,021 | |||||
Total senior notes | $ 587 | 587 | ||||
Senior notes CHF 450 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 1.50% | 1.50% | ||||
Maturity | 2,018 | |||||
Total senior notes | 461 | |||||
Senior notes CHF 350 Million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 0.50% | |||||
Maturity | 2,022 | |||||
Total senior notes | $ 356 | 360 | ||||
Senior notes CHF 350 Million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 1.00% | |||||
Maturity | 2,025 | |||||
Total senior notes | $ 356 | 360 | ||||
Senior notes CHF 300 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 0.13% | 0.13% | ||||
Maturity | 2,018 | |||||
Total senior notes | 308 | |||||
Hedge Accounting Adjustments [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Total senior notes | $ (9) | (2) | ||||
Term loan USD 2.5 billion [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maturity | 2,018 | |||||
Total loans | 285 | |||||
Term loan USD 2.5 billion [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Description of variable rate basis | LIBOR +1.1375% | |||||
Basis spread on variable rate | 1.1375% | |||||
Term loan USD 2.5 billion [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maturity start | 2,017 | |||||
Maturity end | 2,020 | |||||
Total loans | 2,000 | |||||
Term loan USD 2.5 billion [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Description of variable rate basis | LIBOR +1.50% | |||||
Basis spread on variable rate | 1.50% | |||||
Term loan JPY 58.5 billion [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maturity | 2,022 | |||||
Total loans | 519 | |||||
Term loan JPY 58.5 billion [Member] | London Interbank Offered Rate (LIBOR) [Member] | Japan, Yen | ||||||
Debt Instrument [Line Items] | ||||||
Description of variable rate basis | JPY LIBOR +0.55% | |||||
Basis spread on variable rate | 0.55% | |||||
Term loan JPY 35 billion [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 1.42% | |||||
Maturity | 2,019 | |||||
Total loans | 311 | |||||
Term loan JPY 35 billion [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maturity | 2,018 | |||||
Total loans | 311 | |||||
Term loan JPY 35 billion [Member] | London Interbank Offered Rate (LIBOR) [Member] | Japan, Yen | ||||||
Debt Instrument [Line Items] | ||||||
Description of variable rate basis | JPY LIBOR +0.3% | |||||
Basis spread on variable rate | 0.30% | |||||
Debentures USD 15 million [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 7.20% | |||||
Maturity | 2,018 | |||||
Total debentures and others | 15 | |||||
Other Debentures [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 4.79% | |||||
Maturity | 2,026 | |||||
Total debentures and others | $ 12 | $ 5 |
Debt Obligations - Schedule o_4
Debt Obligations - Schedule of Senior Notes and Loans (Parenthetical) (Detail) - Dec. 31, 2018 € in Millions, SFr in Millions, $ in Millions, ¥ in Billions | USD ($) | EUR (€) | JPY (¥) | CHF (SFr) |
Senior notes EUR 1,660 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | € | € 1,660 | |||
Senior notes EUR 1,500 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | € | 1,500 | |||
Senior notes EUR 1,300 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | € | 1,300 | |||
Senior notes EUR 1,000 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | € | 1,000 | |||
Senior notes EUR 900 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | € | 900 | |||
Senior notes EUR 750 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | € | 750 | |||
Senior notes EUR 700 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | € | 700 | |||
Senior notes EUR 700 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | € | € 700 | |||
Senior notes USD 3,500 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | $ 3,500 | |||
Senior notes USD 3,000 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | 3,000 | |||
Senior notes USD 3,000 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | 3,000 | |||
'Senior notes USD 1,700 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | 1,700 | |||
Senior notes USD 2,000 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | 2,000 | |||
Senior notes USD 1,500 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | 1,500 | |||
Senior notes USD 1,250 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | 1,250 | |||
Senior notes USD 1,250 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | 1,250 | |||
Senior notes USD 844 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | 844 | |||
Senior notes USD 789 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | 789 | |||
Senior notes USD 700 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | 700 | |||
Senior notes USD 613 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | 613 | |||
Senior notes USD 588 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | 588 | |||
Senior notes CHF 450 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | SFr | SFr 450 | |||
Senior notes CHF 350 Million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | SFr | 350 | |||
Senior notes CHF 350 Million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | SFr | 350 | |||
Senior notes CHF 300 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | SFr | SFr 300 | |||
Term loan USD 2.5 billion [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | 2,500 | |||
Term loan USD 2.5 billion [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | 2,500 | |||
Term loan JPY 58.5 billion [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | ¥ | ¥ 58.5 | |||
Term loan JPY 35 billion [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | ¥ | 35 | |||
Term loan JPY 35 billion [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | ¥ | ¥ 35 | |||
Debentures USD 15 million [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | $ 15 |
Debt Obligation - Schedule Requ
Debt Obligation - Schedule Required Annual Principal Payments of Long-term Debt, Excluding Debt Issuance Cost (Detail) $ in Millions | Dec. 31, 2018USD ($) |
Long Term Debt Maturity [Line Items] | |
2,020 | $ 2,596 |
2,021 | 4,205 |
2,022 | 2,017 |
2,023 | 4,473 |
2024 and thereafter | 13,513 |
Total | $ 26,804 |
Other Income - Schedule of Othe
Other Income - Schedule of Other Income (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Income [Line Items] | |||
Gains on divestitures | $ 67 | $ 1,083 | $ 720 |
Gain on litigation settlements | 195 | 83 | 20 |
Gain on sale of assets | 9 | 11 | 10 |
Other, net | 20 | 22 | 19 |
Total other income | $ 291 | $ 1,199 | $ 769 |
Commitments and Contingencies -
Commitments and Contingencies - Commitments - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Commitment And Contingencies [Line Items] | |||
2,019 | $ 193,000,000 | ||
2,020 | 154,000,000 | ||
2,021 | 118,000,000 | ||
2,022 | 91,000,000 | ||
2,023 | 66,000,000 | ||
2024 and thereafter | 283,000,000 | ||
Lease and rental expense | 175,000,000 | $ 200,000,000 | $ 164,000,000 |
Royalty expense | 536,000,000 | $ 956,000,000 | $ 814,000,000 |
Maximum [Member] | |||
Commitment And Contingencies [Line Items] | |||
