Teva Reports Fourth Quarter and Full Year 2013 Results

Teva Pharmaceutical Industries Ltd. (NYSE:TEVA) today reported results for the quarter and year ended December 31, 2013.

“Teva is reporting today strong results for the fourth quarter of 2013, bringing to close a year largely in-line with our expectations. During 2013, we had several key product launches, driven by a strong pipeline, which will continue to bear notable results in 2014, starting with the launch of COPAXONE 40mg/mL,” stated Eyal Desheh, Acting President and CEO of Teva. “We continue to focus our efforts on our core R&D programs and go-to-market activities while increasing organizational effectiveness through our cost-reduction program to ensure Teva's growth and its role as a leader in the ever-changing pharmaceutical industry. 2013 was an important year for Teva and its shareholders. Many seeds were planted to ensure our long-term success and prosperity. 2014 will be a pivotal year in terms of execution and further enhancement of our strategic direction.”

Revenues for the three months ended December 31, 2013, were $5.4 billion, an increase of 3% compared to the fourth quarter of 2012. In local currency terms, revenues increased 4%. The increase was primarily attributable to higher sales of generic medicines in the U.S. and higher revenues from our global specialty medicines business, as well as higher sales of OTC products. This increase was partially offset by a decrease in generics sales outside the U.S., mostly in Japan, due to the weaker yen, and API sales to third parties.

Revenues by Segment for the Fourth Quarter 2013

		Three Months Ended December 31,								Percentage Change		Percentage Change
		2013		2012		% of 2013		% of 2012		2013-2012		2013 from 2012
		U.S. $ in millions										in local currencies
Generic Medicines
United States		1,178		1,034		22%		20%		14%		14%
Europe*		940		955		17%		18%		(2%)		(5%)
Rest of the World		579		673		11%		13%		(14%)		(2%)
Total Generic Medicines		2,697		2,662		50%		51%		1%		3%
Specialty Medicines
United States		1,540		1,527		28%		29%		1%		1%
Europe*		463		422		8%		8%		10%		5%
Rest of the World		201		157		4%		3%		28%		36%
Total Specialty		2,204		2,106		40%		40%		5%		4%
Other Revenues
United States		69		60		1%		1%		15%		15%
Europe*		196		181		4%		3%		8%		6%
Rest of the World		264		240		5%		5%		10%		14%
Total Other Revenues		529		481		10%		9%		10%		11%
Total Revenues		5,430		5,249		100%		100%		3%		4%

* All members of the European Union, Switzerland, Norway, Albania and the countries of former Yugoslavia.

Generic medicines net revenues in the fourth quarter were $2.7 billion (including API sales to third parties of $163 million), an increase of 1% compared to the fourth quarter of 2012. In local currency terms, revenues increased 3%. Generic revenues consisted of:

• U.S. revenues of $1.2 billion, an increase of 14% compared to the fourth quarter of 2012. The increase resulted mainly from the exclusive launches of niacin ER, the generic version of Niaspan^®, and temozolomide, the generic version of Temodar^®, in the third quarter of 2013, and launches of duloxetine, the generic version of Cymbalta^®, and tobramycin, the generic version of Tobi^®, in the fourth quarter of 2013, as well as higher sales of budesonide inhalation, the generic version of Pulmicort^®.
• European revenues of $940 million, a decrease of 2%, or 5% in local currency terms, compared to the fourth quarter of 2012. The decrease was mainly due to our strategic focus on profitable and sustainable business in Germany and Spain and a contraction of the market for generics in France, as well as lower API sales to third parties. The decrease was partially offset by higher revenues in the U.K. and Italy.
• Rest of the World ("ROW") revenues of $579 million, a decrease of 14%, or 2% in local currency terms, compared to the fourth quarter of 2012. The decrease was primarily due to lower sales in Russia, due to a particularly weak winter season, and Japan, mainly because of the weakening of the yen.

Generics medicines comprised 50% of total revenues in the quarter, compared to 51% in the fourth quarter of 2012.

		Three Months Ended December 31,										Percentage Change
		2013			2012			% of 2013		% of 2012		2013 from 2012
		U.S. $ in millions
Generic Medicines		$	2,697		$	2,662		50%		51%		1%
API			163			202		3%		4%		(19%)

Specialty medicines net revenues in the fourth quarter were $2.2 billion, an increase of 5% compared to $2.1 billion in the fourth quarter of 2012. Specialty revenues consisted of:

• U.S. revenues of $1.5 billion, an increase of 1% compared to the fourth quarter of 2012.
• European revenues of $463 million, an increase of 10%, or 5% in local currency terms, compared to the fourth quarter of 2012.
• ROW revenues of $201 million, an increase of 28%, or 36% in local currency terms, compared to the fourth quarter of 2012.

Specialty medicines comprised 40% of total revenues in the quarter, the same as in the fourth quarter of 2012.

The increase in specialty medicines revenues over the fourth quarter of 2012 was primarily due to increased sales of COPAXONE^® and TREANDA^®, partially offset by lower sales of respiratory and women’s health medicines.

Global revenues recorded by Teva for COPAXONE^®, the leading multiple sclerosis therapy in the U.S. and globally, increased 8% during the quarter both in U.S. dollar terms and in local currency terms to $1,142 million, compared to $1,059 million in the fourth quarter of 2012. The increase primarily resulted from higher sales in Russia and Germany. In the U.S., sales decreased 2% to $805 million, as a result of increased competition from oral MS therapies, partially offset by a price increase. Sales outside the U.S. were $337 million, an increase of 42%, or 43% in local currency terms, compared to the fourth quarter of 2012, primarily due to the timing of tenders in Russia and higher sales in Germany.

AZILECT^® revenues recorded by Teva this quarter increased 14% to $98 million, while global in-market revenues increased 18% to $133 million, primarily due to increased demand in the U.S. and Europe.

TREANDA^® revenues amounted to $177 million in the quarter, an increase of 10% over the comparable quarter, due to increases in both volume and price.

