Thursday, August 01, 2013 « Back
Teva Reports Second Quarter 2013 Results

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Net Revenues of $4.9 Billion

Non-GAAP Diluted EPS of $1.20, GAAP Diluted EPS Loss of $0.53

JERUSALEM--(BUSINESS WIRE)--Aug. 1, 2013-- Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) today reported results for the quarter ended June 30, 2013.

“Net revenue of $4.9 billion was in-line with the previous quarter, and we are pleased with increased sales in our Specialty franchise, as well as in our OTC business,” said Jeremy Levin, Teva’s President and Chief Executive Officer. “In the short to mid-term, we are especially excited by the positive momentum of our U.S. Generics business, progression in our R&D portfolio, especially in the NTE franchise, and by the expected launches of key generic and specialty medicines."

Dr. Levin continued, “Teva is a different company than it was one year ago; I have great confidence in where the company is and in its future. We are building a strong and diverse business, as well as a robust pipeline that positions Teva to achieve a high level of performance and growth."

Revenues for the three months ended June 30, 2013, amounted to $4.9 billion, a decrease of 1% compared to the second quarter of 2012, which was a strong quarter. The decrease was primarily attributed to a decline in revenues of generic medicines in the United States and Europe, and exchange rate fluctuations in our ROW markets, primarily in Japan, which had a negative impact of $55 million on sales. The decline was partially offset by higher revenues of COPAXONE® and other specialty medicines in the United States and in Europe as well as by higher revenues from our OTC products.

Revenues by Geography for the Second Quarter 20131

Net revenues in the United States in the second quarter were $2.5 billion (51% of total revenues), an increase of 2% compared to the second quarter of 2012, driven primarily by increased sales of COPAXONE®, offset by lower revenues of generic medicines.

Net revenues in Europe in the second quarter were $1.5 billion (30% of total revenues), a decrease of 3% (4% in local currency terms) compared to the second quarter of 2012. The decline in revenues was mainly due to lower revenues from sales of generic medicines. This was partially offset by increased sales from our OTC business.

Net revenues in the Rest of the World in the second quarter totaled $945 million (19% of total revenues), a decrease of 8% (1% in local currency terms) compared to the second quarter of 2012. In addition to negative foreign currency effects (primarily the Japanese yen), the decline in revenues was due to lower revenues in Russia, resulting from the timing of COPAXONE® tenders as well as in Canada and Japan.

      Three Months Ended

June 30,

                 

Percentage
Change

     

Percentage
Change

   
2013       2012 % of 2013 % of 2012 2013-2012

2013 from
2012

U.S. $ in millions in local currencies
United States:
Generic 970 1,054 20% 21% (8%) (8%)
Specialty 1,497 1,365 30% 27% 10% 10%
Others 55 45 1% 1% 22% 22%
Total United States 2,522 2,464 51% 49% 2% 2%
Europe*:
Generic 860 905 18% 18% (5%) (6%)
Specialty 405 406 8% 8% § (1%)
Others 192 192 4% 4% § (1%)
Total Europe 1,457 1,503 30% 30% (3%) (4%)
Rest of the World:
Generic 581 655 12% 13% (11%) (2%)
Specialty 149 178 3% 4% (16%) (14%)
Others 215 194 4% 4% 11% 14%
Total Rest of the World 945 1,027 19% 21% (8%) (1%)
Total Revenues 4,924 4,994 100% 100% (1%) §
 

 

*All members of the European Union, Switzerland, Norway and certain South Eastern Europe countries

Revenues by Product Line for the Second Quarter 2013

Generic medicines net revenues in the second quarter were $2.4 billion (including API sales of $181 million), a decrease of 8% compared to $2.6 billion in the second quarter of 2012. Generic revenues comprised 49% of total revenues in the quarter, compared to 52% in the second quarter of 2012. Generic revenues consisted of:

