StockSelector.com
  Research, Select, & Monitor Tuesday, November 21, 2017 5:47:07 PM ET  
Trade Ideas The Market Industries Stocks Portfolio

 
Ticker Lookup
Teva Pharmaceutical Industries, Ltd$13.33$.251.91%

  Quote | Ranking | Chart | Valuations | Sentiment | Industry | News | Earnings | Analysts | More...

Your Target?

 Teva Reports Second Quarter 2017 Financial Results
   Thursday, August 03, 2017 6:30:11 AM ET

--GAAP EPS loss of $5.94

--Non-GAAP EPS of $1.02

--2017 business outlook revised to non-GAAP EPS of $4.30 - $4.50

--Teva announces second quarter 2017 dividend of 8.5 cents,down 75% from 34 cents in the first quarter of 2017

Teva Pharmaceutical Industries Ltd. (TEVA, TASE: TEVA ) today reported results for the quarter ended June 30, 2017.

"Second quarter results were lower than we anticipated due to the performance of our U.S. Generics business and the continued deterioration in Venezuela. These factors also led to a lowering of our outlook for the remainder of the year. All of us at Teva understand the frustration and disappointment of our shareholders in light of these results," stated Dr. Yitzhak Peterburg, Interim President and CEO. "In our U.S. Generics business, we experienced accelerated price erosion and decreased volume mainly due to customer consolidation, greater competition as a result of an increase in generic drug approvals by the U.S. FDA, and some new product launches that were either delayed or subjected to more competition."



Dr. Peterburg continued, "Given the current environment, we have had to take swift and decisive actions. We are focused on executing meaningful cost reductions, rationalizing our assets and maximizing their value, actively pursuing divestiture opportunities and strengthening our balance sheet. We will continue to take action to aggressively confront our challenges."

Dr. Peterburg concluded, "The other parts of our business are performing well and in line with our expectations. In our Specialty business, we have achieved several very significant milestones, including the positive phase III results for our anti-CGRP asset fremanuzemab in both chronic and episodic migraine, and the approval and subsequent launch of Austedo(TM) in Huntington Disease and its pending approval in Tardive Dyskinesia. The FDA has also accepted the Biologics License Applications that Teva has submitted for review with its partner, Celltrion, Inc., for biosimilar versions of both Rituxan(R) and Herceptin(R). In our Generics business, our deep R&D capabilities and strong pipeline of new products in the U.S. where we have more than 300 ANDAs under review at the FDA, of which more than 100 are first-to-file, and our broad geographical footprint, will help us weather the current conditions in the U.S. market."

Second Quarter 2017 Results

Revenues in the second quarter of 2017 were $5.7 billion, up 13% compared to the second quarter of 2016, primarily due to the inclusion of the Actavis Generics business, following the closing of the acquisition on August 2, 2016. Excluding the impact of foreign exchange fluctuations, revenues increased 17%.

Exchange rate differences between the second quarter of 2017 and the second quarter of 2016 reduced revenues by $218 million, GAAP operating income by $62 million and non-GAAP operating income by $56 million.

Adjustments of the exchange rates used for the Venezuelan bolivar resulted in a decrease of $183 million in revenues, a decrease of $47 million in GAAP operating income and a decrease of $38 million in non-GAAP operating income, compared to results in the second quarter of 2016. In light of the political and economic conditions in Venezuela, the changes in revenues and operating profit in Venezuela have been excluded from any discussion of currency effects.

GAAP gross profit was $2.8 billion in the second quarter of 2017, down 2% compared to the second quarter of 2016. GAAP gross profit margin was 49.6% in the second quarter of 2017, compared to 57.1% in the second quarter of 2016. Non-GAAP gross profit was $3.2 billion in the second quarter of 2017, up 2% from the second quarter of 2016. Non-GAAP gross profit margin was 56.8% in the second quarter of 2017, compared to 62.5% in the second quarter of 2016. The decrease in gross profit margin, on both a GAAP and a non-GAAP basis, was the result of the addition of the low-margin Anda distribution business, as well as lower margins in our generic medicines business, as well as higher amortization expenses which impacted our GAAP results only.

Research and Development (R&D) expenses for the second quarter of 2017 amounted to $486 million, up 30% compared to the second quarter of 2016, mainly due to the inclusion of R&D expenses for the Actavis Generics business. R&D expenses excluding equity compensation expenses and purchase of in-process R&D in the second quarter of 2017 were $450 million, or 7.9% of quarterly revenues, compared to $370 million, or 7.3%, in the second quarter of 2016. R&D expenses related to our generic medicines segment were $200 million, an increase of 49% compared to $134 million in the second quarter of 2016, mainly due to the inclusion of R&D expenses for the Actavis Generics business. R&D expenses related to our specialty medicines segment were $250 million, an increase of 6% compared to $235 million in the second quarter of 2016, mainly due to increased expenses for the development of late-stage migraine (fremanezumab) and pain (fasinumab) products.

Selling and Marketing (S&M) expenses in the second quarter of 2017 amounted to $960 million, an increase of 1% compared to the second quarter of 2016. S&M expenses excluding amortization of purchased intangible assets and equity compensation expenses were $906 million, or 15.9% of revenues, in the second quarter of 2017, compared to $898 million, or 17.8% of revenues, in the second quarter of 2016. S&M expenses related to our generic medicines segment were $425 million, an increase of 4% compared to $410 million in the second quarter of 2016, mainly due to the inclusion of the S&M expenses of the Actavis Generics business, partially offset by cost reduction and efficiency measures, as well as a decrease of expenses in Venezuela due to exchange rate adjustments. S&M expenses related to our specialty medicines segment were $439 million, down 8% compared to $478 million in the second quarter of 2016, mainly due to cost reduction and efficiency measures in our commercial operations, aligning with the life cycle of our product portfolio.

General and Administrative (G&A) expenses in the second quarter of 2017 amounted to $272 million, compared to $311 million in the second quarter of 2016. The lower G&A expenses in the second quarter of 2017 were mainly due to income from an upfront payment from Otsuka related to the out-license of fremanezumab in Japan, income related to divestiture of products and income from legal settlements, partially offset by the increased expenses related to the Actavis Generics acquisition. G&A expenses excluding equity compensation expenses and income from certain divestments were $274 million in the second quarter of 2017, or 4.8% of quarterly revenues, compared to $299 million, or 5.9% in the second quarter of 2016.

During the second quarter of 2017, Teva identified certain developments in the U.S. market that caused it to revisit management’s assumptions regarding the market dynamics of the U.S. generics unit. Based on the revised discounted cash flows analysis, the Company recorded a goodwill impairment charge of $6.1 billion related to the U.S. generics reporting unit in the second quarter of 2017.

GAAP operating loss in the second quarter of 2017 was $5.7 billion, compared to operating income of $0.4 billion in the second quarter of 2016. Non-GAAP operating income in the second quarter of 2017 was $1.6 billion, up 1% compared to the second quarter of 2016. Non-GAAP operating margin was 28.1% in the second quarter of 2017 compared to 31.4% in the second quarter of 2016.

EBITDA (non-GAAP operating income - which excludes amortization and certain other items - as well as excluding depreciation expenses) was $1.75 billion in the second quarter of 2017, up 3% compared to $1.7 billion in the second quarter of 2016.

GAAP financial expenses for the second quarter of 2017 were $238 million, compared to $105 million in the second quarter of 2016. Non-GAAP financial expenses were $235 million in the second quarter of 2017, compared to $6 million in the second quarter of 2016. The increase in our financial expenses is due mainly to interest expenses related to the debt raised to finance the acquisition of Actavis Generics, which increased by $151 million in the second quarter of 2017, compared to the second quarter of 2016.

GAAP income taxes for the second quarter of 2017 amounted to a benefit of $22 million. In the second quarter of 2016, income taxes amounted to $29 million, or 11% on pre-tax income of $256 million. Non-GAAP income taxes for the second quarter of 2017 amounted to $230 million on pre-tax non-GAAP income of $1.4 billion, for a quarterly tax rate of 17%. Non-GAAP income taxes in the second quarter of 2016 amounted to $333 million on pre-tax non-GAAP income of $1.6 billion, for a quarterly tax rate of 21%.

GAAP net loss attributable to ordinary shareholders and GAAP diluted EPS loss were $6.0 billion and $5.94, respectively, in the second quarter of 2017, compared to net income attributable to ordinary shareholders of $188 million and diluted EPS of $0.20, in the second quarter of 2016. Non-GAAP net income attributable to ordinary shareholders for calculating diluted EPS and non-GAAP diluted EPS were $1.0 billion and $1.02, respectively, in the second quarter of 2017, compared to $1.2 billion and $1.25 in the second quarter of 2016.

For the second quarter of 2017, the weighted average outstanding shares for the fully diluted earnings per share calculation on both a GAAP and a non-GAAP basis was 1,017 million. For the second quarter of 2016, this was 920 million shares on a GAAP basis, and 979 million shares on a non-GAAP basis. For the three months ended June 30, 2017, no account was taken of the potential dilution resulting from the conversion of the mandatory convertible preferred shares amounting to 59.4 million weighted average shares, since they had an anti-dilutive effect on earnings per share.

As of June 30, 2017, the fully diluted share count for calculating Teva’s market capitalization was approximately 1,082 million shares.

Non-GAAP information: Net non-GAAP adjustments in the second quarter of 2017 were $7.1 billion. Non-GAAP net income and non-GAAP EPS for the quarter were adjusted to exclude the following items:

-- A goodwill impairment charge of $6.1 billion related to the U.S. generics reporting unit;

-- Amortization of purchased intangible assets totaling $411 million, of which $367 million is included in cost of goods sold and the remaining $44 million in selling and marketing expenses;

-- Legal settlements and loss contingencies of $324 million;

-- Contingent consideration of $140 million mainly related to Bendeka(R) royalties;

-- Impairment of long-lived assets of $145 million;

-- Restructuring expenses of $98 million, mainly related to the integration of Actavis Generics and other efficiency measures;

-- Equity compensation expenses of $35 million;

-- Acquisition, integration and related expenses of $33 million;

-- Purchase of in-process R&D of $26 million;

-- Costs related to regulatory actions taken in facilities of $15 million;

-- Other non-GAAP items of $15 million;

-- Minority interest adjustment of negative $20 million; and

-- Corresponding tax benefit of $252 million.