Respiratory medicines revenues were $238 million this quarter, a decrease of 7% from the comparable quarter of 2012. The decrease was primarily due to lower revenues in Europe, mainly as a result of pricing pressure.

Women’s Health products revenues were $127 million this quarter, a decrease of 4% from $132 million in the comparable quarter of 2012. The decrease was primarily due to decreased sales of PARAGARD^® in the U.S., partially offset by higher sales of other Women’s Health products.

		Three Months Ended December 31,								Percentage Change
		2013		2012		% of 2013		% of 2012		2013 from 2012
		U.S. $ in millions
Specialty Medicines		2,204		2,106		40%		40%		5%
CNS		1,456		1,340		27%		26%		9%
Copaxone®		1,142		1,059		21%		20%		8%
Azilect®		98		86		2%		2%		14%
Nuvigil®		76		78		1%		1%		(3%)
Provigil®		26		25		§		§		4%
Oncology		261		233		5%		4%		12%
Treanda®		177		161		3%		3%		10%
Respiratory		238		256		4%		5%		(7%)
ProAir®		114		120		2%		2%		(5%)
Qvar®		89		92		2%		2%		(3%)
Women's Health		127		132		2%		2%		(4%)
Other Specialty		122		145		2%		3%		(16%)
§ Less than 0.5%.

Other net revenues include:

• OTC net revenues in the quarter were $316 million, an increase of 17%, or 21% in local currency terms, compared to $269 million in the fourth quarter of 2012, primarily due to higher sales from our PGT Healthcare joint venture.
• Other net revenues in the quarter were $213 million, mostly from the distribution of third-party products in Israel and Hungary, compared to $212 million in the fourth quarter of 2012. In local currency terms, revenues decreased by 2%.

		Three Months Ended December 31,								Percentage Change
		2013		2012		% of 2013		% of 2012		2013 from 2012
		U.S. $ in millions
All Others		529		481		10%		9%		10%
OTC		316		269		6%		5%		17%
Other Revenues		213		212		4%		4%		§
§ Less than 0.5%.

Revenues by Geography for the Fourth Quarter 2013

Net revenues in the U.S. in the fourth quarter were $2.8 billion (51% of total revenues), an increase of 6% compared to the fourth quarter of 2012, driven primarily by higher sales of both generic and specialty medicines.

Net revenues in Europe in the fourth quarter were $1.6 billion (29% of total revenues), an increase of 3% compared to the fourth quarter of 2012, or 1% decrease in local currency terms. Revenues in Europe this quarter benefited from stronger revenues from specialty medicines, primarily COPAXONE^®, as well as increased sales from our OTC business, partially offset by lower generic revenues.

Net revenues in the ROW in the fourth quarter totaled $1.0 billion (20% of total revenues), a decrease of 2% compared to the fourth quarter of 2012, mainly due to negative foreign currency effects. In local currency terms, ROW revenues increased 7%, mainly as a result of higher revenues in Russia, Latin America and Israel, partially offset by lower revenues in Japan.

		Year Ended December 31,									Percentage Change		Percentage Change
		2013		2012			% of 2013		% of 2012		2013-2012		2013 from 2012
		U.S. $ in millions											in local currencies
Generic Medicines
United States		4,181		$	4,381		21%		22%		(5%)		(5%)
Europe*		3,485			3,482		17%		17%		§		(2%)
Rest of the World		2,240			2,522		11%		12%		(11%)		(1%)
Total Generic Medicines		9,906			10,385		49%		51%		(5%)		(3%)
Specialty Medicines
United States		6,026			5,857		30%		29%		3%		3%
Europe*		1,706			1,575		8%		8%		8%		6%
Rest of the World		670			718		3%		3%		(7%)		(3%)
Total Specialty		8,402			8,150		41%		40%		3%		3%
Other Revenues
United States		254			200		1%		1%		27%		27%
Europe*		797			741		4%		4%		8%		6%
Rest of the World		955			841		5%		4%		14%		16%
Total Other Revenues		2,006			1,782		10%		9%		13%		12%
Total Revenues		20,314			20,317		100%		100%		§		1%
* All members of the European Union, Switzerland, Norway, Albania and the countries of former Yugoslavia.
§ Less than 0.5%.

Revenues by Segment for Full Year 2013

Generic medicines net revenues in 2013 were $9.9 billion (including API sales to third parties of $692 million), a decrease of 5% compared to $10.4 billion in 2012. Generic revenues consisted of:

• U.S. revenues of $4.2 billion, a decrease of 5% compared to 2012. The decrease mainly reflected the absence of royalties related to sales of atorvastatin, the generic equivalent of Lipitor^® under our agreement with Ranbaxy, which we received in the first half of 2012, a decline in sales of escitalopram oxalate, the generic version of Lexapro^®, to which we had exclusive rights in the first half of 2012, and a decline in sales of generic versions of Actos^® (pioglitazone) and Actoplus met^® (pioglitazone/ metformin), which were launched in the third quarter of 2012.
• European revenues of $3.5 billion, flat compared to 2012, or a 2% decrease in local currency terms. The decrease in local currency terms mainly resulted from lower sales in Germany and Spain, as well as lower sales of APIs.
• ROW revenues of $2.2 billion, a decrease of 11%, or 1% in local currency terms, compared to 2012. The decrease was mainly due to lower revenues in Japan, partially offset by higher revenues in Russia and Latin America markets.

Generics medicines revenues comprised 49% of total revenues for the year, compared to 51% in 2012.

		Year Ended December 31,								Percentage Change
		2013		2012		% of 2013		% of 2012		2013 from 2012
		U.S. $ in millions
Generic Medicines		$ 9,906		$ 10,385		49%		51%		(5%)
API		692		796		3%		4%		(13%)

Specialty medicines net revenues in 2013 were $8.4 billion, an increase of 3% compared to $8.2 billion in 2012. Specialty revenues consisted of:

• U.S. revenues of $6.0 billion, an increase of 3% compared to 2012.
• European revenues of $1.7 billion, an increase of 8%, or 6% in local currency terms compared to 2012.
• ROW revenues of $670 million, a decrease of 7%, or 3% in local currency terms compared to 2012.

