01—Abstract
Summary
Summary of the 10-K filed February 9, 2022. Cited figures are marked; the original filing is the authoritative source.
Teva Pharmaceutical Industries Limited reported 2021 net revenues of $15,878 milliona, a decrease of 5% in U.S. dollars (6% in local currency) from 2020, mainly due to lower COPAXONE revenues, U.S. generic products, Japan generic divestment effects, and Anda, partially offset by higher AUSTEDO and AJOVY revenues.
Operating income was $1,716 millionb versus an operating loss of $3,572 million in 2020, which included a $4,628 million goodwill impairment. Net income attributable to Teva was $417 million, or $0.38 diluted EPS, compared with a net loss of $3,990 million in 2020. Cash flow from operating activities was $798 million, and the company reported free cash flow of $2,196 million.
Debt declined to $23,043 millionc at December 31, 2021 from $25,919 million, following a $5 billion sustainability-linked senior notes issuance, a cash tender offer that repurchased $4,008 million of notes, and repayment of maturing senior notes. The company stated it was in compliance with all financial ratios as of year-end, and it had no amounts outstanding under its revolving credit facility. Teva has not paid dividends since December 2017.
The filing also details significant legal exposure, including a $717 milliond expense for legal settlements and loss contingencies in 2021, a $2,710 million provision for legal settlements, and a $420 million Ontario Teachers securities class action settlement reached in January 2022. Segment profit was $2,224 million in North America, $1,494 million in Europe, and $529 million in International Markets. Growth products AUSTEDO (up 26% in North America to $802 million) and AJOVY (up 31% in North America to $176 million) partly offset declines in COPAXONE, which fell 35% in North America to $577 million.
02—Key points
Key Highlights
- Revenues of $15,878 million, down 5% in U.S. dollars and 6% in local currency versus 2020.
- Operating income of $1,716 million, compared with an operating loss of $3,572 million in 2020, which included a $4,628 million goodwill impairment.
- Net income attributable to Teva of $417 million, or $0.38 per diluted share, versus a net loss of $3,990 million in 2020.
- Free cash flow of $2,196 million in 2021, versus $798 million of operating cash flow.
- Total debt reduced to $23,043 million from $25,919 million, after a $5 billion sustainability-linked senior notes issuance and a $4,008 million cash tender offer.
- Legal settlements and loss contingencies expense of $717 million in 2021, with a provision of $2,710 million outstanding at year-end.
- AUSTEDO revenue in North America rose 26% to $802 million and AJOVY rose 31% to $176 million, while COPAXONE fell 35% to $577 million.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Teva Pharmaceutical Industries kept $0.03.
- Revenue$15.88B100.0%
- Cost of revenue−$8.28B52.2%
- Gross profit$7.59B47.8%
- Operating costs−$5.88B37.0%
- Operating income$1.72B10.8%
- Interest, other & tax−$1.30B8.2%
- Net income$417.0M2.6%
Where FY2021 revenue went
$15.88B- Cost of revenue: $8.28B, 52% of revenue
- Operating costs: $5.88B, 37% of revenue
- Net income: $417.0M, 2.6% of revenue
- Interest, other & tax: $1.30B, 8.2% of revenue
Kept 2.6% as net incomeNet income $417.0M · 2.6%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 9, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $15.88B$16.66B | −4.7% |
| Cost of Revenue | $8.28B$8.93B | −7.3% |
| Gross Profit | $7.59B$7.73B | −1.7% |
| Operating Income | $1.72B-$3.57B | +148.0% |
| Interest Expense | $891.00M$901.00M | −1.1% |
| Net Income | $417.00M-$3.99B | +110.5% |
| EPS (Basic) | $0.38$-3.64 | +110.4% |
| EPS (Diluted) | $0.38$-3.64 | +110.4% |
| Shares Outstanding (Basic) | 1.10B1.09B | +0.6% |
| Shares Outstanding (Diluted) | 1.11B1.09B | +1.1% |
05—Questions
Frequently Asked Questions
How did Teva's profitability change in 2021?
Teva returned to positive results in 2021. Operating income was $1,716 million, compared with an operating loss of $3,572 million in 2020, which had been driven by a $4,628 million goodwill impairment and $1,502 million of intangible asset impairments. Net income attributable to Teva was $417 million, or $0.38 per diluted share, compared with a net loss of $3,990 million in 2020. Gross profit was $7,594 million, or 47.8% of revenues, versus 46.4% in 2020.
How much debt does Teva have and how did it change?
Debt was $23,043 million at December 31, 2021, down from $25,919 million a year earlier. The decrease reflected $4,008 million repurchased in a cash tender offer, $3,167 million of senior notes repaid at maturity, and $710 million of exchange rate effects, partly offset by $4,973 million of sustainability-linked senior notes issued in November 2021. The filing states the company was in compliance with all applicable financial ratios as of December 31, 2021, and no amounts were outstanding under its revolving credit facility.
What are the main drivers of Teva's revenue trends?
Revenues fell to $15,878 million, mainly because of lower COPAXONE revenues, U.S. generic products, generic products in Japan following the divestment of most of the Japanese business venture's generic assets, and Anda. These declines were partly offset by higher AUSTEDO and AJOVY revenues. The company also noted that COVID-19 continued to affect markets and customer stocking and purchasing patterns during 2021.
What legal exposures does the filing highlight?
The filing describes numerous matters, including opioid litigation, U.S. government investigations into generic drug pricing, and antitrust claims. Teva recorded $717 million of legal settlements and loss contingencies expense in 2021, and its provision for legal settlements and loss contingencies was $2,710 million at year-end. The filing also notes a DOJ criminal indictment of Teva USA on Sherman Act charges, and a Ontario Teachers securities class action settlement of $420 million reached on January 18, 2022, largely funded by insurance carriers.
Does Teva pay dividends and what is its dividend outlook?
Teva has not paid dividends on its ordinary shares or ADSs since December 2017. The filing states the company's accounting policies assume its foreign subsidiaries will not distribute taxable dividends in the foreseeable future, and it has suspended dividend distributions since 2017. The filing does not provide a dividend reinstatement timeline.
06—Continue