Teva believes that excluding such items facilitates investors’ understanding of its business. See the attached tables for a reconciliation of the GAAP results to the adjusted non-GAAP figures. Investors should consider non-GAAP financial measures in addition to, and not as replacement for, or superior to, measures of financial performance prepared in accordance with GAAP.

Cash flow from operations generated during the second quarter of 2017 was $741 million, compared to $963 million in the second quarter of 2016. The decrease was mainly due to a payment of $113 million, made during the quarter, related to the ciprofloxacin settlement, as well as the effect of an $88 million positive impact of inventory balances in the second quarter of 2016, which did not recur in the second quarter of 2017.

Free cash flow, excluding net capital expenditures, was $567 million, compared to $796 million in the second quarter of 2016.

Total balance sheet assets amounted to $86.4 billion as of June 30, 2017, compared to $91.3 billion as of March 31, 2017. The decrease was mainly due to the goodwill impairment charge booked during the quarter.

As of June 30, 2017, our debt was $35.1 billion, compared to $34.6 billion at March 31, 2017. The increase was mainly due to foreign exchange fluctuations of $0.6 billion, partially offset by a repayment in the amount of $0.3 billion of our revolving credit facility and other short term loans. The portion of total debt classified as short-term at June 30, 2017 was 4%.

Total shareholders’ equity was $29.6 billion as of June 30, 2017, compared to $35.7 billion as of March 31, 2017. The decrease was mainly due to $6.0 billion of net loss during the quarter.

Segment Results for the Second Quarter 2017

Beginning in the fourth quarter of 2016, our OTC business, conducted primarily through PGT, is included in our generic medicines segment. This segment also includes chemical and therapeutic equivalents of originator medicines in a variety of dosage forms and our API manufacturing business.

All data presented has been conformed to the new segment structure.

                        
Generic Medicines Segment
                                                                
                                                                                                                                         Three Months Ended June 30,
                                                               ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          2017                                                                  2016
                                                               -----------------------------------------------------------                                          -------------------------------------------------------------------------
                                                                                                                                 U.S. $ in millions / % of Segment Revenues
                                                                                                                                           
Revenues                                                         $ 3,078                                           100.0%                                             $ 2,557                                                         100.0%
Gross profit                                                       1,316                                            42.8%                                               1,148                                                          44.9%
R&D expenses                                                         200                                             6.5%                                                 134                                                           5.3%
S&M expenses                                                         425                                            13.9%                                                 410                                                          16.0%
                                                                   -----                                           ------                                               -----                                           --------------------
Segment profit*                                                  $   691                                            22.4%                                             $   604                                                          23.6%
 
--------------------
                                                                                                                                                                                                                         
* Segment profit consists of gross profit for the segment, less R&D
and S&M expenses related to the segment. Segment profit does not
include G&A expenses, amortization and certain other items.
 

Generic Medicines Revenues

Generic medicines revenues in the second quarter of 2017 were $3.1 billion, an increase of 20% compared to the second quarter of 2016, reflecting the inclusion of the Actavis Generics business.

Generic revenues consisted of:

-- U.S. revenues of $1.3 billion, an increase of 45% compared to the second quarter of 2016, mainly due to the inclusion of Actavis Generics.

-- European revenues of $957 million, an increase of 24%, or 28% in local currency terms, compared to the second quarter of 2016, mainly due to the inclusion of Actavis Generics.

-- ROW revenues of $831 million, a decrease of 7% compared to the second quarter of 2016. In local currency terms, revenues increased 13%, mainly due to the inclusion of Actavis Generics.

-- OTC revenues (which are included in the market revenues above) were $283 million, up 6% compared to $266 million in the second quarter of 2016, mainly due to the inclusion of Actavis Generics, partially offset by lower revenues in Venezuela. In local currency terms, revenues increased 40%. PGT’s in-market sales were $301 million in the second quarter of 2017, down 20% compared to results in the second quarter of 2016.

-- API sales to third parties (which are included in the market revenues above) were $204 million, down 1% compared to the second quarter of 2016.

Generic medicines revenues comprised 54% of our total revenues in the quarter, compared to 51% in the second quarter of 2016.

Generic Medicines Gross Profit

Gross profit of our generic medicines segment in the second quarter of 2017 was $1.3 billion, an increase of 15% compared to the second quarter of 2016. The higher gross profit was mainly a result of the inclusion of Actavis Generics.

Gross profit margin for our generic medicines segment in the second quarter of 2017 decreased to 42.8% from 44.9% in the second quarter of 2016. The decrease in gross profit margin was due to lower profitability in our U.S. and ROW markets, partially offset by improved profitability of our European markets.

Generic Medicines Profit

Our generic medicines segment generated profit of $691 million in the second quarter of 2017, an increase of 14% compared to the second quarter of 2016. Generic medicines profitability as a percentage of generic medicines revenues was 22.4% in the second quarter of 2017, down from 23.6% in the second quarter of 2016.

                        
Specialty Medicines Segment
                                                                
                                                                                                                                  Three Months Ended June 30,
                                                               ----------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          2017                                                           2016
                                                               -----------------------------------------------------------                                          -----------------------------------------------------------
                                                                                                                          U.S. $ in millions / % of Segment Revenues
                                                                                                                                           
Revenues                                                         $ 2,065                                           100.0%                                             $ 2,271                                           100.0%
Gross profit                                                       1,851                                            89.6%                                               1,978                                            87.1%
R&D expenses                                                         250                                            12.1%                                                 235                                            10.4%
S&M expenses                                                         439                                            21.2%                                                 478                                            21.0%
                                                                   -----                                           ------                                               -----                                           ------
Segment profit*                                                  $ 1,162                                            56.3%                                             $ 1,265                                            55.7%
 
--------------------
 
* Segment profit consists of gross profit for the segment, less R&D
and S&M expenses related to the segment. Segment profit does not
include G&A expenses, amortization and certain other items.
 

Specialty Medicines Revenues

Specialty medicines revenues in the second quarter of 2017 were $2.1 billion, down 9% compared to the second quarter of 2016. U.S. specialty medicines revenues were $1.5 billion, down 13% compared to the second quarter of 2016. European specialty medicines revenues were $419 million, an increase of 1%, or 5% in local currency terms, compared to the second quarter of 2016. ROW specialty revenues were $110 million, up 29%, or 33% in local currency terms, compared to the second quarter of 2016.

Specialty medicines revenues comprised 36% of our total revenues in the quarter, compared to 45% in the second quarter of 2016.

The decrease in specialty medicines revenues compared to the second quarter of 2016 was primarily due to lower sales of our CNS and oncology products, partially offset by a payment of $75 million which we received in connection with our agreement to sell our royalties and other rights in Ninlaro(R) (ixazomib) to a subsidiary of Takeda.

The following table presents revenues by therapeutic area and key products for our specialty medicines segment for the three months ended June 30, 2017 and 2016:

                                                                                                                                                                  
                                                                                                                                            Three Months Ended                                                                                        Change
                                                                                                                                                 June 30,
                                                                                                     ------------------------------------------------------------------------------------------
                                                                                                                2017                           2016                                                               2017 - 2016
                                                                                                     ---------------------------                                          ---------------------------                                          --------------------
                                                                                                                                            U.S. $ in millions
CNS                                                                                                                     $ 1,158                                                              $ 1,415                                                          (18%)
   Copaxone(R)                                                                                             1,023                                                                1,141                                                          (10%)
   Azilect(R)                                                                                                 34                                                                  108                                                          (69%)
   Nuvigil(R)                                                                                                 14                                                                   51                                                          (73%)
Respiratory                                                                                                                 322                                                                  313                                                             3%
   ProAir(R)                                                                                                 123                                                                  135                                                           (9%)
   QVAR(R)                                                                                                   107                                                                  116                                                           (8%)
Oncology                                                                                                                    280                                                                  334                                                          (16%)
   Treanda(R) and Bendeka(R)                                                                  163                                                                  207                                                          (21%)
Women’s Health                                                                                                              115                                                                  117                                                           (2%)
Other Specialty*                                                                                         190                                                92                                                           107%
                                                                                                     -------------------- -----                                           -------------------- -----
   Total Specialty Medicines                                                                                            $ 2,065                                                              $ 2,271                                                           (9%)
                                                                                                                                                                                                                                                
* Includes a $75 million payment related to the Ninlaro(R)
transaction in the second quarter of 2017.
 

Global revenues of Copaxone(R) (20 mg/mL and 40 mg/mL), the leading multiple sclerosis therapy in the U.S. and globally, were $1.0 billion, a decrease of 10% compared to the second quarter of 2016.

Copaxone(R) revenues in the United States, were $843 million, a decrease of 12% compared to the second quarter of 2016, mainly due to lower volumes of Copaxone(R) 20 mg/mL as well as negative net pricing effects despite a price increase of 7.9% for both Copaxone(R) products in January 2017. At the end of the second quarter of 2017, according to June 2017 IMS data, our U.S. market shares for the Copaxone(R) products in terms of new and total prescriptions were 26.5% and 28.8%, respectively. Copaxone(R) 40 mg/mL accounted for over 85% of total Copaxone(R) prescriptions in the U.S.

Copaxone(R) revenues outside the United States were $180 million, down 3%, compared to the second quarter of 2016. Over 75% of European Copaxone(R) prescriptions are now filled with the 40 mg/mL version.

Our global Azilect(R) revenues were $34 million, a decrease of 69% compared to the second quarter of 2016 following the introduction of generic competition to Azilect(R) in the United States in 2017.

