ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Business Overview

We are a global pharmaceutical company, committed to helping patients around the world to access affordable medicines and benefit from innovations to improve their health. Our mission is to be a global leader in generics, innovative medicines and biopharmaceuticals, improving the lives of patients.

We operate worldwide, with headquarters in Israel and a significant presence in the United States, Europe and many other markets around the world. Our key strengths include our world-leading generic medicines expertise and portfolio, focused innovative medicines portfolio and global infrastructure and scale.

Teva was incorporated in Israel on February 13, 1944 and is the successor to a number of Israeli corporations, the oldest of which was established in 1901.

Our Business Segments

We operate our business through three segments: North America, Europe and International Markets. Each business segment manages our entire product portfolio in its region, including generics, which includes biosimilars and OTC products, as well as innovative medicines. This structure enables strong alignment and integration between operations, commercial regions, R&D and our global marketing and portfolio function, optimizing our product lifecycle across therapeutic areas.

In addition to these three segments, we have other activities, primarily the sale of API 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.

Pivot to Growth Strategy

In May 2023, we introduced our new “Pivot to Growth” strategy, which is based on four key pillars: (i) delivering on our growth engines, mainly AUSTEDO, AJOVY, UZEDY and our late-stage pipeline of biosimilars; (ii) stepping up innovation through delivering on our late-stage innovative pipeline assets as well as building up our early-stage pipeline organically and potentially through business development activities; (iii) sustaining our generics medicines powerhouse with a global commercial footprint, focused portfolio, pipeline and manufacturing footprint; and (iv) focusing our business by optimizing our portfolio and global manufacturing footprint to enable strategic capital deployment to accelerate our near and long-term growth engines and reorganizing certain of our business units to a more optimal structure, while also reorganizing key business units to enhance operational efficiency.

Macroeconomic and Geopolitical Environment

In recent years, the global economy has been impacted by fluctuating foreign exchange rates. Approximately 47% of our revenues are denominated in currencies other than the U.S. dollar and we manufacture our products largely outside of the United States. Fluctuations in the U.S. dollar versus other currencies in which we operate may materially impact our revenues, results of operations, profits and cash flows. Additionally, high levels of inflation have recently resulted in significant economic volatility and monetary tightening by central banks through increasing interest rates. In addition to rising inflation, heightened interest rates and fluctuating foreign exchange rates, the global economy has also been impacted by geopolitical tensions which have resulted in disruptions to global supply chains, including to our internal supply chain. In October 2023, Israel was attacked by a terrorist organization and entered a state of war. Our global headquarters as well as several of our manufacturing and R&D facilities are located in Israel and, while operations there currently remain largely unaffected, the impact of this war on our operations may increase, which could be material, as a result of

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the continuation, escalation or expansion of this war. In light of the above, supply chain disruptions could continue to result in delays in our production and distribution processes, R&D initiatives and our ability to timely respond to consumer demand. We have implemented certain measures in response to such macroeconomic pressures and geopolitical events and are continually considering various initiatives, including price adjustments where we are not restricted contractually or regulatorily, enhanced inventory management, alternative sourcing strategies for our raw material supply and backup production plans for key products, to allow us to partially mitigate and offset the impact of these macroeconomic and geopolitical factors. However, although inflationary and other macroeconomic pressures may ease, the higher costs we have experienced during the recent periods have already impacted our operations and will likely continue to have an effect on our financial results.

Highlights

Significant highlights of 2023 included:

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Results of Operations

The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for fiscal years 2023 and 2022. For a comparison of our results of operations and financial condition for fiscal years 2022 and 2021, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2022 Annual Report on Form 10-K, filed with the SEC on February 10, 2023.

Segment Information

North America Segment

The following table presents revenues, expenses and profit for our North America segment for the past two years:

Year ended December 31,

(U.S. in millions / % of Segment Revenues)

Other income (8 ) § (15 ) §

* Segment profit does not include amortization and certain other items.

§ Represents an amount less than 0.5%.

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North America Revenues

Our North America segment includes the United States and Canada. As part of a recent shift in executive management responsibilities, commencing January 1, 2024, Canada will be reported as part of our International Markets segment.

Revenues from our North America segment in 2023 were $8,124 million, an increase of $672 million, or 9%, compared to 2022, mainly due to an upfront payment received in connection with the collaboration on our anti-TL1A asset, higher revenues from our innovative products AUSTEDO and AJOVY, as well as higher revenues from Anda, partially offset by lower revenues from BENDEKA and TREANDA, COPAXONE and from generic products.

Revenues by Major Products and Activities

The following table presents revenues for our North America segment by major products and activities for the past two years:

(U.S. $ in millions)

financial statements.

Generic products revenues (including biosimilars) in our North America segment in 2023 decreased by 2% to $3,475 million, compared to 2022, mainly due to increased competition to parts of our portfolio, partially offset by revenues from lenalidomide capsules (the generic version of Revlimid®) and other generic launches in 2023.

Among the most significant generic products we sold in North America in 2023 were lenalidomide capsules (the generic version of Revlimid®), epinephrine injectable solution (the generic equivalent of EpiPen® and EpiPen Jr®), Truxima® (the biosimilar to Rituxan®) and albuterol sulfate inhalation aerosol (our ProAir® authorized generic).

On March 9, 2023, Teva and Natco Pharma Ltd. announced the launch of additional strengths for lenalidomide capsules (the generic equivalent of Revlimid®) in the U.S. in 2.5 mg and 20 mg strengths.

During the fourth quarter of 2023, we received approval in the U.S. for the following complex generics: Teriparitide Injection (generic version of Forteo®) for the treatment of osteoporosis in adults, Risperidone for extended-release injectable suspension (generic version of Risperdal Consta long-acting injection) for the treatment of schizophrenia, Octreotide Acetate (generic version of Sandostatin®) which is used for acromegaly or diarrhea associated with metastatic carcinoid tumors or Vasoactive Intestinal Peptide (VIP) secreting tumors, and Cyclosporine Ophthalmic Emulsion (generic version of Restasis®) which is used to increase tear production.

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For more information on our generic products, including biosimilars, see “Item 1—Business—Our Product Portfolio and Business Offering—Generic Medicines.”

In 2023, our total prescriptions were approximately 318 million (based on trailing twelve months), representing 8.4% of total U.S. generic prescriptions according to IQVIA data.

AJOVY revenues in our North America segment in 2023 increased by 6% to $230 million, compared to 2022, mainly due to growth in volume, partially offset by unfavorable net pricing. In 2023, AJOVY’s exit market share in the United States in terms of total number of prescriptions was 24.5%, compared to 26.0% in 2022.

For more information on AJOVY, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—AJOVY.”

AUSTEDO revenues in our North America segment in 2023 increased by 27% to $1,225 million, compared to 2022, mainly due to growth in volume including the launch of AUSTEDO XR in May 2023.

For more information on AUSTEDO, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—AUSTEDO.”

BENDEKA and TREANDA combined revenues in our North America segment in 2023 decreased by 24% to $241 million compared to 2022, mainly due to generic bendamustine products entry into the market. The orphan drug exclusivity that was attached to bendamustine products expired in December 2022.

For more information on BENDEKA and TREANDA, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—Oncology.”

COPAXONE revenues in our North America segment in 2023 decreased by 17% to $320 million, compared to 2022, mainly due to generic competition in the United States and a decrease in glatiramer acetate market share due to availability of alternative biologic therapies, partially offset by a reduction in sales allowance.

For more information on COPAXONE, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—COPAXONE.”

Anda revenues from third parties in our North America segment in 2023 increased by 7% to $1,577 million compared to 2022, mainly due to higher demand.

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Product Launches and Pipeline

In 2023, we launched the generic version of the following branded products in the United States:

Lubiprostone Capsules Amitiza® capsules January $ 204

Sorafenib Tablets, USP Nexavar® tablets January $ 64

Theophylline Extended-Release Tablets Theo-Dur® January $ 22

Doxepin Hydrochloride Cream Zonalon® Cream February $ 6

Teriflunomide Tablets Aubagio® Tablets March $ 1,970

Topiramate Extended-release Capsules Trokendi XR® ER capsules March $ 188

Lenalidomide Capsules 2.5mg & 20mg Revlimid® capsules March $ 185

Topiramate Extended-release Capsules Trokendi XR® May $ 244

Amlodipine Besylate Tablets, USP Norvasc® tablets May $ 88

Darunavir Tablets Prezista® tablets June $ 308

Gefitinib Tablets Norvasc® tablets June $ 5

Plerixafor Injection Mozobil® July $ 211

Everolimus Tablets Afinitor® Tablets October $ 251

Pazopanib Tablets Votrient® Tablets October $ 172

Pitavastatin Tablets Livalo® tablets November $ 299

Deferasirox Oral Granules Jadenu® November $ 21

Teriparatide Injection Forteo® December $ 720

Cetrorelix Acetate for Injection Cetrotide® December $ 126

As of December 31, 2023, our generic products pipeline in the United States includes 137 product applications awaiting FDA approval, including 63 tentative approvals. This total reflects all pending ANDAs, supplements for product line extensions and tentatively approved applications and includes some instances where more than one application was submitted for the same reference product. Excluding overlaps, the branded products underlying these pending applications had U.S. sales for the twelve months ended September 30, 2023 of approximately $107 billion, according to IQVIA. Approximately 78% of pending applications include a paragraph IV patent challenge and we believe we are first to file with respect to 62 of these products, or 88 products including final approvals where launch is pending a settlement agreement or court decision. Collectively, these first to file opportunities represent over $72 billion in U.S. brand sales for the twelve months ended September 30, 2023, according to IQVIA.

