Financial Analysis

NOTE 10 Commitments and contingencies: Overview 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, as described below, in large part as a result of the nature of its business, Teva is frequently subject to litigation. Teva generally believes that it has meritorious defenses to the actions brought against it and vigorously pursues the defense or settlement of each such action. 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. Except as noted below, no material provision has been made regarding any matter disclosed in this note, based upon the case status, managements assessments of the likelihood of damages, and the advice of legal counsel. Litigation outcomes and contingencies are unpredictable, and substantial damages or other relief may be awarded. Accordingly, managements assessments involve complex judgments about future events and often rely heavily on estimates and assumptions. Teva continuously reviews the matters described below and may, from time to time, remove a previously disclosed matter where the exposure was fully resolved in the prior year, or determined to no longer meet the materiality threshold for disclosure (including, in some circumstances, because such matter has been substantially resolved). If one or more of …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 7 Debt obligations: a. Short-term debt: Weighted average interest rate as of December 31, 2025 Maturity June 30, 2026 December 31, 2025 (U.S. $ in millions) Convertible debentures (1) 0.25 % 2026 $ $ 23 Current maturities of long-term liabilities 4,500 1,798 Total short-term debt $ 4,500 $ 1,820 (1) In February 2026, Teva repaid $23 million of the 0.25% convertible senior debentures at maturity. b. Long-term debt: Interest rate as of June 30, 2026 Maturity June 30, 2026 December 31, 2025 (U.S. $ in millions) Senior notes USD 3,500 million 3.15 % 2026 1,798 1,798 Senior notes EUR 700 million 1.88 % 2027 798 823 Sustainability-linked senior notes USD 1,000 million (1) 4.75 % 2027 649 649 Sustainability-linked senior notes EUR 1,100 million (1) 3.75 % 2027 1,255 1,292 Senior notes USD 1,250 million 6.75 % 2028 1,250 1,250 Senior notes EUR 750 million 1.63 % 2028 856 880 Sustainability-linked senior notes USD 1,000 million ( 1 ) 5.13 % 2029 1,000 1,000 Sustainability-linked senior notes USD 600 million ( 1 ) 7.88 % 2029 398 398 Sustainability-linked senior notes EUR 800 million ( 1 ) 7.38 % 2029 758 779 Sustainability-linked senior notes EUR 1,500 million ( 1 ) 4.38 % 2030 1,714 1,762 Senior notes USD 700 million 5.75 % 2030 696 696 Sustainability-linked senior notes USD 500 million ( 1 ) 8.13 % 2031 500 500 Sustainability-linked senior notes EUR 500 million ( 1 ) 7.88 % 2031 572 587 Senior notes EUR 1,000 million 4.13 % 2031 1,138 1,168 Senior notes USD 500 million 6.00 % 2 …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table disaggregates Tevas revenues by major revenue streams. For additional information on disaggregation of revenues, see note 15. In alignment with Tevas Pivot to Growth strategy, commencing January 1, 2026, Anda is no longer reported under Tevas United States segment. As a result, from that date, Anda is reported as part of the Companys Other Activities. Prior period amounts were recast to reflect this change. Three months ended June 30, 2026 United States Europe International Markets Other Activities Total (U.S.$ in millions) Sale of goods 1,704 1,253 527 118 3,602 Licensing arrangements 17 13 7 37 Distribution 20 413 433 Other (19 ) (3 ) (3 ) 95 70 $ 1,702 $ 1,263 $ 550 $ 627 $ 4,142 Represents an amount less than $0.5 million. Three months ended June 30, 2025 United States Europe International Markets Other Activities Total (U.S.$ in millions) Sale of goods 1,755 1,275 469 136 3,636 Licensing arrangements 29 9 9 (1 ) 46 Distribution 12 365 377 Other 2 13 5 98 117 $ 1,786 $ 1,298 $ 495 $ 597 $ 4,176 Represents an amount less than $0.5 million. Six months ended June 30, 2026 United States Europe International Markets Other Activities Total (U.S.$ in millions) Sale of goods 3,197 2,565 1,003 227 6,991 Licensing arrangements 39 23 15 77 Distribution 38 792 830 Other 1 15 18 192 226 $ 3,236 $ 2,603 $ 1,074 $ 1,211 $ 8,124 Represents an amount less than $0.5 million. Six months ended June 30, 2025 United States Europe International Markets Other Activities Total …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

