Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) today
reported results for the year and the quarter ended December 31,
2022.
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the full release here:
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- Q4 and FY 2022 highlights:
Q4
2022
FY
2022
Revenues
$3.9 billion
$14.9 billion
GAAP diluted loss per share
$(1.10)
$(2.12)
Non-GAAP diluted EPS
$0.71
$2.52
Cash flow generated from operating
activities
$973 million
$1,590 million
Free cash flow
$1,140 million
$2,243 million
- 2023 business outlook:
- Revenues are expected to be $14.8 - $15.4 billion
- Adjusted EBITDA of $4.5 - $4.9 billion
- Non-GAAP diluted EPS is expected to be $2.25 - $2.55
- Free cash flow is expected to be $1.7 - $2.1 billion
"It is a huge pleasure to be leading the Company through my
first reporting period as CEO of Teva. The tremendous work that has
been done to get the business back to a solid foundation serves as
excellent grounds to transition into a new path for growth.
In 2022, Teva delivered solid results. Our key innovative
brands, AUSTEDO® and AJOVY®, continued to drive growth, with
AUSTEDO increasing 20% in the U.S. We expect continued expansion as
this medicine addresses a still large unmet need for tardive
dyskinesia patients.
Our generics business performed strongly in Europe and
International Markets, growing 9% and 5% respectively, in local
currency terms. We also continued to optimize our supply chain and
manufacturing capabilities and reduced our net debt.
Looking ahead to 2023, I am especially enthusiastic about the
progress of our innovative, biosimilars and generic pipelines,
which include interesting and differentiated assets. As we work on
an updated strategy, we are looking for opportunities to best
position Teva for long-term growth and generate value to all
stakeholders."
2022 Annual Consolidated Results
Revenues in 2022 were $14,925 million, a decrease of 6%,
in U.S. dollars or 1% in local currency terms, compared to 2021,
mainly due to lower revenues from COPAXONE® and certain respiratory
products in our North America and Europe segments, generic products
as well as BENDEKA® and TREANDA® in our North America segment,
partially offset by higher revenues from generic products in our
Europe and International Markets segments, and from our innovative
products – AUSTEDO and AJOVY, and Anda.
Exchange rate movements during 2022, including hedging
effects, negatively impacted revenues by $780 million, operating
income by $247 million and non-GAAP operating income by $263
million, each as compared to 2021.
Gross profit was $6,973 million in 2022, a decrease of 8%
compared to 2021. Gross profit margin was 46.7% in 2022,
compared to 47.8% in 2021. Non-GAAP gross profit was
$8,056 million in 2022, a decrease of 6% compared to 2021.
Non-GAAP gross profit margin was 54.0% in 2022,
compared to 54.2% in 2021. This decrease in both GAAP and non-GAAP
gross profit margin was mainly due to lower revenues from COPAXONE
and certain respiratory products in our North America and Europe
segments, partially offset by higher revenues from AUSTEDO in North
America and a favorable mix of generic products in our Europe
segment.
Research and Development (R&D) expenses in
2022 were $838 million, a decrease of 13% compared to 2021. The
decrease in R&D expenses in 2022 was mainly due to a decrease
in several neuroscience projects (in the pain and migraine and
headache therapeutic areas) and immunology (in the respiratory
therapeutic area) as well as a decline in various generics
projects, and an adjustment in payments pursuant to a contract with
one of our R&D partners in 2022, partially offset by higher
R&D expenses related to our biosimilar products pipeline.
Selling and Marketing (S&M) expenses in 2022
were $2,265 million, a decrease of 7% compared to 2021.
General and Administrative (G&A) expenses in 2022
were $1,180 million, an increase of 7% compared to 2021. This
increase was related to proceeds received from Teva’s insurance
carriers pursuant to a settlement reached on a derivative
proceeding in the second quarter of 2021 related to the acquisition
of Actavis Generics, as well as higher litigation fees in the
second quarter of 2022.
Other income in 2022 was $107 million, compared to $98
million in 2021.
Operating loss was $2,099 million in 2022, compared to
operating income of $1,716 million in 2021. Operating loss as a
percentage of revenues was 14.1% in 2022, compared to operating
income as a percentage of revenues of 10.8% in 2021. Operating loss
in 2022 was mainly affected by goodwill impairment charges, and
legal settlements and loss contingencies. Non-GAAP
operating income was $4,139 million in 2022, or 27.7% of
revenues compared to $4,401 million, or 27.7% of revenues in 2021.
Non-GAAP operating margin in 2022 was mainly affected by lower
gross profit margin, as discussed above, offset by lower operating
expenses as a percentage of revenues.
Adjusted EBITDA was $4,598 million in 2022, compared to
$4,911 million in 2021.
In 2022, financial expenses, net were $966 million,
compared to $1,058 million in 2021. Financial expenses in 2022 were
mainly comprised of interest expenses and other bank charges of
$930 million. Financial expenses in 2021 were mainly comprised of
interest expenses and other bank charges of $891 million and loss
on revaluations of marketable securities of $90 million.
In 2022, we recognized a tax benefit of $638 million, or
21%, on a pre-tax loss of $3,065 million. In 2021, we recognized a
tax expense of $211 million, or 32%, on a pre-tax income of $658
million. Our tax rate for 2022 was lower than in 2021 mainly
due to the realization of losses related to an investment in one of
our U.S. subsidiaries, partially offset by a goodwill impairment
charge that did not have a corresponding tax effect.
Non-GAAP tax rate for 2022 was 12%, compared to
16% in 2021. Our non-GAAP tax rate in 2022 was mainly affected by
the realization of losses related to an investment in one of our
U.S. subsidiaries, the mix of products we sold, interest expense
disallowances and adjustments to valuation allowances on deferred
tax assets.
Net loss attributable to Teva and diluted loss per
share in 2022 were $2,353 million and $2.12, respectively,
compared to net income attributable to Teva of $417 million and
diluted income per share of $0.38 in 2021. Net loss in 2022 was
mainly affected by goodwill impairment charges and legal
settlements and loss contingencies, partially offset by a tax
benefit. Non-GAAP net income attributable to Teva and
non-GAAP diluted earnings per share in 2022 were $2,812
million and $2.52, respectively, compared to $2,855 million and
$2.58 in 2021.
As of December 31, 2022 and 2021, the fully diluted share count
for purposes of calculating our market capitalization was
approximately 1,143 million and 1,128 million shares,
respectively.
Non-GAAP information: net non-GAAP adjustments in 2022
were $5,166 million. Non-GAAP net income attributable to Teva and
non-GAAP diluted EPS for the year were adjusted to exclude the
following items:
- Amortization of purchased intangible assets totaling $732
million, of which $649 million is included in cost of goods sold
and the remaining $83 million in S&M expenses;
- Legal settlements and loss contingencies of $2,082
million;
- Goodwill impairment charges of $2,045 million;
- Impairment of long-lived assets of $402 million;
- Restructuring expenses of $146 million;
- Costs related to regulatory actions taken in facilities of $7
million;
- Equity compensation expenses of $124 million;
- Contingent consideration expenses of $163 million;
- Gain on sale of business of $47 million;
- Accelerated depreciation of $117 million;
- Financial expenses of $61 million;
- Share in profits of associated companies, net of $22
million;
- Items attributable to non-controlling interests of $96
million;
- Other non-GAAP items of $465 million; and
- Corresponding tax effects and unusual tax items amounted to
income of $1,016 million.