Revenues of our respiratory products were $322 million, up 3% compared to the second quarter of 2016, mainly due to the launches of Braltus(R) and Cinqair(R)/Cinqaero(R). ProAir(R) revenues in the second quarter of 2017 were $123 million, down 9% compared to the second quarter of 2016, mainly due to higher positive net pricing effects in the second quarter of 2016, partially offset by higher volumes. QVAR(R) global revenues were $107 million in the second quarter of 2017, down 8% compared to the second quarter of 2016, primarily due to negative net pricing effects, partially offset by higher volumes.

Revenues of our oncology products were $280 million in the second quarter of 2017, down 16% compared to the second quarter of 2016. Combined revenues of Treanda(R) and Bendeka(R) were $163 million, down 21% compared to the second quarter of 2016, mainly due to higher volumes sold in the second quarter of 2016 as part of the launch promotion activities for Bendeka(R).

Specialty Medicines Gross Profit

Gross profit of our specialty medicines segment was $1.9 billion, a decrease of $127 million compared to the second quarter of 2016, mainly due to the decrease in revenues of our specialty medicines. Gross profit margin for our specialty medicines segment in the second quarter of 2017 was 89.6%, compared to 87.1% in the second quarter of 2016. The improvement in profitability is mainly due to the finalization of an ongoing vendor dispute which reduced cost of goods sold in the quarter.

Specialty Medicines Profit

Our specialty medicines segment profit was $1.2 billion in the second quarter of 2017, down 8% compared to the second quarter of 2016.

Specialty medicines profit as a percentage of segment revenues was 56.3% in the second quarter of 2017, compared to 55.7% in the second quarter of 2016.

The following tables present details of our multiple sclerosis franchise and of our other specialty medicines for the three months ended June 30, 2017 and 2016:

                          
                                                                                                                                                                Multiple Sclerosis
                                                                 ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                            Three months ended June 30,
                                                                 ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     2017                                                                                   2016
                                                                 ----------------------------------------------------------------------------                                          ------------------------------------------------------------------------------------------
                                                                                                                                                       U.S.$ in millions / % of MS Revenues
                                                                                                                                                                               
Revenues                                                                            $ 1,023                                           100.0%                                                              $ 1,141                                                         100.0%
Gross profit                                                                            937                                            91.6%                                                                1,029                                                          90.2%
R&D expenses                                                                             20                                             2.0%                                                                   20                                                           1.8%
S&M expenses                                                          92       9.0%                                                81                     7.1%
                                                                 -------------------- ----- -------------------- -------------------- ------                                           -------------------- ----- -------------------- -------------------- --------------------
MS profit                                                                           $   825      80.6%                                                              $   928                    81.3%
                                                                 ==================== ===== ==================== ==================== ======                                           ==================== ===== ==================== ==================== ====================
                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                             
                                                                                                                                                                  Other Specialty
                                                                 ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                            Three months ended June 30,
                                                                 ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     2017                                                                                                                         2016
                                                                 ----------------------------------------------------------------------------                                          ------------------------------------------------------------------------------------------
                                                                                                                                                 U.S.$ in millions / % of Other Specialty Revenues
                                                                                                                                                                                                                                                             
Revenues                                                                            $ 1,042                                           100.0%                                                              $ 1,130                                                         100.0%
Gross profit                                                                            914                                            87.7%                                                                  949                                                          84.0%
R&D expenses                                                                            230                                            22.1%                                                                  215                                                          19.0%
S&M expenses                                                         347      33.3%                                               397                    35.2%
                                                                 -------------------- ----- -------------------- -------------------- ------                                           -------------------- ----- -------------------- -------------------- --------------------
Other Specialty profit                                                              $   337      32.3%                                                              $   337                    29.8%
                                                                 ==================== ===== ==================== ==================== ======                                           ==================== ===== ==================== ==================== ====================
                                                                                                                                                                                                                                                             

Other Activities

Other revenues (primarily sales of third-party products for which we act as distributor, mostly in the United States via Anda, contract manufacturing services related to products divested in connection with the Actavis Generics acquisition and other miscellaneous items) were $543 million in the second quarter of 2017, compared to $210 million, in the second quarter of 2016. The increase was mainly related to the inclusion of Anda’s revenues beginning in the fourth quarter of 2016.

Revenues from these other activities comprised 10% of our total revenues in the quarter, compared to 4% in the second quarter of 2016.

Outlook for 2017 Non-GAAP Results

We have lowered our outlook for 2017 Non-GAAP results to revenues of $22.8 - $23.2 billion, from a previously expected range of $23.8 - $24.5 billion. Non-GAAP EPS for 2017 is now expected to be $4.30 - $4.50, based on a weighted average number of shares of 1,076 million, down from a previously expected range of $4.90 - $5.30.

This adjusted outlook takes into consideration the impact of increased price erosion in our U.S. Generics business, which is expected to be in a high single digits rate through the remainder of the year, and delays in generic launches in the U.S. Lastly, this outlook reflects the continued deterioration of political and economic conditions in Venezuela.

The revised guidance ranges assume no generic competition to Copaxone(R) 40mg in the United Stated in 2017.

                                                       
billions, except EPS                                                 2017 Business Outlook                                           Updated 2017 Business Outlook
                                                                         January 2017                                                         August 2017
Net revenues                                                              23.8 - 24.5                                                         22.8 - 23.2
Gross profit (%)                                                           57% - 58%                                                           56% - 57%
R&D                                                                       1.75 - 1.85                                                          1.6 - 1.7
S&M                                                                       3.4 - 3.55                                                          3.45 - 3.55
G&A                                                                        1.0 - 1.1                                                           1.1 - 1.2
Operating income ($B)                                                      7.4 - 7.8                                                           6.6 - 6.8
EBITDA                                                                     8.0 - 8.4                                                           7.2 - 7.4
Finance expenses                                                          0.8 - 0.85                                                           0.8 - 0.9
Tax (%)                                                                    17% - 18%                                                         16.5 - 17.5%
Number of shares (M)                                                         1,076                                                              1,076*
EPS                                                                       4.90 - 5.30                                                         4.30 - 4.50
                                                                                                                                     
Cash flow from operations                                                  5.7 - 6.1                                                           4.4 - 4.6
                                                                                                                                     
* If annual EPS is below $4.37, the mandatory convertible preferred
shares will be anti-dilutive and the number of shares will be 1,017
with no impact on guided EPS of $4.30-$4.50.
 

These estimates reflect management’s current expectations for Teva’s performance in 2017. Actual results may vary, whether as a result of exchange rate differences, market conditions or other factors. In addition, the non-GAAP measures exclude the amortization of purchased intangible assets, costs related to certain regulatory actions, inventory step-up, legal settlements and reserves, impairments and related tax effects.

Dividends

On July 31, 2017, the Board of Directors declared a cash dividend of $0.085 per ordinary share for the second quarter of 2017. For holders of our ordinary shares that are traded on the Tel Aviv Stock Exchange, the dividend will be converted into new Israeli shekels based on the official exchange rate as of August 3, 2017. The record date will be August 29, 2017, and the payment date will be September 14, 2017. Tax will be withheld at a rate of 15%.

On July 31, 2017, the Board of Directors also declared a cash dividend of $17.50 per Mandatory Convertible Preferred Share for the second quarter of 2017. The record date will be September 1, 2017 and the payment date will be September 15, 2017. Tax will be withheld at a rate of 15%.

Conference Call

Teva will host a conference call and live webcast along with a slide presentation on Thursday, August 3, 2017 at 7:30 a.m. ET to discuss its second quarter 2017 results and overall business environment. A question & answer session will follow.

In order to participate, please dial the following numbers (at least 10 minutes before the scheduled start time): United States 1-866-869-2321; Canada 1-866-766-8269 or International +44(0) 203 0095710; passcode: 52029560. For a list of other international toll-free numbers, click here.

A live webcast of the call will also be available on Teva’s website at: www.ir.tevapharm.com. Please log in at least 10 minutes prior to the conference call in order to download the applicable audio software.

Following the conclusion of the call, a replay of the webcast will be available within 24 hours on the Company’s website. The replay can be accessed until September 3, 2017, 9:00 a.m. ET by calling United States 1-866-247-4222; Canada 1-866-878-9237 or International +44(0) 1452550000; passcode: 52029560.

About Teva

Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions used by approximately 200 million patients in 100 markets every day. Headquartered in Israel, Teva is the world’s largest generic medicines producer, leveraging its portfolio of more than 1,800 molecules to produce a wide range of generic products in nearly every therapeutic area. In specialty medicines, Teva has the world-leading innovative treatment for multiple sclerosis as well as late-stage development programs for other disorders of the central nervous system, including movement disorders, migraine, pain and neurodegenerative conditions, as well as a broad portfolio of respiratory products. Teva is leveraging its generics and specialty capabilities in order to seek new ways of addressing unmet patient needs by combining drug development with devices, services and technologies. Teva’s net revenues in 2016 were $21.9 billion. For more information, visit www.tevapharm.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on management’s current beliefs and expectations and are subject to substantial risks and uncertainties, both known and unknown, that could cause our future results, performance or achievements to differ significantly from that expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating to:

-- our generics medicines business, including: that we are substantially more dependent on this business, with its significant attendant risks, following our acquisition of Allergan plc’s worldwide generic pharmaceuticals business ("Actavis Generics"); our ability to realize the anticipated benefits of the acquisition (and any delay in realizing those benefits) or difficulties in integrating Actavis Generics; the increase in the number of competitors targeting generic opportunities and seeking U.S. market exclusivity for generic versions of significant products; price erosion relating to our generic products, both from competing products and as a result of increased governmental pricing pressures; and our ability to take advantage of high-value biosimilar opportunities;

-- our specialty medicines business, including: competition for our specialty products, especially Copaxone(R), our leading medicine, which faces competition from existing and potential additional generic versions and orally-administered alternatives; our ability to achieve expected results from investments in our product pipeline; competition from companies with greater resources and capabilities; and the effectiveness of our patents and other measures to protect our intellectual property rights;