Milestone contingent expense | $ 420,000,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Contingencies - Additional Information (Detail) € in Millions, $ in Millions, $ in Millions | Oct. 04, 2018USD ($) | Jun. 27, 2018USD ($) | Aug. 21, 2017USD ($) | Jul. 15, 2015USD ($) | Nov. 30, 2017USD ($) | Jul. 31, 2015USD ($) | Sep. 30, 2013USD ($) | Apr. 30, 2013USD ($) | Aug. 31, 2012USD ($) | Dec. 31, 2010USD ($) | Nov. 30, 2009USD ($) | Aug. 31, 2008USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2014CAD ($) | Dec. 31, 2018EUR (€) | Dec. 31, 2018CAD ($) | Dec. 31, 2016USD ($) | May 31, 2015USD ($) | Dec. 31, 2014USD ($) | Mar. 31, 2014USD ($) | Nov. 30, 2013USD ($) | Aug. 31, 2013USD ($) | Jan. 31, 2009USD ($) | Jul. 31, 2008USD ($) | Feb. 28, 2005USD ($) |
Commitment And Contingencies [Line Items] | |||||||||||||||||||||||||
Damages assessment | $ 235.5 | ||||||||||||||||||||||||
Sales | $ 94 | ||||||||||||||||||||||||
Sales | $ 459 | ||||||||||||||||||||||||
Sales | $ 1,300 | ||||||||||||||||||||||||
Modafinil payment | $ 1,200 | ||||||||||||||||||||||||
Modafinil Euro sales | € | € 46.5 | ||||||||||||||||||||||||
Annual sales at the time of settlement | $ 350 | ||||||||||||||||||||||||
Annual sales of Effexor | $ 2,600 | ||||||||||||||||||||||||
Annual sales of Lamictal | $ 2,300 | $ 950 | |||||||||||||||||||||||
Annual sales of Niaspan | $ 1,100 | $ 416 | |||||||||||||||||||||||
Annual sales of Lidoderm | $ 1,400 | $ 1,200 | |||||||||||||||||||||||
Annual sales of Aggrenox | $ 455 | $ 340 | |||||||||||||||||||||||
Annual sales of Actos | $ 2,800 | $ 3,700 | |||||||||||||||||||||||
Annual sales of Acto plus | $ 430 | $ 500 | |||||||||||||||||||||||
Annual sales of Namenda | $ 550 | $ 1,100 | |||||||||||||||||||||||
Annual sales of Intuniv | $ 335 | $ 327 | |||||||||||||||||||||||
Compensatory damages and penalties | $ 12.4 | ||||||||||||||||||||||||
Punitive damages | $ 17.9 | ||||||||||||||||||||||||
Litigation settlement amount | $ 135 | ||||||||||||||||||||||||
Loss contingency payment | 22 | ||||||||||||||||||||||||
Eosinophilic Esophagitis [Member] | |||||||||||||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||||||||||||
Damage claimed | 200 | ||||||||||||||||||||||||
Eosinophilic Esophagitis [Member] | United States [Member] | |||||||||||||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||||||||||||
Damage claimed | 150 | ||||||||||||||||||||||||
Eosinophilic Esophagitis [Member] | Europe [Member] | |||||||||||||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||||||||||||
Damage claimed | 50 | ||||||||||||||||||||||||
AbbVie [Member] | |||||||||||||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||||||||||||
Legal fees | $ 448,000 | ||||||||||||||||||||||||
Janssen and Millennium [Member] | |||||||||||||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||||||||||||
Maximum damages payable | $ 200 | ||||||||||||||||||||||||
Litigation settlement awarded from other party | $ 5 | ||||||||||||||||||||||||
AndroGel Rate at 1% [Member] | |||||||||||||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||||||||||||
Annual sales at the time of settlement | $ 140 |
Equity - Additional Information
Equity - Additional Information (Detail) - USD ($) | Dec. 31, 2018 | Dec. 17, 2018 | Jul. 13, 2017 | Aug. 02, 2016 | Apr. 18, 2016 | Jan. 06, 2016 | Dec. 08, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 03, 2015 | Oct. 31, 2014 | Dec. 31, 2011 | Jun. 29, 2010 |
Class of Stock [Line Items] | ||||||||||||||
Ordinary shares issuance ADSs | 1,200,000,000 | 1,200,000,000 | 1,100,000,000 | |||||||||||
ADSs offering | 54,000,000 | |||||||||||||
Share price | $ 15.42 | $ 62.50 | $ 15.42 | |||||||||||
Proceeds from issuance or sale of equity ads | $ 5,400,000,000 | |||||||||||||
Proceeds from issuance or sale of equity convertible preferred shares | $ 329,000,000 | |||||||||||||
Shares transferred to Allergan | 100,300,000 | |||||||||||||
Share issued due to conversion of convertible preferred shares | 70,600,000 | 70,600,000 | ||||||||||||
Convertible preferred stock shares issued upon conversion | 337,500 | 3,375,000 | ||||||||||||
Convertible preferred shares rate | 7.00% | |||||||||||||
Proceeds from issuance of mandatory convertible preferred shares, net of issuance costs ADSs | $ 329,000,000 | $ 329,000,000 | ||||||||||||
Aggregate Proceeds From Issuance Of Preferred Stock And Preference Stock | $ 3,620,000,000 | |||||||||||||
Convertible preferred stock terms of conversion | 1 mandatory convertible preferred share to 16 ADSs, and all of the accumulated and unpaid dividends on the mandatory convertible preferred shares were paid in ADSs, at a ratio of 3.0262 | |||||||||||||
Number of shares exercisable | 24,086,000 | 24,086,000 | ||||||||||||
Number of shares available for future awards | 76,600,000 | 76,600,000 | ||||||||||||
Vesting period, description | The vesting period of the outstanding options, RSUs and PSUs is generally from 1 to 4 years from the date of grant. The rights of the ordinary shares obtained from the exercise of options, RSUs or PSUs are identical to those of the other ordinary shares of the Company. The contractual term of these options is primarily for seven years in prior plans and ten years for options granted under the 2010 and 2015 plans described above. | |||||||||||||
Company average share price | $ 20.92 | $ 20.92 | $ 25.62 | |||||||||||
Total intrinsic value of options exercised during the years | $ 5,000,000 | |||||||||||||
Average market price of Teva's ordinary shares during the year | $ 50.96 | |||||||||||||
Total unrecognized compensation cost before tax on employee stock options | $ 112,000,000 | $ 112,000,000 | ||||||||||||
Total unrecognized compensation cost before tax on employee stock RSUs | $ 138,000,000 | $ 138,000,000 | ||||||||||||
Share based compensation arrangements expected over weighted average period | 2 years 6 months | |||||||||||||
Dividends declared and paid | $ 0 | 0.85 | $ 1.36 | |||||||||||
Dividend mandatory convertible preferred shares | $ 0 | $ 0 | $ 70 | |||||||||||
2010 Long-Term Equity-Based Incentive Plan [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Number of shares exercisable | 70,000,000 | |||||||||||||
2015 Long-Term Equity-Based Incentive Plan [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Number of shares exercisable | 142,000,000 | 77,000,000 | 43,700,000 | |||||||||||
Number of additional shares authorized | 65,000,000 | 33,300,000 | ||||||||||||
Board of Directors [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Stock repurchase program, authorized amount | $ 0 | $ 0 | $ 3,000,000,000 | |||||||||||
Stock repurchase program, remaining authorized repurchase amount | $ 2,100,000,000 | $ 2,100,000,000 | $ 1,300,000,000 | |||||||||||
Minimum [Member] | Board of Directors [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Stock repurchase program, authorized amount | $ 1,700,000,000 | |||||||||||||
Maximum [Member] | Board of Directors [Member] | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Stock repurchase program, authorized amount | $ 3,000,000,000 |
Equity - Summary of Stock Optio
Equity - Summary of Stock Option Activity (Detail) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Balance outstanding at beginning of year | 43,121 | 32,789 | 25,233 |
Granted | 12,401 | 15,467 | 10,895 |
Exercised | (84) | (7) | (766) |
Forfeited | (7,040) | (4,953) | (1,382) |
Expired | (5) | (175) | (1,191) |
Balance outstanding at end of year | 48,393 | 43,121 | 32,789 |