We believe that excluding such items facilitates investors’
understanding of our business. Commencing the first quarter of
2022, we no longer exclude in-process research and development
(“IPR&D”) acquired in development arrangements from our
non-GAAP financial measures. In our comparable non-GAAP financial
measures for 2021 we excluded $15 million IPR&D acquired in
development arrangements. We are not recasting the non-GAAP
presentation for 2021 since the adjustment is not significant. We
made this change to our presentation of non-GAAP financial measures
to improve comparability of our non-GAAP presentation to those of
other companies in the pharmaceutical industry that made a similar
change to their presentations beginning in the first quarter of
2022.
For a reconciliation of the U.S. GAAP results to the adjusted
non-GAAP figures and for additional information, see the tables
below and the information included under “Non-GAAP Financial
Measures.” 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 generated from operating activities in 2022 was
$1,590 million, compared to $798 million in 2021. The increase in
2022 resulted mainly from the sale of accounts receivables under
our U.S. securitization facility entered into in November 2022, and
lower cash collections remitted to the owner of the receivables
under our EU securitization program mainly due to exchange rate
fluctuation, partially offset by an increase in inventory levels,
as well as higher payments of legal settlements in connection with
the opioids litigation.
Free cash flow (defined as cash flow generated from
operating activities, cash used for capital investments, beneficial
interest collected in exchange for securitized accounts
receivables, proceeds from divestitures of businesses and other
assets and cash used for acquisition of businesses, net of cash
acquired) was $2,243 million in 2022, compared to $2,196 million in
2021. The increase in 2022 resulted mainly from an increase in cash
flow generated from operating activities, partially offset by lower
beneficial interest collected in exchange for securitized accounts
receivables under our EU securitization program mainly due to
exchange rate fluctuations, as well as lower proceeds from
divestitures of businesses and other assets.
On November 7, 2022, Teva and a bankruptcy-remote special
purpose vehicle (“SPV”) entered into an accounts receivable
securitization facility (“AR Facility”) with PNC Bank, National
Association (“PNC”) with a three-year term. The AR Facility
provides for purchases of accounts receivable by PNC in an amount
of up to $1 billion through November 2023, and up to $500 million
from November 2023 through November 2025, provided that the SPV may
increase the commitment amount up to $1 billion if additional
credit providers participate in the AR facility. The total balance
of accounts receivables sold to PNC as of December 31, 2022 was
$820 million which were derecognized by the SPV. In addition to the
accounts receivables sold, an amount of $436 million of the SPV’s
accounts receivables is pledged to PNC by the SPV as a seller
guarantee, and is included under “Accounts receivables, net”, in
our consolidated balance sheet as of December 31,2022. In the
fourth quarter of 2022, Teva received proceeds of $820 million
under the AR facility, which are included in cash from operating
activities in the Consolidated Statements of Cash Flows for the
year ended December 31, 2022.
As of December 31, 2022, our debt was $21,212 million,
compared to $23,043 million as of December 31, 2021. This decrease
was mainly due to $1,369 million of senior notes repaid at maturity
and $484 million of exchange rate fluctuations. The portion of
total debt classified as short-term as of December 31, 2022 was
10%, compared to 6% as of December 31, 2021, mainly due to
repayment of debt, partially offset by a reclassification of
upcoming maturities in 2022. Our average debt maturity was
approximately 5.8 years as of December 31, 2022, compared to 6.4
years as of December 31, 2021.
Fourth Quarter 2022 Consolidated Results
Revenues in the fourth quarter of 2022 were $3,884
million, a decrease of 5% in U.S. dollars or an increase of 1% in
local currency terms, compared to the fourth quarter of 2021. This
increase was mainly due to higher revenues from Anda, generic
products in our Europe segment, AUSTEDO and AJOVY, partially offset
by lower revenues from generic products and certain respiratory
products in our North America segment as well as COPAXONE.
Exchange rate differences between the fourth quarter of
2022 and the fourth quarter of 2021, including hedging effects,
negatively impacted revenues by $270 million and operating income
by $132 million. Non-GAAP operating income was negatively impacted
by $135 million.
Gross profit was $1,770 million in the fourth quarter of
2022, a decrease of 14% compared to the fourth quarter of 2021.
Gross profit margin was 45.6% in the fourth quarter of 2022,
compared to 50.0% in the fourth quarter of 2021. Non-GAAP
gross profit was $2,105 million in the fourth quarter of
2022, a decrease of 9% compared to the fourth quarter of 2021.
Non-GAAP gross profit margin was 54.2% in the fourth
quarter of 2022, compared to 56.1% in the fourth quarter of 2021.
The decrease in gross profit margin in the fourth quarter of 2022
resulted mainly from an increase in revenues with lower
profitability from Anda in our North America segment, partially
offset by higher revenues from AUSTEDO in our North America segment
and a favorable mix of generic products in our Europe segment.
Research and Development (R&D) expenses in the
fourth quarter of 2022 were $210 million, a decrease of 14%
compared to the fourth quarter of 2021. The decrease in R&D
expenses in the fourth quarter of 2022 was mainly due to a decrease
in various generics projects as well as in immunology (in the
respiratory therapeutic area), partially offset by higher R&D
expenses related to our biosimilar products pipeline.
Selling and Marketing (S&M) expenses in the
fourth quarter of 2022 were $549 million, a decrease of 13%
compared to the fourth quarter of 2021.
General and Administrative (G&A) expenses in the
fourth quarter of 2022 were $289 million, an increase of 4%
compared to the fourth quarter of 2021.
Other income in the fourth quarter of 2022 was $19
million, compared to $26 million in the fourth quarter of 2021.
Operating loss in the fourth quarter of 2022 was $855
million, compared to operating income of $78 million in the fourth
quarter of 2021. This decrease was mainly due to goodwill
impairment charges recorded in the fourth quarter of 2022,
partially offset by lower legal settlements and loss contingencies.
Operating loss as a percentage of revenues was 22.0% in the fourth
quarter of 2022, compared to operating income as a percentage of
revenues of 1.9% in the fourth quarter of 2021. The decrease in
operating margin was mainly due to the effect of goodwill
impairment charges as a percentage of revenues, partially offset by
lower legal settlements and loss contingencies as a percentage of
revenues.
Non-GAAP operating income in the fourth quarter of
2022 was $1,130 million or 29.1% of revenues compared to $1,248
million or 30.4% of revenues in the fourth quarter of 2021.
Non-GAAP operating margin in the fourth quarter of 2022 was mainly
affected by lower gross profit margin, as discussed above,
partially offset by lower operating expenses as a percentage of
revenues.