IQVIA reported brand sales are one of the many indicators of future potential value of a launch, but equally important are the mix and timing of competition, as well as cost effectiveness. The potential advantages of being the first filer with respect to some of these products may be subject to forfeiture, shared exclusivity or competition from so-called “authorized generics,” which may ultimately affect the value derived.

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In 2023, we received tentative approvals for generic equivalents of the products listed in the table below, excluding overlapping applications. A “tentative approval” indicates that the FDA has substantially completed its review of an application and final approval is expected once the relevant patent expires, a court decision is reached, a 30-month regulatory stay lapses or a 180-day exclusivity period awarded to another manufacturer either expires or is forfeited.

Tofacitinib Tablets, 5 mg and 10 mg Xeljanz PF® $ 879

Fidaxomicin Tablets, 200 mg Dificid® $ 320

Encorafenib Capsules, 75 mg Braftovi® $ 197

Ponatinib Tablets, 15 mg and 45 mg Iclusig® $ 175

Pazopanib Tablets, 200 mg Votrient® $ 172

Thalidomide Capsules USP, 50 mg, 100 mg, and 200 mg Thalomid® $ 12

Treprostinil ER Tabs, 0.25 mg, 1 mg and 2.5 mg*** Orenitram No Data

** Branded product discontinued on FDA website.

*** Marketed through Specialty Pharmacy that does not report to IQVIA.

For a description of our innovative medicines pipeline, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines” above.

North America Gross Profit

Gross profit from our North America segment in 2023 was $4,421 million, an increase of 13% compared to $3,926 million in 2022.

Gross profit margin for our North America segment in 2023 increased to 54.4%, compared to 52.7% in 2022. This increase was mainly due to an upfront payment received in connection with the collaboration on our anti-TL1A asset, as discussed above, as well as a favorable mix of products primarily driven by an increase in revenues from AUSTEDO and lenalidomide capsules (the generic version of Revlimid®), partially offset by higher costs due to inflationary and other macroeconomic pressures.

North America R&D Expenses

R&D expenses relating to our North America segment in 2023 were $625 million, an increase of 18% compared to $532 million in 2022.

For a description of our R&D expenses in 2023, see “—Teva Consolidated Results—Research and Development (R&D) Expenses” below.

North America S&M Expenses

S&M expenses relating to our North America segment in 2023 were $1,005 million, an increase of 7% compared to $941 million in 2022. This increase was mainly due to promotional and commercial activities related to AUSTEDO and UZEDY.

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North America G&A Expenses

G&A expenses relating to our North America segment in 2023 were $403 million, a decrease of 15% compared to $474 million in 2022. This decrease was mainly due to lower litigation fees in 2023.

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 2023 was $2,396 million, an increase of 20% compared to $1,993 million in 2022. This increase was mainly due to higher revenues, partially offset by higher R&D and S&M expenses, as discussed above.

Europe Segment

The following table presents revenues, expenses and profit for our Europe segment for the past two years:

Year ended December 31,

(U.S. $ in millions / % of Segment Revenues)

Other (income) expense (2 ) § (3 ) §

* Segment profit does not include amortization and certain other items.

§ Represents an amount less than 0.5%.

Europe Revenues

Our Europe segment includes the European Union, the United Kingdom and certain other European countries. Revenues from our Europe segment in 2023 were $4,837 million, an increase of $312 million, or 7%, compared to 2022. In local currency terms, revenues increased by 5%, mainly due to higher revenues from generic and OTC products as well as higher revenues from AJOVY, partially offset by lower revenues from COPAXONE and certain other respiratory products. Higher revenues from our Europe segment in 2023 were also driven by the sale of certain product rights.

In 2023, revenues were positively impacted by exchange rate fluctuations of $88 million, net of hedging effects, compared to 2022. Revenues in 2023 were affected by a $12 million negative hedging impact, compared to a $17 million positive hedging impact in 2022, which are included in “Other” in the table below. See note 10d to our consolidated financial statements.

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Revenues by Major Products and Activities

The following table presents revenues for our Europe segment by major products and activities for the past two years:

(U.S. $ in millions)

Generic products revenues (including OTC and biosimilar products) in our Europe segment in 2023 increased by 6% to $3,664 million compared to 2022. In local currency terms, revenues increased by 3%, mainly due to higher volumes and OTC price increases.

AJOVY revenues in our Europe segment in 2023 increased by 29% to $160 million, compared to 2022. In local currency terms, revenues increased by 27% due to higher volumes.

For more information on AJOVY, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—AJOVY.”

COPAXONE revenues in our Europe segment in 2023 decreased by 14% to $231 million, compared to 2022. In local currency terms, revenues decreased by 16%, mainly due to price reductions and lower volumes resulting from competing glatiramer acetate products and availability of alternative therapies.

For more information on COPAXONE, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—COPAXONE.”

Respiratory products revenues in our Europe segment in 2023 decreased by 3% to $265 million, compared to 2022. In local currency terms, revenues decreased by 5%, mainly due to net price reductions and lower volumes.

Product Launches and Pipeline

As of December 31, 2023, our generic products pipeline in Europe included 442 generic approvals relating to 67 compounds in 124 formulations, no EMA approvals received during 2023. In addition, approximately 1,318 marketing authorization applications pending approval in 37 European countries, relating to 99 compounds in 214 formulations. Two applications are pending with the EMA.

For a description of our innovative medicines pipeline, see “Item 1—Business—Research and Development” above.

Europe Gross Profit

Gross profit from our Europe segment in 2023 was $2,726 million, an increase of 1% compared to $2,700 million in 2022.

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Gross profit margin for our Europe segment in 2023 decreased to 56.4%, compared to 59.7% in 2022, mainly due to higher cost of goods sold primarily due to inflationary and other macroeconomic pressures, and a negative impact of hedging activities, partially offset by revenues from the sale of certain product rights in 2023.

Europe R&D Expenses

R&D expenses relating to our Europe segment in 2023 were $220 million, an increase of 3% compared to $213 million in 2022.

For a description of our R&D expenses in 2023, see “—Teva Consolidated Results—Research and Development (R&D) Expenses” below.

Europe S&M Expenses

S&M expenses relating to our Europe segment in 2023 were $767 million, an increase of 3% compared to $748 million in 2022. This increase was mainly to support revenue growth as well as due to exchange rate fluctuations.

Europe G&A Expenses

G&A expenses relating to our Europe segment in 2023 were $263 million, an increase of 7% compared to $246 million in 2022. This increase was mainly due to higher litigation fees in 2023 and exchange rate fluctuations.

Europe Profit

Profit of 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 2023 was $1,478 million, a decrease of 1% compared to $1,496 million in 2022.

International Markets Segment

The following table presents revenues, expenses and profit for our International Markets segment for the past two years:

Year ended December 31,

(U.S. $ in millions / % of Segment Revenues)

Other (income) expense (35 ) (1.8% ) (43 ) (2.2% )

* Segment profit does not include amortization and certain other items.

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International Markets Revenues

Our International Markets segment includes all countries in which we operate other than those in our North America and Europe segments. The International Markets segment includes more than 35 countries, covering a substantial portion of the global pharmaceutical market. The countries in our International Markets segment include highly regulated, pure generic markets, such as Israel, branded generics oriented markets, such as Russia and certain Latin American markets, and hybrid markets, such as Japan.

As part of a recent shift in executive management responsibilities, commencing January 1, 2024, Canada will be reported under our International Markets segment and will no longer be included as part of our North America segment. See note 19 to our consolidated financial statements.