  • U.S. revenues of $970 million, a decrease of 8% compared to the second quarter of 2012. The decrease resulted from a decline in sales of generic Lexapro® (for which we had exclusive rights in the second quarter of 2012); the absence of royalties related to the sales of the generic equivalent of Lipitor® (atorvastatin); and a decline in sales of irbesartan tablets and irbesartan HCTZ tablets, which launched at the end of the first quarter of 2012. This was partially offset by higher sales of generic versions of Pulmicort® (budesonide inhalation); Adderall IR® (mixed amphetamine salts IR), as well as products that were sold in the second quarter of 2013 that were not sold in the second quarter of 2012, the largest of which was generic version of TriCor® (fenofibrate).
  • European revenues of $860 million, a decrease of 5% (6% in local currency terms) compared to the second quarter of 2012. The decrease was mainly due to lower sales in Italy and Spain which was partially offset by increased generic penetration in France.
  • ROW revenues of $581 million, a decrease of 11% (2% in local currency terms), compared to the second quarter of 2012. The decrease was primarily due to lower sales in Japan, as well as lower sales in Canada, partially offset by continued growth in our other ROW markets.
  Three Months Ended

June 30,

 

Percentage
Change

2013   2012   % of 2013   % of 2012

2013 from
2012

U.S. $ in millions
 
Generic Medicines $ 2,411 $ 2,614 49% 52% (8%)
API 181 200 4% 4% (10%)

Specialty medicines net revenues in the second quarter were $2.1 billion, an increase of 5% compared to $1.9 billion in the second quarter of 2012. Specialty revenues consisted of:

  • U.S. revenues of $1.5 billion, an increase of 10% compared to the second quarter of 2012.
  • European revenues of $405 million, flat compared to the second quarter of 2012.
  • ROW revenues of $149 million, a decrease of 16% (14% in local currency terms), compared to the second quarter of 2012.

Specialty revenues comprised 42% of total revenues in the quarter, compared to 39% in the second quarter of 2012.

The increase in specialty medicines revenues from the second quarter of 2012 was primarily due to increased revenues of COPAXONE® as well as of several other specialty medicines, mainly TREANDA®, and ProAir®, which was offset by a decrease in revenues of Provigil® in the United States due to the introduction of generic competition during 2012, as well as lower revenues of NUVIGIL® and AZILECT®.

COPAXONE® revenues increased 9% to $1.1 billion compared to $982 million in the second quarter of 2012. The increase primarily resulted from COPAXONE®‘s continued global market share leadership. In the U.S., sales increased 17% to $817 million, as a result of price and volume increases. Sales outside the U.S. were $253 million, a decrease of 10% in both dollar and local currency terms, compared to the second quarter of 2012, primarily due to the timing of tenders in Russia.

AZILECT® revenues recorded by Teva were $87 million, a decrease of 8% compared to the second quarter of 2012, while global in-market revenues increased 10% to $119 million, primarily due to increases in both price and volume in the United States.

  Three Months Ended

June 30,

 

Percentage
Change

2013   2012   % of 2013   % of 2012

2013 from
2012

U.S. $ in millions
 
Specialty Medicines 2,051 1,949 42% 39% 5%
CNS 1,345 1,309 27% 27% 3%
Copaxone® 1,070 982 22% 20% 9%
Azilect® 87 95 2% 2% (8%)
Nuvigil® 74 91 2% 2% (19%)
Provigil® 19 48 § 1% (60%)
Oncology 239 198 5% 4% 21%
Treanda® 177 139 4% 3% 27%
Respiratory 226 209 5% 4% 8%
ProAir® 115 87 2% 2% 32%
Qvar® 76 80 2% 2% (5%)
Women's Health 107 112 2% 2% (4%)
Other Specialty 134 121 3% 2% 11%
 
§ Less than 0.5%.

OTC net revenues in the quarter were $257 million, an increase of 17% (21% in local currency terms) compared to $219 million in the second quarter of 2012, primarily due to higher sales of our consumer joint venture, PGT Healthcare, which enjoyed strong revenues and share growth in all key markets including Europe, Russia and Israel.

Other net revenues in the quarter were $205 million, mostly from the distribution of third-party products in Israel and Hungary, compared to $212 million in the second quarter of 2012.