Balance exercisable at end of year | 24,086 | 19,129 | 14,468 |
Balance outstanding at beginning of year | $ 44.32 | $ 50.71 | $ 49.69 |
Granted | 19.12 | 32.08 | 53.21 |
Exercised | 17.01 | 17.44 | 44.24 |
Forfeited | 39.38 | 47.92 | 54.09 |
Expired | 50.65 | 59.81 | 52.79 |
Balance outstanding at end of year | 38.62 | 44.32 | 50.71 |
Balance exercisable at end of year | $ 46.89 | $ 47.94 | $ 46.06 |
Equity - Summary of Weighted Av
Equity - Summary of Weighted Average Fair Value of Options Granted (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average fair value | $ 7.4 | $ 5.7 | $ 9.4 |
Equity - Summary of Fair Value
Equity - Summary of Fair Value of Options Estimated on Date of Grant Based on Weighted Average Assumptions (Detail) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | 0.00% | 3.70% | 2.60% |
Expected volatility | 40.00% | 29.00% | 25.00% |
Risk-free interest rate | 2.60% | 2.10% | 1.40% |
Expected term | 5 years | 5 years | 5 years |
Equity - Schedule of Ordinary S
Equity - Schedule of Ordinary Shares Issued Upon Outstanding Options (Detail) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |
Dec. 31, 2018USD ($)yr$ / sharesshares | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Balance at end of period (in thousands) Number of shares | shares | 48,393 | |
Weighted average exercise price | $ 38.62 | |
Weighted average remaining life Years | yr | 6.87 | |
Aggregate intrinsic value (in millions) | $ | $ 2.4 | |
Lower than $15.01 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Balance at end of period (in thousands) Number of shares | shares | 593 | |
Weighted average exercise price | $ 11.40 | |
Weighted average remaining life Years | yr | 8.85 | |
Aggregate intrinsic value (in millions) | $ | $ 2.4 | |
Range of exercise prices, upper limit | $ 15.01 | |
$15.01 - $25.00 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Balance at end of period (in thousands) Number of shares | shares | 12,398 | |
Weighted average exercise price | $ 18.92 | |
Weighted average remaining life Years | yr | 9.13 | |
Aggregate intrinsic value (in millions) | $ | [1] | |
Range of exercise prices, lower limit | $ 15.01 | |
Range of exercise prices, upper limit | $ 25 | |
$25.01 - $35.00 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Balance at end of period (in thousands) Number of shares | shares | 9,615 | |
Weighted average exercise price | $ 34.63 | |
Weighted average remaining life Years | yr | 8.17 | |
Range of exercise prices, lower limit | $ 25.01 | |
Range of exercise prices, upper limit | $ 35 | |
$35.01 - $45.00 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Balance at end of period (in thousands) Number of shares | shares | 6,703 | |
Weighted average exercise price | $ 40.57 | |
Weighted average remaining life Years | yr | 3.58 | |
Range of exercise prices, lower limit | $ 35.01 | |
Range of exercise prices, upper limit | $ 45 | |
$45.01 - $55.00 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Balance at end of period (in thousands) Number of shares | shares | 12,908 | |
Weighted average exercise price | $ 50.84 | |
Weighted average remaining life Years | yr | 5.64 | |
Range of exercise prices, lower limit | $ 45.01 | |
Range of exercise prices, upper limit | $ 55 | |
$55.01 - $65.00 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Balance at end of period (in thousands) Number of shares | shares | 6,167 | |
Weighted average exercise price | $ 59.34 | |
Weighted average remaining life Years | yr | 6.30 | |
Range of exercise prices, lower limit | $ 55.01 | |
Range of exercise prices, upper limit | $ 65 | |
$65.01 - $70.00 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Balance at end of period (in thousands) Number of shares | shares | 9 | |
Weighted average exercise price | $ 66.85 | |
Weighted average remaining life Years | yr | 0.03 | |
Range of exercise prices, lower limit | $ 65.01 | |
Range of exercise prices, upper limit | $ 70 | |
[1] | Represents an amount less than 0.5 million. |
Equity - Schedule of Ordinary_2
Equity - Schedule of Ordinary Shares Issued Upon Vested Options (Detail) shares in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)yr$ / sharesshares | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Balance at end of period (in thousands) Number of shares | shares | 24,086 | |
Weighted average exercise price | $ 46.89 | |
Weighted average remaining life Years | yr | 5.30 | |
Aggregate intrinsic value (in millions) | $ | [1] | |
$15.01 - $25.00 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Balance at end of period (in thousands) Number of shares | shares | 548 | |
Weighted average exercise price | $ 16.99 | |
Weighted average remaining life Years | yr | 8.68 | |
Aggregate intrinsic value (in millions) | $ | [1] | |
Range of exercise prices, lower limit | $ 15.01 | |
Range of exercise prices, upper limit | $ 25 | |
$25.01 - $35.00 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Balance at end of period (in thousands) Number of shares | shares | 2,464 | |
Weighted average exercise price | $ 34.60 | |
Weighted average remaining life Years | yr | 8.18 | |
Range of exercise prices, lower limit | $ 25.01 | |
Range of exercise prices, upper limit | $ 35 | |
$35.01 - $45.00 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Balance at end of period (in thousands) Number of shares | shares | 6,655 | |
Weighted average exercise price | $ 40.59 | |
Weighted average remaining life Years | yr | 3.55 | |
Range of exercise prices, lower limit | $ 35.01 | |
Range of exercise prices, upper limit | $ 45 | |
$45.01 - $55.00 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Balance at end of period (in thousands) Number of shares | shares | 10,041 | |
Weighted average exercise price | $ 50.17 | |
Weighted average remaining life Years | yr | 5.17 | |
Range of exercise prices, lower limit | $ 45.01 | |
Range of exercise prices, upper limit | $ 55 | |
$55.01 - $65.00 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Balance at end of period (in thousands) Number of shares | shares | 4,369 | |
Weighted average exercise price | $ 59.58 | |
Weighted average remaining life Years | yr | 6.25 | |
Range of exercise prices, lower limit | $ 55.01 | |
Range of exercise prices, upper limit | $ 65 | |
$65.01 - $70.00 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Balance at end of period (in thousands) Number of shares | shares | 9 | |
Weighted average exercise price | $ 66.85 | |
Weighted average remaining life Years | yr | 0.03 | |
Range of exercise prices, lower limit | $ 65.01 | |
Range of exercise prices, upper limit | $ 70 | |
[1] | Represents an amount less than 0.5 million. |
Equity - Schedule of Ordinary_3
Equity - Schedule of Ordinary Shares Issued Upon Vested Options (Parenthetical) (Detail) | Dec. 31, 2018USD ($) |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Maximum aggregate intrinsic value | $ 2,400,000 |
Maximum [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Maximum aggregate intrinsic value | $ 500,000 |
Equity - Schedule of Number of
Equity - Schedule of Number of RSUs Issued and Outstanding (Detail) - Restricted Stock Units [Member] - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Balance outstanding at beginning of year | 7,468 | 4,636 | 2,551 |