In February 2022, Russia launched an invasion of Ukraine. As of the date of this Annual Report on Form 10-K, sustained conflict and disruption in the region is ongoing. Russia and Ukraine markets are included in our International Markets segment results. We have no manufacturing or R&D facilities in these markets. During the year ended December 31, 2023, the impact of this conflict on our International Markets segment’s results of operations and financial condition was immaterial. Consistent with our foreign exchange risk management hedging programs, we entered into hedges to hedge our exposure to currency exchange rate fluctuations with respect to our balance sheet assets, revenues and expenses. However, as of the end of 2023, we were unable to renew certain of our expiring hedging positions due to the liquidity situation in the market for Russian rubles. Prior to and since the escalation of the conflict, we have been taking measures to reduce our operational cash balances in Russia and Ukraine. We have been monitoring the solvency of our customers in Russia and Ukraine and have taken measures, where practicable, to mitigate our exposure to risks related to the conflict in the region. However, the duration, severity and global implications (including potential inflation and devaluation consequences) of the conflict cannot be predicted at this time and could have an effect on our business, including on our exchange rate exposure, supply chain, operational costs and commercial presence in these markets.

In October 2023, Israel was attacked by a terrorist organization and entered a state of war. For additional information see “—Macroeconomic and Geopolitical Environment” above and note 1 to our consolidated financial statements.

Revenues from our International Markets segment in 2023 were $1,958 million, an increase of $55 million, or 3% compared to 2022. In local currency terms, revenues increased by 16% compared to 2022, mainly due to higher revenues from generic products in most markets, partially offset by regulatory price reductions and generic competition to off-patented products in Japan.

In 2023, revenues were negatively impacted by exchange rate fluctuations of $246 million, net of hedging effects, compared to 2022. Revenues in 2023 were affected by an $11 million positive hedging impact, compared to an $11 million negative hedging impact in 2022, which are included in “Other” in the table below. See note 10d to our consolidated financial statements.

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Revenues by Major Products and Activities

The following table presents revenues for our International Markets segment by major products and activities for the past two years:

(U.S. $ in millions)

Generic products revenues (including OTC products) in our International Markets segment in 2023 increased by 1% to $1,594 million, compared to 2022. In local currency terms, revenues increased by 16%, mainly due to higher revenues in most markets, as well as price increases largely as a result of higher costs due to inflationary pressure, partially offset by regulatory price reductions and generic competition to off-patented products in Japan.

AJOVY was launched by the end of 2023 in certain countries within our International Markets segment, including in Japan, Australia, Israel, South Korea, Brazil and others. We are moving forward with plans to launch AJOVY in other markets. AJOVY revenues in our International Markets segment in 2023 increased by 25% to $44 million, compared to 2022. In local currency terms, revenues increased by 35%.

For more information on AJOVY, see “Item 1—Business—Our Product Portfolio and Business Offering— Innovative Medicines—AJOVY.”

COPAXONE revenues in our International Markets segment in 2023 increased by 9% to $39 million, compared to 2022. In local currency terms, revenues increased by 25%.

For more information on COPAXONE, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—COPAXONE.”

AUSTEDO was launched in China and Israel in 2021 and in Brazil in 2022 for the treatment of chorea associated with Huntington’s disease and for the treatment of tardive dyskinesia.

For more information on AUSTEDO, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—AUSTEDO.”

International Markets Gross Profit

Gross profit from our International Markets segment in 2023 was $1,050 million, an increase of 2% compared to $1,033 million in 2022.

Gross profit margin for our International Markets segment in 2023 decreased to 53.6%, compared to 54.3% in 2022. This decrease was mainly due to regulatory price reductions and generic competition to off-patented products in Japan, partially offset by price increases largely as a result of higher costs due to inflationary pressure, a favorable mix of products sold and a positive hedging impact.

International Markets R&D Expenses

R&D expenses relating to our International Markets segment in 2023 were $83 million, an increase of 16% compared to $72 million in 2022.

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For a description of our R&D expenses in 2023, see “—Teva Consolidated Results—Research and Development (R&D) Expenses” below.

International Markets S&M Expenses

S&M expenses relating to our International Markets segment in 2023 were $420 million, an increase of 4% compared to $405 million in 2022, mainly to support revenue growth.

International Markets G&A Expenses

G&A expenses relating to our International Markets segment in 2023 were $118 million, a decrease of 1% compared to $119 million in 2022.

International Markets Other Income

Other income relating to our International Markets segment in 2023 was $35 million, compared to $43 million in 2022. Other income in 2023 was mainly the result of a capital gain from the sale of assets. Other income in 2022 was mainly the result of settlement proceeds.

International Markets Profit

Profit of 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 2023 was $464 million a decrease of 3% compared to $479 million in 2022. This decrease was mainly due to higher S&M and R&D expenses and lower other income.

Other Activities

We have other sources of revenues, primarily the sale of 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 described above.

Our revenues from other activities in 2023 were $926 million, a decrease of 11% in U.S. dollars, or 12% in local currency terms, compared to 2022.

API sales to third parties in 2023 were $568 million, a decrease of 16% in both U.S. dollars and local currency terms, mainly due to changes in market conditions.

On January 31, 2024, we announced that we intend to divest our API business (including its R&D, manufacturing and commercial activities) through a sale, which divestment is expected to be completed in the first half of 2025. The intention to divest is in alignment with our Pivot to Growth strategy. However, there can be no assurance regarding the ultimate timing or structure of a potential divestiture or that a divestiture will be agreed or completed at all.

Teva Consolidated Results

The data presented with respect to other asset impairments, restructuring and other items, operating income (loss), income taxes, net income (loss) attributable to Teva and earnings (loss) per share for the prior period have been revised to reflect a revision in relation to a contingent consideration and related expenses in the consolidated financial statements. For additional information, see note 1b to our consolidated financial statements.

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Revenues

Revenues in 2023 were $15,846 million, an increase of 6%, in U.S. dollars or 7% in local currency terms, compared to 2022. This increase was mainly due to an upfront payment received in connection with the collaboration on our anti-TL1A asset, higher revenues from generic products in our International Markets and Europe segments, from our innovative products AUSTEDO and AJOVY, the sale of certain product rights in our Europe segment, as well as higher revenues from Anda, partially offset by lower revenues from COPAXONE, API sales to third parties, BENDEKA and TREANDA, and generic products in our North America segment. See “—North America Revenues,” “—Europe Revenues,” “—International Markets Revenues” and “—Other Activities” above.

Exchange rate movements during 2023, including hedging effects, negatively impacted revenues by $172 million, compared to 2022. See note 10d to our consolidated financial statements.

Gross Profit

Gross profit in 2023 was $7,645 million, an increase of 10% compared to 2022.

Gross profit margin was 48.2% in 2023, compared to 46.7% in 2022.

This increase in gross profit margin was mainly due to an upfront payment received in connection with the collaboration on our anti-TL1A asset and higher revenues from AUSTEDO in our North America segment, as well as the sale of certain product rights in our Europe segment, partially offset by higher cost of goods sold, mainly driven by higher costs due to inflationary and other macroeconomic pressures, and lower revenues from COPAXONE.

Research and Development (R&D) Expenses, net

Our R&D activities for innovative medicines and biosimilar products in each of our segments include costs of discovery research, preclinical work, drug formulation, early- and late-clinical development and product registration costs. These expenditures are reported net of contributions received from collaboration partners. Our spending takes place throughout the development process, including (i) early-stage projects in both discovery and preclinical phases; (ii) middle-stage projects in clinical programs up to phase 3; (iii) late-stage projects in phase 3 programs, including where a new drug application is currently pending approval; (iv) post-approval studies for marketed products; and (v) indirect expenses, such as costs of internal administration, infrastructure and personnel.

Our R&D activities for generic products in each of our segments include both (i) direct expenses relating to product formulation, analytical method development, stability testing, management of bioequivalence and other clinical studies and regulatory filings; and (ii) indirect expenses, such as costs of internal administration, infrastructure and personnel.

Our R&D expenses, net in 2023 were $953 million, an increase of 14% compared to $838 million in 2022, as we continue to execute on our Pivot to Growth strategy.

Our higher R&D expenses, net in 2023 compared to 2022, were mainly due to an increase related to our late-stage innovative pipeline in neuroscience (mainly neuropsychiatry), in immunology and in immuno-oncology, partially offset by a decline in various generics projects, as well as lower R&D expenses related to our biosimilar products pipeline. Additionally, in 2022 our R&D expenses were lower due to an adjustment in payments pursuant to a contract with one of our R&D partners.

Our R&D expenses, net in 2023 were also impacted by reimbursements from our strategic partnerships entered into in 2023. See note 2 to our consolidated financial statements.

R&D expenses as a percentage of revenues were 6.0% in 2023, compared to 5.6% in 2022.