Adjusted EBITDA was $1,240 million in the fourth quarter
of 2022, a decrease of 10%, compared to $1,373 million in the
fourth quarter of 2021.
Financial expenses, net in the fourth quarter of 2022
were $245 million, compared to $253 million in the fourth quarter
of 2021. Financial expenses, net in the fourth quarter of 2022 and
2021, were mainly comprised of interest expenses of $237 million
and $225 million, respectively.
In the fourth quarter of 2022, we recognized a tax
expense of $154 million on a pre-tax loss of $1,100 million,
mainly due to goodwill impairment charges that did not have a
corresponding tax effect. In the fourth quarter of 2021, we
recognized a tax benefit of $24 million on pre-tax loss of $175
million.
Non-GAAP tax rate in the fourth quarter of 2022 was 11%,
compared to 15% in the fourth quarter of 2021. Our non-GAAP tax
rate in the fourth quarter of 2022 was mainly affected by the mix
of products we sold, interest expense disallowances and adjustments
to valuation allowances on deferred tax assets.
Net loss attributable to Teva and diluted loss per
share in the fourth quarter of 2022 were $1,221 million and
$1.10, respectively, compared to $159 million and $0.14,
respectively, in the fourth quarter of 2021. Non-GAAP net
income attributable to Teva and non-GAAP diluted earnings
per share in the fourth quarter of 2022 were $791 million and
$0.71, respectively, compared to $854 million and $0.77,
respectively, in the fourth quarter of 2021.
Non-GAAP information: net non-GAAP adjustments in the
fourth quarter of 2022 were $2,012 million. Non-GAAP net income
attributable to Teva and non-GAAP diluted EPS for the fourth
quarter were adjusted to exclude the following items:
- Amortization of purchased intangible assets of $156 million, of
which $136 million is included in cost of sales and the remaining
$20 million in S&M expenses;
- Legal settlements and loss contingencies of $34 million;
- Goodwill impairment charges of $1,300 million;
- Impairment of long-lived assets of $145 million;
- Restructuring expenses of $30 million;
- Costs related to regulatory actions taken in facilities of $1
million;
- Equity compensation expenses of $36 million;
- Contingent consideration expenses of $63 million;
- Gain on sale of business in an amount of $15 million;
- Accelerated depreciation of $39 million;
- Financial expenses of $14 million;
- Items attributable to non-controlling interests in an amount of
$43 million;
- Other non-GAAP items of $196 million; and
- Corresponding tax effects and unusual tax items of $56
million.
We believe that excluding such items facilitates investors'
understanding of our business. Commencing the first quarter of
2022, we no longer exclude IPR&D acquired in development
arrangements from our non-GAAP financial measures. In our
comparable non-GAAP financial measures for the fourth quarter of
2021, we excluded $10 million IPR&D acquired in development
arrangements. We are not recasting the non-GAAP presentation for
the fourth quarter of 2021 since the adjustment is not significant.
We have made this change to our presentation of non-GAAP financial
measures to improve comparability of our non-GAAP presentation to
those of other companies in the pharmaceutical industry that made a
similar change to their presentations beginning in the first
quarter of 2022.
For further information, see the tables below for a
reconciliation of the U.S. GAAP results to the adjusted non-GAAP
figures and the information under “Non-GAAP Financial Measures.”
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 generated from operating activities during the
fourth quarter of 2022 was $973 million, compared to $456 million
in the fourth quarter of 2021. The increase resulted mainly from
the sale of accounts receivables under our U.S. securitization
facility entered into in November 2022, partially offset by changes
in working capital items, primarily an increase in accounts
receivables, net of SR&A due to timing of sales cycle in the
fourth quarter of 2022.
Free cash flow (defined as cash flow generated from
operating activities, cash used for capital investments, beneficial
interest collected in exchange for securitized accounts
receivables, proceeds from divestitures of businesses and other
assets and cash used for acquisition of businesses, net of cash
acquired) was $1,140 million in the fourth quarter of 2022,
compared to $716 million in the fourth quarter of 2021. The
increase resulted mainly from higher cash flow generated from
operating activities.
Segment Results for the Fourth Quarter of 2022
North America Segment
Our North America segment includes the United States and
Canada.
The following table presents revenues, expenses and profit for
our North America segment for the three months ended December 31,
2022 and 2021:
Three months ended December
31,
2022
2021
(U.S. $ in millions / % of
Segment Revenues)
Revenues
$
2,002
100%
$
2,003
100%
Gross profit
1,085
54.2%
1,145
57.2%
R&D expenses
131
6.6%
151
7.5%
S&M expenses
209
10.4%
255
12.7%
G&A expenses
113
5.7%
88
4.4%
Other income
(2)
§
(17)
(0.8%)
Segment profit*
$
633
31.6%
$
668
33.4%
*Segment profit does not include
amortization and certain other items.
§ Represents an amount less than $0.5
million or 0.5%, as applicable.
Revenues from our North America segment in the fourth
quarter of 2022 were $2,002 million, flat, compared to the fourth
quarter of 2021, mainly due to a decline in revenues from generic
products, COPAXONE and BENDEKA and TREANDA, offset by higher
revenues from our innovative products - AUSTEDO and AJOVY, and
Anda.
Revenues in the United States, our largest market, were
$1,912 million in the fourth quarter of 2022, an increase of $35
million, or 2%, compared to the fourth quarter of 2021.
Revenues by Major Products and Activities
The following table presents revenues for our North America
segment by major products and activities for the three months ended
December 31, 2022 and 2021:
Three months ended
December 31,
Percentage
Change
2022
2021
2022-2021
(U.S. $ in millions)
Generic products
$
818
$
905
(10%)
AJOVY
75
53
41%
AUSTEDO
344
282
22%
BENDEKA and TREANDA
75
93
(20%)
COPAXONE
101
129
(22%)
Anda
450
355
27%
Other*
138
186
(26%)
Total
$
2,002
$
2,003
§
* Other revenues in the fourth quarter of
2022 decreased mainly due to reduction in sales of certain
innovative respiratory products. On October 1, 2022, we
discontinued marketing ProAir® HFA.
Generic products revenues in our North America segment in
the fourth quarter of 2022 decreased by 10% to $818 million,
compared to the fourth quarter of 2021, mainly due to increased
competition to parts of our portfolio as well as supply disruptions
including the closure of the Irvine, CA site.
In the fourth quarter of 2022, our total prescriptions were
approximately 80 million representing 8.3% of total U.S. generic
prescriptions according to IQVIA data.
AJOVY revenues in our North America segment in the fourth
quarter of 2022 were $75 million compared to $53 million in the
fourth quarter of 2021. This increase was mainly due to growth in
volume and favorable net pricing.
AUSTEDO revenues in our North America segment in the
fourth quarter of 2022 were $344 million, compared to $282 million
in the fourth quarter of 2021. This increase was mainly due to
growth in volume.
BENDEKA and TREANDA combined revenues in our North
America segment in the fourth quarter of 2022 decreased by 20% to
$75 million, compared to the fourth quarter of 2021, mainly due to
the availability of alternative therapies and intense competition.