  Three Months Ended

June 30,

 

Percentage
Change

2013   2012   % of 2013   % of 2012

2013 from
2012

U.S. $ in millions
 
All Others 462 431 9% 9% 7%
OTC 257 219 5% 5% 17%
Other Revenues 205 212 4% 4% (3%)

Key Metrics for the Second Quarter 2013

Exchange rate differences between this quarter and the second quarter of 2012 reduced our revenues by approximately $55 million. We also recorded lower expenses due to these currency fluctuations and, as a result, changes in exchange rates had an overall net negative impact on our non-GAAP operating profit of approximately $35 million.

Non-GAAP Information This quarter, we had net non-GAAP charges of $1,470 million, consisting mainly of legal expenses and amortization of purchased intangible assets. Accordingly, non-GAAP net income and non-GAAP EPS for the quarter are adjusted to exclude these and certain other items, as follows:

  • Legal expenses totaling $1,435 million related mainly to the additional $930 million provision for the settlement of the pantoprazole patent litigation and a $485 million provision relating to the modafinil antitrust litigation;
  • Amortization of purchased intangible assets totaling $288 million, of which $279 million is included in cost of goods sold and the remaining $9 million in selling and marketing expenses;
  • Restructuring, acquisition and other expenses of $55 million, mostly related to the Cephalon acquisition;
  • Impairment of long-lived assets that amounted to $49 million;
  • Costs of $16 million related to regulatory actions taken in facilities;
  • Financial expenses of $7 million in connection with early redemption of senior notes and others;
  • Purchase of research and development in-process of $3 million; and
  • Related tax benefit of $383 million.

Teva believes that excluding such items facilitates investors' understanding of the Company's business. See the attached tables for a reconciliation of U.S. GAAP results to the adjusted non-GAAP figures.

GAAP net loss and GAAP loss per share were $452 million and $0.53 in the quarter compared to GAAP net income and GAAP EPS of $863 million and $0.99, respectively, in the second quarter of 2012.

Quarterly non-GAAP operating income of $1.3 billion, down 9% compared to the second quarter of 2012. Quarterly GAAP operating loss was $586 million compared to GAAP operating income of $1 billion in the second quarter of 2012.

Non-GAAP gross profit margin was 58.7% in the quarter, compared to 59.5% in the second quarter of 2012. This reflects a decreased contribution from the sales of certain high-margin generic medicines, offset by higher sales of OTC products and COPAXONE®. GAAP gross profit margin was 52.7% in the quarter, compared to 53.2% in the second quarter of 2012.

    FY 2012   Q2 2013
Product Line   Non-GAAP Gross Profit Margin

(% of total net revenues for the line)

  Non-GAAP Gross Profit Margin

(% of total net revenues for the line)

Generic (including API)   43.5%   40.4%
MS   89.2%   89.2%
Specialty (excluding MS)   86.8%   84.7%

Net Research & Development (R&D) expenditures in the quarter (excluding purchase of in-process R&D) totaled $336 million, or 6.8% of revenues, compared to $298 million, or 6.0% of revenues in the second quarter of 2012. The increase in R&D spending primarily reflects the progress in development activities.

    FY 2012   Q2 2013
Product Line   Non-GAAP R&D Expenses

(% of total net revenues for the line)

  Non-GAAP R&D Expenses

(% of total net revenues for the line)

Generic (including API)   4.7%   5.2%
MS   2.1%   1.4%
Specialty (excluding MS)   17.1%   19.9%

Selling and Marketing expenditures (excluding amortization of purchased intangible assets) totaled $973 million, or 19.8% of revenues, in the quarter, compared to $973 million, or 19.5% of revenues in the second quarter of 2012.

    FY 2012   Q2 2013
Product Line   Non-GAAP S&M Expenses

(% of total net revenues for the line)

  Non-GAAP S&M Expenses

(% of total net revenues for the line)

Generic (including API)   19.0%   15.0%
MS   12.6%   11.2%
Specialty (excluding MS)   28.4%   32.3%

General and Administrative (G&A) expenditures totaled $319 million in the quarter, or 6.5% of revenues, compared with $316 million, or 6.3% of revenues, for the second quarter of 2012.