Specialty medicines revenues comprised 41% of total revenues for the year, compared to 40% in 2012.

The increase in specialty medicines revenues from 2012 was due to higher sales of several specialty medicines, primarily COPAXONE^®, TREANDA^®, AZILECT^®, QVAR^® and ProAir^®, partially offset by a decrease in Provigil^® sales due to its loss of exclusivity.

Global revenues recorded by Teva for COPAXONE^®, the leading multiple sclerosis therapy in the U.S. and globally, increased 8% to $4.3 billion, compared to $4.0 billion in 2012. In the U.S., sales increased 11% to $3.2 billion, as a result of increases in both price and volume. Sales outside the U.S. were $1.1 billion, an increase of 2%, compared to 2012, mainly as a result of higher revenues in certain countries in Europe.

AZILECT^® revenues recorded by Teva increased 12% to $371 million, while global in-market revenues increased 17% to $493 million, primarily due to increased demand in the U.S. and Europe as well as a price increase in the U.S.

TREANDA^® revenues reached $709 million in 2013, an increase of 17% from 2012, primarily due to volume growth.

Respiratory medicines revenues were $905 million in 2013, an increase of 6% from $856 million in 2012. The increase was primarily due to higher revenues from QVAR^®, ProAir^® and Qnasl^® in the U.S., partially offset by lower revenues in Europe.

Women’s Health medicines revenues amounted to $463 million in 2013, an increase of 3% from $448 million in 2012. The increase was primarily due to higher revenues in Europe and Latin America, as well as the launch of Quartette™ and Plan B One-Step^® OTC in the U.S.

In addition, during the year we successfully launched several specialty medicines, including Quartette™ , Plan B One-Step^® OTC, Lonquex^® (lipegfilgrastim) and Granix^® tbo-filgrastim.

		Year Ended December 31,								Percentage Change
		2013		2012		% of 2013		% of 2012		2013 from 2012
		U.S. $ in millions
Specialty Medicines		8,402		8,150		41%		40%		3%
CNS		5,505		5,464		27%		27%		1%
Copaxone®		4,328		3,996		21%		20%		8%
Azilect®		371		330		2%		2%		12%
Nuvigil®		320		347		2%		2%		(8%)
Provigil®		91		417		§		2%		(78%)
Oncology		982		860		5%		4%		14%
Treanda®		709		608		3%		3%		17%
Respiratory		905		856		4%		4%		6%
ProAir®		429		406		2%		2%		6%
Qvar®		328		297		2%		1%		10%
Women's Health		463		448		2%		2%		3%
Other Specialty		547		522		3%		3%		5%
§ Less than 0.5%.

Other net revenues include:

• OTC net revenues for the year were $1.2 billion, an increase of 24%, or 28% in local currency terms, compared to $936 million in 2012, primarily due to growth in sales in Latin America and Europe, as well as sales of OTC products in the U.S. to The Procter & Gamble Company.
• Other net revenues for the year were $841 million, mostly from the distribution of third-party products in Israel and Hungary, compared to $846 million in 2012. In local currency terms, revenues decreased 4%.

		Year Ended December 31,								Percentage Change
		2013		2012		% of 2013		% of 2012		2013 from 2012
		U.S. $ in millions
All Others		2,006		1,782		10%		9%		13%
OTC		1,165		936		6%		5%		24%
Other Revenues		841		846		4%		4%		(1%)

Revenues by Geography for the Full Year 2013

Net revenues in the U.S. were $10.5 billion (52% of total revenues), flat compared to 2012, driven by strong revenues of specialty medicines offset by lower sales of generic medicines.

Net revenues in Europe were $6.0 billion (29% of total revenues), an increase of 3% compared to 2012, or 1% in local currency terms. Revenues in Europe this year benefited from increased sales of specialty medicines, primarily COPAXONE^®, as well as continued growth in our OTC business. This growth was partially offset by lower API sales.

Net revenues in the ROW totaled $3.9 billion (19% of total revenues), a decrease of 5% compared to 2012. In local currency terms, ROW revenues grew by 2%. The increase in local currency terms was primarily due to higher revenue in Latin America and Russia, partially offset by lower revenues in Japan.

Key Metrics

Exchange rate differences between this quarter and the fourth quarter of 2012 reduced our revenues and non-GAAP operating income by approximately $49 million and $45 million, respectively. The impact on revenues resulted primarily from the weakening of certain currencies (primarily the Japanese yen, Latin American currencies, the Russian ruble and the Canadian dollar) relative to the U.S. dollar, while the euro and the Israeli shekel appreciated against the U.S. dollar. Exchange rate differences during 2013 in comparison with 2012 negatively impacted our overall revenues by approximately $166 million and operating income by $129 million.

Non-GAAP Information This quarter, we had net non-GAAP charges of $825 million, consisting primarily of impairments of $329 million and amortization of $313 million. Accordingly, non-GAAP net income and non-GAAP EPS for the quarter are adjusted to exclude these and certain other items, as follows:

• Impairment of $329 million relating mainly to write-off of product rights due to market changes, plant closures, write-offs of R&D projects that were terminated and of certain equity investments;
• Amortization of purchased intangible assets totaling $313 million, of which $298 million is included in cost of goods sold and the remaining $15 million in selling and marketing expenses;
• Net tax expense of $248 million related to settlements with the Israeli tax authorities;
• Restructuring and acquisition expenses of $107 million mainly related to Teva’s previously announced cost reduction program;
• Legal settlements of $15 million;
• Regulatory actions taken in facilities of $5 million;
• Contingent consideration and other expenses of $29 million;
• Financial expenses of $4 million; and
• Related tax benefits of $225 million.