In December 2022, the orphan drug exclusivity that had attached to
bendamustine products expired. To-date we are aware of one generic
TREANDA product on the market.
COPAXONE revenues in our North America segment in the
fourth quarter of 2022 decreased by 22% to $101 million, compared
to the fourth quarter of 2021, mainly due to generic competition in
the United States and a decrease in glatiramer acetate market share
due to availability of alternative biologic therapies.
Anda revenues in our North America segment in the fourth
quarter of 2022 increased by 27% to $450 million, compared to the
fourth quarter of 2021, mainly due to higher demand.
North America Gross Profit
Gross profit from our North America segment in the fourth
quarter of 2022 was $1,085 million, a decrease of 5% compared to
the fourth quarter of 2021, mainly due to lower revenues as
discussed above. Gross profit margin for our North America
segment in the fourth quarter of 2022 decreased to 54.2%, compared
to 57.2% in the fourth quarter of 2021. This decrease was mainly
due to an unfavorable mix of products.
North America Profit
Profit from our North America segment consists of gross profit
less R&D expenses, S&M expenses, G&A expenses and any
other income related to this segment. Segment profit does not
include amortization and certain other items.
Profit from our North America segment in the fourth
quarter of 2022 was $633 million, a decrease of 5% compared to $668
million in the fourth quarter of 2021. Profit decreased mainly due
to lower revenues, partially offset by lower operating
expenses.
Europe Segment
Our Europe segment includes the European Union, the United
Kingdom and certain other European countries.
The following table presents revenues, expenses and profit for
our Europe segment for the three months ended December 31, 2022 and
2021:
Three months ended December
31,
2022
2021
(U.S. $ in millions / % of
Segment Revenues)
Revenues
$
1,129
100%
$
1,268
100%
Gross profit
669
59.3%
760
59.9%
R&D expenses
55
4.9%
60
4.8%
S&M expenses
187
16.6%
218
17.2%
G&A expenses
63
5.6%
64
5.0%
Other income
(2)
§
(2)
§
Segment profit*
$
366
32.4%
$
420
33.1%
* Segment profit does not include
amortization and certain other items.
§ Represents an amount less than $0.5
million or 0.5%, as applicable.
Revenues from our Europe segment in the fourth quarter of
2022 were $1,129 million, a decrease of $139 million, or 11%,
compared to the fourth quarter of 2021. In local currency terms,
revenues increased by 4%, mainly due to higher demand for generic
products resulting from new product launches as well as higher
revenues from AJOVY, partially offset by lower revenues from
COPAXONE and certain other respiratory products.
In the fourth quarter of 2022, revenues were negatively impacted
by exchange rate fluctuations of $193 million, including hedging
effects, compared to the fourth quarter of 2021. Revenues in the
fourth quarter of 2022 included $46 million from a negative hedging
impact, which are included in “Other” in the table below.
Revenues by Major Products and Activities
The following table presents revenues for our Europe segment by
major products and activities for the three months ended December
31, 2022 and 2021:
Three months ended
December 31,
Percentage
Change
2022
2021
2022-2021
(U.S. $ in millions)
Generic products
$
914
$
932
(2%)
AJOVY
35
29
19%
COPAXONE
61
95
(35%)
Respiratory products
75
93
(19%)
Other
43
119
(63%)
Total
$
1,129
$
1,268
(11%)
Generic products revenues (including OTC and biosimilar
products) in our Europe segment in the fourth quarter of 2022,
decreased by 2% to $914 million, compared to the fourth quarter of
2021. In local currency terms, revenues increased by 10%, mainly
due to higher demand for generic products resulting from new
product launches.
AJOVY revenues in our Europe segment in the fourth
quarter of 2022 increased by 19% to $35 million, compared the
fourth quarter of 2021. In local currency terms, revenues increased
by 34%, mainly due to launches and reimbursements in additional
European countries and growth in existing countries.
COPAXONE revenues in our Europe segment in the fourth
quarter of 2022 decreased by 35% to $61 million, compared to the
fourth quarter of 2021. In local currency terms, revenues decreased
by 27% due to price reductions and a decline in volume resulting
from competing glatiramer acetate products and availability of
alternative therapies.
Respiratory products revenues in our Europe
segment in the fourth quarter of 2022 decreased by 19% to $75
million, compared to the fourth quarter of 2021. In local currency
terms, revenues decreased by 8% mainly due to net price reductions
and lower volumes.
Europe Gross Profit
Gross profit from our Europe segment in the fourth
quarter of 2022 was $669 million, a decrease of 12% compared to
$760 million in the fourth quarter of 2021. This decrease was
mainly due to exchange rate fluctuations.
Gross profit margin for our Europe segment in the fourth
quarter of 2022 decreased to 59.3%, compared to 59.9% in the fourth
quarter of 2021. This decrease was mainly due to the negative
impact of hedging activities, as discussed above.
Europe Profit
Profit from our Europe segment consists of gross profit less
R&D expenses, S&M expenses, G&A expenses and any other
income related to this segment. Segment profit does not include
amortization and certain other items.
Profit from our Europe segment in the fourth quarter of
2022 was $366 million, a decrease of 13% compared to $420 million
in the fourth quarter of 2021. This decrease was mainly due to
lower gross profit as discussed above, partially offset by lower
operating expenses.
International Markets Segment
Our International Markets segment includes all countries other
than those in our North America and Europe segments.
The following table presents revenues, expenses and profit for
our International Markets segment for the three months ended
December 31, 2022 and 2021:
Three months ended December
31,
2022
2021
(U.S. $ in millions / % of
Segment Revenues)
Revenues
$
482
100%
$
527
100%
Gross profit
253
52.6%
292
55.3%
R&D expenses
18
3.7%
17
3.2%
S&M expenses
112
23.2%
114
21.6%
G&A expenses
30
6.3%
30
5.7%
Other income
§
§
§
§
Segment profit*
$
93
19.4%
$
131
24.8%
* Segment profit does not include
amortization and certain other items.
§ Represents an amount less than $0.5
million or 0.5%, as applicable.
Revenues from our International Markets segment in the
fourth quarter of 2022 were $482 million, a decrease of $45
million, or 9%, compared to the fourth quarter of 2021. In local
currency terms, revenues increased by 3% compared to the fourth
quarter of 2021, mainly due to higher revenues in most markets.
Revenues by Major Products and Activities
The following table presents revenues for our International
Markets segment by major products and activities for the three
months ended December 31, 2022 and 2021:
Three months ended
December 31,
Percentage
Change
2022
2021
2022-2021
(U.S. $ in millions)
Generic products
$
411
$
438
(6%)
AJOVY
13
4
188%
COPAXONE
7
8
(19%)
Other
51
77
(34%)
Total
$
482
$
527
(9%)
Generic products revenues in our International Markets
segment, including OTC products, were $411 million in the fourth
quarter of 2022, a decrease of 6% compared to the fourth quarter of
2021. In local currency terms, revenues increased by 3%, due to
higher revenues in most markets.