Granted | 5,900 | 5,461 | 3,193 |
Vested | (1,638) | (1,884) | (830) |
Forfeited | (1,327) | (745) | (278) |
Balance outstanding at end of year | 10,403 | 7,468 | 4,636 |
Weighted-average grant date fair value per share - RSUs at beginning year | $ 27.95 | $ 45.15 | $ 51.43 |
Granted | 18.80 | 20.10 | 40.78 |
Vested | 37.30 | 39.63 | 45.79 |
Forfeited | 32.50 | 42.84 | 46.08 |
Weighted-average grant date fair value per share - RSUs at end of year | $ 20.93 | $ 27.95 | $ 45.15 |
Equity - Summary of Company Exp
Equity - Summary of Company Expenses Compensation Costs Based on Grant Date Fair Value (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock Options Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 74 | $ 64 | $ 56 |
Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 81 | 69 | 66 |
Omnibus Long Term Share Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 155 | 133 | 122 |
Tax effect on stock-based compensation expense | 18 | 24 | 26 |
Net effect | $ 137 | $ 109 | $ 96 |
Equity - Accumulated Other Comp
Equity - Accumulated Other Comprehensive Income/(Loss) (Net of Tax) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | $ 17,359 | ||
Ending Balance | 14,707 | $ 17,359 | |
Foreign Currency Translation Adjustments [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | (1,316) | (2,769) | $ (2,384) |
Other comprehensive income/(loss) before reclassifications | (739) | 1,075 | (355) |
Amounts reclassified to the statements of income | 378 | 3 | |
Net other comprehensive income/(loss) before tax | (739) | 1,453 | (352) |
Corresponding income tax | (33) | ||
Net other comprehensive income/(loss) after tax | (739) | 1,453 | (385) |
Ending Balance | (2,055) | (1,316) | (2,769) |
Available-for-sale Securities [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | (4) | (7) | 312 |
Cumulative effect of new accounting standard (See Note 1) | 5 | ||
Other comprehensive income/(loss) before reclassifications | (1) | 64 | (456) |
Amounts reclassified to the statements of income | 1 | (66) | 140 |
Net other comprehensive income/(loss) before tax | (2) | (316) | |
Corresponding income tax | 5 | (3) | |
Net other comprehensive income/(loss) after tax | 3 | (319) | |
Ending Balance | 1 | (4) | (7) |
Derivative Financial Instruments [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | (442) | (302) | 175 |
Other comprehensive income/(loss) before reclassifications | 87 | (167) | (491) |
Amounts reclassified to the statements of income | 28 | 27 | 14 |
Net other comprehensive income/(loss) before tax | 115 | (140) | (477) |
Net other comprehensive income/(loss) after tax | 115 | (140) | (477) |
Ending Balance | (327) | (442) | (302) |
Benefit Plans [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | (91) | (81) | (58) |
Other comprehensive income/(loss) before reclassifications | 4 | (3) | (26) |
Amounts reclassified to the statements of income | 13 | (5) | (6) |
Net other comprehensive income/(loss) before tax | 17 | (8) | (32) |
Corresponding income tax | (4) | (2) | 9 |
Net other comprehensive income/(loss) after tax | 13 | (10) | (23) |
Ending Balance | (78) | (91) | (81) |
AOCI Attributable to Parent [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | (1,853) | (3,159) | (1,955) |
Cumulative effect of new accounting standard (See Note 1) | 5 | ||
Other comprehensive income/(loss) before reclassifications | (649) | 969 | (1,328) |
Amounts reclassified to the statements of income | 42 | 334 | 151 |
Net other comprehensive income/(loss) before tax | (607) | 1,303 | (1,177) |
Corresponding income tax | (4) | 3 | (27) |
Net other comprehensive income/(loss) after tax | (611) | 1,306 | (1,204) |
Ending Balance | $ (2,459) | $ (1,853) | $ (3,159) |
Equity - Accumulated Other Co_2
Equity - Accumulated Other Comprehensive Income/(Loss) (Net of Tax) (Parenthetical) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Foreign Currency Translation Adjustments Attributable to Non-controlling Interests [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Foreign currency translation attributable to non-controlling interests | $ 26 | $ (63) | $ (60) |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Before Income Taxes (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Before Income Taxes And Income Tax Expense Benefit [Line Items] | |||
Parent Company and its Israeli subsidiaries | $ 1,022 | $ 1,451 | $ 1,516 |
Non-Israeli subsidiaries | (3,618) | (19,830) | (692) |
Income (loss) before income taxes | $ (2,596) | $ (18,379) | $ 824 |
Income Taxes - Schedule of the
Income Taxes - Schedule of the Provision for Income Taxes (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Before Income Taxes And Income Tax Expense Benefit [Line Items] | |||
In Israel | $ 131 | $ 96 | $ 209 |
Outside Israel | (326) | (2,029) | 312 |
Effective consolidated income taxes | (195) | (1,933) | 521 |
Current | 700 | 373 | 481 |
Deferred | (895) | (2,306) | 40 |
Income tax expense (benefit) | $ (195) | $ (1,933) | $ 521 |
Income Taxes - Accumulated Othe
Income Taxes - Accumulated Other Comprehensive Income/(Loss) (Net of Tax) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Before Income Taxes And Income Tax Expense Benefit [Line Items] | |||
Income (loss) before income taxes | $ (2,596) | $ (18,379) | $ 824 |
Statutory tax rate in Israel | 23.00% | 24.00% | 25.00% |
Theoretical provision for income taxes | $ (597) | $ (4,411) | $ 206 |
Increase (decrease) in effective tax rate due to: | |||
The Parent Company and its Israeli subsidiaries- Mainly tax benefits arising from reduced tax rates under benefit programs | (134) | (253) | (212) |
Non-Israeli subsidiaries, including impairments | 381 | 3,817 | 546 |
U.S. Tax Cuts and Jobs Act effect | 97 | (1,061) | |
Increase (decrease) in other uncertain tax positions-net | 58 | (25) | (19) |
Effective consolidated income taxes | $ (195) | $ (1,933) | $ 521 |
Income Taxes - Accumulated Ot_2
Income Taxes - Accumulated Other Comprehensive Income/(Loss) (Net of Tax) (Parenthetical) (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Before Income Taxes And Income Tax Expense Benefit [Line Items] | |||
Income before income taxes includes goodwill impairment tax effect | $ 0 | $ 0 | $ 0 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Defered Income Taxes (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Tax Assets Liabilities Net [Line Items] | ||
Inventory related | $ 113 | $ 40 |
Sales reserves and allowances | 199 | 201 |
Provision for legal settlements | 42 | 171 |
Intangible assets | (2,282) | (3,132) |
Carryforward losses and deductions and credits | 1,340 | 1,485 |
Property, plant and equipment | (167) | (231) |
Deferred interest | 391 | |
Provisions for employee related obligations | 102 | 142 |
Other | 123 | 125 |
Long-term deferred tax assets (liabilities)-gross | (139) | (1,199) |
Valuation allowance-in respect of carryforward losses and deductions that may not be utilized | (1,633) | (1,504) |
Deferred tax assets liabilities net | $ (1,772) | $ (2,703) |
Income Taxes - Schedule of De_2
Income Taxes - Schedule of Defered Income Taxes (Parenthetical) (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Tax Assets Liabilities Net [Line Items] | ||