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

Non-GAAP gross profit margin was 58.9% in the quarter, compared to 58.7% in the fourth quarter of 2012. This reflects a decreased contribution from the sales of generic medicines, offset by higher sales of COPAXONE^® and oncology product line medicines. GAAP gross profit margin was 53.3% in the quarter, compared to 53.1% in the fourth quarter of 2012.

Net Research & Development (R&D) expenditures in the quarter (excluding purchase of in-process R&D) totaled $409 million, or 7.5% of revenues, compared to $374 million, or 7.1% of revenues in the fourth quarter of 2012. The increase in R&D spending primarily reflects the progress in development activities.

Selling and Marketing expenditures (excluding amortization of purchased intangible assets) totaled $1.1 billion, or 20.6% of revenues, in the quarter, compared to $1.0 billion, or 19.9% of revenues, in the fourth quarter of 2012. The increase primarily reflects higher expenses related to royalty payments for generic medicines in the U.S. as well as higher expenses related to our specialty medicines prelaunch activities, partially offset by lower non-royalty expenses related to generic medicines.

General and Administrative (G&A) expenditures totaled $316 million in the quarter, or 5.8% of revenues, compared with $318 million, or 6.1% of revenues, for the fourth quarter of 2012.

Quarterly non-GAAP operating income was $1.4 billion, up 1% compared to the fourth quarter of 2012. Quarterly GAAP operating income was $0.6 billion compared to $0.3 billion in the fourth quarter of 2012.

For the full year 2013, non-GAAP operating income was $5.2 billion, down 9% compared to the full year 2012. GAAP operating income was $1.6 billion compared to $2.2 billion in 2012.

Below is a quarterly analysis of profitability by segments or business lines. The annual analysis can be found in the appendix to this release:

		Generics
		Three months ended December 31,										Percentage Change
		2013					2012					2013 - 2012
		U.S.$ in millions / % of Segment Revenues
Revenues		$	2,697		100%		$	2,662		100%		1%
Gross Profit			1,149		43%			1,153		43%		§
R&D Expenses			140		5%			141		5%		(1%)
S&M Expenses			527		20%			507		19%		4%
Segment Profitability*			482		18%			505		19%		(5%)
		Total Specialty
		Three months ended December 31,										Percentage Change
		2013					2012					2013 - 2012
		U.S.$ in millions / % of Segment Revenues
Revenues		$	2,204		100%		$	2,106		100%		5%
Gross Profit			1,934		88%			1,813		86%		7%
R&D Expenses			265		12%			232		11%		14%
S&M Expenses			504		23%			498		24%		1%
Segment Profitability*			1,165		53%			1,083		51%		8%
		MS
		Three months ended December 31,										Percentage Change
		2013					2012					2013 - 2012
		U.S.$ in millions / % of Segment Revenues
Revenues		$	1,142		100%		$	1,059		100%		8%
Gross Profit			1,018		89%			925		87%		10%
R&D Expenses			22		2%			24		2%		(8%)
S&M Expenses			151		13%			166		16%		(9%)
MS Profitability*			845		74%			735		69%		15%
		Other Specialty
		Three months ended December 31,										Percentage Change
		2013					2012					2013 - 2012
		U.S.$ in millions / % of Segment Revenues
Revenues		$	1,062		100%		$	1,047		100%		1%
Gross Profit			916		86%			888		85%		3%
R&D Expenses			243		23%			208		20%		17%
S&M Expenses			353		33%			332		32%		6%
Other Specialty Profitability*			320		30%			348		33%		(8%)

* Profitability is comprised of gross profit for the segment\BL, S&M and R&D expenses related to the segment\BL. Segment\BL profitability does not include G&A expenses, amortization and non-recurring items. Additional information can be found in note 21 of our consolidated financial statements and in “Item 5—Operating Income”.

§ Less than 0.5%.

Financial expenses totaled $55 million in the quarter, compared with $114 million in the fourth quarter of 2012. The expenses in the quarter were below our run-rate mainly due to net positive affect from hedging activities, income from sales of securities in this quarter and lower interest expenses.

The provision for non-GAAP tax for the quarter amounted to $91 million on pre-tax non-GAAP income of $1.3 billion. The provision for tax in the fourth quarter of 2012 was $80 million on pre-tax income of $1.2 billion. The annual non-GAAP effective tax rate for 2013 was 12.8%, compared to 12.3% in 2012. The tax rate for 2013 was primarily the result of the mix of products (both type and location of production) sold during the year. In addition, tax benefits resulting from mergers between subsidiaries and tax incentives to which our subsidiaries are entitled further reduced the tax expenses for 2013.

Non-GAAP net income and non-GAAP EPS were $1.2 billion and $1.42 in the quarter, an increase of 6% and 8%, respectively, compared to $1.1 billion and $1.32 in the fourth quarter of 2012. GAAP net income and GAAP EPS were $380 million and $0.45 in the quarter compared to $320 million and $0.37 in the fourth quarter of 2012.

For the full year 2013, Non-GAAP net income and non-GAAP EPS were $4.3 billion and $5.01, a decrease of 9% and 6%, respectively, compared to $4.7 billion and $5.35 in 2012. GAAP net income and GAAP EPS were $1.3 billion and $1.49 compared to $2 billion and $2.25 in 2012.

Cash flow from operations during the quarter was $816 million, compared to $1,577 million in the fourth quarter of 2012, a decrease of 48%. Free cash flow, excluding net capital expenditures and dividends, was $236 million, a decrease of $802 million compared to $1.0 billion in the fourth quarter of 2012. The decrease in cash flow was mainly due to payments made in connection with litigation and tax settlements. Excluding the effect of these settlements, cash flow from operations and free cash flow were $1.7 billion and $1.1 billion, respectively, in the quarter.

Cash and marketable securities at December 31, 2013 amounted to $1.2 billion.

During the quarter there were no share repurchases. In 2013, Teva repurchased 12.8 million shares for approximately $497 million. Since the beginning of 2012, Teva has repurchased 40.9 million shares for approximately $1.7 billion as part of the $3.0 billion share repurchase plan authorized in December 2011.