AJOVY was launched in certain markets in our
International Markets segment, including in Japan during the third
quarter of 2021. We are moving forward with plans to launch AJOVY
in other markets. AJOVY revenues in our International Markets
segment in the fourth quarter of 2022 were $13 million, compared to
$4 million in the fourth quarter of 2021.
COPAXONE revenues in our International Markets segment in
the fourth quarter of 2022 decreased by 19% to $7 million, compared
to the fourth quarter of 2021. In local currency terms, revenues
increased by 1%.
International Markets Gross Profit
Gross profit from our International Markets segment in
the fourth quarter of 2022 was $253 million, a decrease of 13%
compared to $292 million in the fourth quarter of 2021. Gross
profit margin for our International Markets segment in the
fourth quarter of 2022 decreased to 52.6%, compared to 55.3% in the
fourth quarter of 2021, mainly due to foreign exchange rate
fluctuations and a different portfolio mix.
International Markets Profit
Profit from our International Markets segment consists of gross
profit less R&D expenses, S&M expenses, G&A expenses
and any other income related to this segment. Segment profit does
not include amortization and certain other items.
Profit from our International Markets segment in the
fourth quarter of 2022 was $93 million, compared to $131 million in
the fourth quarter of 2021. This decrease was mainly due to lower
gross profit.
Other Activities
We have other sources of revenues, primarily the sale of active
pharmaceutical ingredients ("APIs") to third parties, certain
contract manufacturing services and an out-licensing platform
offering a portfolio of products to other pharmaceutical companies
through our affiliate Medis. Our other activities are not included
in our North America, Europe or International Markets segments.
Our revenues from other activities in the fourth quarter
of 2022 were $272 million, a decrease of 10% compared to the fourth
quarter of 2021. In local currency terms revenues decreased by
7%.
API sales to third parties in the fourth quarter of 2022
were $168 million, a decrease of 18% in both U.S. dollars and local
currency terms, compared to the fourth quarter of 2021.
Outlook for 2023 Non-GAAP Results
$ billions, except diluted EPS or as
noted
2023 Outlook
2022 Actual
Revenues*
14.8 – 15.4
14.9
COPAXONE ($m)*
~500
691
AUSTEDO ($m)*
~1,200
971
AJOVY ($m)*
~400
377
Operating Income
4.0 – 4.4
4.1
Adjusted EBITDA
4.5 – 4.9
4.6
Diluted EPS ($)
2.25 – 2.55
1,123 million shares
2.52
1,115 million shares
Free Cash Flow**
1.7 - 2.1
2.2
CAPEX*
0.5
0.5
Tax Rate
14% – 17%
11.7%
Foreign Exchange
Volatile swings in FX can
negatively impact revenue and income
* Revenues and CAPEX presented on a GAAP basis.
** Free Cash Flow includes cash flow generated from operating
activities net of capital expenditures and deferred purchase price
cash component collected for securitized trade receivables
Annual Report on Form 10-K
Teva's Annual Report on Form 10-K for the year ended December
31, 2022, which will be filed with the SEC, will include a complete
analysis of the financial results for 2022 and will be available on
Teva’s website: http://ir.tevapharm.com, as well as on the SEC’s
website: http://www.sec.gov.
Conference Call
Teva will host a conference call and live webcast along with a
slide presentation on Wednesday, February 8, 2023 at 8:00 a.m. ET
to discuss its fourth quarter and annual 2022 results and overall
business environment. A question and answer session will
follow.
In order to participate, please register in advance here to obtain a local or toll-free phone
number and your personal pin. A live webcast of the call will be
available on Teva's website at:
https://ir.tevapharm.com/Events-and-Presentations. Following the
conclusion of the call, a replay of the webcast will be available
within 24 hours on Teva's website.
About Teva
Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) has
been developing and producing medicines to improve people’s lives
for more than a century. We are a global leader in generic and
innovative medicines with a portfolio consisting of over 3,500
products in nearly every therapeutic area. Around 200 million
people around the world take a Teva medicine every day, and are
served by one of the largest and most complex supply chains in the
pharmaceutical industry. Along with our established presence in
generics, we have significant innovative medicines research and
operations supporting our growing portfolio of innovative medicines
and biopharmaceutical products. Learn more at
www.tevapharm.com.
Some amounts in this press release may not add up due to
rounding. All percentages have been calculated using unrounded
amounts.
Non-GAAP Financial Measures
This press release contains certain financial information that
differs from what is reported under accounting principles generally
accepted in the United States ("GAAP"). These non-GAAP financial
measures, including, but not limited to, non-GAAP operating income,
non-GAAP operating margin, non-GAAP gross profit, non-GAAP gross
profit margin, Adjusted EBITDA, free cash flow, non-GAAP tax rate,
non-GAAP net income (loss) attributable to Teva and non-GAAP
diluted EPS, are presented in order to facilitate investors'
understanding of our business. We utilize certain non-GAAP
financial measures to evaluate performance, in conjunction with
other performance metrics. The following are examples of how we
utilize the non-GAAP measures: our management and board of
directors use the non-GAAP measures to evaluate our operational
performance, to compare against work plans and budgets, and
ultimately to evaluate the performance of management; our annual
budgets are prepared on a non-GAAP basis; and senior management’s
annual compensation is derived, in part, using these non-GAAP
measures. See the attached tables for a reconciliation of the GAAP
results to the adjusted non-GAAP measures. Investors should
consider non-GAAP financial measures in addition to, and not as
replacements for, or superior to, measures of financial performance
prepared in accordance with GAAP. We are not providing forward
looking guidance for GAAP reported financial measures or a
quantitative reconciliation of forward-looking non-GAAP financial
measures to the most directly comparable GAAP measure because we
are unable to predict with reasonable certainty the ultimate
outcome of certain significant items including, but not limited to,
the amortization of purchased intangible assets, legal settlements
and loss contingencies, impairment of long-lived assets and
goodwill impairment, without unreasonable effort. These items are
uncertain, depend on various factors, and could be material to our
results computed in accordance with GAAP.
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. You
can identify these forward-looking statements by the use of words
such as “should,” “expect,” “anticipate,” “estimate,” “target,”
“may,” “project,” “guidance,” “intend,” “plan,” “believe” and other
words and terms of similar meaning and expression in connection
with any discussion of future operating or financial performance.
Important factors that could cause or contribute to such
differences include risks relating to:
- our ability to successfully compete in the marketplace,
including: that we are substantially dependent on our generic
products; concentration of our customer base and commercial
alliances among our customers; delays in launches of new generic
products; the increase in the number of competitors targeting
generic opportunities and seeking U.S. market exclusivity for
generic versions of significant products; our ability to develop
and commercialize biopharmaceutical products; competition for our
innovative medicines, including AUSTEDO, AJOVY and COPAXONE; our
ability to achieve expected results from investments in our product
pipeline; our ability to develop and commercialize additional
pharmaceutical products; and the effectiveness of our patents and
other measures to protect our intellectual property rights.