Non-GAAP Financial expenses totaled $82 million in the quarter, compared with $97 million in the second quarter of 2012. The decrease resulted primarily from positive foreign currency effects and lower debt balances, partially offset by increased financing costs resulting from the longer maturity of our debt portfolio.

The provision for non-GAAP taxes for the quarter amounted to $161 million on pre-tax non-GAAP income of $1.2 billion. The provision for taxes in the second quarter of 2012 was $162 million on pre-tax income of $1.3 billion. The expected annual tax rate for 2013 is mainly affected by the geographical mix of the products we expect to sell this year and by tax benefits from planned mergers of certain subsidiaries.

Cash flow from operations during the quarter was approximately $875 million, compared to $1.2 billion in the second quarter of 2012, a decrease of 27%. Free cash flow, excluding net capital expenditures and dividends was $378 million, a decrease of 47% compared to $709 million in the second quarter of 2012. The decrease in cash flow mainly reflects the reduction in net income in the second quarter of 2013 and higher dividend payments.

Cash and marketable securities on June 30, 2013 amounted to $1.4 billion.

During the quarter, share repurchases totaled approximately 7.6 million shares for an aggregate purchase price of approximately $297 million. Since the beginning of 2013, Teva has repurchased 12.8 million shares for approximately $497 million. Since the beginning of 2012, Teva has repurchased 40.9 million shares for approximately $1.7 billion as part of the $3.0 billion share repurchase plan which was authorized in December 2011.

For the second quarter of 2013, the weighted average share count for the fully diluted earnings per share calculation was 849 million on a GAAP and 850 million on a non-GAAP basis. At June 30, 2013, the share count for calculating Teva's market capitalization was approximately 845 million.

Total equity at June 30, 2013, was $21.6 billion, a decrease of $1.2 billion, compared to $22.8 billion at March 31, 2013. The decrease in total equity is primarily a result of the GAAP net loss of $452 million, share repurchase and dividends as well as currency translation adjustments.

Dividend

The Board of Directors, at its meeting on July 30, 2013, declared a cash dividend for the second quarter of 2013 of NIS 1.15 (approximately 32.2 cents according to the rate of exchange on July 30, 2013) per share.

The record date will be August 20, 2013, and the payment date will be September 2, 2013. Tax will be withheld at a rate of 15%.

Conference Call

Teva will host a conference call to discuss its second quarter 2013 results on Thursday, August 1, 2013, at 8:00 a.m. ET. The call will be webcast and can be accessed through the Company's website at www.tevapharm.com, or by dialing in to the following numbers (at least 10 minutes before the scheduled start time): United States and Canada 1-888-771-4371; International 1-847-585-4405; passcode: 35300463. 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 also be accessed until August 8, 2013, at 11:59 p.m. ET by calling 1-888-843-7419 or 1-630-652-3042; passcode: 35300463.

* For a full analysis of our quarterly revenues by geography and by product line, beginning in Q4 2010, please visit our website at www.ir.tevapharm.com.

About Teva

Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) is a leading global pharmaceutical company, committed to increasing access to high-quality healthcare by developing, producing and marketing affordable generic drugs as well as innovative and specialty pharmaceuticals and active pharmaceutical ingredients. Headquartered in Israel, Teva is the world's leading generic drug maker, with a global product portfolio of more than 1,000 molecules and a direct presence in about 60 countries. Teva's branded businesses focus on CNS, oncology, pain, respiratory and women's health therapeutic areas as well as biologics. Teva currently employs approximately 46,000 people around the world and reached $20.3 billion in net revenues in 2012.