For the fourth quarter of 2013, the weighted average share count for the fully diluted earnings per share calculation was 848 million on a GAAP and non-GAAP basis. At December 31, 2013, the share count for calculating Teva's market capitalization was approximately 848 million.

Total equity at December 31, 2013, was $22.6 billion, an increase of $0.2 billion, compared to $22.4 billion at September 30, 2013. The increase in total equity was primarily a result of GAAP net income of $380 million and currency translation adjustments, partially offset by dividend payments.

Dividend

The Board of Directors, at its meeting on February 4, 2014, declared a cash dividend for the fourth quarter of 2013 of NIS 1.21 (approximately 34 cents according to the rate of exchange on February 4, 2014) per share , a 5% increase from the third quarter 2013 dividend of NIS 1.15.

The record date will be February 24, 2014, and the payment date will be March 10, 2014. Tax will be withheld at a rate of 15%.

Annual Report on Form 20-F

Teva will file its Annual Report on Form 20-F with the SEC next week. The report will include a complete analysis of the financial results for 2013 and will be available on the company’s website, http://www.tevapharm.com, as well as through the SEC’s website: http://www.sec.gov.

Conference Call

Teva will host a conference call to discuss its fourth quarter and full year 2013 results on Thursday, February 6, 2014, at 8:00 a.m. ET. The call will be webcast and can be accessed through the Company's website at www.tevapharm.com, or by dialing in to 1-888-895-5271 (U.S. and Canada) or 1-847-619-6547 (International). The conference ID is 36341322. Following the conclusion of the call, a replay of the webcast will be available within 24 hours at the Company's website at www.tevapharm.com. A replay of the call will also be available until February 13, 2014, at 11:59 p.m. ET, by calling 1.888.843.7419 (U.S. and Canada) or 1.630.652.3042 (International). The Conference ID is 36341322#

About Teva

Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) is a leading global pharmaceutical company, committed to increasing access to high-quality healthcare by developing, producing and marketing affordable generic drugs as well as innovative and specialty pharmaceuticals and active pharmaceutical ingredients. Headquartered in Israel, Teva is the world's leading generic drug maker, with a global product portfolio of more than 1,000 molecules and a direct presence in about 60 countries. Teva's Specialty Medicines businesses focus on CNS, respiratory oncology, pain, and women's health therapeutic areas as well as biologics. Teva currently employs approximately 45,000 people around the world and reached $20.3 billion in net revenues in 2013.

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

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

		Generics
		Year ended December 31,										Percentage Change
		2013					2012					2013 - 2012
		U.S.$ in millions / % of Segment Revenues
Revenues		$	9,906		100%		$	10,385		100%		(5%)
Gross Profit			4,095		41%			4,518		44%		(9%)
R&D Expenses			494		5%			485		5%		2%
S&M Expenses			1,945		20%			1,971		19%		(1%)
Segment Profitability*			1,656		17%			2,062		20%		(20%)
		Total Specialty
		Year ended December 31,										Percentage Change
		2013					2012					2013 - 2012
		U.S.$ in millions / % of Segment Revenues
Revenues		$	8,402		100%		$	8,150		100%		3%
Gross Profit			7,326		87%			7,173		88%		2%
R&D Expenses			909		11%			793		10%		15%
S&M Expenses			1,850		22%			1,686		21%		10%
Segment Profitability*			4,567		54%			4,694		58%		(3%)
		MS
		Year ended December 31,										Percentage Change
		2013					2012					2013 - 2012
		U.S.$ in millions / % of Segment Revenues
Revenues		$	4,328		100%		$	3,996		100%		8%
Gross Profit			3,869		89%			3,566		89%		8%
R&D Expenses			66		2%			84		2%		(21%)
S&M Expenses			533		12%			506		13%		5%
MS Profitability*			3,270		76%			2,976		74%		10%
		Other Specialty
		Year ended December 31,										Percentage Change
		2013					2012					2013 - 2012
		U.S.$ in millions / % of Segment Revenues
Revenues		$	4,074		100%		$	4,154		100%		(2%)
Gross Profit			3,457		85%			3,607		87%		(4%)
R&D Expenses			843		21%			709		17%		19%
S&M Expenses			1,317		32%			1,180		28%		12%
Other Specialty Profitability*			1,297		32%			1,718		41%		(25%)

* Profitability is comprised of gross profit for the segment\BL, S&M and R&D expenses related to the segment\BL. Segment profitability does not include G&A expenses, amortization and non-recurring items. Additional information can be found in note 21 of our consolidated financial statements and in “Item 5—Operating Income”.

§ Less than 0.5%.

###

APPENDIX

Consolidated Statements of Income
(U.S. dollars in millions, except share and per share data)
				Three months ended								Year ended
				December 31,								December 31,
				2013				2012				2013				2012
				Unaudited				Unaudited				Audited				Audited
Net revenues				5,430				5,249				20,314				20,317
Cost of sales				2,536				2,464				9,607				9,665
Gross profit				2,894				2,785				10,707				10,652
Research and development expenses				411				442				1,427				1,356
Selling and marketing expenses				1,132				1,056				4,080				3,879
General and administrative expenses				316				318				1,239				1,238
Legal settlements and loss contingencies				-				-				1,524				715
Impairments, restructuring and others				475				639				788				1,259
Operating income				560				330				1,649				2,205
Financial expenses – net				59				146				399				386
Income before income taxes				501				184				1,250				1,819
Income taxes				114				(110	)			(43	)			(137	)
Share in losses of associated companies – net				10				14				40				46
Net income				377				280				1,253				1,910
Net loss attributable to non-controlling interests				(3	)			(40	)			(16	)			(53	)
Net income attributable to Teva				380				320				1,269				1,963
Earnings per share attributable to Teva:		Basic ($)		0.45				0.37				1.49				2.25
		Diluted ($)		0.45				0.37				1.49				2.25
Weighted average number of shares (in millions):		Basic		847				867				849				872
		Diluted		848				868				850				873
Non-GAAP net income attributable to Teva:*				1,205				1,142				4,255				4,671
Non-GAAP earnings per share attributable to Teva:		Basic ($)		1.42				1.32				5.01				5.36
		Diluted ($)		1.42				1.32				5.01				5.35
Weighted average number of shares (in millions):		Basic		847				867				849				872
		Diluted		848				868				850				873
* See reconciliation attached.