- our substantial indebtedness, which may limit our ability to
incur additional indebtedness, engage in additional transactions or
make new investments, may result in a further downgrade of our
credit ratings; and our inability to raise debt or borrow funds in
amounts or on terms that are favorable to us;
- our business and operations in general, including: the impact
of global economic conditions and other macroeconomic developments
and the governmental and societal responses thereto; the widespread
outbreak of an illness or any other communicable disease, or any
other public health crisis; effectiveness of our optimization
efforts; our ability to attract, hire, integrate and retain highly
skilled personnel; manufacturing or quality control problems;
interruptions in our supply chain; disruptions of information
technology systems; breaches of our data security; variations in
intellectual property laws; challenges associated with conducting
business globally, including political or economic instability,
major hostilities or terrorism; costs and delays resulting from the
extensive pharmaceutical regulation to which we are subject.
- the effects of reforms in healthcare regulation and reductions
in pharmaceutical pricing, reimbursement and coverage; significant
sales to a limited number of customers; our ability to successfully
bid for suitable acquisition targets or licensing opportunities, or
to consummate and integrate acquisitions; and our prospects and
opportunities for growth if we sell assets;
- compliance, regulatory and litigation matters, including:
failure to comply with complex legal and regulatory environments;
increased legal and regulatory action in connection with public
concern over the abuse of opioid medications and any delay in our
ability to obtain sufficient participation of plaintiffs for the
nationwide settlement of our opioid-related litigation in the
United States; scrutiny from competition and pricing authorities
around the world, including our ability to successfully defend
against the U.S. Department of Justice criminal charges of Sherman
Act violations; potential liability for intellectual property right
infringement; product liability claims; failure to comply with
complex Medicare and Medicaid reporting and payment obligations;
compliance with anti-corruption, sanctions and trade control laws;
environmental risks; and the impact of ESG issues;
- other financial and economic risks, including: our exposure to
currency fluctuations and restrictions as well as credit risks;
potential impairments of our long-lived assets; the impact of
geopolitical conflicts including the ongoing conflict between
Russia and Ukraine; potential 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 this press release and in our
Annual Report on Form 10-K for the year ended December 31, 2022,
including in the sections captioned "Risk Factors” and “Forward
Looking Statements.” 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 (U.S. dollars in millions,
except share and per share data) Three months
ended Year ended December 31, December 31,
2022
2021
2022
2021
(Unaudited) (Unaudited) (Audited)
(Audited) Net revenues
3,884
4,100
14,925
15,878
Cost of sales
2,113
2,049
7,952
8,284
Gross profit
1,770
2,050
6,973
7,594
Research and development expenses, net
210
244
838
967
Selling and marketing expenses
549
632
2,265
2,429
General and administrative expenses
289
276
1,180
1,099
Intangible assets impairment
132
129
355
424
Goodwill impairment
1,300
-
2,045
-
Other asset impairments, restructuring and other items
132
113
414
341
Legal settlements and loss contingencies
34
604
2,082
717
Other income
(19)
(26)
(107)
(98)
Operating income (loss)
(855)
78
(2,099)
1,716
Financial expenses – net
245
253
966
1,058
Income (loss) before income taxes
(1,100)
(175)
(3,065)
658
Income taxes (benefit)
154
(24)
(638)
211
Share in (profits) losses of associated companies, net
-
-
(21)
(9)
Net income (loss)
(1,254)
(151)
(2,406)
456
Net income (loss) attributable to non-controlling interests
(32)
7
(53)
39
Net income (loss) attributable to Teva
(1,221)
(159)
(2,353)
417
Earnings (loss) per share attributable to
Teva: Basic ($)
(1.10)
(0.14)
(2.12)
0.38
Diluted ($)
(1.10)
(0.14)
(2.12)
0.38
Weighted average number of shares (in millions):
Basic
1,111
1,103
1,110
1,102
Diluted
1,111
1,103
1,110
1,107
Non-GAAP net income attributable to Teva for
diluted earnings per share:*
791
854
2,812
2,855
Non-GAAP earnings per share attributable to Teva:*
Diluted ($)
0.71
0.77
2.52
2.58
Non-GAAP average number of shares (in millions):
Diluted
1,121
1,108
1,115
1,107
* See reconciliation attached.
Condensed Consolidated Balance Sheets
(U.S. dollars in millions)
(Audited)
December 31,
December 31,
2022
2021
ASSETS Current assets: Cash and cash equivalents
2,801
2,165
Accounts receivables, net of allowance for
credit losses of $91 million and $90 million as of December 31,
2022 and December 31, 2021
3,696
4,529
Inventories
3,833
3,818
Prepaid expenses
1,162
1,075
Other current assets
549
965
Assets held for sale
10
19
Total current assets
12,051
12,573
Deferred income taxes
1,453
596
Other non-current assets
441
515
Property, plant and equipment, net
5,739
5,982
Operating lease right-of-use assets
419
495
Identifiable intangible assets, net
6,270
7,466
Goodwill
17,633
20,040
Total assets
44,006
47,666
LIABILITIES & EQUITY Current liabilities:
Short-term debt
2,109
1,426
Sales reserves and allowances
3,750
4,241
Trade payables
1,887
1,686
Employee-related obligations
566
563
Accrued expenses
2,151
2,208
Other current liabilities
1,005
903
Total current liabilities
11,469
11,027
Long-term liabilities: Deferred income taxes
548
784
Other taxes and long-term liabilities
3,847
2,578
Senior notes and loans
19,103
21,617
Operating lease liabilities
349
416
Total long-term liabilities
23,846
25,395
Equity: Teva shareholders’ equity:
7,897
10,278
Non-controlling interests
794
966
Total equity
8,691
11,244
Total liabilities and equity
44,006
47,666
TEVA PHARMACEUTICAL INDUSTRIES LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in
millions)
Year ended
Three months ended
December 31,
December 31,
2022
2021
2022
2021
Operating activities:
(Audited)
(Audited)
(Unaudited)
(Unaudited)
Net income (loss) $
(2,406)
$
456
$
(1,254)
$
(152)
Adjustments to reconcile net income (loss) to net cash provided by
operations: Impairment of goodwill, long-lived assets and assets
held for sale
2,447
584
1,445
183
Depreciation and amortization
1,308
1,330
306
320
Net change in operating assets and liabilities
1,257
(1,701)
250
180
Deferred income taxes — net and uncertain tax positions
(1,059)