Teva's Safe Harbor Statement under the U. S. Private Securities Litigation Reform Act of 1995:

This release contains forward-looking statements, which express the current beliefs and expectations of management. Such statements are based on management’s current beliefs and expectations and involve a number of known and unknown risks and uncertainties that could cause our future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating to: our ability to develop and commercialize additional pharmaceutical products, including our ability to develop, manufacture, market and sell biopharmaceutical products, competition for our innovative products, especially COPAXONE® (including competition from innovative orally-administered alternatives, as well as from potential purported generic equivalents), competition for our generic products (including from other pharmaceutical companies and as a result of increased governmental pricing pressures), competition for our specialty pharmaceutical businesses, our ability to achieve expected results through our specialty, including innovative, R&D efforts, the effectiveness of our patents and other protections for innovative products, decreasing opportunities to obtain U.S. market exclusivity for significant new generic products, our ability to identify, consummate and successfully integrate acquisitions, the effects of increased leverage as a result of recent acquisitions, the extent to which any manufacturing or quality control problems damage our reputation for high quality production and require costly remediation, our potential exposure to product liability claims to the extent not covered by insurance, increased government scrutiny in both the U.S. and Europe of our agreements with brand companies, potential liability for sales of generic products prior to a final resolution of outstanding patent litigation, our exposure to currency fluctuations and restrictions as well as credit risks, the effects of reforms in healthcare regulation and pharmaceutical pricing and reimbursement, any failures to comply with complex Medicare and Medicaid reporting and payment obligations, governmental investigations into sales and marketing practices (particularly for our specialty pharmaceutical products), uncertainties surrounding the legislative and regulatory pathways for the registration and approval of biotechnology-based products, adverse effects of political or economical instability, corruption, major hostilities or acts of terrorism on our significant worldwide operations, interruptions in our supply chain or problems with our information technology systems that adversely affect our complex manufacturing processes, any failure to retain key personnel or to attract additional executive and managerial talent, the impact of continuing consolidation of our distributors and customers, variations in patent laws that may adversely affect our ability to manufacture our products in the most efficient manner, potentially significant impairments of intangible assets and goodwill, potential increases in tax liabilities, the termination or expiration of governmental programs or tax benefits, environmental risks and other factors that are discussed in our Annual Report on Form 20-F for the year ended December 31, 2012 and in our other filings with the U.S. Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made and the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

_________________________

1 For a full analysis of our quarterly revenues by geography and by product line, beginning in Q4 2010, please visit our website at www.ir.tevapharm.com.

 
 

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,
2013   2012 2013   2012
Net revenues 4,924 4,994 9,825 10,096
Cost of sales 2,331   2,337   4,642   4,830  
Gross profit 2,593 2,657 5,183 5,266
Research and development expenses – net 339 298 668 590
Selling and marketing expenses 982 981 1,977 1,909
General and administrative expenses 319 316 626 628
Legal settlements, impairments, restructuring and others 1,539   55   1,624   204  
Operating income (loss) (586 ) 1,007 288 1,935
Financial expenses – net 89   97   264   167  
Income (loss) before income taxes (675 ) 910 24 1,768
Provision for income taxes (222 ) 39 (169 ) 30
Share in losses of associated companies – net 3   12   23   24  
Net income (loss) (456 ) 859 170 1,714
Net loss attributable to non-controlling interests (4 ) (4 ) (8 ) (8 )
Net income (loss) attributable to Teva (452 ) 863   178   1,722  
 
Earnings (loss) per share attributable to Teva: Basic ($) (0.53 ) 0.99   0.21   1.97  
Diluted ($) (0.53 ) 0.99   0.21   1.96  
Weighted average number of shares (in millions): Basic 849   871   852   876  
Diluted 849   873   853   878  
 
Non-GAAP net income attributable to Teva:* 1,018   1,117   1,978   2,417  
 
Non-GAAP earnings per share attributable to Teva: Basic ($) 1.20   1.28   2.32   2.76  
Diluted ($) 1.20   1.28   2.32   2.75  
 
Weighted average number of shares (in millions): Basic 849   871   852   876  
Diluted 850   873   853   878  
 
 
* See reconciliation attached.
 