			Condensed Balance Sheets
			(U.S. dollars in millions)
			December 31,			December 31,
			2013			2012
ASSETS			Audited			Audited
Current assets:
Cash and cash equivalents			1,038			2,879
Accounts receivable			5,338			5,572
Inventories			5,053			5,502
Deferred income taxes			1,084			1,142
Other current assets			1,207			1,260
Total current assets			13,720			16,355
Other non-current assets			1,696			1,338
Property, plant and equipment, net			6,635			6,315
Identifiable intangible assets, net			6,476			7,745
Goodwill			18,981			18,856
Total assets			47,508			50,609
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt			1,804			3,006
Sales reserves and allowances			4,918			4,934
Accounts payable and accruals			3,317			3,376
Other current liabilities			1,926			1,572
Total current liabilities			11,965			12,888
Long-term liabilities:
Deferred income taxes			1,247			1,849
Senior notes and loans			10,387			11,712
Other taxes and long-term liabilities			1,273			1,293
Total long-term liabilities			12,907			14,854
Equity:
Teva shareholders’ equity			22,565			22,768
Non-controlling interests			71			99
Total equity			22,636			22,867
Total liabilities and equity			47,508			50,609

		Condensed Cash Flow
		(U.S. Dollars in millions)
		Three months ended							Year ended
		December 31,							December 31,
		2013				2012				2013				2012
		Unaudited				Unaudited				Audited				Audited
Operating activities:
Net income		377				280				1,253				1,910
Net change in operating assets and liabilities		359				448				968				414
Items not involving cash flow		80				849				1,016				2,248
Net cash provided by operating activities		816				1,577				3,237				4,572
Net cash used in investing activities		(316	)			(409	)			(1,147	)			(1,134	)
Net cash provided by (used in) financing activities		(619	)			266				(3,883	)			(1,678	)
Translation adjustment on cash and cash equivalents		9				13				(48	)			23
Net change in cash and cash equivalents		(110	)			1,447				(1,841	)			1,783
Balance of cash and cash equivalents at the beginning of period		1,148				1,432				2,879				1,096
Balance of cash and cash equivalents at the end of period		1,038				2,879				1,038				2,879

		Non GAAP reconciliation items
		(U.S. Dollars in millions)
		Three months ended							Year ended
		December 31,							December 31,
		2013			2012				2013					2012
		Unaudited			Unaudited				Audited					Audited
Impairment of long-lived assets		329			495				524					1,071
Amortization of purchased intangible assets - under cost of sales		298			271				1,136					1,228
Restructuring, acquisition and other expenses		131			136				264					188
Amortization of purchased intangible assets - under selling and marketing expenses		15			13				44					44
Expense in connection with legal settlements and reserves		15			8				1,524					715
Costs related to regulatory actions taken in facilities - under cost of sales		5			25				43					128
Financial expenses related to early repayment of senior notes and other		4			32				110					32
Accelerated depreciation		3			-				9					-
Purchase of research and development in process		2			68				5					73
Minority interest changes related to impairments of co-owned assets		-			(36	)			-					(36	)
Inventory step-up - under cost of sales		-			-				-					63
Net of corresponding tax benefit*		23			(190	)			(673	)				(798	)
* Amount is net of $248 million for Amendment 69 and settlements with the Israeli tax authorities in 2013.

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

					Year ended December 31, 2013													Year ended December 31, 2012
					Audited, U.S. dollars and shares in millions (except per share amounts)
								Non-GAAP				Non-		% of Net							Non-GAAP				Non-			% of Net
					GAAP			Adjustments				GAAP		Revenues				GAAP			Adjustments				GAAP			Revenues
			Gross profit (1)		10,707			1,188				11,895		59	%			10,652			1,419				12,071			59	%
			Operating income (1)(2)		1,649			3,549				5,198		26	%			2,205			3,510				5,715			28	%
			Net income attributable to Teva (1)(2)(3)		1,269			2,986				4,255		21	%			1,963			2,708				4,671			23	%
			Earnings per share attributable to Teva - diluted (4)		1.49			3.52				5.01						2.25			3.10				5.35
(1	)		Amortization of purchased intangible assets					1,136													1,228
			Costs related to regulatory actions taken in facilities					43													128
			Inventory step-up					-													63
			Accelerated depreciation					9													-
			Gross profit adjustments					1,188													1,419
(2	)		Expense in connection with legal settlements and reserves					1,524													715
			Impairment of long-lived assets					524													1,071
			Restructuring, acquisition and other expenses					269													261
			Amortization of purchased intangible assets					44													44
								2,361													2,091
			Operating income adjustments					3,549													3,510
(3	)		Tax effect and other items					(673	)												(834	)
			Financial expense					110													32
			Net income adjustments					2,986													2,708

(4)		The weighted average number of shares was 850 and 873 million for the years ended December 31, 2013 and 2012, respectively. Non-GAAP earnings per share can be reconciled with GAAP earnings per share by dividing each of the amounts included in footnotes 1-3 above by the applicable weighted average share number.