-- our substantially increased indebtedness and significantly decreased cash on hand, which may limit our ability to incur additional indebtedness, engage in additional transactions or make new investments, and may result in a downgrade of our credit ratings;

-- our business and operations in general, including: uncertainties relating to our recent senior management changes; our ability to develop and commercialize additional pharmaceutical products; manufacturing or quality control problems, which may damage our reputation for quality production and require costly remediation; interruptions in our supply chain, including due to labor unrest; disruptions of our or third party information technology systems or breaches of our data security; the failure to recruit or retain key personnel, including those who joined us as part of the Actavis Generics acquisition; the restructuring of our manufacturing network, including potential related labor unrest, including a potential workers’ strike; the impact of continuing consolidation of our distributors and customers; variations in patent laws that may adversely affect our ability to manufacture our products; our ability to consummate dispositions on terms acceptable to us; adverse effects of political or economic instability, major hostilities or terrorism on our significant worldwide operations; and our ability to successfully bid for suitable acquisition targets or licensing opportunities, or to consummate and integrate acquisitions;

-- compliance, regulatory and litigation matters, including: costs and delays resulting from the extensive governmental regulation to which we are subject; the effects of reforms in healthcare regulation and reductions in pharmaceutical pricing, reimbursement and coverage; potential additional adverse consequences following our resolution with the U.S. government of our FCPA investigation; governmental investigations into sales and marketing practices; potential liability for sales of generic products prior to a final resolution of outstanding patent litigation; product liability claims; increased government scrutiny of our patent settlement agreements; failure to comply with complex Medicare and Medicaid reporting and payment obligations; and environmental risks;

-- other financial and economic risks, including: our exposure to currency fluctuations and restrictions as well as credit risks; the significant increase in our intangible assets, which may result in additional substantial impairment charges; potentially significant increases in tax liabilities; and the effect on our overall effective tax rate of the termination or expiration of governmental programs or tax benefits, or of a change in our business;

and other factors discussed in our Annual Report on Form 20-F for the year ended December 31, 2016 ("Annual Report"), including in the section captioned "Risk Factors," and in our other filings with the U.S. Securities and Exchange Commission, which are available at www.sec.gov and www.tevapharm.com. Forward-looking statements speak only as of the date on which they are made, and we assume no obligation to update or revise any forward-looking statements or other information contained herein, whether as a result of new information, future events or otherwise. You are cautioned not to put undue reliance on these forward-looking statements.

                                                                                                                                                                                                                                       
                                                                                                                                                                                                                        Consolidated Statements of Income
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                  (Unaudited, U.S. dollars in millions, except
                                                                                                                                                                                                                            share and per share data)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                Three months ended                                                                                                                                                       Six months ended
                                                                                                                                                                                                                                     June 30,                                                                                                                                                                June 30,
                                                                                                                                                                          ------------------------------------------------------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                             2017                                                                                2016                                                                                2017                                                                                2016
                                                                                                                                                                          ------------------------------------------                                          ------------------------------------------                                          ------------------------------------------                                          ------------------------------------------
Net revenues                                                                                                                                                                             5,686                                                                               5,038                                                                              11,316                                                                               9,848
Cost of sales                                                                                                                                                                            2,865                                                            2,161                                                            5,676                                                            4,180  
                                                                                                                                                                          -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------
Gross profit                                                                                                                                                                             2,821                                                                               2,877                                                                               5,640                                                                               5,668
Research and development expenses                                                                                                                                                          486                                                                                 375                                                                                 943                                                                                 764
Selling and marketing expenses                                                                                                                                                             960                                                                                 952                                                                               1,931                                                                               1,791
General and administrative expenses                                                                                                                                                        272                                                                                 311                                                                                 508                                                                                 615
Impairments, restructuring and others                                                                                                                                                      419                                                                                 712                                                                                 659                                                                                 831
Selling and marketing expenses                                                                                                                                                             324                                                                                 166                                                                                 344                                                                                 141
Goodwill impairment charge                                                                                                                                                               6,100                                                                -                                                            6,100                                                                -  
                                                                                                                                                                          -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------
Operating Income (Loss)                                                                                                                                                                 (5,740 )                                                                               361                                                                              (4,845 )                                                                             1,526
Financial expenses - net                                                                                                                                                      238                                                              105                                                              445                                                              403  
                                                                                                                                                                          -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------
Income (loss) before income taxes                                                                                                                                                       (5,978 )                                                                               256                                                                              (5,290 )                                                                             1,123
Provision for income taxes                                                                                                                                                                 (22 )                                                                                29                                                                                  32                                                                                 257
Share in losses of associated companies- net                                                                                                                                                14                                                              (15 )                                                                                 7                                                               (9 )
                                                                                                                                                                          -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------
Net income (loss)                                                                                                                                                                       (5,970 )                                                                               242                                                                              (5,329 )                                                                               875
Net income attributable to non-controlling interests                                                                                                                                         -                                                              (12 )                                                                                (4 )                                                                               (15 )
                                                                                                                                                                          -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------
Net income (loss) attributable to Teva                                                                                                                                                  (5,970 )                                                                               254                                                           (5,325 )                                                                               890  
                                                                                                                                                                          -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------
Dividends on preferred shares                                                                                                                                                               65                                                               66                                                              130                                                              132  
                                                                                                                                                                          -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------
Net income (loss) attributable to Teva’s ordinary shareholders                                                                                                                          (6,035 )                                                                               188                                                           (5,455 )                                                                               758  
                                                                                                                                                                          ==================== ====================                                           ==================== ====================                                           ==================== ====================                                           ==================== ====================
                                                                                   
---------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Earnings (loss) per share attributable to ordinary shareholders:                                           Basic ($)                                                                     (5.94 )                                                                              0.21                                                            (5.37 )                                                                              0.83  
                                                                                                                                                                          ==================== ====================                                           ==================== ====================                                           ==================== ====================                                           ==================== ====================
                                                                                                           Diluted ($)                                                                   (5.94 )                                                                              0.20                                                            (5.37 )                                                                              0.82  
                                                                                                                                                                          ==================== ====================                                           ==================== ====================                                           ==================== ====================                                           ==================== ====================
Weighted average number of shares (in millions):                                                           Basic                                                                         1,017                                                              914                                                            1,016                                                              914  
                                                                                                                                                                          ==================== ====================                                           ==================== ====================                                           ==================== ====================                                           ==================== ====================
                                                                                                           Diluted                                                                       1,017                                                              920                                                            1,016                                                              922  
                                                                                                                                                                          ==================== ====================                                           ==================== ====================                                           ==================== ====================                                           ==================== ====================
                                                                                   
---------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                   
---------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Non-GAAP net income attributable to ordinary shareholders:*                                                                                                                              1,035                                                            1,162                                                            2,114                                                            2,268  
                                                                                                                                                                          ==================== ====================                                           ==================== ====================                                           ==================== ====================                                           ==================== ====================
Non-GAAP net income attributable to ordinary shareholders for                                                                                                                            1,035                                                            1,228                                                            2,114                                                            2,400  
diluted earnings per share:**
                                                                                                                                                                          ==================== ====================                                           ==================== ====================                                           ==================== ====================                                           ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                            
Non-GAAP earnings per share attributable to ordinary                                                       Basic ($)                                                                      1.02                                                             1.27                                                             2.08                                                             2.48  
shareholders:*
                                                                                                                                                                          ==================== ====================                                           ==================== ====================                                           ==================== ====================                                           ==================== ====================
                                                                                                           Diluted ($)**                                                                  1.02                                                             1.25                                                             2.08                                                             2.45  
                                                                                                                                                                          ==================== ====================                                           ==================== ====================                                           ==================== ====================                                           ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                            
Non-GAAP average number of shares (in millions):                                                           Basic                                                                         1,017                                                              914                                                            1,016                                                              914  
                                                                                                                                                                          ==================== ====================                                           ==================== ====================                                           ==================== ====================                                           ==================== ====================
                                                                                                           Diluted                                                                       1,017                                                              979                                                            1,017                                                              981  
                                                                                                                                                                          ==================== ====================                                           ==================== ====================                                           ==================== ====================                                           ==================== ====================
                                                                                   
---------------------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
* See reconciliation attached.
**Dividends on the mandatory convertible preferred shares of $132
and $66 million for the six months and the three months ended June
30, 2016, respectively, are added back to non-GAAP net income
attributable to ordinary shareholders, since such preferred shares
had a dilutive effect on non-GAAP earnings per share.
 