Condensed Balance Sheets

(U.S. dollars in millions)

 
  June 30,   December 31,
2013 2012
ASSETS Unaudited Audited
Current assets:    
Cash and cash equivalents 1,245 2,879
Accounts receivable 5,305 5,572
Inventories 5,326 5,502
Deferred taxes 976 1,142
Other current assets   1,239     1,260  
Total current assets 14,091 16,355
Other non current assets 1,399 1,338
Property, plant and equipment, net 6,360 6,315
Identifiable intangible assets, net 7,064 7,745
Goodwill   18,589     18,856  
Total assets   47,503     50,609  
 
 
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt and current maturities of long term liabilities 2,534 3,006
Sales reserves and allowances 4,776 4,934
Accounts payable and accruals 3,107 3,376
Other current liabilities   2,418     1,572  
Total current liabilities 12,835 12,888
 
Long-term liabilities:
Deferred income taxes 1,415 1,849
Other taxes and long term payables 1,718 1,293
Senior notes and loans   9,925     11,712  
Total long term liabilities 13,058 14,854
Equity:
Teva shareholders’ equity 21,515 22,768
Non-controlling interests   95     99  
Total equity   21,610     22,867  
Total liabilities and equity   47,503     50,609  
 

Condensed Cash Flow

(Unaudited, U.S. Dollars in millions)

 
  Three months ended   Six months ended
June 30, June 30,
2013   2012 2013   2012
Operating activities:
Net income (loss) (456 ) 859 170 1,714
Net change in operating assets and liabilities 1,150 (179 ) 1,210 (456 )
Items not involving cash flow 181 511 597 689
       
Net cash provided by operating activities 875 1,191 1,977 1,947
 
Net cash used in investing activities (266 ) (282 ) (532 ) (476 )
 
Net cash used in financing activities (748 ) (761 ) (3,008 ) (1,374 )
 
Translation adjustment on cash and cash equivalents (10 ) (22 ) (71 ) (5 )
       
Net change in cash and cash equivalents (149 ) 126 (1,634 ) 92
 
Balance of cash and cash equivalents at beginning of period 1,394 1,062 2,879 1,096
       
Balance of cash and cash equivalents at end of period 1,245   1,188   1,245   1,188  
 
Revenues by Geographic Area

(Unaudited)

 
 

Three Months Ended

     

Percentage

 

Percentage

June 30,

Change

Change

2013 from

2013   2012 % of 2013 % of 2012 2013-2012

2012

in local

U.S. $ in millions

currencies

United States:    
Generic 970 1,054 20 % 21 % (8 %) (8 %)
Specialty 1,497 1,365 30 % 27 % 10 % 10 %
Others   55     45   1 % 1 % 22 % 22 %
Total United States 2,522 2,464 51 % 49 % 2 % 2 %
Europe*:
Generic 860 905 18 % 18 % (5 %) (6 %)
Specialty 405 406 8 % 8 % § (1 %)
Others   192     192   4 % 4 % §   (1 %)
Total Europe 1,457 1,503 30 % 30 % (3 %) (4 %)
Rest of the World:
Generic 581 655 12 % 13 % (11 %) (2 %)
Specialty 149 178 3 % 4 % (16 %) (14 %)
Others   215     194   4 % 4 % 11 % 14 %
Total Rest of the World   945     1,027   19 % 21 % (8 %) (1 %)
Total Revenues   4,924     4,994   100 % 100 % (1 %) §  
 

*All members of the European Union, Switzerland, Norway and certain South Eastern Europe countries.

§ Less than 0.5%.

 
Revenues by Geographic Area

(Unaudited)

 
       

Percentage

 