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Selling and Marketing (S&M) Expenses

S&M expenses in 2023 were $2,336 million, an increase of 3% compared to 2022. Our S&M expenses were primarily the result of the factors discussed above under “—North America Segment— S&M Expenses,” “—Europe Segment— S&M Expenses” and “—International Markets Segment— S&M Expenses.”

S&M expenses as a percentage of revenues were 14.7% in 2023, compared to 15.2% in 2022.

General and Administrative (G&A) Expenses

G&A expenses in 2023 were $1,162 million, a decrease of 2% compared to 2022.

Our G&A expenses were primarily the result of the factors discussed above under “—North America Segment—G&A Expenses” and “—Europe Segment— G&A Expenses.”

G&A expenses as a percentage of revenues were 7.3% in 2023, compared to 7.9% in 2022.

Identifiable Intangible Asset Impairments

We recorded expenses of $350 million for identifiable intangible asset impairments in 2023, compared to expenses of $355 million in 2022. See note 6 to our consolidated financial statements.

Goodwill Impairment

We recorded goodwill impairment charges of $700 million in the year ended December 31, 2023 related to our International Markets reporting unit. We recorded goodwill impairment charges of $2,045 million in the year ended December 31, 2022, of which $979 million is related to our International Markets reporting unit and $1,066 million is related to Teva’s API reporting unit. See note 7 to our consolidated financial statements.

Other Asset Impairments, Restructuring and Other Items

We recorded expenses of $718 million for other asset impairments, restructuring and other items in 2023, compared to expenses of $512 million in 2022. See note 15 to our consolidated financial statements.

Legal Settlements and Loss Contingencies

In 2023, we recorded expenses of $1,043 million in legal settlements and loss contingencies, compared to expenses of $2,082 million in 2022. See note 11 to our consolidated financial statements.

Other Income

Other income in 2023 was $49 million, compared to $107 million in 2022. See note 16 to our consolidated financial statements.

Operating Income (Loss)

Operating income was $433 million in 2023, compared to operating loss of $2,197 million in 2022.

Operating income as a percentage of revenues was 2.7% in 2023, compared to operating loss as a percentage of revenues of 14.7% in 2022. This increase was mainly due to higher goodwill impairment charges and legal settlements and loss contingencies in 2022.

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Financial Expenses, Net

Financial expenses, net were $1,057 million in 2023, compared to $966 million in 2022. Financial expenses in 2023 were mainly comprised of net-interest expenses of $961 million. Financial expenses in 2022 were mainly comprised of net-interest expenses of $921 million.

Reconciliation Table to Consolidated Income (Loss) Before Income Taxes

The following table presents a reconciliation of our segment profits to Teva’s consolidated operating income (loss) and to consolidated income (loss) before income taxes for the past two years:

Year endedDecember 31,

(U.S. $ in millions)

International Markets profit 464 479

Total reportable segments profit 4,338 3,968

Profit of other activities 24 172

Amounts not allocated to segments:

Other asset impairments, restructuring and other items (1) 718 512

Intangible assets impairments 350 355

Legal settlements and loss contingencies 1,043 2,082

Other unallocated amounts 502 610

Consolidated operating income (loss) (1) 433 (2,197 )

Consolidated income (loss) before income taxes (1) $ (624 ) $ (3,163 )

Income Taxes

In 2023, we recognized a tax benefit of $7 million, or 1%, on a pre-tax loss of $624 million.

In 2022, we recognized a tax benefit of $643 million, or 20%, on a pre-tax loss of $3,163 million. See note 13 to our consolidated financial statements.

Share In (Profits) Losses of Associated Companies, Net

Share in profits of associated companies, net was $2 million in 2023, compared to $21 million in 2022. Share in profits of associated companies, net in 2022 was mainly related to the difference between the book value of our investment in Novetide and its fair value as of the date we completed its acquisition in January 2022.

Net Income (Loss) Attributable to Teva

Net loss was $559 million in 2023, compared to a net loss of $2,446 million in 2022. This increase was mainly due to higher goodwill impairment charges and legal settlements and loss contingencies in 2022, partially offset by higher tax benefits in 2022.

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Diluted Shares Outstanding and Earnings (Loss) Per Share

The weighted average diluted shares outstanding used for the fully diluted share calculation for 2023 and 2022 was 1,119 million and 1,110 million shares, respectively.

In computing diluted loss per share for the year ended December 31, 2023 and 2022, no account was taken of the potential dilution that could occur upon the exercise of options and non-vested restricted share units (“RSUs”) and performance share units (“PSUs”) granted under employee stock compensation plans, and convertible senior debentures, since they had an anti-dilutive effect on loss per share.

Diluted loss per share was $0.50 for the year ended December 31, 2023, compared to diluted loss per share of $2.20 for the year ended December 31, 2022.

Share Count for Market Capitalization

We calculate share amounts using the outstanding number of shares (i.e., excluding treasury shares) plus shares that would be outstanding upon the exercise of options and vesting of RSUs and PSUs and the conversion of our convertible senior debentures, in each case, at period end.

As of December 31, 2023 and 2022, the fully diluted share count for purposes of calculating our market capitalization was approximately 1,157 million and 1,143 million, respectively.

Impact of Currency Fluctuations on Results of Operations

In 2023, approximately 47% of our revenues were denominated in currencies other than the U.S. dollar. Since our results are reported in U.S. dollars, we are subject to significant foreign currency risks. Accordingly, changes in the rate of exchange between the U.S. dollar and local currencies in the markets in which we operate (primarily the euro, British pound, Canadian dollar, Russian ruble, Japanese yen, Swiss franc, Israeli shekel and Polish zloty) impact our results.

During 2023, the following main currencies relevant to our operations decreased in value against the U.S. dollar (each on an annual average compared to annual average basis): the Argentinian peso by 52%, the Turkish lira by 29%, the Russian ruble by 20%, the Ukraine hryvna by 13%, the Israeli shekel by 9% and the Japanese yen by 7%. The following main currencies relevant to our operations increased in value against the U.S. dollar: the Mexican peso by 13%, the Swiss franc by 6%, the Polish zloty by 6%, the Hungarian forint by 5%, the Chilean peso by 4% and the euro by 3%.

As a result, exchange rate movements during 2023, including hedging effects, negatively impacted overall revenues by $172 million and operating income by $111 million in comparison with 2022.

In 2023, a negative hedging impact of $2 million was recognized under revenues, and a negative impact of $1 million was recognized under cost of sales. In 2022, a positive impact of $11 million was recognized under revenues and a negative impact of $7 million was recognized under cost of sales.

Hedging transactions against future projected revenues and expenses are recognized on the balance sheet at their fair value on a quarterly basis, while the foreign exchange impact on the underlying revenues and expenses may occur in subsequent quarters. See note 10d to our consolidated financial statements.

Commencing the third quarter of 2018, the cumulative inflation in Argentina exceeded 100% or more over a 3-year period. Although this triggered highly inflationary accounting treatment, it did not have a material impact on our results of operations.

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Commencing the second quarter of 2022, the cumulative inflation in Turkey exceeded 100% or more over a three-year period. Although this triggered highly inflationary accounting treatment, it did not have a material impact on our results of operations.

Liquidity and Capital Resources

Total balance sheet assets were $43,479 million as of December 31, 2023, compared to $44,011 million as of December 31, 2022.

Our working capital balance, which includes accounts receivables net of SR&A, inventories, prepaid expenses and other current assets, accounts payables, employee-related obligations, accrued expenses and other current liabilities, was negative $1,374 million as of December 31, 2023, compared to negative $119 million as of December 31, 2022. This decrease was mainly a result of an increase in accounts payables resulting primarily from more favorable vendor payment terms that went into effect in 2023 and higher inventory purchases, an increase in provisions for legal settlements and loss contingencies, as well as an increase in accrued expenses, partially offset by an increase in inventory levels.

Cash investment in property, plant and equipment and intangible assets in 2023 was $526 million, compared to $548 million in 2022. Depreciation was $537 million in 2023, compared to $576 million in 2022.

Cash and cash equivalents as of December 31, 2023 were $3,226 million compared to $2,801 million as of December 31, 2022.

Our cash on hand that is not used for ongoing operations is generally invested in bank deposits, as well as liquid securities that bear fixed and floating rates.

Teva’s principal sources of short-term liquidity are its cash on hand, existing cash investments, liquid securities and available credit facilities, primarily our $1.8 billion unsecured syndicated sustainability-linked revolving credit facility, entered into in April 2022, as amended in February 2023 (“RCF”). See note 9 to our consolidated financial statements.