NOTE 16 Fair value measurement: Financial items carried at fair value on a recurring basis as of June 30, 2026 and December 31, 2025 are classified in the tables below in one of the three categories of fair value levels: June 30, 2026 Level 1 Level 2 Level 3 Total (U.S. $ in millions) Cash and cash equivalents: Money markets $ 2,710 $ $ $ 2,710 Cash, deposits and other 945 945 Investment in securities: Equity securities 17 17 Other 4 4 Derivatives: Asset derivatives: Options and forward contracts 99 99 Liability derivatives: Options and forward contracts (60 ) (60 ) Cross currency interest rate swap (20 ) (20 ) Contingent consideration* (49 ) (49 ) Total $ 3,676 $ 19 $ (49 ) $ 3,646 December 31, 2025 Level 1 Level 2 Level 3 Total (U.S. $ in millions) Cash and cash equivalents: Money markets $ 2,678 $ $ $ 2,678 Cash, deposits and other 878 878 Investment in securities: Equity securities 16 16 Other 3 3 Derivatives: Asset derivatives: Options and forward contracts 86 86 Liability derivatives: Options and forward contracts (38 ) (38 ) Cross currency interest rate swap (19 ) (19 ) Contingent consideration* (51 ) (51 ) Total $ 3,575 $ 29 $ (51 ) $ 3,553 * Contingent consideration represents liabilities recorded at fair value in connection with acquisitions. Teva determined the fair value of the liabilities for contingent consideration based on a probability-weighted discounted cash flow analysis. This fair value measurement is based on significant unobservable inputs in the market …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

NOTE 11 Income taxes: In the second quarter of 2026, Teva recognized a tax expense of $121 million, on pre-tax loss of $455 million. In the second quarter of 2025, Teva recognized a tax benefit of $78 million, on pre-tax income of $203 million. Tevas tax rate for the second quarter of 2026 was mainly affected by an unfavorable tax impact from a non-deductible acquired IPR&D charge related to the acquisition of Emalex and its primary asset ecopipam (EBS-101), the generation of profits in various jurisdictions in which tax rates are different than the Israeli tax rate and other infrequent or non-recurring items. For additional information see note 2. Tevas tax rate for the second quarter of 2025 was mainly affected by releases of uncertain tax positions, foreign exchange impact on deferred tax positions and interest and inflation adjustments related to the agreement with the Israeli Tax Authorities (ITA) mentioned below. In the first six months of 2026, Teva recognized a tax expense of $188 million, on pre-tax loss of $18 million. In the first six months of 2025, Teva recognized a tax benefit of $4 million, on pre-tax income of $497 million. Tevas tax rate for the first six months of 2026 was mainly affected by an unfavorable tax impact of a non-deductible acquired IPR&D charge related to the acquisition of Emalex and its primary asset ecopipam (EBS-101), the generation of profits in various jurisdictions in which tax rates are different than the Israeli tax rate and ot …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 9 Legal settlements and loss contingencies: In the second quarter of 2026, Teva recorded expenses of $230 million in legal settlements and loss contingencies, compared to expenses of $166 million in the second quarter of 2025. Expenses in the second quarter of 2026 were mainly related to an estimated provision recorded in connection with one of the Companys ongoing antitrust litigations and an update to the estimated settlement provision for the opioid cases (mainly the effect of the passage of time on the net present value of the discounted payments) . Expenses in the second quarter of 2025 were mainly related to an update to the estimated provision recorded for the claims brought by attorneys general representing states and territories throughout the United States in the generic drug antitrust litigation, an update to the estimated settlement provision for the opioid cases (mainly the effect of the passage of time on the net present value of the discounted payments), and a provision recorded in connection with the antitrust litigation related to QVAR . See note 10. In the first six months of 2026, Teva recorded expenses of $303 million in legal settlements and loss contingencies, compared to $252 million in the first six months of 2025. Expenses in the first six months of 2026 were mainly related to an estimated provision recorded in connection with one of the Companys ongoing antitrust litigations and an update to the estimated settlement provision for the opioid case …