Unrecognized tax benefits | $ 35 | $ 26 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) ₪ in Millions, $ in Millions | Jan. 01, 2017 | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($)yrEmployee | Dec. 31, 2018ILS (₪)yrEmployee | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Income Tax [Line Items] | |||||||||||||
Balance of accrued potential penalties and interest in unrecognized tax benefits | $ 131 | $ 112 | $ 131 | $ 112 | $ 83 | ||||||||
Unrecognized Tax Benefits Income Tax Penalties And Interest Expense | $ 19 | $ 29 | $ 18 | ||||||||||
Statutory tax rate in Israel | 23.00% | 23.00% | 24.00% | 25.00% | |||||||||
Annual revenue | 4,559 | $ 4,529 | $ 4,701 | $ 5,065 | $ 5,398 | $ 5,617 | $ 5,720 | $ 5,650 | $ 18,854 | $ 22,385 | $ 21,903 | ||
Effective income tax rate | 21.00% | 21.00% | 35.00% | ||||||||||
Tax benefit related to Tax Cuts And Jobs Act | $ 1,200 | ||||||||||||
Provisional estimate for one-time deemed repatriation tax liability | $ 97 | $ 112 | |||||||||||
Israel Tax Authority [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Income tax audit period | 2008 2009 2010 2011 | 2008 2009 2010 2011 | |||||||||||
Withholding tax percentage on dividends | 8.00% | ||||||||||||
Israel Tax Authority [Member] | Tax Year 2005 To 2007 [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Income tax settlement amount | $ 213 | ||||||||||||
Tax Carryforwards And Deductions Expiration Period One [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Tax effect of unspecified carryforward losses and deductions | 206 | 206 | |||||||||||
Tax Carryforwards And Deductions Expiration Period Two [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Tax effect of unspecified carryforward losses and deductions | 448 | 448 | |||||||||||
Tax Carryforwards And Deductions No Expiration [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Tax effect of unspecified carryforward losses and deductions | 280 | 280 | |||||||||||
Tax Carryforwards And Deductions Indefinite [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Tax effect of unspecified carryforward losses and deductions | 441 | 441 | |||||||||||
Amendment 69 to Investment Law [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Payment of corporate tax | 577 | ||||||||||||
Exempt Income | 9,400 | ||||||||||||
Amendment 68 to Investment Law [Member] | Israel Tax Authority [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Statutory tax rate in Israel | 16.00% | ||||||||||||
Amendment 68 to Investment Law [Member] | Israel Tax Authority [Member] | Development Zonea [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Statutory tax rate in Israel | 9.00% | ||||||||||||
Amendment 73 to Investment Law [Member] | Israel Tax Authority [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Statutory tax rate in Israel | 6.00% | ||||||||||||
Amendment 73 to Investment Law [Member] | Israel Tax Authority [Member] | Development Zonea [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Statutory tax rate in Israel | 7.50% | ||||||||||||
Preferred Enterprise [Member] | Israel Tax Authority [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Withholding tax percentage on dividends | 20.00% | ||||||||||||
Preferred Enterprise [Member] | Israel Tax Authority [Member] | Development Zonea [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Withholding tax percentage on dividends | 5.00% | ||||||||||||
Preferred Technological Enterprises [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Venture capital investment | $ 2 | $ 2 | |||||||||||
Average growth rate in sales or workforce | 25.00% | 25.00% | |||||||||||
Average growth preceding period in sales or workforce | yr | 3 | 3 | |||||||||||
Preferred Technological Enterprises [Member] | Research and Development Arrangement [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Minimum percentage of investment income | 7.00% | 7.00% | |||||||||||
Minimum investment income | ₪ 75 | $ 19 | |||||||||||
Minimum percentage of workforce | 20.00% | 20.00% | |||||||||||
Minimum number of employees employed | Employee | 200 | 200 | |||||||||||
Preferred Technological Enterprises [Member] | Israel Tax Authority [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Statutory tax rate in Israel | 12.00% | 12.00% | |||||||||||
Preferred Technological Enterprises [Member] | Israel Tax Authority [Member] | Development Zonea [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Statutory tax rate in Israel | 7.50% | 7.50% | |||||||||||
Special Preferred Technological Enterprise [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Annual revenue | $ 2,800 | ₪ 10,000 | |||||||||||
Special Preferred Technological Enterprise [Member] | Israel Tax Authority [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Statutory tax rate in Israel | 6.00% | 6.00% | |||||||||||
Withholding tax percentage on dividends | 4.00% | 4.00% | |||||||||||
Minimum [Member] | Tax Carryforwards And Deductions Expiration Period One [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Expiration period | Jan. 1, 2019 | Jan. 1, 2019 | |||||||||||
Minimum [Member] | Tax Carryforwards And Deductions Expiration Period Two [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Expiration period | Jan. 1, 2022 | Jan. 1, 2022 | |||||||||||
Minimum [Member] | Tax Carryforwards And Deductions No Expiration [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Expiration period | Jan. 1, 2029 | Jan. 1, 2029 | |||||||||||
Maximum [Member] | Tax Carryforwards And Deductions Expiration Period One [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Expiration period | Dec. 31, 2021 | Dec. 31, 2021 | |||||||||||
Maximum [Member] | Tax Carryforwards And Deductions Expiration Period Two [Member] | |||||||||||||
Income Tax [Line Items] | |||||||||||||
Expiration period | Dec. 31, 2028 | Dec. 31, 2028 |
Income Taxes - Schedule of De_3
Income Taxes - Schedule of Deferred Tax Assets and Liabilities By Report Caption (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Tax Assets Liabilities Net [Line Items] | ||
Long-term assets-deferred income taxes | $ 368 | $ 574 |
Long-term liabilities-deferred income taxes | (2,140) | (3,277) |
Deferred tax assets liabilities net | $ (1,772) | $ (2,703) |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule Of Unrecognized Tax Benefits [Line Items] | |||
Balance at the beginning of the year | $ 1,034 | $ 734 | $ 648 |
Increase (decrease) related to prior year tax positions, net | 76 | 56 | 23 |
Increase related to current year tax positions | 11 | 26 | 71 |
Decrease related to settlements with tax authorities and lapse of applicable statutes of limitations | (49) | (56) | (103) |
Liabilities assumed in acquisitions | 273 | 101 | |
Other | 1 | (6) | |
Balance at the end of the year | $ 1,072 | $ 1,034 | $ 734 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Jul. 31, 2016 | |
Derivative [Line Items] | |||||||
Revenues other than USD | 48.00% | ||||||
Teva other comprehensive loss | $ 493 | ||||||
Transactions termination loss settled | 242 | ||||||
Forward starting interest rate swaps and treasury lock agreements losses | (28) | $ (27) | $ (12) | ||||
Settlement gain position | $ 41 | ||||||
Interest rate swap gain | 6 | 7 | 2 | ||||
Gain from currency swap | 31 | ||||||