2023 Debt Balance and Movements

As of December 31, 2023, our debt was $19,833 million, compared to $21,212 million as of December 31, 2022.This decrease was mainly due to $1,646 million senior notes repaid at maturity, partially offset by $302 million of exchange rate fluctuations. Additionally, during the first quarter of 2023, we repurchased $2,506 million aggregate principal amount of notes upon consummation of a cash tender offer and issued $2,445 million of sustainability-linked senior notes, net of issuance costs. For further information, see note 9 to our consolidated financial statements.

In March 2023, we repaid $646 million of our 1.25% senior notes at maturity.

In July 2023, we repaid $1,000 million of our 2.8% senior notes at maturity.

In July 2023, a total amount of $700 million was withdrawn under the RCF, of which $200 million was repaid in September 2023 and the remaining amount of $500 million was repaid in the fourth quarter of 2023. As of December 31, 2023 and as of the date of this Annual Report on Form 10-K, no amounts were outstanding under the RCF.

Our debt as of December 31, 2023 was effectively denominated in the following currencies: 60% in U.S. dollars, 38% in euros and 2% in Swiss francs.

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The portion of total debt classified as short-term as of December 31, 2023 was 8%, compared to 10% as of December 31, 2022.

Our financial leverage, which is the ratio between our debt and the sum of our debt and equity, was 71% as of December 31, 2023 and December 31, 2022.

Our average debt maturity was approximately 6.0 years as of December 31, 2023, compared to 5.8 years as of December 31, 2022.

For further information, see note 9 to our consolidated financial statements.

2022 Debt Balance and Movements

In April 2022, Teva repaid $296 million of its 3.25% senior notes at maturity.

In July 2022, Teva repaid $365 million of its 0.50% senior notes at maturity.

In December 2022, Teva repaid $713 million of its 2.95% senior notes at maturity.

Total Equity

Total equity was $8,126 million as of December 31, 2023, compared to $8,598 million as of December 31, 2022. This decrease was mainly due to a net loss of $615 million and a dividend declaration to non-controlling interests in Teva’s joint venture in Japan of $67 million, which is expected to be paid in the first quarter of 2024, partially offset by a positive impact of $80 million from exchange rate fluctuations. The data presented for the prior period have been revised to reflect a revision in relation to a contingent consideration liability and related expenses in the consolidated financial statements. For additional information see note 1b to our consolidated financial statements.

Exchange rate fluctuations affected our balance sheet, as approximately 81% of our net assets (including both non-monetary and monetary assets) were in currencies other than the U.S. dollar. When compared to December 31, 2022, changes in currency rates had a positive impact of $80 million on our equity as of December 31, 2023. The following main currencies decreased in value against the U.S. dollar: Russian ruble by 21%, Japanese yen by 8% and Chilean peso by 4%. The following main currencies increased in value against the U.S. dollar: Mexican peso by 13%, Polish zloty by 10%, Swiss franc by 9%, British pound by 5%, euro by 3%, Bulgarian lev by 3% and the Peruvian nuevo sol by 3%. All comparisons are on a year-end to year-end basis.

Cash Flow

We continually seek to improve the efficiency of our working capital management. Periodically, as part of our cash and commercial relationship management activities, we make decisions in our commercial and supply chain activities which may drive an acceleration of receivable payments from customers, or deceleration of payments to vendors. This has the effect of increasing or decreasing cash from operations during any given period. Increased cash from operations has the effect of reducing our leverage ratio, which is measured net of cash and cash equivalents, as of the end of such period. In connection with strategic continual improvement, we obtained more favorable payment terms from many of our vendors which are expected to continue in future periods. In addition, in periods in which receivable payments from customers are delayed, we have and expect we may in the future extend the time to pay certain vendors, in order to balance our liquidity position. Such decisions may have a material impact on our annual operating cash flow measurement, as well as on our quarterly results.

Cash flow generated from operating activities in 2023 was $1,368 million, compared to $1,590 million in 2022. The decrease in 2023 resulted mainly from the sale of accounts receivables under our U.S. securitization

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facility during 2022 and higher payments of legal settlements in connection with the opioids litigation in 2023, partially offset by changes in working capital items, including positive impacts of accounts payables and accounts receivables in 2023, as well as higher tax payments in 2022.

During 2023, we generated free cash flow of $2,387 million, which we define as comprising $1,368 million in cash flow generated from operating activities, $1,477 million in beneficial interest collected in exchange for securitized accounts receivables (under our EU securitization program) and $68 million proceeds from sale of businesses and long-lived assets, partially offset by $526 million in cash used for capital investments. During 2022, we generated free cash flow of $2,243 million, which we define as comprising $1,590 million in cash flow generated from operating activities, $1,140 million in beneficial interest collected in exchange for securitized accounts receivables and $68 million proceeds from sale of businesses and long-lived assets, partially offset by $548 million in cash used for capital investments and $7 million in cash used for acquisition of businesses, net of cash acquired. The increase in 2023 resulted mainly from higher beneficial interest collected in exchange for securitized accounts receivables under our EU securitization, partially offset by lower cash flow generated from operating activities. For further information on our securitization facilities see note 10f to our consolidated financial statements.

Dividends

We have not paid dividends on our ordinary shares or ADSs since December 2017.

Commitments

In addition to financing obligations under short-term debt and long-term senior notes and loans, debentures and convertible debentures, our major contractual obligations and commercial commitments include leases, royalty payments, contingent payments pursuant to acquisition agreements, collaboration agreements and participation in joint ventures associated with R&D activities. For further information on our agreements with Biolojic Design, Sanofi, Modag, Alvotech, Takeda and MedinCell, see note 2 to our consolidated financial statements.

We are committed to pay royalties to owners of know-how, partners in alliances and certain other arrangements, and to parties that financed R&D at a wide range of rates as a percentage of sales of certain products, as defined in the agreements. In some cases, the royalty period is not defined; in other cases, royalties will be paid over various periods not exceeding 20 years.

In connection with certain development, supply and marketing, and research and collaboration or services agreements, we are required to indemnify, in unspecified amounts, the parties to such agreements against third-party claims relating to (i) infringement or violation of intellectual property or other rights of such third party; or (ii) damages to users of the related products. Except as described in our financial statements, we are not aware of any material pending action that may result in the counterparties to these agreements claiming such indemnification.

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Aggregated Contractual Obligations

The following table summarizes our material contractual obligations and commitments as of December 31, 2023:

Payments Due by Period

Total Less than1 year 1-3years 3-5years More than5 years

(U.S. $ in millions)

The total gross amount of unrecognized tax benefits for uncertain tax positions was $651 million at December 31, 2023. Payment of these obligations would result from settlements with tax authorities. Due to the difficulty in determining the timing and magnitude of settlements, these obligations are not included in the table above. Correspondingly, it is difficult to ascertain whether we will pay any significant amount related to these obligations within the next year.

We have committed to make potential future milestone payments to third parties under various agreements. These payments are contingent upon the occurrence of certain future events and, given the nature of these events, it is unclear when, if ever, we may be required to pay such amounts. As of December 31, 2023, if all development milestones and targets, for compounds in phase 2 and more advanced stages of development, are achieved, the total contingent payments could reach an aggregate amount of up to $20 million. Additional contingent payments are owed upon achievement of product approval or launch milestones.

We have committed to pay royalties to owners of know-how, partners in alliances and pursuant to certain other arrangements and to parties that financed research and development, at a wide range of rates as a percentage of sales or of the gross margin of certain products, as defined in the underlying agreements.

Due to the uncertainty of the timing of these payments, these amounts, and the amounts described in the previous paragraph, are not included in the table above.

Off-Balance Sheet Arrangements

Except for securitization transactions, which are disclosed in note 10f to our consolidated financial statements, we do not have any material off-balance sheet arrangements.

Non-GAAP Net Income and Non-GAAP EPS Data

We present non-GAAP net income and non-GAAP earnings per share (“EPS”) as management believes that such data provide useful information to investors because they are used by management and our Board of Directors, in conjunction with other performance metrics, to evaluate our operational performance, to prepare and evaluate our work plans and annual budgets and ultimately to evaluate the performance of management, including annual compensation. While other qualitative factors and judgment also affect annual compensation, the principal quantitative element in the determination of such compensation are performance targets tied to the work plan, which are based on these non-GAAP measures.

Non-GAAP financial measures have no standardized meaning and accordingly have limitations in their usefulness to investors. Investors are cautioned that, unlike financial measures prepared in accordance with U.S.

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GAAP, non-GAAP measures may not be comparable with the calculation of similar measures for other companies. These non-GAAP financial measures are presented solely to permit investors to more fully understand how management assesses our performance. The limitations of using non-GAAP financial measures as performance measures are that they provide a view of our results of operations without including all events during a period and may not provide a comparable view of our performance to other companies in the pharmaceutical industry. Investors should consider non-GAAP net income and non-GAAP EPS in addition to, and not as replacements for, or superior to, measures of financial performance prepared in accordance with GAAP.

