Teva Pharma Q2: $16M Hedge Gain, Allergan Contingent Consideration Revised

TL;DR

Teva snagged $16M from a hedge termination, but watch out for Allergan deal adjustments.

AI Summary

Teva Pharmaceutical Industries Ltd. reported its Q2 2024 results, noting a revision in prior period presentation. A significant event was the termination of a cross-currency interest rate swap agreement on March 31, 2023, which generated $16 million in cash proceeds in Q1 2024. The company also addressed revisions related to contingent consideration for the Allergan acquisition.

Why It Matters

The $16 million gain from the terminated hedge impacts Teva's short-term cash flow. Revisions to contingent consideration for past acquisitions like Allergan can affect future liabilities and profitability.

Risk Assessment

Risk Level: medium — The company is dealing with revisions to contingent consideration and past hedging activities, which can introduce financial complexities and potential future liabilities.

Key Numbers

• $16 million — Cash Proceeds (Generated from the termination of a cross-currency interest rate swap agreement in Q1 2024.)

Key Players & Entities

• TEVA PHARMACEUTICAL INDUSTRIES LTD (company) — Filer
• Teva (company) — Company Name
• $16 million (dollar_amount) — Cash proceeds from hedge termination
• Allergan (company) — Acquisition context for contingent consideration

FAQ

Filing Documents

• d674405d10q.htm (10-Q) — 2824KB
• d674405dex102.htm (EX-10.2) — 19KB
• d674405dex311.htm (EX-31.1) — 10KB
• d674405dex312.htm (EX-31.2) — 10KB
• d674405dex32.htm (EX-32) — 4KB
• 0001193125-24-189924.txt ( ) — 13535KB
• teva-20240630.xsd (EX-101.SCH) — 91KB
• teva-20240630_cal.xml (EX-101.CAL) — 50KB
• teva-20240630_def.xml (EX-101.DEF) — 596KB
• teva-20240630_lab.xml (EX-101.LAB) — 615KB
• teva-20240630_pre.xml (EX-101.PRE) — 626KB
• d674405d10q_htm.xml (XML) — 2962KB

Financial Statements (unaudited)

Financial Statements (unaudited) Item 1.

Financial Statements (unaudited)

Financial Statements (unaudited) Consolidated Balance Sheets 5 Consolidated Statements of Income (loss) 6 Consolidated Statements of Comprehensive Income (loss) 7 Consolidated statements of changes in equity 8 Consolidated Statements of Cash Flows 10

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 11 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 54 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 82 Item 4.

Controls and Procedures

Controls and Procedures 82 PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 84 Item 1A.

Risk Factors

Risk Factors 84 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 84 Item 3. Defaults Upon Senior Securities 84 Item 4. Mine Safety Disclosures 84 Item 5. Other Information 84 Item 6. Exhibits 85

Signatures

Signatures 86 Table of Contents TEVA PHARMACEUTICAL INDUSTRIES LIMITED INTRODUCTION AND USE OF CERTAIN TERMS Unless otherwise indicated, all references to the "Company," "we," "our" and "Teva" refer to Teva Pharmaceutical Industries Limited and its subsidiaries, and references to "revenues" refer to net revenues. References to "U.S. dollars," "dollars," "U.S.

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION ITEM1. FINANCIAL STATEMENTS TEVA PHARMACEUTICAL INDUSTRIES LIMITED CONSOLIDATED BALANCE SHEETS (U.S. dollars in millions, except for share data) (Unaudited) June 30, December 31, 2024 2023 ASSETS Current assets: Cash and cash equivalents $ 2,258 $ 3,226 Accounts receivables, net of allowance for credit losses of $ 95 million as of June 30, 2024 and as of December 31, 2023. 3,766 3,408 Inventories 3,927 4,021 Prepaid expenses 1,096 1,255 Other current assets 517 504 Assets held for sale 69 70 Total current assets 11,632 12,485 Deferred income taxes 2,000 1,812 Other non-current assets 434 470 Property, plant and equipment, net 5,573 5,750 Operating lease right-of-use assets, net 358 397 Identifiable intangible assets, net 4,853 5,387 Goodwill 16,488 17,177 Total assets $ 41,338 $ 43,479 LIABILITIES AND EQUITY Current liabilities: Short-term debt $ 2,094 $ 1,672 Sales reserves and allowances 3,700 3,535 Accounts payables 2,366 2,602 Employee-related obligations 492 611 Accrued expenses 2,840 2,771 Other current liabilities 1,191 1,044 Liabilities held for sale 356 13 Total current liabilities 13,037 12,247 Long-term liabilities: Deferred income taxes 553 606 Other taxes and long-term liabilities 4,356 4,019 Senior notes and loans 16,547 18,161 Operating lease liabilities 281 320 Total long-term liabilities 21,737 23,106 Commitments and contingencies , see note 10 Total liabilities 34,774 35,353 Equity: Teva shareholders' equity: Ordinary shares of NIS 0.10 par value per share; June 30, 2024 and December 31, 2023: authorized 2,495 million shares; issued 1,239 million shares and 1,227 million shares, respectively. 58 57 Additional paid-in capital 27,829 27,807 Accumulated deficit ( 14,519 ) ( 13,534 ) Accumulated other comprehensive loss ( 2,881 ) (

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) Note 1 – Basis of presentation: a. Basis of presentation The accompanying unaudited consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements. In the opinion of management, the financial statements reflect all normal and recurring adjustments necessary to fairly state the financial position and results of operations of Teva. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission ("SEC"). The year-end balance sheet data was derived from the audited consolidated financial statements as of December 31, 2023, but not all disclosures required by generally accepted accounting principles in the United States ("U.S. GAAP") are included. In preparing the Company's consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity and disclosure of contingent liabilities and assets 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. In preparing the Company's consolidated financial statements, management also considered the economic implications of inflation expectations on its critical and significant accounting estimates. As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to determining the valuation and recoverability of IPR&D assets, marketed product rights and goodwill, assessing sales reserves and allowances in the United States, uncertain tax positions, valuation allowances and contingencies. These estimates could be impacted by higher cost

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 on a prospective basis, with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures. In November 2023, the FASB issued ASU 2023-07 "Se

View Full Filing

View this 10-Q filing on SEC EDGAR