Deferred purchase asset | 231 | 261 | |||||
Sold receivables | 686 | 799 | 621 | ||||
Senior Notes Due 2023 Two [Member] | |||||||
Derivative [Line Items] | |||||||
Notional amount hedge debt | $ 500 | ||||||
Previously hedge debt rate | 2.80% | ||||||
Foreign Exchange Contract [Member] | Financial Expenses Net [Member] | |||||||
Derivative [Line Items] | |||||||
Gain (loss) recognized in earnings for the period on derivative contracts | 12 | (82) | $ (7) | ||||
Interest Rate and Cross Currency Swap [Member] | Financial Expenses Net [Member] | |||||||
Derivative [Line Items] | |||||||
Gain (loss) recognized in earnings for the period on derivative contracts | $ 2 | $ 6 | $ 15 | ||||
Senior Notes Due 2022 [Member] | |||||||
Derivative [Line Items] | |||||||
Notional amount hedge debt | $ 500 | $ 500 | $ 844 | ||||
Previously hedge debt rate | 2.95% | ||||||
Asset Derivatives - Options and Forward Contracts [Member] | Cash Flow Hedge [Member] | |||||||
Derivative [Line Items] | |||||||
Notional amount hedge debt | $ 3,750 | ||||||
Treasury Lock [Member] | Cash Flow Hedge [Member] | |||||||
Derivative [Line Items] | |||||||
Notional amount hedge debt | $ 1,500 | ||||||
Senior Notes Due 2021 [Member] | |||||||
Derivative [Line Items] | |||||||
Notional amount hedge debt | $ 450 | ||||||
Previously hedge debt rate | 3.65% |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Summary of Notional Amounts for Hedged Items, Designated as Hedge Accounting (Detail) - Designated as Hedging Instrument [Member] - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Liabilities Derivatives - Interest Rate and Cross Currency Swaps [Member] | Cash Flow Hedge [Member] | ||
Derivative [Line Items] | ||
Notional amounts of hedge | $ 588 | $ 588 |
Liabilities Derivatives - Interest Rate and Cross Currency Swaps [Member] | Net Investment Hedge [Member] | ||
Derivative [Line Items] | ||
Notional amounts of hedge | 1,000 | 1,000 |
Asset Derivatives - Options and Forward Contracts [Member] | Fair Value Hedge [Member] | ||
Derivative [Line Items] | ||
Notional amounts of hedge | $ 500 | $ 500 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Summary of Classification and Fair Values of Derivative Instruments (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Designated as Hedging Instrument [Member] | Swap [Member] | Accounts Payable [Member] | Cash Flow Hedge [Member] | ||
Derivative [Line Items] | ||
Asset derivatives | $ 58 | $ 25 |
Designated as Hedging Instrument [Member] | Swap [Member] | Other Current Liabilities [Member] | Fair Value Hedge [Member] | ||
Derivative [Line Items] | ||
Liability derivatives | (9) | (2) |
Designated as Hedging Instrument [Member] | Liabilities Derivatives - Interest Rate and Cross Currency Swaps [Member] | Accounts Payable [Member] | ||
Derivative [Line Items] | ||
Liability derivatives | (41) | (96) |
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | Other Non-current Assets [Member] | ||
Derivative [Line Items] | ||
Asset derivatives | 18 | 17 |
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contract [Member] | Accounts Payable [Member] | ||
Derivative [Line Items] | ||
Liability derivatives | $ (26) | $ (15) |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities - Summary of Sold Receivables Outstanding Balance Net of DPP Asset under Outstanding Securitization Program (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative [Line Items] | ||
Sold receivables at the beginning of the year | $ 799 | $ 621 |
Proceeds from sale of receivables | 5,071 | 4,944 |
Cash collections (remitted to the owner of the receivables) | (5,151) | (4,863) |
Effect of currency exchange rate changes | (33) | 97 |
Sold receivables at the end of the year | $ 686 | $ 799 |
Financial Expenses-Net - Schedu
Financial Expenses-Net - Schedule of Financial Expenses (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Expenses [Line Items] | |||
Venezuela devaluation | $ 0 | $ 42 | $ 746 |
Interest expenses and other bank charges | 920 | 875 | 546 |
Income from investments | (39) | (84) | (51) |
Foreign exchange (gains) losses-net | 13 | 65 | (49) |
Other, net | 65 | (3) | 2 |
Other-than-temporary impairment | 0 | 136 | |
Total finance expense-net | $ 959 | $ 895 | $ 1,330 |
Financial Expenses-Net - Sche_2
Financial Expenses-Net - Schedule of Financial Expenses (Parenthetical) (Detail) $ in Millions | Dec. 31, 2018USD ($) |
Expenses [Line Items] | |
Payment for redemption of senior notes | $ 46 |
Other Assets Impairments, Res_3
Other Assets Impairments, Restructuring and Other Items - Schedule of Other Assets Impairments, Restructuring and Other Items (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring and Impairment Costs [Line Items] | |||
Impairment of long-lived tangible assets | $ 500 | $ 544 | $ 157 |
Contingent consideration | 57 | 154 | 83 |
Acquisition, integration and related costs | 13 | 105 | 261 |
Restructuring | 488 | 535 | 245 |
Venezuela deconsolidation charge | 396 | ||
Other | (71) | 102 | 84 |
Total | $ 987 | $ 1,836 | $ 830 |
Other Assets Impairments, Res_4
Other Assets Impairments, Restructuring and Other Items - Additional Information (Detail) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)Positions | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Restructuring and Impairment Costs [Line Items] | |||
Impairments of property, plant and equipment | $ 500 | $ 544 | $ 157 |
Business combination contingent consideration arrangements change in amount of contingent consideration liability | 57 | 154 | 83 |
Restructuring costs | $ 488 | $ 535 | $ 245 |
Number of positions eliminated | Positions | 10,300 | ||
Expected revenue from Florida manufacturing plant in 2019 | $ 255 | ||
Recall and inventory reserves cost | 51 | ||
India [Member] | |||
Restructuring and Impairment Costs [Line Items] | |||
Impairments of property, plant and equipment | 64 | ||
Property, Plant and Equipment [Member] | |||
Restructuring and Impairment Costs [Line Items] | |||
Impairments of property, plant and equipment | 245 | ||
Property, Plant and Equipment [Member] | Japan [Member] | |||
Restructuring and Impairment Costs [Line Items] | |||
Impairments of property, plant and equipment | 180 | ||
Property, Plant and Equipment [Member] | China [Member] | |||
Restructuring and Impairment Costs [Line Items] | |||
Impairments of property, plant and equipment | 28 | ||
Restructuring Cost [Member] | |||
Restructuring and Impairment Costs [Line Items] | |||
Impairments of property, plant and equipment | 155 | ||
Restructuring Cost [Member] | Israel [Member] | |||
Restructuring and Impairment Costs [Line Items] | |||
Impairments of property, plant and equipment | 113 | ||
Restructuring Cost [Member] | Headquarters and Distribution Sites Consolidation in US [Member] | |||
Restructuring and Impairment Costs [Line Items] | |||
Impairments of property, plant and equipment | 42 | ||
Expenses Related to Bendeka [Member] | |||
Restructuring and Impairment Costs [Line Items] | |||
Business combination contingent consideration arrangements change in amount of contingent consideration liability | $ 40 |
Other Assets Impairments, Res_5