In preparing our non-GAAP net income and non-GAAP EPS data, we exclude items that either have a non-recurring impact on our financial performance or which, in the judgment of our management, are items that, either as a result of their nature or size, could, were they not excluded, potentially cause investors to extrapolate future performance from an improper base that is not reflective of our underlying business performance. Certain of these items are also excluded because of the difficulty in predicting their timing and scope. The items excluded from our non-GAAP net income and non-GAAP EPS include:

• amortization of purchased intangible assets;

• expenses related to our equity compensation;

• unusual tax items;

• other awards or settlement amounts, either paid or received;

• corresponding tax effects of the foregoing items.

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The following table presents our non-GAAP net income and non-GAAP EPS for the years ended December 31, 2023 and 2022, as well as reconciliations of each measure to their nearest GAAP equivalents:

Year endedDecember 31,

($ in millions except per share amounts) 2023 2022

Net income (loss) attributable to Teva(5) ($) (559 ) (2,446 )

Increase (decrease) for excluded items:

Amortization of purchased intangible assets 616 732

Legal settlements and loss contingencies 1,043 2,082

Impairment of long-lived assets 378 402

Costs related to regulatory actions taken in facilities 4 7

Gain on sale of business (3 ) (47 )

Accelerated depreciation 80 117

Financial expenses 66 61

Share in profits (losses) of associated companies – net — (22 )

Items attributable to non-controlling interests (92 ) (96 )

Corresponding tax effects and unusual tax items(5) (446 ) (1,021 )(4)

Non-GAAP net income attributable to Teva ($) 2,898 2,812

GAAP diluted earnings (loss) per share attributable to Teva ($) (0.50 ) (2.20 )

Non-GAAP diluted EPS attributable to Teva(3) ($) 2.56 2.52

Non-GAAP average number of shares (in millions)(3) 1,131 1,115

Trend Information

The following factors are expected to have a significant effect on our 2024 results:

• continued success of our innovative medicines AUSTEDO, AJOVY and UZEDY;

• continued execution on the key pillars of our Pivot to Growth strategy;

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• ability to successfully execute key generic launches in a timely manner;

• ability to successfully develop and launch new biosimilar products;

• our disciplined cash management and debt repayment schedule;

• continued efforts towards achieving our long-term financial goals.

For additional information, please see “Item 1—Business” above and elsewhere in this Item 7.

Critical Accounting Policies

For a description of our significant accounting policies, see note 1 to our consolidated financial statements.

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions in certain circumstances that affect the amounts reported in the accompanying consolidated financial statements and related footnotes. Actual results may differ from these estimates. We base our judgments on our experience and on various assumptions that we believe to be reasonable under the circumstances.

Of our policies, the following are considered critical to an understanding of our consolidated financial statements as they require the application of subjective and complex judgment, involving critical accounting estimates and assumptions impacting our consolidated financial statements. We have applied our policies and critical accounting estimates consistently across our businesses.

The critical accounting estimates relate to the following:

• Revenue Recognition and SR&A in the United States

• Income Taxes

• Contingencies

• Goodwill

• Identifiable Intangible Assets

Revenue Recognition and SR&A in the United States

Our gross product revenues are subject to a variety of deductions which are generally estimated and recorded in the same period that the revenues are recognized, and primarily represent chargebacks, rebates and

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sales allowances to wholesalers, retailers and government agencies with respect to our pharmaceutical products. Those deductions represent estimates of rebates and discounts related to gross sales for the reporting period and, as such, knowledge and judgment of market conditions and practice are required when estimating the impact of these revenue deductions on gross sales for a reporting period.

Historically, our changes of estimates reflecting actual results or updated expectations, have not been material to our overall business. Product-specific rebates, however, may have a significant impact on year-over-year individual product growth trends. If any of our ratios, factors, assessments, experiences or judgments are not indicative or accurate predictors of our future experience, our results could be materially affected. The sensitivity of our estimates can vary by program, type of customer and geographic location. However, estimates associated with governmental allowances, U.S. Medicaid and other performance-based contract rebates are most at risk for material adjustment because of the extensive time delay between the recording of the accrual and its ultimate settlement, an interval that can generally range up to one year. Because of this time lag, in any given quarter, our adjustments to actual can incorporate revisions of several prior quarters. See also “Revenue recognition” in note 1 to the consolidated financial statements.

Income Taxes

The provision for income tax is calculated based on our assumptions as to our entitlement to various benefits under the applicable tax laws in the jurisdictions in which we operate. The entitlement to such benefits depends upon our compliance with the terms and conditions set out in these laws.

Accounting for uncertainty in income taxes requires that it be more likely than not that the tax benefits recognized in the financial statements be sustained based on technical merits. The amount of benefits recorded for these positions is measured as the largest benefit more likely than not to be sustained. Significant judgment is required in making these determinations.

Deferred taxes are determined utilizing the asset and liability method based on the estimated future tax effects of differences between the financial accounting and tax bases of assets and liabilities under the applicable tax laws. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the determination of the appropriate valuation allowances, we have considered the most recent projections of future business results and prudent tax planning alternatives that may allow us to realize the deferred tax assets. Taxes which would apply in the event of disposal of investments in subsidiaries have not been taken into account in computing deferred taxes, as it is our intention to hold these investments rather than realize them.

Taxes have not been provided for tax-exempt income, as the Company intends to permanently reinvest these earnings and does not currently foresee a need to distribute dividends out of these earnings. In addition, the Company announced a suspension of dividend distribution on ordinary shares and ADSs in 2017. Furthermore, deferred taxes have not been provided for the retained earnings of the Company’s foreign subsidiaries because the Company does not expect these subsidiaries to distribute taxable dividends in the foreseeable future, as their earnings and excess cash are used to pay down the group’s external liabilities, and the Company expects to have sufficient resources in the Israeli companies to fund its cash needs in Israel. An assessment of the tax that would have been payable had the Company’s foreign subsidiaries distributed their income to the Company is not practicable because of the multiple levels of corporate ownership and multiple tax jurisdictions involved in each hypothetical dividend distribution.

For a discussion of the valuation allowance, deferred tax and valuation allowance estimates see notes 1 and 13 to our consolidated financial statements.

Contingencies

From time to time, Teva and/or its subsidiaries are subject to claims for damages and/or equitable relief arising in the ordinary course of business. In addition, in large part as a result of the nature of its business, Teva

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is frequently subject to litigation, governmental investigations and other legal proceedings. Except for income tax contingencies or contingent consideration acquired in a business combination, Teva records a provision in its consolidated financial statements to the extent that it concludes that a contingent liability is probable and the amount thereof is reasonably estimable. When accruing these costs, Teva will recognize an accrual in the amount within a range of loss that is the best estimate within the range. When no amount within the range is a better estimate than any other amount, Teva accrues for the minimum amount within the range. Teva records anticipated recoveries under existing insurance contracts at the gross amount that is expected to be collected when they are considered probable to occur.

Teva reviews the adequacy of the accruals on a periodic basis and, although it believes that its present reserves are adequate, changes in facts and circumstances in the future may lead to adjustments to reserve estimates and could have a material impact on Teva’s results of operations, cash flows and financial condition in the period that reserve estimates are adjusted or paid. As such accruals are based on management’s judgment as to the probability of losses and, where applicable, actuarially determined estimates, accruals may materially differ from actual verdicts, settlements or other agreements made with regards to such contingencies. Litigation outcomes and contingencies are unpredictable and excessive verdicts can occur. Accordingly, management’s assessments involve complex judgments concerning future events and often rely heavily on estimates and assumptions.

Goodwill

Goodwill reflects the excess of the consideration transferred, including the fair value of any contingent consideration and any non-controlling interest in the acquiree, over the assigned fair values of the identifiable net assets acquired. Goodwill is not amortized, and is assigned to reporting units and tested for impairment at least annually, in the second quarter of the fiscal year.

We perform an impairment test annually and whenever events or changes in circumstances indicate the carrying value of a reporting unit may not be recoverable. The provisions of the accounting standard for goodwill allow us to first assess qualitative factors to determine whether it is necessary to perform the next goodwill impairment quantitative test.

Examples of events or circumstances that may be indicative of impairment include, but are not limited to: macroeconomic and industry conditions, overall financial performance and adverse changes in legal, regulatory, market share and other relevant entity specific events.

The Company estimates the fair values of all reporting units using a discounted cash flow model which utilizes Level 3 unobservable inputs. Key estimates include the revenue growth rates taking into consideration industry and market conditions, terminal growth rate and the discount rate. The discount rate used is based on the WACC, adjusted for the relevant risk associated with country-specific and business-specific characteristics.

