Teva Pharma Repays Debt, Faces Bond Target Risks

TL;DR

Teva paid off $1.6B in notes, but watch out for those green bond penalties kicking in later.

AI Summary

Teva Pharmaceutical Industries Ltd. filed a 10-Q for the period ending September 30, 2024. In October 2024, Teva repaid $685 million of its 1.13% senior notes due 2024. In April 2024, Teva repaid $956 million of its 6% senior notes due 2024. The company also noted potential interest rate increases and premium payments on its sustainability-linked bonds if certain targets are not met.

Why It Matters

Teva's debt repayment demonstrates financial management, while the sustainability-linked bond clauses highlight potential future cost increases tied to environmental performance.

Risk Assessment

Risk Level: medium — The company faces potential financial penalties on its sustainability-linked bonds if performance targets are not met, alongside ongoing operational risks inherent in the pharmaceutical industry.

Key Numbers

• $1.641B — Total Debt Repaid (Combined repayment of $685M and $956M in senior notes in 2024.)
• 0.100%-0.375% — Potential Interest Rate Increase (On sustainability-linked bonds if targets are missed, starting from May 2026 or September 2026.)
• 0.15%-0.45% — Potential Premium Payment (On sustainability-linked bonds if targets are missed, payable at maturity or redemption after May 2026.)

Key Players & Entities

• TEVA PHARMACEUTICAL INDUSTRIES LTD (company) — Filer
• $685 million (dollar_amount) — Repayment of senior notes
• 1.13% senior notes due 2024 (dollar_amount) — Debt repaid in October 2024
• $956 million (dollar_amount) — Repayment of senior notes
• 6% senior notes due 2024 (dollar_amount) — Debt repaid in April 2024
• September 30, 2024 (date) — Reporting period end date
• October 2024 (date) — Note repayment date
• April 2024 (date) — Note repayment date

FAQ

Filing Documents

• d874174d10q.htm (10-Q) — 2675KB
• d874174dex311.htm (EX-31.1) — 10KB
• d874174dex312.htm (EX-31.2) — 10KB
• d874174dex32.htm (EX-32) — 4KB
• 0001193125-24-252039.txt ( ) — 13413KB
• teva-20240930.xsd (EX-101.SCH) — 98KB
• teva-20240930_cal.xml (EX-101.CAL) — 52KB
• teva-20240930_def.xml (EX-101.DEF) — 623KB
• teva-20240930_lab.xml (EX-101.LAB) — 638KB
• teva-20240930_pre.xml (EX-101.PRE) — 655KB
• d874174d10q_htm.xml (XML) — 2780KB

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 57 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 85 Item 4.

Controls and Procedures

Controls and Procedures 85 PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 87 Item 1A.

Risk Factors

Risk Factors 87 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 87 Item 3. Defaults Upon Senior Securities 87 Item 4. Mine Safety Disclosures 87 Item 5. Other Information 88 Item 6. Exhibits 89

Signatures

Signatures 90 2 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

FINANCIAL STATEMENTS TEVA PHARMACEUTICAL INDUSTRIES LIMITED CONSOLIDATED BALANCE SHEETS (U.S. dollars in millions, except for share data) (Unaudited) September 30, December 31, 2024 2023 ASSETS Current assets: Cash and cash equivalents $ 3,319 $ 3,226 Accounts receivables, net of allowance for credit losses of $ 91 million and $ 95 million as of September 30, 2024 and December 31, 2023 3,462 3,408 Inventories 3,959 4,021 Prepaid expenses 1,127 1,255 Other current assets 445 504 Assets held for sale 2 70 Total current assets 12,314 12,485 Deferred income taxes 2,070 1,812 Other non-current assets 459 470 Property, plant and equipment, net 5,672 5,750 Operating lease right-of-use assets, net 364 397 Identifiable intangible assets, net 4,756 5,387 Goodwill 16,124 17,177 Total assets $ 41,758 $ 43,479 LIABILITIES AND EQUITY Current liabilities: Short-term debt $ 2,580 $ 1,672 Sales reserves and allowances 3,785 3,535 Accounts payables 2,371 2,602 Employee-related obligations 619 611 Accrued expenses 2,984 2,771 Other current liabilities 1,241 1,044 Liabilities held for sale 216 13 Total current liabilities 13,797 12,247 Long-term liabilities: Deferred income taxes 538 606 Other taxes and long-term liabilities 4,344 4,019 Senior notes and loans 16,400 18,161 Operating lease liabilities 295 320 Total long-term liabilities 21,578 23,106 Commitments and contingencies , see note 10 Total liabilities 35,375 35,353 Equity: Teva shareholders' equity: Ordinary shares of NIS 0.10 par value per share; September 30, 2024 and December 31, 2023: authorized 2,495 million shares; issued 1,240 million shares and 1,227 million shares, respectively 58 57 Additional paid-in capital 27,860 27,807 Accumulated deficit ( 14,956 ) ( 13,534 ) Accumulated other comprehensive loss ( 2,769 ) ( 2,697 ) Treasu

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

View Full Filing

View this 10-Q filing on SEC EDGAR