Other Assets Impairments, Restructuring and Other Items - Summary of Restructuring Plan Including Costs Related to Exit and Disposal (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 488 | $ 535 | $ 245 |
Employee Termination [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 410 | 443 | 211 |
Other [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 78 | $ 92 | $ 34 |
Other Assets Impairments, Res_6
Other Assets Impairments, Restructuring and Other Items - Summary of Restructuring Accruals (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||
Beginning balance | $ (311) | $ (153) |
Provision | (488) | (535) |
Utilization and other | 566 | 377 |
Ending balance | (233) | (311) |
Employee Termination [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Beginning balance | (294) | (144) |
Provision | (410) | (443) |
Utilization and other | 500 | 293 |
Ending balance | (204) | (294) |
Other Exit and Disposal [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Beginning balance | (17) | (9) |
Provision | (78) | (92) |
Utilization and other | 66 | 84 |
Ending balance | $ (29) | $ (17) |
Legal Settlements and Loss Co_2
Legal Settlements and Loss Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Loss Contingencies [Line Items] | |||
Legal settlements and loss contingencies, expenses | $ 1,208 | $ 500 | $ 899 |
Accrued amount for legal settlements and loss contingencies | $ 562 | $ 1,232 |
Segments - Additional Informati
Segments - Additional Information (Detail) - Segment | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | 3 | 2 | |
Israel [Member] | Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 5.00% | 5.00% | 5.00% |
Segments - Summary of Segment P
Segments - Summary of Segment Profit (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Revenues | $ 4,559 | $ 4,529 | $ 4,701 | $ 5,065 | $ 5,398 | $ 5,617 | $ 5,720 | $ 5,650 | $ 18,854 | $ 22,385 | $ 21,903 |
Gross profit | $ 1,971 | $ 1,977 | $ 2,033 | $ 2,315 | $ 2,444 | $ 2,599 | $ 2,802 | $ 2,770 | 8,296 | 10,615 | 11,653 |
R&D expenses | 1,213 | 1,778 | 2,077 | ||||||||
S&M expenses | 2,916 | 3,395 | 3,583 | ||||||||
G&A expenses | 1,298 | 1,451 | 1,390 | ||||||||
Operating (loss) income | (1,637) | (17,484) | 2,154 | ||||||||
North America [Member] | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Revenues | 9,297 | 12,141 | 11,778 | ||||||||
Gross profit | 4,979 | 7,322 | 8,404 | ||||||||
R&D expenses | 713 | 969 | 1,040 | ||||||||
S&M expenses | 1,154 | 1,288 | 1,362 | ||||||||
G&A expenses | 484 | 533 | 496 | ||||||||
Other income (loss) | (209) | (92) | (30) | ||||||||
Operating (loss) income | 2,837 | 4,624 | 5,536 | ||||||||
Europe [Member] | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Revenues | 5,186 | 5,466 | 4,969 | ||||||||
Gross profit | 2,884 | 2,887 | 2,685 | ||||||||
R&D expenses | 283 | 390 | 383 | ||||||||
S&M expenses | 1,003 | 1,130 | 1,267 | ||||||||
G&A expenses | 325 | 354 | 377 | ||||||||
Other income (loss) | 0 | (16) | (9) | ||||||||
Operating (loss) income | 1,273 | 1,029 | 667 | ||||||||
International Markets [Member] | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Revenues | 3,005 | 3,395 | 4,015 | ||||||||
Gross profit | 1,254 | 1,433 | 1,811 | ||||||||
R&D expenses | 96 | 154 | 205 | ||||||||
S&M expenses | 518 | 672 | 754 | ||||||||
G&A expenses | 153 | 189 | 226 | ||||||||
Other income (loss) | (11) | (8) | (10) | ||||||||
Operating (loss) income | $ 498 | $ 426 | $ 636 |
Segments - Summary of Profit by
Segments - Summary of Profit by Segments and Reconciliation of Segments Profit to Consolidated Income Before Income Taxes (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Amounts allocated to segments: | |||||
Segment profit | $ (1,637) | $ (17,484) | $ 2,154 | ||
Amounts not allocated to segments: | |||||
Amortization | 1,166 | 1,444 | 993 | ||
Other asset impairments, restructuring and other items | 987 | 1,836 | 830 | ||
Goodwill impairment | $ 11,000 | $ 6,100 | 3,027 | 17,100 | 900 |
Intangible asset impairments | 1,991 | 3,238 | 589 | ||
Gain on divestitures, net of divestitures related costs | (66) | (1,083) | (720) | ||
Inventory step-up | 67 | 383 | |||
Other R&D expenses | 83 | 221 | 426 | ||
Costs related to regulatory actions taken in facilities | 14 | 47 | 153 | ||
Legal settlements and loss contingencies | (1,208) | 500 | 899 | ||
Other unallocated amounts | 366 | 187 | 240 | ||
Consolidated operating income (loss) | (1,637) | (17,484) | 2,154 | ||
Financial expenses, net | 959 | 895 | 1,330 | ||
Consolidated income (loss) before income taxes | (2,596) | (18,379) | 824 | ||
North America [Member] | |||||
Amounts allocated to segments: | |||||
Segment profit | 2,837 | 4,624 | 5,536 | ||
Amounts not allocated to segments: | |||||
Consolidated operating income (loss) | 2,837 | 4,624 | 5,536 | ||
Europe [Member] | |||||
Amounts allocated to segments: | |||||
Segment profit | 1,273 | 1,029 | 667 | ||
Amounts not allocated to segments: | |||||
Consolidated operating income (loss) | 1,273 | 1,029 | 667 | ||
International Markets [Member] | |||||
Amounts allocated to segments: | |||||
Segment profit | 498 | 426 | 636 | ||
Amounts not allocated to segments: | |||||
Consolidated operating income (loss) | 498 | 426 | 636 | ||
Corporate Segment [Member] | |||||
Amounts allocated to segments: | |||||
Segment profit | 4,608 | 6,079 | 6,839 | ||
Amounts not allocated to segments: | |||||
Consolidated operating income (loss) | 4,608 | 6,079 | 6,839 | ||
Other Segments [Member] | |||||
Amounts allocated to segments: | |||||
Segment profit | 115 | (6) | 8 | ||
Amounts not allocated to segments: | |||||
Goodwill impairment | 600 | ||||
Consolidated operating income (loss) | 115 | (6) | 8 | ||
Segments and Other Activities [Member] | |||||
Amounts allocated to segments: | |||||
Segment profit | 4,723 | 6,073 | 6,847 | ||
Amounts not allocated to segments: | |||||
Consolidated operating income (loss) | $ 4,723 | $ 6,073 | $ 6,847 |
Segments - Schedule of Revenues
Segments - Schedule of Revenues by Major Products and Activities (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Product Information [Line Items] | |||||||||||
Revenues | $ 4,559 | $ 4,529 | $ 4,701 | $ 5,065 | $ 5,398 | $ 5,617 | $ 5,720 | $ 5,650 | $ 18,854 | $ 22,385 | $ 21,903 |
North America [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenues | 9,297 | 12,141 | 11,778 | ||||||||
Europe [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenues | 5,186 | 5,466 | 4,969 | ||||||||
International Markets [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenues | 3,005 | 3,395 | 4,015 | ||||||||
Generic products [Member] | North America [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenues | 4,056 | 5,203 | 4,654 | ||||||||
Generic products [Member] | Europe [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenues | 3,593 | 3,471 | 3,155 | ||||||||
Generic products [Member] | International Markets [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenues | 2,022 | 2,370 | 3,129 | ||||||||
COPAXONE [Member] | North America [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenues | 1,759 | 3,116 | 3,543 | ||||||||
COPAXONE [Member] | Europe [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenues | 535 | 595 | 585 | ||||||||
COPAXONE [Member] | International Markets [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenues | 72 | 91 | 95 | ||||||||