Percentage

Six Months Ended June 30,

Change

Change

2012 from

2013   2012 % of 2013 % of 2012 2013-2012

2011

in local

U.S. $ in millions

currencies

United States:    
Generic 1,865 2,273 19 % 22 % (18 %) (18 %)
Specialty 2,977 2,862 30 % 28 % 4 % 4 %
Others   121     81   1 % 1 % 49 % 49 %
Total United States 4,963 5,216 50 % 51 % (5 %) (5 %)
Europe*:
Generic 1,733 1,706 18 % 17 % 2 % 1 %
Specialty 817 774 8 % 8 % 6 % 5 %
Others   401     373   4 % 4 % 8 % 6 %
Total Europe 2,951 2,853 30 % 29 % 3 % 3 %
Rest of the World:
Generic 1,128 1,252 12 % 12 % (10 %) (2 %)
Specialty 325 387 3 % 4 % (16 %) (14 %)
Others   458     388   5 % 4 % 18 % 20 %
Total Rest of the World   1,911     2,027   20 % 20 % (6 %) §  
Total Revenues   9,825     10,096   100 % 100 % (3 %) (2 %)
 
*All members of the European Union, Switzerland, Norway and certain South Eastern Europe countries.
§ Less than 0.5%.
 
Revenues by Product line
(Unaudited)
 
   

Three Months Ended

     

Percentage

June 30,

Change

2013 from

2013   2012 % of 2013 % of 2012

2012

U.S. $ in millions
 
Generic Medicines $ 2,411 $ 2,614 49 % 52 % (8 %)
API 181 200 4 % 4 % (10 %)
Specialty Medicines 2,051 1,949 42 % 39 % 5 %
CNS 1,345 1,309 27 % 27 % 3 %
Copaxone® 1,070 982 22 % 20 % 9 %
Azilect® 87 95 2 % 2 % (8 %)
Nuvigil® 74 91 2 % 2 % (19 %)
Provigil® 19 48 § 1 % (60 %)
Oncology 239 198 5 % 4 % 21 %
Treanda® 177 139 4 % 3 % 27 %
Respiratory 226 209 5 % 4 % 8 %
ProAir® 115 87 2 % 2 % 32 %
Qvar® 76 80 2 % 2 % (5 %)
Women's Health 107 112 2 % 2 % (4 %)
Other Specialty 134 121 3 % 2 % 11 %
All Others 462 431 9 % 9 % 7 %
OTC 257 219 5 % 5 % 17 %
Other Revenues   205     212   4 % 4 % (3 %)
Total $ 4,924   $ 4,994   100 % 100 % (1 %)
 
§ Less than 0.5%.
 
Revenues by Product line
(Unaudited)
 
       

Percentage

Six Months Ended June 30,

Change

2013 from

2013   2012 % of 2013   % of 2012

2012

U.S. $ in millions  
 
Generic Medicines $ 4,726 $ 5,231 48 % 52 % (10 %)
API 367 399 4 % 4 % (8 %)
Specialty Medicines 4,119 4,023 42 % 40 % 2 %
CNS 2,693 2,758 27 % 27 % (2 %)
Copaxone® 2,134 1,891 22 % 19 % 13 %
Azilect® 180 167 2 % 2 % 8 %
Nuvigil® 157 175 2 % 2 % (10 %)
Provigil® 43 339 § 3 % (87 %)
Oncology 473 406 5 % 4 % 17 %
Treanda® 348 287 4 % 3 % 21 %
Respiratory 445 399 5 % 4 % 12 %
ProAir® 203 177 2 % 2 % 15 %
Qvar® 170 143 2 % 1 % 19 %
Women's Health 210 220 2 % 2 % (5 %)
Other Specialty 298 240 3 % 3 % 24 %
All Others 980 842 10 % 8 % 16 %
OTC 563 415 6 % 4 % 36 %
Other Revenues   417     427   4 % 4 % (2 %)
Total $ 9,825   $ 10,096   100 % 100 % (3 %)
 
§ Less than 0.5%.
 