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

					Three months ended December 31, 2013														Three months ended December 31, 2012
					Unaudited, U.S. dollars and shares in millions (except per share amounts)
								Non-GAAP			Non-			% of Net								Non-GAAP				Non-			% of Net
					GAAP			Adjustments			GAAP			Revenues					GAAP			Adjustments				GAAP			Revenues
			Gross profit (1)		2,894			306			3,200			59	%				2,785			296				3,081			59	%
			Operating Profit (1)(2)		560			798			1,358			25	%				330			1,016				1,346			26	%
			Net income attributable to Teva (1)(2)(3)		380			825			1,205			22	%				320			822				1,142			22	%
			Earnings per share attributable to Teva - Diluted (4)		0.45			0.97			1.42								0.37			0.95				1.32
(1	)		Amortization of purchased intangible assets					298														271
			Costs related to regulatory actions taken in facilities					5														25
			Accelerated deprecation					3														-
			Gross profit adjustments					306														296
(2	)		Impairment of long-lived assets					329														495
			Restructuring, acquisition and other expenses					133														204
			Amortization of purchased intangible assets					15														13
			Expense in connection with legal settlements and reserves					15														8
								492														720
			Operating profit adjustments					798														1016
(3	)		Tax effect and other items					23														(226	)
			Finance expense					4														32
			Net income adjustments					825														822

(4)		The weighted average number of shares was 848 and 868 million for the three months ended December 31, 2013 and 2012, respectively. Non-GAAP earnings per share can be reconciled with GAAP earnings per share by dividing each of the amounts included in footnotes 1-3 above by the applicable weighted average share number.

		Segment Information
		Generics																		Specialty
		Three months ended December 31,														Percentage Change				Three months ended December 31,											Percentage Change
		2013							2012							2013 - 2012				2013					2012						2013 - 2012
		U.S.$ in millions / % of Segment Revenues																		U.S.$ in millions / % of Segment Revenues
Revenues		$	2,697			100%			$	2,662			100%			1%				$	2,204	100%			$	2,106			100%		5%
Gross Profit			1,149			43%				1,153			43%			§					1,934	88%				1,813			86%		7%
R&D Expenses			140			5%				141			5%			(1%)					265	12%				232			11%		14%
S&M Expenses			527			20%				507			19%			4%					504	23%				498			24%		1%
Segment Profitability*			482			18%				505			19%			(5%)					1,165	53%				1,083			51%		8%

* Segment profitability is comprised of gross profit for the segment, S&M and R&D expenses related to the segment. Segment profitability does not include G&A expenses, amortization and non-recurring items. Additional information can be found in note 21 of our consolidated financial statements and in “Item 5—Operating Income”.

§ Less than 0.5%.

Reconciliation of our segment profitability to Teva's consolidated operating income
		Three months ended
		December 31,
		2013			2012
		U.S.$ in millions
Generic medicines profitability		$	482		$	505
Specialty medicines profitability			1,165			1,083
Total segment profitability			1,647			1,588
Profitability of other activities			27			76
Total profitability			1,674			1,664
Amounts not allocated to segments:
Amortization			313			284
General and administrative expenses			316			318
Legal settlements and loss contingencies			15			8
Impairments, restructuring and others			460			631
Other unallocated amounts			10			93
Consolidated operating income			560			330
Financial expenses - net			59			146
Consolidated income before income taxes		$	501		$	184

		Generics																		Specialty
		Year ended December 31,														Percentage Change				Year ended December 31,													Percentage Change
		2013							2012							2013 - 2012				2013							2012						2013 - 2012
		U.S.$ in millions / % of Segment Revenues																		U.S.$ in millions / % of Segment Revenues
Revenues		$	9,906			100%			$	10,385			100%			(5%)				$	8,402			100%			$	8,150			100%		3%
Gross Profit			4,095			41%				4,518			44%			(9%)					7,326			87%				7,173			88%		2%
R&D Expenses			494			5%				485			5%			2%					909			11%				793			10%		15%
S&M Expenses			1,945			20%				1,971			19%			(1%)					1,850			22%				1,686			21%		10%
Segment Profitability*			1,656			17%				2,062			20%			(20%)					4,567			54%				4,694			58%		(3%)

* Segment profitability is comprised of gross profit for the segment, S&M and R&D expenses related to the segment. Segment profitability does not include G&A expenses, amortization and non-recurring items. Additional information can be found in note 21 of our consolidated financial statements and in “Item 5—Operating Income”.

Reconciliation of our segment profitability to Teva's consolidated operating income
		Year ended December 31,
		2013				2012
		U.S.$ in millions
Generic medicines profitability		$	1,656			$	2,062
Specialty medicines profitability			4,567				4,694
Total segment profitability			6,223				6,756
Profitability of other activities			214				197
Total profitability			6,437				6,953
Amounts not allocated to segments:
Amortization			1,180				1,272
General and administrative expenses			1,239				1,238
Legal settlements and loss contingencies			1,524				715
Impairments, restructuring and others			788				1,259
Other unallocated amounts			57				264
Consolidated operating income			1,649				2,205
Financial expenses - net			399				386
Consolidated income before income taxes		$	1,250			$	1,819

Revenues by Activity and Geographical Area
(Audited)
		Three Months Ended December 31,														Percentage Change				Percentage Change
		2013			2012			% of 2013				% of 2012				2013 - 2012				2013 - 2012
		U.S. $ in millions																		in local currencies
Generic Medicines
United States		1,178			1,034			22	%			20	%			14	%			14	%
Europe*		940			955			17	%			18	%			(2	%)			(5	%)
Rest of the World.		579			673			11	%			13	%			(14	%)			(2	%)
Total Generic Medicines		2,697			2,662			50	%			51	%			1	%			3	%
Specialty Medicines
United States		1,540			1,527			28	%			29	%			1	%			1	%
Europe*		463			422			8	%			8	%			10	%			5	%
Rest of the World.		201			157			4	%			3	%			28	%			36	%
Total Specialty		2,204			2,106			40	%			40	%			5	%			4	%
Other Revenues
United States		69			60			1	%			1	%			15	%			15	%
Europe*		196			181			4	%			3	%			8	%			6	%
Rest of the World.		264			240			5	%			5	%			10	%			14	%
Total Other Revenues		529			481			10	%			9	%			10	%			11	%
Total Revenues		5,430			5,249			100	%			100	%			3	%			4	%
* All members of the European Union, Switzerland, Norway, Albania and the countries of former Yugoslavia.