(120)
155
(133)
Stock-based compensation
124
119
36
33
Other items
(91)
16
26
20
Research and development in process
-
10
-
10
Net loss (gain) from investments and from sale of business and long
lived assets
10
104
9
(5)
Net cash provided by (used in) operating activities
1,590
798
973
456
Investing activities: Beneficial interest collected
in exchange for securitized trade receivables
1,140
1,648
286
370
Proceeds from sale of business and long lived assets
68
311
23
42
Purchases of property, plant and equipment
(548)
(562)
(142)
(153)
Purchases of investments and other assets
(1)
(47)
-
(11)
Proceeds from sale of investments
4
172
2
-
Other investing activities
-
1
1
(2)
Acquisitions of businesses, net of cash acquired
(7)
-
-
-
Net cash provided by (used in) investing activities
656
1,523
170
246
Financing activities: Repayment of senior notes and
loans and other long term liabilities
(1,369)
(6,649)
(713)
(5,174)
Proceeds from senior notes, net of issuance costs
-
4,974
-
4,974
Proceeds from short term debt
-
700
-
200
Repayment of short term debt
-
(700)
-
(500)
Redemption of convertible debentures
-
(491)
-
-
Other financing activities
(118)
(6)
-
(1)
Net cash provided by (used in) financing activities
(1,487)
(2,172)
(713)
(501)
Translation adjustment on cash and cash equivalents
(123)
(128)
146
(48)
Net change in cash, cash equivalents and restricted cash $
636
$
21
$
576
$
153
Balance of cash, cash equivalents and restricted cash at
beginning of year
2,198
2,177
2,258
2,045
Balance of cash, cash equivalents and restricted cash at end of
year
2,834
2,198
2,834
2,198
Reconciliation of cash, cash equivalents and
restricted cashreported in the consolidated Balance sheets:
Cash and cash equivalents
2,801
2,165
2,801
2,165
Restricted cash included in other current assets
33
33
33
33
Total cash, cash equivalents and restricted cash shownin the
statements of cash flows
2,834
2,198
2,834
2,198
Reconciliation of gross profit to Non-GAAP gross
profit Three months ended Year ended December 31,
December 31, ($ in millions)
2022
2021
2022
2021
Gross profit ($)
1,770
2,050
($)
6,973
7,594
Gross profit margin
45.6%
50.0%
46.7%
47.8%
Increase (decrease) for excluded items: Amortization of purchased
intangible assets
136
165
649
702
Costs related to regulatory actions taken in facilities
1
5
7
23
Equity compensation
4
6
21
23
Accelerated Depreciation
39
5
115
18
Other non-GAAP items*
154
70
290
252
Non-GAAP gross profit ($)
2,105
2,301
($)
8,056
8,612
Non-GAAP gross profit margin**
54.2%
56.1%
54.0%
54.2%
* Other non-GAAP items include other
exceptional items that we believe are sufficiently large that their
exclusion is important to facilitate an understanding of trends in
our financial results, such as certain accelerated depreciation
expenses and inventory write offs, primarily related to
the rationalization of our plants and
other unusual events.
** Non-GAAP gross profit margin is non-GAAP gross profit as a
percentage of revenue.
Reconciliation of operating income
(loss) to Non-GAAP operating income (loss) Three months
ended Year ended, December 31, December 31, ($ in millions)
2022
2021
2022
2021
Operating income (loss) ($)
(855)
78
($)
(2,099)
1,716
Operating margin
(22%)
1.9%
(14.1%)
10.8%
Increase (decrease) for excluded items: Amortization of purchased
intangible assets
156
188
732
802
Legal settlements and loss contingencies
34
604
2,082
717
Goodwill impairment
1,300
-
2,045
-
Impairment of long-lived assets
145
183
402
584
Other R&D expenses
-
10
-
15
Restructuring costs
30
37
146
133
Costs related to regulatory actions taken in facilities
1
5
7
23
Equity compensation
36
32
124
118
Contingent consideration
63
14
163
7
Gain on sale of business
(15)
(7)
(47)
(51)
Accelerated depreciation
39
5
117
18
Other non-GAAP items*
196
98
465
318
Non-GAAP operating income (loss) ($)
1,130
1,248
($)
4,139
4,401
Non-GAAP operating margin**
29.1%
30.4%
27.7%
27.7%
* Other non-GAAP items include other
exceptional items that we believe are sufficiently large that their
exclusion is important to facilitate an understanding of trends in
our financial results, such as certain accelerated depreciation
expenses and inventory write offs, primarily related to the
rationalization of our plants, material litigation fees and other
unusual events.
** Non-GAAP operating margin is Non-GAAP operating income as a
percentage of revenues.
Reconciliation of net income
(loss) attributable to Teva to Non-GAAP net income (loss)
attributable to Teva Three months ended Year ended
December 31, December 31, ($ in millions except per share amounts)
2022
2021
2022
2021
Net income (loss) attributable to Teva ($)
(1,221)
(159)
($)
(2,353)
417
Increase (decrease) for excluded items: Amortization of purchased
intangible assets
156
188
732
802
Legal settlements and loss contingencies
34
604
2,082
717
Goodwill impairment
1,300
-
2,045
-
Impairment of long-lived assets
145
183
402
584
Other R&D expenses
-
10
-
15
Restructuring expenses
30
37
146
133
Costs related to regulatory actions taken in facilities
1
5
7
23
Equity compensation expenses
36
32
124
118
Contingent consideration expenses
63
14
163
7
Gain on sale of business
(15)
(7)
(47)
(51)
Accelerated depreciation
39
5
117
18
Financial expenses
14
25
61
128
Share in profits (losses) of associated companies - net
-
-
(22)
(1)
Items attributable to non-controlling interests
(43)
(5)
(96)
(15)
Other non-GAAP items*
196
98
465
318
Corresponding tax effects and unusual tax items
56
(178)
(1,016)
(360)
Non-GAAP net income attributable to Teva ($)
791
854
($)
2,812
2,855
Non-GAAP tax rate**
11.0%
15.0%
11.7%
16.4%
GAAP diluted earnings (loss) per share attributable to Teva
($)
(1.10)
(0.14)
($)
(2.12)
0.38
EPS difference***
1.81
0.91
4.64
2.20
Non-GAAP Diluted EPS attributable to Teva*** ($)
0.71
0.77
($)
2.52
2.58
Non-GAAP average number of shares (in millions)***
1,121
1,108
1,115
1,107
* Other non-GAAP items include other
exceptional items that we believe are sufficiently large that their
exclusion is important to facilitate an understanding of trends in
our financial results, such as certain accelerated depreciation
expenses and inventory write offs, primarily related to the
rationalization of our plants, material litigation fees and other
unusual events.
** Non-GAAP tax rate is tax expenses excluding the impact of
non-GAAP tax adjustments presented above as a percentageof income
(loss) before income taxes excluding the impact of non-GAAP
adjustments presented above. ***EPS difference and diluted non-GAAP
EPS are calculated by dividing our non-GAAP net income attributable
to Tevaby our non-GAAP diluted weighted average number of shares.