                                                        
                                                                 Condensed Consolidated Balance Sheets
----------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      (U.S. dollars in millions)
----------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              (Unaudited)
----------------------------------------------------------------------------------------------------------------------------------------------------------------
 
                                                                                                           
                                                                                               June 30,                                               December 31,
                                                                                                 2017                                                     2016
                                                                                               --------                                           --------------------
ASSETS
----------------------------------------------------
Current assets:
Cash and cash equivalents                                                                           599                                                            988
Trade receivables                                                                                 7,320                                                          7,523
Inventories                                                                                       5,132                                                          4,954
Prepaid expenses                                                                                    871                                                          1,362
Other current assets                                                                                652                                                          1,293
Assets held for sale                                                                                 21                                                            841
                                                                                               --------                                           --------------------
Total current assets                                                                             14,595                                                         16,961
Deferred income taxes                                                                               773                                                            725
Other non-current assets                                                                          1,245                                                          1,235
Property, plant and equipment, net                                                                8,043                                                          8,073
Identifiable intangible assets, net                                                              21,664                                                         21,487
Goodwill                                                                                         40,035                                                         44,409
                                                                                               --------                                           --------------------
Total assets                                                                                     86,355                                                         92,890
                                                                                               ========                                           ====================
                                                                                                                                                   
LIABILITIES AND EQUITY
----------------------------------------------------
Current liabilities:
Short-term debt                                                                                   1,246                                                          3,276
Sales reserves and allowances                                                                     7,565                                                          7,839
Trade payables                                                                                    2,278                                                          2,157
Employee-related obligations                                                                        712                                                            859
Accrued expenses                                                                                  2,758                                                          3,405
Other current liabilities                                                                           898                                                            867
Liabilities held for sale                                                                             -                                                            116
                                                                                               --------                                           --------------------
Total current liabilities                                                                        15,457                                                         18,519
                                                                                                                                                   
Long-term liabilities:
Deferred income taxes                                                                             5,446                                                          5,215
Other taxes and long-term liabilities                                                             2,038                                                          1,639
Senior notes and loans                                                                           33,806                                                         32,524
                                                                                               --------                                           --------------------
Total long-term liabilities                                                                      41,290                                                         39,378
Equity:
Teva shareholders’ equity                                             27,994                                                         33,337
Non-controlling interests                                                                         1,614                                                          1,656
                                                                                               --------                                           --------------------
Total equity                                                                                     29,608                                                         34,993
                                                                                               --------                                           --------------------
Total liabilities and equity                                                                     86,355                                                         92,890
                                                                                               ========                                           ====================
                                                                                                                                                   
 
                                                                                                                                                                                      Condensed Consolidated Cash Flow
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                    (Unaudited, U.S. Dollars in millions)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
                                                                                                                                                                                                         
                                                                                                                                                            Three months ended                                                                                                                                                       Six months ended
                                                                                                                                                                 June 30,                                                                                                                                                                June 30,
                                                                                                      ------------------------------------------------------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------------------------------------------------------
                                                                                                                         2017                                                                                2016                                                                                2017                                                                                2016
                                                                                                      ------------------------------------------                                          ------------------------------------------                                          ------------------------------------------                                          ------------------------------------------
Operating activities:
     Net income                                                                                                     (5,970 )                                                                               242                                                                              (5,329 )                                                                               875
     Net change in operating assets and liabilities                                                                   (248 )                                                                              (144 )                                                                              (711 )                                                                                45
     Items not involving cash flow                                                                                   6,959                                                                                 865                                                                               7,251                                                                               1,419
                                                                                                                                                                                                                                                   
                                                                                                      -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------
Net cash provided by operating activities                                                                              741                                                                                 963                                                                               1,211                                                                               2,339
                                                                                                                                                                                                                                                                                                                                                                                        
Net cash provided by (used in) investing activities                                                                   (392 )                                                                              (225 )                                                                               790                                                                              (2,642 )
                                                                                                                                                                                                                                                                                                                                                                                        
Net cash provided by (used in) financing activities                                                                   (651 )                                                                               279                                                                              (2,419 )                                                                               546
                                                                                                                                                                                                                                                                                                                                                                                        
Translation adjustment on cash and cash equivalents                                                                      1                                                                                   3                                                                                  29                                                                                (205 )
                                                                                                                                                                                                                                                   
                                                                                                      -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------
Net change in cash and cash equivalents                                                                               (301 )                                                                             1,020                                                                                (389 )                                                                                38
                                                                                                                                                                                                                                                                                                                                                                                        
Balance of cash and cash equivalents at beginning of period                                                            900                                                                               5,964                                                                                 988                                                                               6,946
                                                                                                                                                                                                                                                   
                                                                                                      -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------                                           -------------------- --------------------
Balance of cash and cash equivalents at end of period                                                                  599                                                            6,984                                                              599                                                            6,984  
                                                                                                      ==================== ====================                                           ==================== ====================                                           ==================== ====================                                           ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                    
                                                                                                                             Non GAAP reconciliation items
                                                                                                                         (Unaudited, U.S. Dollars in millions)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                   
                                                                                                                       Three Months Ended                                                                                               Six Months Ended
                                                                                                                            June 30,                                                                                                        June 30,
                                                                                                  -------------------------------------------------------                                                ------------------------------------------------------------------------
                                                                                                     2017                                               2016                                                2017                                                        2016
                                                                                                  ----------                                          ---------                                          ----------                                          --------------------------
                                                                                                                       U.S. $ in millions                                                                                              U.S. $ in millions
                                                                                                                                                                                                                                                                   
Amortization of purchased intangible assets                                                         411                                                193                                                 731                                                382
Restructuring expenses                                                                               98                                                 20                                                 228                                                 39
Inventory step-up                                                                                     3                                                 85                                                  67                                                 91
Equity compensation expenses                                                                         35                                                 28                                                  71                                                 52
Costs related to regulatory actions taken in facilities                                              15                                                 39                                                  49                                                 77
Acquisition, integration and related expenses                                                        33                                                 62                                                  56                                                 99
In Process Research and Development                                                                  26                                                  -                                                  26                                                 10
Contingent consideration                                                                            140                                                  -                                                 161                                                 51
Legal settlements and loss contingencies                                                            324                                                166                                                 344                                                141
Goodwill impairment charge                                                                        6,100                                                  -                                               6,100                                                  -
Impairment of long-lived assets                                                                     145                                                572                                                 156                                                585
Other non-GAAP items                                                                                  9                                                 57                                                  76                                                 59
Financial expense (income)                                                                            3                                                 99                                                 (25 )                                              345
Minority interest                                                                                   (20 )                                              (43 )                                               (33 )                                              (43 )
Corresponding tax benefit                                                                          (252 )                                             (304 )                                              (438 )                                             (378 )
                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                      Three Months Ended June 30, 2017                                                                                                                                                                                                                                                                            Three Months Ended June 30, 2016
                                                                                                                                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                             U.S. dollars and shares in millions (except per share amounts)
                                                                                                                                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                           GAAP                                                              Non-GAAP                                                             Dividends                                            Non-GAAP                                            % of Net                                            GAAP                                                            Non-GAAP                                                             Dividends                                            Non-GAAP                                                    % of Net
                                                                                                                                                                                                            Adjustments                                                         on Preferred                                                                                               Revenues                                                                                                           Adjustments                                                         on Preferred                                                                                                       Revenues
                                                                                                                                                                                                                                                                                   Shares                                                                                                                                                                                                                                                                                            Shares
                                                                                                                                        --------                                            ----------------------------------------                                            ------------                                           --------                                           --------                                            -----                                           ----------------------------------------                                            ------------                                           --------                                           ------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                         Gross profit (1)                                                                                                2,821                                                               406                                                                                                                          3,227                                             57 %                                              2,877                                                            273                                                                                                                          3,150                                             63 %
                         Operating income (loss) (1)(2)                                                                                 (5,740 )                                                           7,337                                                                                                                          1,597                                             28 %                                                361                                                          1,222                                                                                                                          1,583                                             31 %
                         Net income (loss) attributable to ordinary shareholders (1)(2)(3)(4)                                           (6,035 )                                                           7,070                                                                                                                          1,035                                             18 %                                                188                                                            974                                                                          66                                              1,228                                             24 %
                         Earnings (loss) per share attributable to ordinary shareholders -                                               (5.94 )                                                            6.96                                                                                                                           1.02                                                                                                0.20                                                           1.05                                                                                                                           1.25
                         diluted (5)
                          
                         --------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
(1)                      Amortization of purchased intangible assets                                                                                                                                         367                                                                                                                                                                                                                                                                                               146
                         Inventory step up                                                                                                                                                                     3                                                                                                                                                                                                                                                                                                85
                         Costs related to regulatory actions taken in facilities                                                                                                                              15                                                                                                                                                                                                                                                                                                39
                         Equity compensation expenses                                                                                                                                                          7                                                                                                                                                                                                                                                                                                 3
                         Other COGS related adjustments                                                                                                                                                       14                                                                                                                                                                                                                                                                              -  
                                                                                                                                                                                            -------------------- --------------------                                                                                                                                                                                                                                                         -------------------- --------------------
                         Gross profit adjustments                                                                                                                                                            406                                                                                                                                                                                                                                                                                               273
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
(2)                      Restructuring expenses                                                                                                                                                               98                                                                                                                                                                                                                                                                                                20
                         Amortization of purchased intangible assets                                                                                                                                          44                                                                                                                                                                                                                                                                                                47
                         Equity compensation expenses                                                                                                                                                         28                                                                                                                                                                                                                                                                                                25
                         Acquisition, Integration and related expenses                                                                                                                                        33                                                                                                                                                                                                                                                                                                62
                         In process research and development                                                                                                                                                  26                                                                                                                                                                                                                                                                                                 -
                         Contingent consideration                                                                                                                                                            140                                                                                                                                                                                                                                                                                                 -
                         Legal settlements and loss contingencies                                                                                                                                            324                                                                                                                                                                                                                                                                                               166
                         Goodwill impairment charge                                                                                                                                                        6,100                                                                                                                                                                                                                                                                                                 -
                         Impairment of long-lived assets                                                                                                                                                     145                                                                                                                                                                                                                                                                                               572
                         Other operating related adjustments                                                                                                                                                  (7 )                                                                                                                                                                                                                                                                                              57  
                                                                                                                                                                                            -------------------- --------------------                                                                                                                                                                                                                                                         -------------------- --------------------
                                                                                                                                                                                                           6,931                                                                                                                                                                                                                                                                                               949
                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                            -------------------- --------------------                                                                                                                                                                                                                                                         -------------------- --------------------
                         Operating income adjustments                                                                                                                                                      7,337                                                                                                                                                                                                                                                                          1,222  
                                                                                                                                                                                            -------------------- --------------------                                                                                                                                                                                                                                                         -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
(3)                      Financial expense (income)                                                                                                                                                            3                                                                                                                                                                                                                                                                                                99
                         Tax effect                                                                                                                                                                         (252 )                                                                                                                                                                                                                                                                                            (304 )
                         Impairment of equity investment--net                                                                                                                                      2                                                                                                                                                                                                                                                                                                 -
                         Minority interest                                                                                                                                                                   (20 )                                                                                                                                                                                                                                                                                             (43 )
                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                            -------------------- --------------------                                                                                                                                                                                                                                                         -------------------- --------------------
                         Net income adjustments                                                                                                                                                            7,070                                                                                                                                                                                                                                                                            974  
                                                                                                                                                                                            ==================== ====================                                                                                                                                                                                                                                                         ==================== ====================
                          
(4)   For the three months ended June 30, 2017, no account was taken of
                         the potential dilution of the accrued dividend to preferred shares
                         amounting to $65 million, since it had an anti-dilutive effect on
                         loss per share. Dividends on the mandatory convertible preferred
                         shares of $66 million for the three months ended June 30, 2016, are
                         added back to non-GAAP net income attributable to ordinary
                         shareholders, since such preferred shares had a dilutive effect on
                         non-GAAP earnings per share.
                          
