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Financial Fundamentals

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201320122011201020092008*
NET SALES 20,314 20,317 18,312 16,121 13,899 11,085
COST OF SALES - excluding inventory step-up and amortization 8,419 8,246 7,607 6,452 5,780 4,960
INVENTORY STEP-UP - 63 352 107 302 5
AMORTIZATION OF PURCHASED INTANGIBLE ASSETS 298 1,136668 497 450 152
COSTS RELATED TO REGULATORY ACTIONS TAKEN IN FACILITIES  43 128170---
ACCELERATED DEPRECIATION 9
GROSS PROFIT – GAAP10,707 10,652 9,515 9,065 7,367 5,968
GROSS PROFIT – NON GAAP**11,89512,071 1,2839,669 8,119 6,125
RESEARCH AND DEVELOPMENT EXPENSES - net    1,422    1,283  1,080    933    802    786
PURCHASE OF RESEARCH AND DEVELOPMENT IN PROCESS       5           73      15      18      23 1,402
SELLING AND MARKETING EXPENSES - excluding amortization4,0363,835 3,4402,938 2,641 1,814
AMORTIZATION OF PURCHASED INTANGIBLE ASSETS      44       44      38      30      35      28
GENERAL AND ADMINISTRATIVE EXPENSES     1,239    1,238    932    865    823    669
LOSS CONTINGENCIES, IMPAIRMENTS, SETTLEMENTS, AND OTHER      2,312    1,974   901    410    638    124
OPERATING INCOME (LOSS) – GAAP1,6492,205 3,109 3,871 2,405 1,145
OPERATING INCOME – NON GAAP**5,1985,715 5,253 4,933 3,853 2,856
FINANCIAL EXPENSES (INCOME) - net (mainly recurring interest and exchange gains(losses))     289     354   153    154    210      70
FINANCIAL EXPENSES (INCOME) - net (mainly impairment and other special items)       110          32       -        71       (8)   275
INCOME (LOSS) BEFORE INCOME TAXES – GAAP1,250    1,8192,956 3,646 2,203    800
PROVISION FOR INCOME TAXES   630   661    592    613    577    286
TAX EFFECT of items excluded from GAAP results    (673)   (798)  (465)  (330)  (411)  (102)
1,293    1,956 2,829 3,363 2,037    616
SHARE IN PROFITS (LOSSES) OF ASSOCIATED COMPANIES – net       (46)     (46)    (61)    (24)    (33)      (1)
NET (INCOME) LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS        16        17        (9)        (8)        (4) (6)***
MINORITY INTEREST CHANGES RELATED TO IMPAIRMENTS OF CO-OWNED ASSETS - 36 - - - -
NET INCOME (LOSS) ATTRIBUTABLE TO TEVA – GAAP1,269    1,963 2,759 3,331 2,000    609
NET INCOME (LOSS) ATTRIBUTABLE TO TEVA– NON GAAP**4,2554,6714,438 4,134 3,029 2,493
     
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO TEVA– GAAP:                                           Diluted ($)  1.49  2.25   3.09   3.67   2.23   0.75
     
WEIGHTED AVERAGE NUMBER OF SHARES (IN MILLIONS) – GAAP:   Diluted     850     873    893    921    896    820
     
EARNINGS PER SHARE ATTRIBUTABLE TO TEVA– NON GAAP:    Diluted ($)   5.01    5.35   4.97   4.54   3.37   3.03
     
WEIGHTED AVERAGE NUMBER OF SHARES (IN MILLIONS) – NON GAAP:   Diluted     850    873    893    921    912    837
* After giving retroactive effect to the adoption of an accounting pronouncement which requires issuers to account separately for the liability and equity components of convertible debt instruments that may be settled in cash (including partial cash settlement)
** Non GAAP results exclude the following items, as applicable - inventory step up, amortization of purchased intangible assets, costs related to regulatory actions taken in facilities, purchase of R&D in process, legal settlements and reserves, acquisition restructuring and other expenses and impairment, impairment of financial assets and other special items and their related tax effect
*** Non-controlling interests reclassification
The table below reconciles Teva's non GAAP results as reported prior to 2009 with the Company's non GAAP presentation adopted in Q1'09. Prior to 2009, Teva's non GAAP results included the impact of amortization of intangible assets. Non GAAP results prior to 2009 excluded, as applicable, inventory step up, acquisition of R&D in process, impairment of intangible assets and legal settlements and impairment of financial assets and their related tax effect. 

Amortization included in cost of sales      152 150129
Amortization included S&M       28 7161
Tax effect on amortization     (36)    (50)    (48)
    
COST OF SALES - as reported   5,112   4,531   4,054
SELLING AND MARKETING - as reported   1,842   1,264   1,024
TAX EFFECT ON NON-GAAP ITEMS - as reported     (66)0   (173)
    
EPS non GAAP as reported (including amortization)Diluted ($) 2.862.362.29
EPS effect of amortization  0.170.210.17
201320122011201020092008 *
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 1,038 2,879 1,096 1,248 1,995 1,854
Accounts receivable 5,338 5,572 6,213 5,476 5,019 4,653
Inventories 5,033 5,502 5,012 3,866 3,332 3,396
Deferred taxes and other current assets 2,2912,402 2,132 1,452 1,6951,423
TOTAL CURRENT ASSETS13,720 16,355 14,453 12,042 12,041 11,326
Other non-current assets 1,696 1,338 1,133 770 676 617
PROPERTY, PLANT AND EQUIPMENT, net 6,635 6,315 5,947 4,357 3,766 3,699
IDENTIFIABLE INTANGIBLE ASSETS, net 6,476 7,745 10,316 5,751 4,053 4,581
GOODWILL18,981 18,856 18,293 15,232 12,674 12,297
TOTAL ASSETS47,50850,609 50,142 38,152 33,210 32,520
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term debt and current maturities of long term liabilities 1,804 3,006 4,280 2,771 1,301 2,906
Sales reserves and allowances 4,918 4,934 4,428 3,403 2,942 2,708
Accounts payable and accruals  3,317 3,376 3,572 2,467 2,349 2,244
Other current liabilities 1,926 1,572 1,396 1,053 910 523
TOTAL CURRENT LIABILITIES 11,965 12,888 13,676 9,694 7,502 8,381
LONG-TERM LIABILITIES:
Deferred income taxes1,2471,849 2,610 1,348 1,241 1,423
Other taxes and long term payables 1,273 1,293 1,277 998 897 803
Senior notes and loans10,38711,712 10,236 4,097 3,494 3,654
Convertible senior debentures - long term- - - 13 817 1,821
TOTAL LONG-TERM LIABILITIES12,90714,854 14,123 6,456 6,449 7,701
EQUITY:
Teva shareholders' equity22,56522,768 22,195 21,947 19,222 16,378
Non-controlling interest71 99 148 55 37 **60
TOTAL EQUITY22,63622,867 22,343 22,002 19,259 16,438
TOTAL LIABILITIES & EQUITY47,50850,609 50,142 38,152 33,210 32,520
* After giving retroactive effect to the adoption of an accounting pronouncement which requires issuers to account separately for the liability and equity components of convertible debt instruments that may be settled in cash (including partial cash settlement) 
** Non-controlling interests reclassification