The carrying value of each reporting unit is determined by assigning the assets and liabilities, including the existing goodwill, to those reporting units.

When necessary, we record charges for impairments of goodwill for the amount by which the carrying amount exceeds the fair value of these assets.

See note 7 and note 19 to our consolidated financial statements for further details on the goodwill impairments recognized in 2023 and 2022, and Teva’s operating and reporting segments.

Identifiable Intangible Assets

Identifiable intangible assets are comprised of definite life intangible assets and indefinite life intangible assets.

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Definite life intangible assets consist mainly of acquired product rights and other rights relating to products for which marketing approval was received from the FDA or the equivalent agencies in other countries. These assets are amortized using mainly the straight-line method over their estimated period of useful life, or based on economic benefit models, if more appropriate, which is determined by identifying the period and manner in which substantially all of the cash flows are expected to be generated. Amortization of acquired developed products is recorded under cost of sales. Amortization of marketing and distribution rights is recorded under selling and marketing expenses when separable.

Indefinite life intangible assets are mainly comprised of IPR&D assets. Teva monitors these assets for items such as research and development milestones and progress to identify any triggering events.

The fair value of acquired identifiable intangible assets is determined using an income approach. This method starts with a forecast of all expected future net cash flows associated with the asset and then adjusts the forecast to present value by applying an appropriate discount rate that reflects the risk factors associated with the cash flow streams.

Whenever impairment indicators are identified for definite life intangible assets, Teva reconsiders the asset’s estimated life, calculates the undiscounted value of the asset’s or asset group’s cash flows and then calculates, if required, the discounted value of cash flow by applying an appropriate discount rate to the undiscounted cash flow streams. Teva then compares such value against the asset’s or asset group’s carrying amount. If the carrying amount is greater, Teva records an impairment loss for the excess of carrying value over fair value based on the discounted cash flows.

For indefinite life intangible assets Teva performs an impairment test annually in the second quarter and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Teva determines the fair value of the asset annually or when triggering events are present, based on discounted cash flows and records an impairment loss if book value exceeds fair value.

Examples of events or circumstances that may be indicative of impairment include:

The more significant estimates and assumptions inherent in the estimate of the fair value of identifiable intangible assets include (i) assumptions associated with forecasting product profitability, including sales and cost to sell projections, (ii) tax rates which seek to incorporate the geographic diversity of the projected cash flows, (iii) expected impact of competitive, legal and/or regulatory forces on the projections and the impact of

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technological risk, R&D expenditure for ongoing support of product rights or continued development of IPR&D, and (iv) estimated useful lives and IPR&D expected launch dates. Additionally, for IPR&D assets the risk of failure has been factored into the fair value measure.

While all intangible assets other than goodwill can face events and circumstances that can lead to impairment, in general, intangible assets other than goodwill that are most at risk of impairment include IPR&D assets and newly acquired or recently impaired indefinite-lived brand assets. IPR&D assets are high-risk assets, as R&D is an inherently risky activity. Consequently, IPR&D assets could be determined to be no longer commercially viable. Newly acquired and recently impaired indefinite-lived assets are more vulnerable to impairment as the assets are recorded at fair value and are then subsequently measured at the lower of fair value or carrying value annually or when triggering events are present. As such, immediately after acquisition or impairment, even small declines in the outlook for these assets can negatively impact our ability to recover the carrying value and can result in an impairment charge.

Recently Issued Accounting Pronouncements

See note 1 to our consolidated financial statements.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

General

The objective of our financial risk management measures is to minimize the impact of risks arising from foreign exchange and interest rate fluctuations. To reduce these risks, we take various operational measures in order to achieve a natural hedge and may enter, from time to time, into financial derivative instruments. Our derivative transactions are executed through global banks. We believe that due to our diversified derivatives portfolio, the credit risk associated with any of these banks is minimal. No derivative instruments are entered into for trading purposes.

Exchange Rate Risk Management

We operate our business worldwide and, as such, we are subject to foreign exchange risks on our results of operations, our monetary assets and liabilities and our foreign subsidiaries’ net assets. For further information on currencies in which we operate, see “Item 7— Management’s Discussion and Analysis of Financial Condition and Results of Operations —Impact of Currency Fluctuations on Results of Operations.”

We generally prefer to borrow in U.S. dollars or euros; however, from time to time we borrow funds in other currencies, such as the Swiss franc, in order to benefit from same currency revenues in relation to same currency costs and same currency assets in relation to same currency liabilities.

Cash Flow Exposure

Our total revenues were $15,846 million in 2023. Of these revenues, approximately 47% were denominated in currencies other than the U.S. dollar, of which 21% in euros and the rest in other currencies, none of which accounted for more than 3% of total revenues in 2023. In most currencies, we record corresponding expenses.

In certain currencies, primarily the euro, our revenues generally exceed our expenses. Conversely, in other currencies, primarily the new Israeli shekel and the Indian rupee, our expenses generally exceed our revenues.

We enter into financial derivatives to hedge part of those currencies which do not have a sufficient natural hedge, in order to reduce the impact of foreign exchange fluctuations on our operating results.

As of December 31, 2023, we hedged part of our expected operating results for 2024 in currencies other than the U.S. dollar, primarily the euro, British pound, Canadian dollar, Swiss franc, Swedish krona, Polish zloty, Japanese yen, Chilean peso, Indian rupee and Israeli shekel.

In certain cases, we may hedge exposure arising from a specific transaction, executed in a currency other than the functional currency, by entering into forward contracts and/or by using plain-vanilla and exotic option strategies. We generally limit the term of hedging transactions to a maximum of eighteen months.

Balance Sheet Exposure

With respect to our monetary assets and liabilities, the exposure arises when the monetary assets and/or liabilities are denominated in currencies other than the functional currency of our subsidiaries. We strive to limit our exposure through natural hedging. The remaining exposure is hedged almost in full by entering into financial derivative instruments. To the extent possible, the hedging activity is carried out on a consolidated level.

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The table below presents exposures exceeding $50 million in absolute values:

Net exposure as of December 31, 2023

Liability/Asset (U.S. $ in millions)

Outstanding Foreign Exchange Hedging Transactions

As of December 31, 2023, we had outstanding derivatives, primarily forwards and currency option contracts, with a corresponding notional amount of approximately $2.5 billion and $0.2 billion, respectively. As of December 31, 2022, we had outstanding derivatives, primarily forwards and currency option contracts, with a corresponding notional amount of approximately $1.9 billion and $0.3 billion, respectively.

The table below presents the net notional and fair values of the financial derivatives entered into as of December 31, 2023 in order to reduce currency exposure arising from our cash flow and balance sheet exposures. The table below presents only currency paired with hedged net notional values exceeding $50 million.

(U.S. $ in millions)

Forward:

Options:

EUR USD * 132 — (3 ) —

CAD USD * * — — 1.38

CHF USD * * — (1 ) 1

* Represents net notional value of less than $50 million.

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Foreign Subsidiaries Net Assets

Under certain market conditions, we may hedge against possible fluctuations in foreign subsidiaries’ net assets (“net investment hedge”). In these cases, we may use cross currency swaps and forward contracts.

Interest Rate Risk Management

We are subject to interest rate risk on our investments and on our borrowings. We manage interest rate risk in the aggregate, while focusing on our immediate and intermediate liquidity needs.

We raise capital through various debt instruments including senior notes, sustainability-linked senior notes, and convertible debentures that bear fixed or variable interest rates, as well as a syndicated sustainability-linked revolving credit facility and securitization programs that bear a variable interest rate. In some cases, as described below, we have swapped from a fixed to a variable interest rate (“fair value hedge”), from a variable to a fixed interest rate and from a fixed to a fixed interest rate with an exchange from a currency other than the functional currency (“cash flow hedge”), reducing overall interest expenses or hedging risks associated with interest rate fluctuations. As of December 31, 2023, all outstanding senior notes, sustainability-linked senior notes and convertible debentures bear a fixed interest rate.

In certain cases, we may hedge, in whole or in part, against exposure arising from a specific transaction, such as debt issuances related to an acquisition or debt refinancing, by entering into forward and interest rate swap contracts and/or by using options.

