Womens health 1336 100 1214 100 1104 100 1004 100 912

Women's Health 1,336 10.0% 1,214 10.0% 1,104 10.0% 1,004 10.0% 912 10.0% 829 10.0% 754 10.0% 685 10.0% 623 10.0% 566 11.1% 510 13.8%
Oncology 713 -3.3% 738 -5.0% 777 -7.0% 835 -9.1% 918 -10.4% 1,025 -12.9% 1,177 -14.0% 1,368 2.9% 1,329 15.0% 1,156 15.0% 1,005 16.9%
Treanda 125 -25.0% 167 -25.0% 223 -25.0% 297 -25.0% 396 -25.0% 527 -25.0% 703 -25.0% 938 0.0% 938 15.0% 815 15.0% 709 16.6%
Other 588 3.0% 571 3.0% 554 3.0% 538 3.0% 522 5.0% 497 5.0% 474 10.0% 431 10.0% 391 15.0% 340 15.0% 296 17.5%
Other Branded 217 -5.0% 228 -5.0% 240 -5.0% 253 -5.0% 266 -5.0% 280 -5.0% 295 -5.0% 310 -5.0% 327 -5.0% 344 -5.6% 364 -30.3%
All Others 4,278 4.0% 4,115 3.9% 3,960 5.8% 3,744 5.7% 3,542 7.4% 3,298 7.2% 3,076 10.4% 2,787 9.9% 2,535 12.4% 2,256 11.4% 2,024 13.6%
OTC 3,420 5.0% 3,257 5.0% 3,102 7.5% 2,886 7.5% 2,685 10.0% 2,440 10.0% 2,219 15.0% 1,929 15.0% 1,678 20.0% 1,398 20.0% 1,165 24.5%
Distr. / other 858 0.0% 858 0.0% 858 0.0% 858 0.0% 858 0.0% 858 0.0% 858 0.0% 858 0.0% 858 0.0% 858 -0.1% 859 1.5%

F. Seton Staley [email protected] July 22, 2014
Teva - 17
Consensus 20,925 $ 20,172 $ 20,068 $ 20,225 $ 20,347 $
Net revenues $ 27,483 3.8% $ 26,466 5.3% $ 25,144 6.5% $ 23,606 5.8% $ 22,307 5.6% $ 21,125 3.6% $ 20,383 1.7% $ 20,033 -0.9% $ 20,213 -0.7% $ 20,358 0.2% $ 20,314 0.0%
Cost of sales 11,548 42.0% 11,106 42.0% 10,557 42.0% 9,913 42.0% 9,367 42.0% 8,883 42.0% 8,564 42.0% 8,621 43.0% 8,891 44.0% 9,153 45.0% 9,607 47.3%
Gross profit 15,935 58.0% 15,360 58.0% 14,587 58.0% 13,693 58.0% 12,940 58.0% 12,242 58.0% 11,819 58.0% 11,412 57.0% 11,322 56.0% 11,206 55.0% 10,707 52.7%
Research and development expenses 1,790 6.5% 1,722 6.5% 1,628 6.5% 1,527 6.5% 1,444 6.5% 1,366 6.5% 1,321 6.5% 1,295 6.5% 1,319 6.5% 1,360 6.7% 1,427 7.0%
Selling and marketing expenses 4,804 17.5% 4,625 17.5% 4,401 17.5% 4,130 17.5% 3,902 17.5% 3,705 17.5% 3,558 17.5% 3,498 17.5% 3,542 17.5% 3,671 18.0% 4,080 20.1%
General and administrative expenses 1,374 5.0% 1,323 5.0% 1,257 5.0% 1,180 5.0% 1,115 5.0% 1,056 5.0% 1,019 5.0% 1,002 5.0% 1,011 5.0% 1,018 5.0% 1,239 6.1%
Acquisition of R&D in Process - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% 0.0%
Legal settlements and loss contingencies 824 3.0% 794 3.0% 754 3.0% 708 3.0% 669 3.0% 1,056 5.0% 1,019 5.0% 1,002 5.0% 1,011 5.0% 1,018 5.0% 1,560 7.7%
Restructuring Costs 137 0.5% 132 0.5% 126 0.5% 118 0.5% 112 0.5% 211 1.0% 204 1.0% 501 2.5% 505 2.5% 1,018 5.0% 201 1.0%
Impairments - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% 524 2.6%
Acquisition costs and others - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% 27 0.1%
Total Impair., loss cont., restructuring (note 17) 962 3.5% 926 3.5% 880 3.5% 826 3.5% 781 3.5% 1,267 6.0% 1,223 6.0% 1,502 7.5% 1,516 7.5% 2,036 10.0% 2,312 11.4%
Operating income 7,005 25.5% 6,764 25.6% 6,421 25.5% 6,029 25.5% 5,697 25.5% 4,848 22.9% 4,698 23.0% 4,114 20.5% 3,934 19.5% 3,121 15.3% 1,649 8.1%
Financial expenses – net (note 16) 687 2.5% 635 2.4% 578 2.3% 519 2.2% 468 2.1% 422 2.0% 357 1.8% 300 1.5% 303 1.5% 305 1.5% 399 2.0%
Income before income taxes 6,318 23.0% 6,129 23.2% 5,843 23.2% 5,510 23.3% 5,229 23.4% 4,425 20.9% 4,341 21.3% 3,814 19.0% 3,631 18.0% 2,815 13.8% 1,250 6.2%
Income taxes 1,674 26.5% 1,624 26.5% 1,548 26.5% 1,460 26.5% 1,386 26.5% 1,173 26.5% 1,150 26.5% 1,011 26.5% 962 26.5% 563 20.0% (43) -3.4%
Share in losses of associated companies – net 63 0.2% 60 0.2% 57 0.2% 54 0.2% 51 0.2% 48 0.2% 47 0.2% 46 0.2% 46 0.2% 47 0.2% 40 0.2%
Net income 4,581 16.7% 4,444 16.8% 4,237 16.9% 3,996 16.9% 3,792 17.0% 3,204 15.2% 3,144 15.4% 2,757 13.8% 2,623 13.0% 2,206 10.8% 1,253 6.2%
Net loss attributable to non-controlling interests 27 0.1% 26 0.1% 25 0.1% 24 0.1% 22 0.1% 21 0.1% 20 0.1% 20 0.1% 20 0.1% 20 0.1% (16) -0.1%
Net income attributable to Teva $ 4,554 16.6% $ 4,418 16.7% $ 4,212 16.8% $ 3,972 16.8% $ 3,770 16.9% $ 3,183 15.1% $ 3,124 15.3% $ 2,737 13.7% $ 2,602 12.9% $ 2,185 10.7% $ 1,269 6.2%
Consensus
2,779 $ 2,853 $ 2,981 $
Net Earnings per Share
Basic 3.94 3.37 2.38 1.49
Diluted 3.93 3.37 2.38 1.49
Consensus GAAP 4.00 per Bloomber 3.70 per Bloomber 3.25 per Bloomberg
2014 Est 2015 Est 2016 Est 2013 2022 Est 2023 Est 2017 Est 2018 Est 2019 Est 2020 Est 2021 Est
APPENDIX II - Modelled Income Statement

F. Seton Staley
[email protected]
July 22, 2014
Teva - 18
APPENDIX III - Discounted Cash Flow Model with Sensitivity Analysis
Teva Pharmaceuticals (TEVA) Terminal Discount Rate = 9.75%
Terminal FCF Growth = 3.50%
(000,000s)
Year 2013 Actual 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E
v s p m j g d
Revenue 20,314 20,358 20,213 20,033 20,383 21,125 22,307 23,606 25,144 26,466 27,483
% Grow th
0.2% -0.7% -0.9%
1.7% 3.6% 5.6% 5.8% 6.5% 5.3% 3.8%
20,033 20,383 21,125 22,307 23,606 25,144 26,466 27,483
Operating Income 1,649 3,121 3,934 4,114 4,698 4,848 5,697 6,029 6,421 6,764 7,005
Operating Margin 8.1% 15.3% 19.5% 20.5% 23.0% 22.9% 25.5% 25.4% 25.5% 25.6% 25.5%
4,114 4,698 4,848 5,697 6,029 6,421 6,764 7,005
Interest Exp 399 305 303 300 357 422 468 519 578 635 687
Interest % of Sales
2.0% 1.5% 1.5% 1.5% 1.8% 2.0% 2.1% 2.2% 2.3% 2.4% 2.5%
300 357 422 468 519 578 635 687
Taxes (43) 563 962 1,011 1,150 1,173 1,386 1,460 1,548 1,624 1,674
Tax Rate -3.4% 20.0% 26.5% 26.5% 26.5% 26.5% 26.5% 26.5% 26.5% 26.5% 26.5%
1,011 1,150 1,173 1,386 1,460 1,548 1,624 1,674
Sh. In Losses of Assoc. Co.'s/ 24 67 66 66 66 70 74 78 83 87 90
Net Loss Attr. Non-Cntrl Int. 0.1% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3%
66 67 69 73 78 83 87 90
Net Income 1,269 2,185 2,602 2,737 3,124 3,183 3,770 3,972 4,212 4,418 4,554
% Grow th 72.2% 19.1% 5.2% 14.1% 1.9% 18.4% 5.4% 6.0% 4.9% 3.1%
1,269 $ 2,185 $ 2,602 $ 2,737 $ 3,124 $ 3,183 $ 3,770 $ 3,972 $ 4,212 $ 4,418 $ 4,554 $
Add Depreciation/Amort 1,642 1,566 1,328 1,217 1,223 1,204 1,227 1,298 1,333 1,403 1,374
% of Sales
8.1% 7.7% 6.6% 6.1% 6.0% 5.7% 5.5% 5.5% 5.3% 5.3% 5.0%
Plus/(minus) Changes WC 624 (41) (71) (76) (102) (148) (223) (307) (377) (450) (550)