(5)                      The non-GAAP weighted average number of shares was 1,017 and 979
                         million for the three months ended June 30, 2017 and 2016,
                         respectively. The non-GAAP weighted average number of shares for the
                         three months ended June 30, 2017 does not take into account the
                         potential dilution of the mandatory convertible preferred shares
                         (amounting to 59.4 million weighted average shares), which have an
                         anti dilutive effect on non-GAAP earnings per share. Non-GAAP
                         earnings per share can be reconciled with GAAP earnings per share by
                         dividing each of the amounts included in footnotes 1-4 above by the
                         applicable weighted average share number.
                          
                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                       Six Months Ended June 30, 2017                                                                                                                                                                                                                                                                              Six Months Ended June 30, 2016
                                                                                                                                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                             U.S. dollars and shares in millions (except per share amounts)
                                                                                                                                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                           GAAP                                                              Non-GAAP                                                           Dividends on                                           Non-GAAP                                            % of Net                                            GAAP                                                            Non-GAAP                                                           Dividends on                                           Non-GAAP                                                    % of Net
                                                                                                                                                                                                            Adjustments                                                           Preferred                                                                                                Revenues                                                                                                           Adjustments                                                           Preferred                                                                                                        Revenues
                                                                                                                                                                                                                                                                                   Shares                                                                                                                                                                                                                                                                                            Shares
                                                                                                                                        --------                                            ----------------------------------------                                            ------------                                           --------                                           --------                                            -----                                           ----------------------------------------                                            ------------                                           --------                                           ------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                         Gross profit (1)                                                                                                5,640                                                               783                                                                                                                          6,423                                             57 %                                              5,668                                                            498                                                                                                                          6,166                                             63 %
                         Operating income (loss) (1)(2)                                                                                 (4,845 )                                                           8,063                                                                                                                          3,218                                             28 %                                              1,526                                                          1,583                                                                                                                          3,109                                             32 %
                         Net income (loss) attributable to ordinary shareholders (1)(2)(3)(4)                                           (5,455 )                                                           7,569                                                                                                                          2,114                                             19 %                                                758                                                          1,510                                                                         132                                              2,400                                             24 %
                         Earnings (loss) per share attributable to ordinary shareholders -                                               (5.37 )                                                            7.45                                                                                                                           2.08                                                                                                0.82                                                           1.63                                                                                                                           2.45
                         diluted (5)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
                          
                         --------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
(1)                      Amortization of purchased intangible assets                                                                                                                                         634                                                                                                                                                                                                                                                                                               324
                         Inventory step up                                                                                                                                                                    67                                                                                                                                                                                                                                                                                                91
                         Costs related to regulatory actions taken in facilities                                                                                                                              49                                                                                                                                                                                                                                                                                                77
                         Equity compensation expenses                                                                                                                                                         12                                                                                                                                                                                                                                                                                                 6
                         Other COGS related adjustments                                                                                                                                                       21                                                                                                                                                                                                                                                                              -  
                                                                                                                                                                                            -------------------- --------------------                                                                                                                                                                                                                                                         -------------------- --------------------
                         Gross profit adjustments                                                                                                                                                            783                                                                                                                                                                                                                                                                                               498
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
(2)                      Legal settlements and loss contingencies                                                                                                                                            344                                                                                                                                                                                                                                                                                               141
                         Contingent consideration                                                                                                                                                            161                                                                                                                                                                                                                                                                                                51
                         Acquisition and related expenses                                                                                                                                                     56                                                                                                                                                                                                                                                                                                99
                         In process research and development                                                                                                                                                  26                                                                                                                                                                                                                                                                                                10
                         Equity compensation expenses                                                                                                                                                         59                                                                                                                                                                                                                                                                                                46
                         Restructuring expenses                                                                                                                                                              228                                                                                                                                                                                                                                                                                                39
                         Goodwill impairment charge                                                                                                                                                        6,100                                                                                                                                                                                                                                                                                                 -
                         Impairment of long-lived assets                                                                                                                                                     156                                                                                                                                                                                                                                                                                               585
                         Amortization of purchased intangible assets                                                                                                                                          97                                                                                                                                                                                                                                                                                                58
                         Other operating related expenses (income)                                                                                                                                            53                                                                                                                                                                                                                                                                             56  
                                                                                                                                                                                            -------------------- --------------------                                                                                                                                                                                                                                                         -------------------- --------------------
                                                                                                                                                                                                           7,280                                                                                                                                                                                                                                                                                             1,085
                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                            -------------------- --------------------                                                                                                                                                                                                                                                         -------------------- --------------------
                         Operating income adjustments                                                                                                                                                      8,063                                                                                                                                                                                                                                                                          1,583  
                                                                                                                                                                                            -------------------- --------------------                                                                                                                                                                                                                                                         -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
(3)                      Financial expense                                                                                                                                                                   (25 )                                                                                                                                                                                                                                                                                             345
                         Tax effect                                                                                                                                                                         (438 )                                                                                                                                                                                                                                                                                            (378 )
                         Impairment of equity investment--net                                                                                                                                      2                                                                                                                                                                                                                                                                                                 3
                         Minority interest                                                                                                                                                                   (33 )                                                                                                                                                                                                                                                                                             (43 )
                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                            -------------------- --------------------                                                                                                                                                                                                                                                         -------------------- --------------------
                         Net income adjustments                                                                                                                                                            7,569                                                                                                                                                                                                                                                                          1,510  
                                                                                                                                                                                            ==================== ====================                                                                                                                                                                                                                                                         ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
(4)   For the six months ended June 30, 2017, no account was taken of the
                         potential dilution of the accrued dividend to preferred shares
                         amounting to $130 million, since it had an anti-dilutive effect on
                         loss per share. Dividends on the mandatory convertible preferred
                         shares of $132 million for the six months ended June 30, 2016 are
                         added back to non-GAAP net income attributable to ordinary
                         shareholders, since such preferred shares had a dilutive effect on
                         non-GAAP earnings per share.
                          
(5)                      The non-GAAP weighted average number of shares was 1,017 and 981
                         million for the six months ended June 30, 2017 and 2016,
                         respectively. The non-GAAP weighted average number of shares for the
                         six months ended June 30, 2017 does not take into account the
                         potential dilution of the mandatory convertible preferred shares
                         (amounting to 59.4 million weighted average shares), which have an
                         anti dilutive effect on non-GAAP earnings per share. Non-GAAP
                         earnings per share can be reconciled with GAAP earnings per share by
                         dividing each of the amounts included in footnotes 1-4 above by the
                         applicable weighted average share number.
                          
                                                                                                           
                                                                                                                                                           Segment Information
                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                             Generics
                                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                Three months ended June 30,                                                                                                                                      Percentage Change
                                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ------------------------------
                                                                                               2017                                                                                                                    2016                                                                                         2017 - 2016
                                                          ------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------                                          ------------------------------
                                                                                                                                         U.S.$ in millions / % of Segment Revenues
                                                                                                                                                                                                                                                                                                                    
Revenues                                                                     $ 3,078                                           100.0 %                                                               $ 2,557                                           100.0 %                                                  20 %
Gross Profit                                                                   1,316                                            42.8 %                                                                 1,148                                            44.9 %                                                  15 %
R&D Expenses                                                                     200                                             6.5 %                                                                   134                                             5.3 %                                                  49 %
S&M Expenses                                                  425      13.9 %                                                410      16.0 %                                                   4 %
                                                          -------------------- ----- -------------------- -------------------- ----- --                                           -------------------- ----- -------------------- -------------------- ----- --
Segment Profit*                                                              $   691      22.4 %                                                               $   604      23.6 %                                                  14 %
                                                          ==================== ===== ==================== ==================== ===== ==                                           ==================== ===== ==================== ==================== ===== ==
                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                             Specialty
                                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                Three months ended June 30,                                                                                                                                      Percentage Change
                                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ------------------------------
                                                                                               2017                                                                                                                    2016                                                                                         2017 - 2016
                                                          ------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------                                          ------------------------------
                                                                                                                                         U.S.$ in millions / % of Segment Revenues
                                                                                                                                                                                                                                                                                                                    
Revenues                                                                     $ 2,065                                           100.0 %                                                               $ 2,271                                           100.0 %                                                  (9 %)
Gross Profit                                                                   1,851                                            89.6 %                                                                 1,978                                            87.1 %                                                  (6 %)
R&D Expenses                                                                     250                                            12.1 %                                                                   235                                            10.4 %                                                   6 %
S&M Expenses                                                  439      21.2 %                                                478      21.0 %                                                  (8 %)
                                                          -------------------- ----- -------------------- -------------------- ----- --                                           -------------------- ----- -------------------- -------------------- ----- --
Segment Profit*                                                              $ 1,162      56.3 %                                                               $ 1,265      55.7 %                                                  (8 %)
                                                          ==================== ===== ==================== ==================== ===== ==                                           ==================== ===== ==================== ==================== ===== ==
                                                                                                                                                                                                                                                                                                                    
* Segment profit consists of gross profit for the segment, less R&D
and S&M expenses related to the segment. Segment profit does not
include G&A expenses, amortization and certain other items.
Beginning in the fourth quarter of 2016, our OTC business is
included in our generics medicines segment. The data presented have
been conformed to reflect these changes for all relevant periods.
 
