Revenue from contracts with customers

9 Months Ended

Sep. 30, 2022

Revenue from contracts with customers

NOTE 3 – Revenue from contracts with customers:

Disaggregation of revenue

The following table disaggregates Teva’s revenues by major revenue streams. For additional information on disaggregation of revenues, see note 15.

	Three months ended September 30, 2022
	North America		Europe		International Markets		Other activities		Total
	(U.S. $ in millions)
Sale of goods		1,393		1,034		445		149		3,021
Licensing arrangements		37		10		4		1		52
Distribution		371		§		12		—		383
Other		9		26		14		91		139
	$	1,809	$	1,069	$	475	$	241	$	3,595

§ Represents an amount less than $0.5 million.

	Three months ended September 30, 2021
	North America		Europe		International Markets		Other activities		Total
	(U.S. $ in millions)
Sale of goods		1,487		1,197		495		160		3,340
Licensing arrangements		22		11		4		1		38
Distribution		363		§		15		—		378
Other		2		11		15		102		130
	$	1,875	$	1,220	$	530	$	262	$	3,887

§ Represents an amount less than $0.5 million.

	Nine months ended September 30, 2022
	North America		Europe		International Markets		Other activities		Total
	(U.S. $ in millions)
Sale of goods		4,308		3,295		1,338		505		9,447
Licensing arrangements		111		36		12		3		162
Distribution		1,021		1		38		—		1,060
Other		10		65		33		266		373
	$	5,450	$	3,396	$	1,422	$	773		11,041

	Nine months ended September 30, 2021
	North America		Europe		International Markets		Other activities		Total
	(U.S. $ in millions)
Sale of goods		4,776		3,560		1,397		534		10,268
Licensing arrangements		62		32		9		3		106
Distribution		968		§		49		—		1,018
Other		§		25		50		312		387
	$	5,807	$	3,618	$	1,505	$	849	$	11,778

§ Represents an amount less than $0.5 million.                

Variable consideration

Variable consideration mainly includes sales reserves and allowances (“SR&A”), comprised of rebates (including Medicaid and other governmental program discounts), chargebacks, returns and other promotional (including shelf stock adjustments) items. Provisions for prompt payment discounts are netted against accounts receivables.

The Company recognizes these provisions at the time of sale and adjusts them if the actual amounts differ from the estimated provisions.

SR&A to U.S. customers comprised approximately 72% of the Company’s total SR&A as of September 30, 2022, with the remaining balance primarily related to customers in Canada and Germany. The changes in SR&A for third-party sales for the nine months ended September 30, 2022 and 2021 were as follows:

	Sales Reserves and Allowances
	Reserves included in Accounts Receivable, net			Rebates			Medicaid and other governmental allowances			Chargebacks			Returns			Other			Total reserves included in SR&A			Total
	(U.S. $ in millions)
Balance at December 31, 2021	$	68		$	1,655		$	854		$	1,085		$	535		$	112		$	4,241		$	4,309
Provisions related to sales made in current year		269			2,832			684			5,656			219			226			9,617			9,886
Provisions related to sales made in prior periods		—			(103	)		(15	)		(28	)		(9	)		(3	)		(158	)		(158	)
Credits and payments		(285	)		(2,845	)		(762	)		(5,826	)		(300	)		(213	)		(9,946	)		(10,231	)
Translation differences		—			(66	)		(11	)		(17	)		(8	)		(4	)		(106	)		(106	)
Balance at September 30, 2022	$	52			1,473		$	750		$	870		$	437		$	118		$	3,648		$	3,700

	Reserves included in Accounts Receivable, net			Rebates			Medicaid and other governmental allowances			Chargebacks			Returns			Other			Total reserves included in SR&A			Total
	(U.S.$ in millions)
Balance at December 31, 2020	$	80		$	2,054		$	828		$	1,108		$	686		$	148		$	4,824		$	4,904
Provisions related to sales made in current year		285			3,060			617			5,949			207			246			10,079			10,364
Provisions related to sales made in prior periods		(5	)		(94	)		(46	)		(31	)		(53	)		(25	)		(249	)		(254	)
Credits and payments		(293	)		(3,286	)		(595	)		(5,983	)		(265	)		(247	)		(10,376	)		(10,669	)
Translation differences		—			(22	)		(5	)		(4	)		(4	)		(2	)		(37	)		(37	)
Balance at September 30, 2021	$	67		$	1,712		$	799		$	1,039		$	571		$	120		$	4,241		$	4,308