BENDEKA and TREANDA [Member] | North America [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenues | 642 | 656 | 661 | ||||||||
ProAir [Member] | North America [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenues | 397 | 501 | 565 | ||||||||
QVAR [Member] | North America [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenues | 182 | 313 | 409 | ||||||||
AUSTEDO [Member] | North America [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenues | 204 | 24 | |||||||||
Distribution [Member] | International Markets [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenues | 602 | 550 | 458 | ||||||||
Respiratory Product [Member] | Europe [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenues | 402 | 368 | 239 | ||||||||
Anda [Member] | North America [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenues | 1,347 | 1,153 | 301 | ||||||||
Other Products [Member] | North America [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenues | 710 | 1,175 | 1,645 | ||||||||
Other Products [Member] | Europe [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenues | 656 | 1,032 | 990 | ||||||||
Other Products [Member] | International Markets [Member] | |||||||||||
Product Information [Line Items] | |||||||||||
Revenues | $ 309 | $ 384 | $ 333 |
Segments - Schedule of Sales Pe
Segments - Schedule of Sales Percentage by Therapeutic Category (Detail) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
McKesson Corporation [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Third party net sales present | 12.00% | 16.00% | 15.00% |
AmerisourceBergen Corporation [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Third party net sales present | 14.00% | 15.00% | 19.00% |
Segments - Schedule of Net Sale
Segments - Schedule of Net Sales by Product Line - Schedule of Property, Plant and Equipment by Geographic Location (Detail) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | $ 6,868 | $ 7,673 |
Israel [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 1,987 | 2,180 |
United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 950 | 1,109 |
Croatia [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 538 | 561 |
Germany [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 518 | 423 |
Japan [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 188 | 376 |
Hungary [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 343 | 368 |
Other [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | 1,992 | 2,309 |
Czech republic [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment, net | $ 352 | $ 347 |
Earnings (Loss) per Share - Sch
Earnings (Loss) per Share - Schedule of Earnings per Share (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Net income (loss) used for the computation of diluted earnings per share | $ (2,399) | $ (16,525) | $ 68 |
Weighted average number of shares used in the computation of basic earnings per share | 1,021 | 1,016 | 955 |
Additional shares from the assumed exercise of employee stock options and unvested RSUs | 3 | ||
Weighted average number of additional shares issued upon the assumed conversion of convertible senior debentures | 3 | ||
Weighted average number of shares used in the computation of diluted earnings per share | 1,021 | 1,016 | 961 |
Earnings (Loss) per Share - Add
Earnings (Loss) per Share - Additional Information (Detail) - shares shares in Millions | Dec. 31, 2018 | Dec. 17, 2018 | Dec. 31, 2018 | Dec. 17, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Convertible preferred stock terms of conversion | 1 mandatory convertible preferred share to 16 ADSs, and all of the accumulated and unpaid dividends on the mandatory convertible preferred shares were paid in ADSs, at a ratio of 3.0262 | |||||
Ordinary shares issued upon mandatory conversion of preferred shares | 70.6 | 70.6 | ||||
Stock Option Restricted Stock Units And Performance Stock Units [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Weighted average shares with anti-dilutive effect on earnings per share | 51 | 38 | ||||
Convertible Preferred Stock [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Weighted average shares with anti-dilutive effect on earnings per share | 74 | 59 | 59 | |||
Restricted Stock Units (RSUs) [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Weighted average shares with anti-dilutive effect on earnings per share | 4 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) - Selected Quarterly Financial Data (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Selected Quarterly Financial Information [Line Items] | |||||||||||
Net revenues | $ 4,559 | $ 4,529 | $ 4,701 | $ 5,065 | $ 5,398 | $ 5,617 | $ 5,720 | $ 5,650 | $ 18,854 | $ 22,385 | $ 21,903 |
Gross profit | 1,971 | 1,977 | 2,033 | 2,315 | 2,444 | 2,599 | 2,802 | 2,770 | 8,296 | 10,615 | 11,653 |
Net income (loss) | (3,243) | (197) | (166) | 1,134 | (11,730) | 610 | (5,970) | 641 | (2,472) | (16,449) | 311 |
Net income (loss) attributable to Teva | (2,886) | (208) | (176) | 1,120 | (11,535) | 595 | (5,970) | 645 | (2,150) | (16,265) | 329 |
Net income (loss) attributable to ordinary shareholders | $ (2,940) | $ (273) | $ (241) | $ 1,055 | $ (11,600) | $ 530 | $ (6,035) | $ 580 | $ (2,399) | $ (16,525) | $ 68 |
Earnings per share attributable to ordinary shareholders: | |||||||||||
Basic | $ (2.85) | $ (0.27) | $ (0.24) | $ 1.04 | $ (11.41) | $ 0.52 | $ (5.94) | $ 0.57 | $ (2.35) | $ (16.26) | $ 0.07 |
Diluted | $ (2.85) | $ (0.27) | $ (0.24) | $ 1.03 | $ (11.41) | $ 0.52 | $ (5.94) | $ 0.57 | $ (2.35) | $ (16.26) | $ 0.07 |
Selected Quarterly Financial _4
Selected Quarterly Financial Data (Unaudited) - Selected Quarterly Financial Data (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Selected Quarterly Financial Information [Line Items] | |||||
Goodwill impairment | $ 11,000 | $ 6,100 | $ 3,027 | $ 17,100 | $ 900 |
Selected Quarterly Financial _5
Selected Quarterly Financial Data (Unaudited) - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effect of Fourth Quarter Events [Line Items] | |||||||||||
Royalty payments | $ 536 | $ 956 | $ 814 | ||||||||
Cost Of Goods Sold [Member] | |||||||||||
Effect of Fourth Quarter Events [Line Items] | |||||||||||
Royalty payments | $ 33 | $ 28 | $ 44 | $ 37 | $ 69 | $ 53 | $ 51 | $ 37 | |||
Selling and Marketing Expenses [Member] | |||||||||||
Effect of Fourth Quarter Events [Line Items] | |||||||||||
Royalty payments | $ 33 | $ 28 | $ 44 | $ 37 | $ 69 | $ 53 | $ 51 | $ 37 |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of period | $ 8,077 | ||
Deductions | (20,480) | ||
Balance at end of period | 6,886 | $ 8,077 | |
Allowance For Doubtful Accounts [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of period | 232 | 191 | $ 146 |
Charged to costs and expenses | 13 | 12 | 5 |
Charged to other accounts | (9) | 51 | 61 |
Deductions | (4) | (22) | (21) |
Balance at end of period | 232 | 232 | 191 |
Valuation Allowance in Tax Carryforward Losses And Deductions [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of period | 1,504 | 1,690 | 760 |
Charged to costs and expenses | 407 | 173 | 135 |
Charged to other accounts | 5 | 390 | 1,137 |
Deductions | (283) | (749) | (342) |
Balance at end of period | $ 1,633 | $ 1,504 | $ 1,690 |