 
                                                                                                                                                           Segment Information
 
                                                                                                                                                       Generics
                                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                 Six months ended June 30,                                                                                                 Percentage Change
                                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ------------------------------
                                                                                               2017                                                                              2016                                                                                         2017 - 2016
                                                          ------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------                                          ------------------------------
                                                                                                                                         U.S.$ in millions / % of Segment Revenues
                                                                                                                                                                          
Revenues                                                                     $ 6,136                                           100.0 %                                                               $ 5,015                                           100.0 %                                                  22 %
Gross Profit                                                                   2,686                                            43.8 %                                                                 2,271                                            45.3 %                                                  18 %
R&D Expenses                                                                     391                                             6.4 %                                                                   263                                             5.2 %                                                  49 %
S&M Expenses                                                  825      13.4 %                                                755      15.1 %                                                   9 %
                                                          -------------------- ----- -------------------- -------------------- ----- --                                           -------------------- ----- -------------------- -------------------- ----- --
Segment Profit*                                                              $ 1,470      24.0 %                                                               $ 1,253      25.0 %                                                  17 %
                                                          ==================== ===== ==================== ==================== ===== ==                                           ==================== ===== ==================== ==================== ===== ==
                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                             Specialty
                                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                 Six months ended June 30,                                                                                                                                       Percentage Change
                                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ------------------------------
                                                                                               2017                                                                                                                    2016                                                                                         2017 - 2016
                                                          ------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------                                          ------------------------------
                                                                                                                                         U.S.$ in millions / % of Segment Revenues
                                                                                                                                                                                                                                                                                                                    
Revenues                                                                     $ 4,085                                           100.0 %                                                               $ 4,423                                           100.0 %                                                  (8 %)
Gross Profit                                                                   3,605                                            88.2 %                                                                 3,849                                            87.0 %                                                  (6 %)
R&D Expenses                                                                     505                                            12.3 %                                                                   474                                            10.7 %                                                   7 %
S&M Expenses                                                  900      22.0 %                                                935      21.1 %                                                  (4 %)
                                                          -------------------- ----- -------------------- -------------------- ----- --                                           -------------------- ----- -------------------- -------------------- ----- --
Segment Profit*                                                              $ 2,200      53.9 %                                                               $ 2,440      55.2 %                                                 (10 %)
                                                          ==================== ===== ==================== ==================== ===== ==                                           ==================== ===== ==================== ==================== ===== ==
                                                                                                                                                                                                                                                                                                                    
* Segment profit consists of gross profit for the segment, less R&D
and S&M expenses related to the segment. Segment profit does not
include G&A expenses, amortization and certain other items.
Beginning in the fourth quarter of 2016, our OTC business is
included in our generics medicines segment. The data presented have
been conformed to reflect these changes for all relevant periods.
 
 
                                                                                                              Additional information
                                                                                                         
                                                                                                      Multiple Sclerosis
                                                                                                  Three months ended June 30,                                                                                         Percentage Change
                                           -----------------------------------------------------------------------------------------------------------------------------------------                     ------------------------------------------
                                                                      2017                                                                           2016                                                                2017 - 2016
                                           ----------------------------------------------------------                     ----------------------------------------------------------                     ------------------------------------------
                                                                                          U.S. $ in millions / % of Segment Revenues
                                                                                                                                                                                                          
Revenues                                                      $ 1,023                      100.0 %                                           $ 1,141                      100.0 %                                         (10 %)
Gross profit                                                      937                       91.6 %                                             1,029                       90.2 %                                          (9 %)
R&D expenses                                                       20                        2.0 %                                                20                        1.8 %                                           0 %
S&M expenses                                    92     9.0 %                             81     7.1 %                                          14 %
                                           -------------------- ----- -------------------- ----- ---                      -------------------- ----- -------------------- ----- ---
Segment profitability                                         $   825    80.6 %                                           $   928    81.3 %                                         (11 %)
                                           ==================== ===== ==================== ===== ===                      ==================== ===== ==================== ===== ===
                                                                                                                                                                                                                               
                                                                                                                                                                                                                               
                                                                                                        Other Specialty
                                           -----------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  Three months ended June 30,                                                                                         Percentage Change
                                           -----------------------------------------------------------------------------------------------------------------------------------------                     ------------------------------------------
                                                                      2017                                                                           2016                                                                2017 - 2016
                                           ----------------------------------------------------------                     ----------------------------------------------------------                     ------------------------------------------
                                                                                          U.S. $ in millions / % of Segment Revenues
                                                                                                                                                                                                          
Revenues                                                      $ 1,042                      100.0 %                                           $ 1,130                      100.0 %                                          (8 %)
Gross profit                                                      914                       87.7 %                                               949                       84.0 %                                          (4 %)
R&D expenses                                                      230                       22.1 %                                               215                       19.0 %                                           7 %
S&M expenses                                   347    33.3 %                            397    35.2 %                                         (13 %)
                                           -------------------- ----- -------------------- ----- ---                      -------------------- ----- -------------------- ----- ---
Segment profitability                                         $   337    32.3 %                                           $   337    29.8 %                         
                                           ==================== ===== ==================== ===== ===                      ==================== ===== ==================== ===== ===
                                                                                                                                                                                                                               
Less than 0.5%.
                                                                                                                                                                                                                               
 
                                                                                                           Additional information
                                                                                                            
                                                                                                                                   Multiple Sclerosis
                                            ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Six months ended June 30,                                                                                      Percentage Change
                                            -------------------------------------------------------------------------------------------------------------------------------------------                     --------------------------------
                                                                       2017                                                                            2016                                                            2017 - 2016
                                            -----------------------------------------------------------                     -----------------------------------------------------------                     --------------------------------
                                                                                               U.S. $ in millions / % of MS Revenues
                                                                                                                                                                                                             
Revenues                                                       $ 1,993                      100.0 %                                            $ 2,147                      100.0 %                                 (7 %)
Gross profit                                                     1,825                       91.6 %                                              1,948                       90.7 %                                 (6 %)
R&D expenses                                                        42                        2.1 %                                                 45                        2.1 %                                 (7 %)
S&M expenses                                    216    10.9 %                             170     7.9 %                                 27 %
                                            -------------------- ----- -------------------- ----- ----                      -------------------- ----- -------------------- ----- ----
MS profit                                                      $ 1,567    78.6 %                                            $ 1,733    80.7 %                                (10 %)
                                            ==================== ===== ==================== ===== ====                      ==================== ===== ==================== ===== ====
                                                                                                                                                                                                             
                                                                                                                                                                                                             
                                                                                                                                     Other Specialty
                                            ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Six months ended June 30,                                                                                      Percentage Change
                                            -------------------------------------------------------------------------------------------------------------------------------------------                     --------------------------------
                                                                       2017                                                                            2016                                                            2017 - 2016
                                            -----------------------------------------------------------                     -----------------------------------------------------------                     --------------------------------
                                                                                        U.S. $ in millions / % of Other Specialty Revenues
                                                                                                                                                                                                             
Revenues                                                       $ 2,092                      100.0 %                                            $ 2,276                      100.0 %                                 (8 %)
Gross profit                                                     1,780                       85.1 %                                              1,901                       83.5 %                                 (6 %)
R&D expenses                                                       463                       22.1 %                                                429                       18.8 %                                  8 %
S&M expenses                                    684    32.7 %                             765    33.6 %                                (11 %)
                                            -------------------- ----- -------------------- ----- ----                      -------------------- ----- -------------------- ----- ----
Other Specialty profit                                         $   633    30.3 %                                            $   707    31.1 %                                (10 %)
                                            ==================== ===== ==================== ===== ====                      ==================== ===== ==================== ===== ====
                                                                                                                                                                                                                        
 
                                                                                  Reconciliation of our segment profit
                                                                               to consolidated income before income taxes
                                                                                                                  Three months ended
                                                                                    --------------------------------------------------------------------------------------------------------------------
                                                                                                                                          June 30,
                                                                                    --------------------------------------------------------------------------------------------------------------------
                                                                                                            2017                                              2016
                                                                                    -----------------------------------------------------                     ------------------------------------------
                                                                                                                                                                                    
                                                                                                                                     U.S. $ in millions
                                                                                                                                                                                    
Generic medicines profit                                                                               $        691                                                              $                  604
Specialty medicines profit                                                                 1,162                                         1,265
                                                                                    -------------------- ---------- --------------------                      -------------------- --------------------
Total segment profit                                                                                          1,853                                                                               1,869
Profit of other activities                                                                    18                                            13
                                                                                    -------------------- ---------- --------------------                      -------------------- --------------------
                                                                                                              1,871                                                                               1,882
Amounts not allocated to segments:
       Amortization                                                                                             411                                                                                 193
       General and administrative expenses                                                                      272                                                                                 311
       Goodwill impairment charge                                                                             6,100                                                                                   -
       Impairments, restructuring and others                                                                    419                                                                                 712
       Inventory step-up                                                                                          3                                                                                  85
       Purchase of research and development in process                                                           26                                                                                   -
                                                                                                                 15                                                                                  39
       Costs related to regulatory actions taken in facilities
       Legal settlements and loss contingencies                                                                 324                                                                                 166
       Other unallocated amounts                                                                                 41                                                                                  15
                                                                                                                           
                                                                                    -------------------- --------------------------------                     -------------------- --------------------
Consolidated operating income (loss)                                                      (5,740 )                                                            361
                                                                                    -------------------- ---------- --------------------                      -------------------- --------------------
Financial expenses - net                                                                     238                                           105
                                                                                    -------------------- ---------- --------------------                      -------------------- --------------------
Consolidated income (loss) before income taxes                                                         $     (5,978 )                                                            $                  256
                                                                                    ==================== ========== ====================                      ==================== ====================
                                                                                                                                                                                    
 
                                                                                  Reconciliation of our segment profit
                                                                            to Teva’s consolidated income before income taxes
                                                                                                                    Six months ended
                                                                                     --------------------------------------------------------------------------------------------------------------------
                                                                                                                                           June 30,
                                                                                     --------------------------------------------------------------------------------------------------------------------
                                                                                                             2017                                              2016
                                                                                     -----------------------------------------------------                     ------------------------------------------
                                                                                                                                                                                     