The table below presents the aggregate outstanding debt by currencies and maturities as of December 31, 2023:

(U.S. dollars in millions)

Fixed Rate:

USD convertible debentures* 23 0.25 % 0.25 % — — — — — —

Variable Rate:

Less debt issuance costs (80 )

* Classified under short-term debt.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

TEVA PHARMACEUTICAL INDUSTRIES LIMITED

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2023

Page

Consolidated Financial Statements:

Balance sheets 92

Statements of income 93

Statements of comprehensive income (loss) 94

Statements of changes in equity 95

Statements of cash flows 96

Notes to consolidated financial statements 98

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the

Board of Directors and Shareholders of Teva Pharmaceutical Industries Limited

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Teva Pharmaceutical Industries Limited and its subsidiaries

(the “Company”) as of December 31, 2023 and 2022,

and the related consolidated statements of income (loss), of comprehensive income (loss), of changes in equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended

December 31, 2023 appearing under Item 8 (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in

Internal Control—Integrated Framework

(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated

financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022

and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023

in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework (2013) issued by the COSO because a material weakness in internal control over financial reporting existed as of that date as the Company did not design and maintain effective control over the contingent consideration liability and related expenses in connection with estimated future royalty payments.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness referred to above is described in the Report of Teva Management on Internal Control over Financial Reporting appearing under Item 9A. We considered this material weakness in determining the nature, timing, and extent of audit tests applied in our audit of the 2023 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in management’s report referred to above. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

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that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Goodwill Impairment Assessment—North America, Europe, International Markets and Teva API reporting units

As described in Notes 1 and 7 to the consolidated financial statements, the Company’s consolidated goodwill balance and goodwill balance for the North America, Europe, International Markets and Teva API reporting units were $ 6,459 million, $8,466 million, $675 million and $1,313 million, respectively, as of December 31, 2023. As disclosed by management, goodwill is assigned to reporting units and tested for impairment at least annually, in the second quarter of the fiscal year, and whenever events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. During the second quarter of 2023, management conducted a quantitative analysis of all reporting units as part of its annual goodwill impairment test with the assistance of an independent valuation expert. In the second quarter of 2023, management recorded a goodwill impairment charge of $700 million related to its International Markets reporting unit, mainly due to an increase in the discount rate due to higher risk associated with country-specific characteristics of several countries. Management noted the following main triggering events during the fourth quarter for its International Markets reporting unit and its Teva API reporting unit: (i) fluctuations in exchange rates between certain currencies in which Teva operates in its International Markets reporting unit, and the U.S. dollar, are expected to significantly lower projected

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operating results; and (ii) updated assumptions supporting the cash flow projections of Teva’s API reporting unit, including certain revenue growth assumptions, and the associated operating profit margins, mainly resulting from changes in market conditions.

As a result, management performed a quantitative assessment in the fourth quarter of 2023, which resulted in no recognition of a goodwill impairment.

Management determines the fair value of its reporting units using the income approach. Within the income approach, the method used is the discounted cash flow method. Management begins with a forecast of all the expected net cash flows associated with the reporting unit, which includes the application of a terminal value, and then applies a discount rate to arrive at a net present value amount. As disclosed by management, key estimates include the revenue growth rates taking into consideration industry and market conditions, terminal growth rate and the discount rate.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment for the North America, Europe, International Markets and Teva API reporting units is a critical audit matter are (i) the significant judgment by management when determining the fair value of the reporting units; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the revenue growth rates, discount rate and terminal growth rate; and (iii) the audit effort involved using professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the North America, Europe, International Markets and Teva API reporting units. These procedures also included, among others, (i) testing management’s process for determining the fair value estimate; (ii) evaluating the appropriateness of the discounted cash flow model; (iii) testing the completeness, accuracy and relevance of underlying data used in the model; and (iv) evaluating the significant assumptions used by management related to the revenue growth rates, discount rate and terminal growth rate. Evaluating management’s assumptions related to the revenue growth rates and terminal growth rate involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting unit, (ii) the consistency with external market and industry data, and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of management’s discounted cash flow model and the discount rate assumption.

Sales Reserves and Allowances (“SR&A”)—Rebates, Chargebacks and Medicaid in the United States

As described in Notes 1 and 3 to the consolidated financial statements, revenues are recorded in the amount of consideration to which the Company expects to be entitled in exchange for performance obligations upon transfer of control to the customer. The amount of consideration to which the Company expects to be entitled varies as a result of rebates, chargebacks and other SR&A that the Company offers to its customers and their customers, as well as the occurrence or nonoccurrence of future events, including milestone events. A minimum amount of variable consideration is recorded by the Company concurrently with the satisfaction of performance obligations to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. As of December 31, 2023, consolidated SR&A for rebates, chargebacks and Medicaid were $3,002 million. Provisions for chargebacks involve estimates of usage by retailers and other indirect buyers with varying contract prices for multiple wholesalers. The provision for chargebacks varies in relation to changes in product mix, pricing and the level of inventory at the wholesalers. Provisions for estimating chargebacks are calculated using historical chargeback experience and/or expected chargeback levels for new products and anticipated pricing changes. Provisions for rebates are estimated based on the specific terms in each agreement based on historical trends and expected sales. Provisions for Medicaid are based on historical trends of rebates paid, as well as on changes in wholesaler inventory levels and increases or decreases in sales.

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The principal considerations for our determination that performing procedures relating to SR&A for rebates, chargebacks and Medicaid in the United States is a critical audit matter are (i) the significant judgment by management due to the significant measurement uncertainty involved in developing the reserves, as the reserves are based on assumptions developed using contractual and mandated terms with customers, historical experience, and projected market conditions in the U.S.; and (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to wholesaler inventory levels and expected chargeback levels.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to SR&A for rebates, chargebacks and Medicaid in the United States, including controls over the assumptions used by management to estimate the reserves. These procedures also included, among others, (i) developing independent estimates of the reserves using third party information, the contractual or mandated terms of the specific rebate or chargeback programs, and the historical trends of payments and comparing the independent estimates to management’s estimates; (ii) evaluating the reasonableness of significant assumptions used by management related to wholesaler inventory levels and expected chargeback levels; and (iii) testing the completeness, accuracy, and relevance of underlying data used to estimate the reserves, including testing actual claims processed by the Company.

/s/ Kesselman & Kesselman

Certified Public Accountants (Isr.)

A member of PricewaterhouseCoopers International Limited

Tel Aviv, Israel

February

, 2024

We have served as the Company’s auditor since at least 1976. We have not been able to determine the specific year we began serving as the auditor of the Company.

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TEVA PHARMACEUTICAL INDUSTRIES LIMITED

CONSOLIDATED BALANCE SHEETS

(U.S. dollars in millions)

ASSETS

Current assets:

Cash and cash equivalents $ 3,226 $ 2,801

Assets held for sale 70 10

Other non-current assets 470 441

Property, plant and equipment, net 5,750 5,739

Operating lease right-of-use assets 397 419

Identifiable intangible assets, net 5,387 6,270

LIABILITIES AND EQUITY

Current liabilities:

Sales reserves and allowances 3,535 3,750

Employee-related obligations 611 566

Long-term liabilities:

Other taxes and long-term liabilities 4,019 3,945

Operating lease liabilities 320 349

Commitments and contingencies, see note 12

Equity:

Teva shareholders’ equity:

Accumulated other comprehensive loss (2,697 ) (2,838 )

Non-controlling interests 620 794

Amounts may not add up due to rounding.

The accompanying notes are an integral part of the financial statements.

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TEVA PHARMACEUTICAL INDUSTRIES LIMITED

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(U.S. dollars in millions, except share and per share data)

Year ended December 31,

Research and development expenses, net 953 838 967

Other asset impairments, restructuring and other items 718 512 341

Legal settlements and loss contingencies 1,043 2,082 717

Income (loss) before income taxes (624 ) (3,163 ) 658

Income taxes (benefit) (7 ) (643 ) 211

Share in (profits) losses of associated companies – net (2 ) (21 ) (9 )

Net income (loss) attributable to non-controlling interests (56 ) (53 ) 39

Net income (loss) attributable to Teva (559 ) (2,446 ) 417

Earnings (loss) per share attributable to ordinary shareholders:

Weighted average number of shares (in millions):

Amounts may not add up due to rounding.

The accompanying notes are an integral part of the financial statements.

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TEVA PHARMACEUTICAL INDUSTRIES LIMITED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(U.S. dollars in millions)

Year ended December 31,

Other comprehensive income (loss), net of tax:

Currency translation adjustment 80 (356 ) (462 )

Unrealized gain (loss) on derivative financial instruments, net 29 29 39

Unrealized gain (loss) on defined benefit plans, net (18 ) 57 32

Total other comprehensive income (loss) 91 (270 ) (391 )

Total comprehensive income (loss) (524 ) (2,769 ) 65

Comprehensive income (loss) attributable to Teva $ (418 ) $ (2,600 ) $ 133

TEVA US Equity

TEVA · 10-K · period ended 2023-12-31

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

TEVA US Equity☆

TEVA · 10-K · period ended 2023-12-31

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

TEVA US Equity