Reconciliation of net income (loss) to adjusted
EBITDA
Three months ended
Year ended
December 31,
December 31,
($ in millions)
2022
2021
2022
2021
Net income (loss) ($)
(1,254)
(151)
($)
(2,406)
456
Increase (decrease) for excluded items: Financial expenses
245
253
966
1,058
Income taxes
154
(24)
(638)
211
Share in losses of associated companies- net
-
-
(21)
(9)
Depreciation
150
132
576
528
Amortization
156
188
732
802
EBITDA ($)
(550)
397
($)
(791)
3,046
Legal settlements and loss contingencies
34
604
2,082
717
Goodwill impairment
1,300
-
2,045
-
Impairment of long lived assets
145
183
402
584
Other R&D expenses
-
10
-
15
Restructuring costs
30
37
146
133
Costs related to regulatory actions taken in facilities
1
5
7
23
Equity compensation
36
32
124
118
Contingent consideration
63
14
163
7
Gain on sale of business
(15)
(7)
(47)
(51)
Other non-GAAP items *
196
98
465
318
Adjusted EBITDA ($)
1,240
1,373
($)
4,598
4,911
* Other non-GAAP items include other
exceptional items that we believe are sufficiently large that their
exclusion is important to facilitate an understanding of trends in
our financial results, such as certain accelerated depreciation
expenses and inventory write offs, primarily related to the
rationalization of our plants, material litigation fees and other
unusual events.
Segment Information
North America
Europe
International Markets
Three months ended December
31,
Three months ended December
31,
Three months ended December
31,
2022
2021
2022
2021
2022
2021
(U.S. $ in millions)
(U.S. $ in millions)
(U.S. $ in millions)
Revenues $
2,002
$
2,003
$
1,129
$
1,268
$
482
$
527
Gross profit
1,085
1,145
669
760
253
292
R&D expenses
131
151
55
60
18
17
S&M expenses
209
255
187
218
112
114
G&A expenses
113
88
63
64
30
30
Other (income) expense
(2)
(17)
(2)
(2)
§ § Segment profit $
633
$
668
$
366
$
420
$
93
$
131
Segment Information
North America
Europe
International Markets
Year ended December
31,
Year ended December
31,
Year ended December
31,
2022
2021
2022
2021
2022
2021
(U.S. $ in millions)
(U.S. $ in millions)
(U.S. $ in millions)
Revenues $
7,452
$
7,809
$
4,525
$
4,886
$
1,903
$
2,032
Gross profit
3,926
4,226
2,700
2,823
1,033
1,118
R&D expenses
532
618
213
244
72
68
S&M expenses
941
988
748
846
405
417
G&A expenses
474
427
246
244
119
109
Other (income) expense
(15)
(31)
(3)
(5)
(43)
(5)
Segment profit $
1,993
$
2,224
$
1,496
$
1,494
$
479
$
529
Reconciliation of our segment profit to
consolidated income before income taxes
Three months ended
December 31,
2022
2021
(U.S.$ in millions) North America profit $
633
$
668
Europe profit
366
420
International Markets profit
93
131
Total segment profit
1,093
1,219
Profit (loss) of other activities
37
29
Total segment profit
1,130
1,248
Amounts not allocated to segments: Amortization
156
188
Other asset impairments, restructuring and other items
132
113
Goodwill impairment
1,300
-
Intangible asset impairments
132
129
Legal settlements and loss contingencies
34
604
Other unallocated amounts
231
136
Consolidated operating income (loss)
(855)
78
Financial expenses - net
245
253
Consolidated income (loss) before income taxes $
(1,100)
$
(175)
Reconciliation of our segment profit to
consolidated income before income taxes Year
ended December 31,
2022
2021
(U.S.$ in millions) North America profit $
1,993
$
2,224
Europe profit
1,496
1,494
International Markets profit
479
529
Total segment profit
3,968
4,246
Profit (loss) of other activities
172
154
Total segment profit
4,140
4,401
Amounts not allocated to segments: Amortization
732
802
Other asset impairments, restructuring and other items
414
341
Goodwill impairment
2,045
-
Intangible asset impairments
355
424
Legal settlements and loss contingencies
2,082
717
Other unallocated amounts
610
402
Consolidated operating income (loss)
(2,099)
1,716
Financial expenses - net
966
1,058
Consolidated income (loss) before income taxes $
(3,065)
$
658
Revenues by Activity and Geographical Area
(Unaudited)
Three months ended December 31,
PercentageChange
2022
2021
2021-2022
(U.S.$ in millions) North America segment Generics
products $
818
$
905
(10%)
AJOVY
75
53
41%
AUSTEDO
344
282
22%
BENDEKA/TREANDA
75
93
(20%)
COPAXONE
101
129
(22%)
Anda
450
355
27%
Other
138
186
(26%)
Total
2,002
2,003
§ § Represents an amount less than $0.5 million or 0.5%, as
applicable
Three months ended December
31, PercentageChange
2022
2021
2021-2022
(U.S.$ in millions) Europe segment Generics products
$
914
$
932
(2%)
AJOVY
35
29
19%
COPAXONE
61
95
(35%)
Respiratory products
75
93
(19%)
Other
43
119
(63%)
Total
1,129
1,268
(11%)
Three months ended December 31,
PercentageChange
2022
2021
2021-2022
(U.S.$ in millions) International Markets segment
Generics products $
411
$
438
(6%)
AJOVY
13
4
188%
COPAXONE
7
8
(19%)
Other
51
77
(34%)
Total
482
527
(9%)
Revenues by Activity and Geographical Area
(Unaudited)
Year ended December 31,
PercentageChange
2022
2021
2021-2022
(U.S.$ in millions) North America segment Generics
products $
3,549
$
3,769
(6%)
AJOVY
218
176
24%
AUSTEDO
963
802
20%
BENDEKA/TREANDA
316
385
(18%)
COPAXONE
387
577
(33%)
Anda
1,471
1,323
11%
Other
549
777
(29%)
Total
7,452
7,809
(5%)
Year ended December 31,
PercentageChange
2022
2021
2021-2022
(U.S.$ in millions) Europe segment Generics products
$
3,466
$
3,569
(3%)
AJOVY
124
87
43%
COPAXONE
268
391
(31%)
Respiratory products
273
356
(23%)
Other
393
483
(19%)
Total
4,525
4,886
(7%)
Year ended December 31,
PercentageChange
2022
2021
2021-2022
(U.S.$ in millions)
International Markets segment
Generics products $
1,586
$
1,649
(4%)
AJOVY
35
50
(30%)
COPAXONE
36
37
(3%)
Other
246
295
(17%)
Total
1,903
2,032
(6%)
Free cash flow reconciliation (Unaudited)
Three months ended December 31,
2022
2021
(U.S. $ in millions) Net cash provided by
operating activities
973
456
Beneficial interest collected in exchange for securitized accounts
receivables
286
370
Purchase of property, plant and equipment
(142)
(153)
Proceeds from sale of business and long lived assets.
23
43
Free cash flow $
1,140
$
716
Free cash flow reconciliation (Unaudited)
Year ended December 31,
2022
2021
(U.S. $ in millions) Net cash provided by
operating activities
1,590
798
Beneficial interest collected in exchange for securitized accounts
receivables
1,140
1,648
Purchases of property, plant and equipment
(548)
(562)
Proceeds from sale of business and long lived assets
68
311
Acquisition of businesses, net of cash acquired
(7)
-
Free cash flow $
2,243
$
2,196
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230208005167/en/
IR Contacts Ran Meir (267) 468-4475 Yael Ashman +972 (3)
914 8262
PR Contacts Kelley Dougherty (973) 832-2810 Eden Klein
+972 (3) 906 2645
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