                                                                                                                                      U.S. $ in millions
                                                                                                                                                                                     
Generic medicines profit                                                                                $      1,470                                                              $                1,253
Specialty medicines profit                                                                  2,200                                         2,440
                                                                                     -------------------- ---------- --------------------                      -------------------- --------------------
Total segment profit                                                                                           3,670                                                                               3,693
Profit of other activities                                                                     44                                             9
                                                                                     -------------------- ---------- --------------------                      -------------------- --------------------
                                                                                                               3,714                                                                               3,702
Amounts not allocated to segments:
       Amortization                                                                                              731                                                                                 382
       General and administrative expenses                                                                       508                                                                                 615
       Goodwill impairment charge                                                                              6,100                                                                                   -
       Impairments, restructuring and others                                                                     659                                                                                 831
       Inventory step-up                                                                                          67                                                                                  91
       Purchase of research and development in process                                                            26                                                                                  10
       Costs related to regulatory actions taken in facilities.                                                   49                                                                                  77
       Legal settlements and loss contingencies                                                                  344                                                                                 141
       Other unallocated amounts                                                                                  75                                                                                  29
                                                                                                                            
                                                                                     -------------------- --------------------------------                     -------------------- --------------------
Consolidated operating income (loss)                                                       (4,845 )                                                          1,526
                                                                                     -------------------- ---------- --------------------                      -------------------- --------------------
Financial expenses - net                                                                      445                                           403
                                                                                     -------------------- ---------- --------------------                      -------------------- --------------------
Consolidated income (loss) before income taxes                                                          $     (5,290 )                                                            $                1,123
                                                                                     ==================== ========== ====================                      ==================== ====================
                                                                                                                                                                                     
 
                                                                                Revenues by Activity and Geographical Area
                                                                                                (Unaudited)
 
                                                        Three Months Ended                                Percentage           Percentage
                                                                                June 30,                                                          Change                                  Change
                                               ----------------------------------------------------------------------
                                                          2017                         2016                                  2017 - 2016                             2017 - 2016
                                               ---------------------------                     ---------------------------                     ------------                     ---------------------------
                                                                           U.S. $ in millions                                                                                            in local
                                                                                                                                                                                        currencies
Generic Medicines
        United States                                             $ 1,290                                         $   892                         45 %                             45 %
        Europe                                                        957                                             771                         24 %                             28 %
        Rest of the World                          831                          894                         (7 %)                            13 %
                                               -------------------- -----                      -------------------- -----                      ----- -----                      ----- --------------------
Total Generic Medicines                                             3,078                                           2,557                         20 %                             28 %
Specialty Medicines
        United States                                               1,536                                           1,772                        (13 %)                           (13 %)
        Europe                                                        419                                             414                          1 %                              5 %
        Rest of the World                          110                           85                         29 %                             33 %
                                               -------------------- -----                      -------------------- -----                      ----- -----                      ----- --------------------
Total Specialty Medicines                                           2,065                                           2,271                         (9 %)                            (8 %)
Other Revenues
        United States                                                 304                                               3                        n/a                              n/a
        Europe                                                         79                                              54                         46 %                             50 %
        Rest of the World                          160                          153                          5 %                              0 %
                                               -------------------- -----                      -------------------- -----                      ----- -----                      ----- --------------------
Total Other Revenues                               543                          210                        159 %                            156 %
                                               -------------------- -----                      -------------------- -----                      ----- -----                      ----- --------------------
Total Revenues                                                    $ 5,686                                         $ 5,038                         13 %                             17 %
                                               ==================== =====                      ==================== =====                      ===== =====                      ===== ====================
                                                                                                                                                                                       
 
                                                                              Revenues by Activity and Geographical Area
                                                                                              (Unaudited)
                                                      Six Months Ended June 30,                            Percentage        Percentage
                                                                                                                                                   Change                               Change
                                               -----------------------------------------------------------------------                          ----------                       -------------------
                                                           2017                         2016                                  2017 - 2016                          2017 - 2016
                                               ----------------------------                     ---------------------------                     ------------                     ---------------------
                                                                            U.S. $ in millions                                                                                         in local
                                                                                                                                                                                      currencies
Generic Medicines
        United States                                             $  2,671                                         $ 1,868                         43 %                                  43 %
        Europe                                                       1,945                                           1,561                         25 %                                  29 %
        Rest of the World                         1,520                        1,586                         (4 %)                                 19 %
                                               -------------------- ------                      -------------------- -----                      ----- -----                      ---------- ---------
Total Generic Medicines                                              6,136                                           5,015                         22 %                                  31 %
Specialty Medicines
        United States                                                3,028                                           3,449                        (12 %)                                (12 %)
        Europe                                                         857                                             808                          6 %                                  11 %
        Rest of the World                           200                          166                         20 %                                  21 %
                                               -------------------- ------                      -------------------- -----                      ----- -----                      ---------- ---------
Total Specialty                                                      4,085                                           4,423                         (8 %)                                 -7 %
Other Revenues
        United States                                                  624                                               7                        n/a                                   n/a
        Europe                                                         157                                             105                         50 %                                  54 %
        Rest of the World                           314                          298                          5 %                                   1 %
                                               -------------------- ------                      -------------------- -----                      ----- -----                      ---------- ---------
Total Other Revenues                              1,095                          410                        167 %                                 165 %
                                               -------------------- ------                      -------------------- -----                      ----- -----                      ---------- ---------
Total Revenues                                                    $ 11,316                                         $ 9,848                         15 %                                  20 %
                                               ==================== ======                      ==================== =====                      ===== =====                      ========== =========
                                                                                                                                                                                  
 
                                                                                       Revenues by Product line
                                                                                              (Unaudited)
                                                                                                                                          
                                                                                                             Three Months Ended                                                       Percentage
                                                                                                                  June 30,                                                              Change
                                                                                 ----------------------------------------------------------------------
                                                                                            2017                         2016                                      2017 - 2016
                                                                                 ---------------------------                     ---------------------------                     ---------------------
                                                                                                             U.S. $ in millions
                                                                                                                                                                                  
Generic Medicines                                                                                   $ 3,078                                         $ 2,557                              20 %
OTC                                                                                                     283                                             266                               6 %
API                                                                                                     204                                             207                              (1 %)
Specialty Medicines                                                                                   2,065                                           2,271                              (9 %)
CNS                                                                                                   1,158                                           1,415                             (18 %)
    Copaxone(R)                                                                        1,023                                           1,141                             (10 %)
    Azilect(R)                                                                            34                                             108                             (69 %)
    Nuvigil(R)                                                                            14                                              51                             (73 %)
Respiratory                                                                                             322                                             313                               3 %
    ProAir(R)                                                                            123                                             135                              (9 %)
    QVAR(R)                                                                              107                                             116                              (8 %)
Oncology                                                                                                280                                             334                             (16 %)
    Treanda(R) and Bendeka(R)                                             163                                             207                             (21 %)
Women’s Health                                                                                          115                                             117                              (2 %)
Other Specialty*                                                                                        190                                              92                             107 %
All Others                                                                           543                          210                             159 %
                                                                                 -------------------- -----                      -------------------- -----                      ---------- ---------
Total                                                                                               $ 5,686                                         $ 5,038                              13 %
                                                                                 ==================== =====                      ==================== =====                      ========== =========
 
* Includes a $75 million payment related to the Ninlaro(R) transaction
in the second quarter of 2017.
 
 
                                                                                       Revenues by Product line
                                                                                              (Unaudited)
                                                                                        Six Months Ended June 30,                                Percentage
                                                                                                                                                                                         Change
                                                                                 -----------------------------------------------------------------------
                                                                                             2017                         2016                                      2017 - 2016
                                                                                 ----------------------------                     ---------------------------                     ---------------------
                                                                                                              U.S. $ in millions
                                                                                                                                                                                   
Generic Medicines                                                                                   $  6,136                                         $ 5,015                              22 %
OTC                                                                                                      547                                             558                              (2 %)
API                                                                                                      401                                             404                              (1 %)
Specialty Medicines                                                                                    4,085                                           4,423                              (8 %)
CNS                                                                                                    2,296                                           2,738                             (16 %)
    Copaxone(R)                                                                         1,993                                           2,147                              (7 %)
    Azilect(R)                                                                             94                                             221                             (57 %)
    Nuvigil(R)                                                                             31                                             154                             (80 %)
Respiratory                                                                                              626                                             679                              (8 %)
    ProAir(R)                                                                             244                                             308                             (21 %)
    QVAR(R)                                                                               205                                             250                             (18 %)
Oncology                                                                                                 550                                             602                              (9 %)
    Treanda(R) and Bendeka(R)                                              320                                             362                             (12 %)
Women’s Health                                                                                           239                                             227                               5 %
Other Specialty*                                                                                         374                                             177                             111 %
All Others                                                                          1,095                          410                             167 %
                                                                                 -------------------- ------                      -------------------- -----                      ---------- ---------
Total                                                                                               $ 11,316                                         $ 9,848                              15 %
                                                                                 ==================== ======                      ==================== =====                      ========== =========
 
* Includes a $150 million payment related to the Ninlaro(R)
transaction in the first six months of 2017.
 

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170803005523r1&sid=cmtx6&distro=nx&

View source version on businesswire.com: http://www.businesswire.com/news/home/20170803005523/en/

SOURCE: Teva Pharmaceutical Industries Ltd.

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


Register |  Password |  Feedback |  Copyright |  Usage Agreement |  Privacy Policy |  Advertising |  About Us |  Contact Us |  FAQ 

Past performance is not indicative of future results

StockSelector.com, the StockSelector.com logo, and News Selects are trademarks of StockSelector.com.
Copyright © 1998 - 2017 StockSelector.com. All rights reserved.