LegalMattersAndContingenciesTextBlock · excerpt; the full note is in the filing

NOTE 3 Revenue from contracts with customers: Disaggregation of revenue The following table disaggregates Tevas revenues by major revenue streams. For additional information on disaggregation of revenues, see note 15. In alignment with Tevas Pivot to Growth strategy, commencing January 1, 2026, Anda is no longer reported under Tevas United States segment. As a result, from that date, Anda is reported as part of the Companys Other Activities. Prior period amounts were recast to reflect this change. Three months ended June 30, 2026 United States Europe International Markets Other Activities Total (U.S.$ in millions) Sale of goods 1,704 1,253 527 118 3,602 Licensing arrangements 17 13 7 37 Distribution 20 413 433 Other (19 ) (3 ) (3 ) 95 70 $ 1,702 $ 1,263 $ 550 $ 627 $ 4,142 Represents an amount less than $0.5 million. Three months ended June 30, 2025 United States Europe International Markets Other Activities Total (U.S.$ in millions) Sale of goods 1,755 1,275 469 136 3,636 Licensing arrangements 29 9 9 (1 ) 46 Distribution 12 365 377 Other 2 13 5 98 117 $ 1,786 $ 1,298 $ 495 $ 597 $ 4,176 Represents an amount less than $0.5 million. Six months ended June 30, 2026 United States Europe International Markets Other Activities Total (U.S.$ in millions) Sale of goods 3,197 2,565 1,003 227 6,991 Licensing arrangements 39 23 15 77 Distribution 38 792 830 Other 1 15 18 192 226 $ 3,236 $ 2,603 $ 1,074 $ 1,211 $ 8,124 Represents an amount less than $0.5 million. Six months ended June 30 …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

NOTE 15 Segments: Teva operates its business and reports its financial results in the following three segments: (a) United States segment. (b) Europe segment, which includes the European Union, the United Kingdom and certain other European countries. (c) International Markets segment, which includes all countries other than the United States and countries included in the Europe segment. In addition to these three segments, Teva has other sources of revenues included in O ther A ctivities, primarily Tevas distribution business in the United States through Anda, sale of APIs to third parties, an out-licensing platform offering a portfolio of products to other pharmaceutical companies through its affiliate Medis and certain contract manufacturing services. In alignment with Tevas Pivot to Growth strategy, commencing January 1, 2026, Anda is no longer reported under Tevas United States segment. This shift allows the United States segment to continue to manage its entire product portfolio in the region, while strengthening focus on its biopharmaceutical business, growth engines and innovation. As a result, from that date, Anda is reported as part of the Companys O ther A ctivities. Prior period amounts were recast to reflect this change. Tevas Chief Executive Officer (CEO), who is the chief operating decision maker (CODM), reviews financial information prepared on a consolidated basis, accompanied by disaggregated information about revenues and contributed profit by the three iden …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

N OTE 14 Accumulated other comprehensive income (loss): The components of, and changes within, accumulated other comprehensive income (loss) attributable to Teva are presented in the table below: Net Unrealized Gains (Losses) Benefit Plans Foreign currency translation adjustments Derivative financial instruments Actuarial gains (losses) and prior service (costs) credits Total (U.S. $ in millions) Balance as of December 31, 2025, net of taxes $ (2,152 ) $ (199 ) $ (39 ) $ (2,391 ) Other comprehensive income (loss) before reclassifications (58 ) (12 ) (70 ) Amounts reclassified to the statements of income 10 (1 ) 9 Release of cumulative translation adjustments (6 ) (6 ) Net other comprehensive income (loss) before tax (64 ) (2 ) (1 ) (67 ) Corresponding income tax (7 ) (7 ) Net other comprehensive income (loss) after tax (71 ) (2 ) (1 ) (74 ) Balance as of June 30, 2026, net of taxes $ (2,223 ) $ (201 ) $ (40 ) $ (2,465 ) Net Unrealized Gains (Losses) Benefit Plans Foreign currency translation adjustments Derivative financial instruments Actuarial gains (losses) and prior service (costs) credits Total (U.S. $ in millions) Balance as of December 31, 2024, net of taxes $ (2,857 ) $ (238 ) $ (52 ) $ (3,148 ) Other comprehensive income (loss) before reclassifications 558 558 Amounts reclassified to the statements of income 24 (1 ) 23 Release of cumulative translation adjustments** 181 181 Net other comprehensive income (loss) before tax 739 24 (1 ) 762 Corresponding income tax 45 4 …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing