v3.26.1
Fair value measurement
 6 Months Ended
Jun. 30, 2026
Fair value measurement
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 and thus represents a Level 3 measurement within the fair value hierarchy. The fair value of contingent consideration is based on several factors, such as cash flows projected from the success of unapproved product candidates; probability of success of product candidates, including risks associated with uncertainty regarding achievement and payment of milestone events; time and resources required to complete the development and approval of product candidates; life of the potential commercialized products and associated risks with obtaining regulatory approvals in the United States and Europe, and the risk adjusted discount rate for fair value measurement. The discount rate applied ranged from 
7.5% to 11%. The weighted average discount rate, calculated based on the relative fair value of Teva’s contingent consideration liabilities, was 8.3%.
Contingent consideration is evaluated quarterly, or more frequently, if circumstances dictate. Changes in the fair value of contingent consideration are recorded in the consolidated statements of income. A change of the discount rate by
1% would not have resulted in material changes to the contingent consideration liabilities.
 
The
 
following table summarizes the activity for the financial assets and liabilities where fair value measurements are estimated utilizing Level 3 inputs:
 
 
 
Six months ended
June 30, 2026
 
  
Six months ended
June 30, 2025
 
 
 
(U.S. $ in millions)
 
Fair value at the beginning of the period
    $ (51 )     $ (401 ) 
Adjustments to provisions for contingent consideration:
      
Allergan transaction
      —         (21 ) 
Eagle transaction
      (18 )       (8 ) 
Novetide transaction
      (1 )       (1 ) 
Settlement of contingent consideration:
      
Allergan transaction
      —         103  
Eagle transaction
      19        23  
Novetide transaction
      2        2  
  
 
 
     
 
 
  
Fair value at the end of the period
    $ (49 )     $ (303 ) 
  
 
 
     
 
 
  
Financial instruments not measured at fair value
Financial instruments measured on a basis other than fair value mostly consist of senior notes, sustainability-linked senior notes and convertible senior debentures (see note 7) and are presented in the table below in terms of fair value (level 1 inputs):
 
 
  
Estimated fair value*
 
 
  
June 30,
2026
 
  
December 31,
2025
 
 
  
(U.S. $ in millions)
 
Senior notes and sustainability-linked senior notes included under senior notes and loans
    $ 12,094      $ 15,128  
Senior notes and convertible senior debentures included under short-term debt
      4,492        1,801  
  
 
 
     
 
 
  
Total
    $ 16,586      $ 16,929  
  
 
 
     
 
 
  
 
*
The fair value was estimated based on quoted market prices.