Revenues by Activity and Geographical Area
(Audited)
		Year Ended December 31,														Percentage Change			Percentage Change
		2013				2012				% of 2013			% of 2012			2013 - 2012			2013 - 2012
		U.S. $ in millions																	in local currencies
Generic Medicines
United States		$	4,181			$	4,381			21%			22%			(5%)			(5%)
Europe*			3,485				3,482			17%			17%			§			(2%)
Rest of the World			2,240				2,522			11%			12%			(11%)			(1%)
Total Generic Medicines			9,906				10,385			49%			51%			(5%)			(3%)
Specialty Medicines
United States			6,026				5,857			30%			29%			3%			3%
Europe*			1,706				1,575			8%			8%			8%			6%
Rest of the World			670				718			3%			3%			(7%)			(3%)
Total Specialty			8,402				8,150			41%			40%			3%			3%
Other Revenues
United States			254				200			1%			1%			27%			27%
Europe*			797				741			4%			4%			8%			6%
Rest of the World			955				841			5%			4%			14%			16%
Total Other Revenues			2,006				1,782			10%			9%			13%			12%
Total Revenues			20,314				20,317			100%			100%			§			1%
* All members of the European Union, Switzerland, Norway, Albania and the countries of former Yugoslavia.
§ Less than 0.5%.

Revenues by Product line
(Unaudited)
		Three Months Ended December 31,														Percentage Change
		2013				2012				% of 2013			% of 2012			2013 from 2012
		U.S. $ in millions
Generic Medicines		$	2,697			$	2,662			50%			51%			1%
API			163				202			3%			4%			(19%)
Specialty Medicines			2,204				2,106			40%			40%			5%
CNS			1,456				1,340			27%			26%			9%
Copaxone®			1,142				1,059			21%			20%			8%
Azilect®			98				86			2%			2%			14%
Nuvigil®			76				78			1%			1%			(3%)
Provigil®			26				25			§			§			4%
Oncology			261				233			5%			4%			12%
Treanda®			177				161			3%			3%			10%
Respiratory			238				256			4%			5%			(7%)
ProAir®			114				120			2%			2%			(5%)
Qvar®			89				92			2%			2%			(3%)
Women's Health			127				132			2%			2%			(4%)
Other Specialty			122				145			2%			3%			(16%)
All Others			529				481			10%			9%			10%
OTC			316				269			6%			5%			17%
Other Revenues			213				212			4%			4%			§
Total		$	5,430			$	5,249			100%			100%			3%
§ Less than 0.5%

Revenues by Product line
(Audited)
		Year Ended December 31,														Percentage Change
		2013				2012				% of 2013			% of 2012			2013 from 2012
		U.S. $ in millions
Generic Medicines		$	9,906			$	10,385			49%			51%			(5%)
API			692				796			3%			4%			(13%)
Specialty Medicines			8,402				8,150			41%			40%			3%
CNS			5,505				5,464			27%			27%			1%
Copaxone®			4,328				3,996			21%			20%			8%
Azilect®			371				330			2%			2%			12%
Nuvigil®			320				347			2%			2%			(8%)
Provigil®			91				417			§			2%			(78%)
Oncology			982				860			5%			4%			14%
Treanda®			709				608			3%			3%			17%
Respiratory			905				856			4%			4%			6%
ProAir®			429				406			2%			2%			6%
Qvar®			328				297			2%			1%			10%
Women's Health			463				448			2%			2%			3%
Other Specialty			547				522			3%			3%			5%
All Others			2,006				1,782			10%			9%			13%
OTC			1,165				936			6%			5%			24%
Other Revenues			841				846			4%			4%			(1%)
Total		$	20,314			$	20,317			100%			100%			§
§ Less than 0.5%.

Revenues by Geographic Area
(Unaudited)
			Three Months Ended December 31,												Percentage Change			Percentage Change
			2013			2012			% of 2013			% of 2012			2013 - 2012			2013 from 2012
			U.S. $ in millions															in local currencies
United States:
Generic			1,178			1,034			22%			20%			14%			14%
Specialty			1,540			1,527			28%			29%			1%			1%
Others			69			60			1%			1%			15%			15%
Total United States			2,787			2,621			51%			50%			6%			6%
Europe*:
Generic			940			955			17%			18%			(2%)			(5%)
Specialty			463			422			8%			8%			10%			5%
Others			196			181			4%			3%			8%			6%
Total Europe			1,599			1,558			29%			29%			3%			(1%)
Rest of the World:
Generic			579			673			11%			13%			(14%)			(2%)
Specialty			201			157			4%			3%			28%			36%
Others			264			240			5%			5%			10%			14%
Total Rest of the World			1,044			1,070			20%			21%			(2%)			7%
Total Revenues			5,430			5,249			100%			100%			3%			4%
* All members of the European Union, Switzerland, Norway, Albania and the countries of former Yugoslavia.

Revenues by Geographic Area
(Unaudited)
			Year Ended December 31,												Percentage Change			Percentage Change
			2013			2012			% of 2013			% of 2012			2013 - 2012			2012 from 2011
			U.S. $ in millions															in local currencies
United States:
Generic			4,181			4,381			21%			22%			(5%)			(5%)
Specialty			6,026			5,857			30%			29%			3%			3%
Others			254			200			1%			1%			27%			27%
Total United States			10,461			10,438			52%			52%			§			§
Europe*:
Generic			3,485			3,482			17%			17%			§			(2%)
Specialty			1,706			1,575			8%			8%			8%			6%
Others			797			741			4%			4%			8%			6%
Total Europe			5,988			5,798			29%			29%			3%			1%
Rest of the World:
Generic			2,240			2,522			11%			12%			(11%)			(1%)
Specialty			670			718			3%			3%			(7%)			(3%)
Others			955			841			5%			4%			14%			16%
Total Rest of the World			3,865			4,081			19%			19%			(5%)			2%
Total Revenues			20,314			20,317			100%			100%			§			1%
* All members of the European Union, Switzerland, Norway, Albania and the countries of former Yugoslavia.
§ Less than 0.5%.