Non GAAP reconciliation items

(Unaudited, U.S. Dollars in millions)

 
  Three months ended   Six months ended
June 30, June 30,
2013   2012 2013   2012
Expense in connection with legal settlements and reserves   1,435   (1 )   1,462   18
Amortization of purchased intangible assets - under cost of sales 279 267 548 669
Restructuring, acquisition and other expenses 55 48 98 91
Impairment of long-lived assets 49 8 64 95
Costs related to regulatory actions taken in facilities - under cost of sales 16 40 28 78
Amortization of purchased intangible assets - under selling and marketing expenses 9 8 19 20
Financial expenses in connection with early redemption of senior notes and others 7 - 101 -
Purchase of research and development in process 3 - 3 -
Inventory step-up - under cost of sales - 7 - 63
Related tax effect (383 ) (123 ) (523 ) (339 )
 
 

Reconciliation between reported Net Income attributable to Teva and Earnings per share as reported under US GAAP to Non-GAAP Net Income attributable to Teva and Earnings per share

 
  Six months ended June 30, 2013   Six months ended June 30, 2012
U.S. dollars and shares in millions (except per share amounts)
 

Non-GAAP

   

% of Net

 

Non-GAAP

   

% of Net

GAAP

Adjustments

Non-GAAP

Revenues

GAAP

Adjustments

Non-GAAP

Revenues

 
Gross profit (1) 5,183 576 5,759 58.6 % 5,266 810 6,076 60.2 %
Operating income (1)(2) 288 2,222 2,510 25.5 % 1,935 1,034 2,969 29.4 %
Net income attributable to Teva (1)(2)(3) 178 1,800 1,978 20.1 % 1,722 695 2,417 23.9 %
Earnings per share attributable to Teva - Diluted (4) 0.21 2.11 2.32 1.96 0.79 2.75
 
 
(1) Amortization of purchased intangible assets 548 669
Costs related to regulatory actions taken in facilities 28 78
Inventory step-up -   63  
Gross profit adjustments 576 810
 
(2) Expense in connection with legal settlements and reserves 1,462 18
Restructuring, acquisition and other expenses 101 91
Impairment of long-lived assets 64 95
Amortization of purchased intangible assets 19   20  
1,646 224
   
Operating profit adjustments 2,222   1,034  
 
(3) Financial expense 101 -
Tax benefit (523 ) (339 )
   
Net income adjustments 1,800   695  
 
(4) The weighted average number of shares was 853 and 878 million for the six months ended June 30, 2013 and 2012, respectively. Non-GAAP earnings per share can be reconciled with GAAP earnings per share by dividing each of the amounts included in footnotes 1-3 above by the applicable weighted average share number.
 
 

Reconciliation between reported Net Income attributable to Teva and Earnings per share as reported under US GAAP to Non-GAAP Net Income attributable to Teva and Earnings per share

 
  Three months ended June 30, 2013   Three months ended June 30, 2012
U.S. dollars and shares in millions (except per share amounts)
 

Non-GAAP

   

% of Net

 

Non-GAAP

   

% of Net

GAAP

Adjustments

Non-GAAP

Revenues

GAAP

Adjustments

Non-GAAP

Revenues

 
Gross profit (1) 2,593 295 2,888 58.7 % 2,657 314 2,971 59.5 %
Operating income (loss) (1)(2) (586 ) 1,846 1,260 25.6 % 1,007 377 1,384 27.7 %
Net income (loss) attributable to Teva (1)(2)(3) (452 ) 1,470 1,018 20.7 % 863 254 1,117 22.4 %
Earnings (loss) per share attributable to Teva - Diluted (4) (0.53 ) 1.73 1.20 0.99 0.29 1.28
 
 
(1) Amortization of purchased intangible assets 279 267
Costs related to regulatory actions taken in facilities 16 40
Inventory step-up -   7  
Gross profit adjustments 295 314
 
(2) Expense in connection with legal settlements and reserves 1,435 (1 )
Restructuring, acquisition and other expenses 58 48
Impairment of long-lived assets 49 8
Amortization of purchased intangible assets 9   8  
1,551 63
   
Operating income adjustments 1,846   377  
 
(3) Financial expense 7 -
Tax benefit (383 ) (123 )
   
Net income adjustments 1,470   254  
 
(4) The weighted average number of shares was 850 and 873 million for the three months ended June 30, 2013 and 2012, respectively. Non-GAAP earnings per share can be reconciled with GAAP loss per share by dividing each of the amounts included in footnotes 1-3 above by the applicable weighted average share number.

Source: Teva Pharmaceutical Industries Ltd.

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