Teva will pay the State of Israel NIS 2.540 billion ($718M)
Total amount related to trapped profits is approximately NIS 2 billion ($565M)
JERUSALEM -- November 11, 2013
Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) announced today that it has
reached an agreement with the Israel Tax Authority to pay NIS 2.540 billion
(approximately $718M, according to rate of exchange on November 10, 2013) for
the release of trapped profits, settling tax assessments for the years
2005-2007, and applying similar principles through 2011.
In total, Teva will pay approximately NIS 2 billion ($565M) within the
framework of amendment 69 to the Law for the Encouragement of Capital
Investments (the "Trapped Profits Law”). This includes the payment of NIS 336M
($95M) made in May 2013.
In addition, Teva will pay approximately NIS 840M ($237M) concerning tax
assessments for the years 2005-2011.
Teva expects to incur a charge of approximately $235M to be reported in the
fourth quarter of 2013, which will be reflected in its non-GAAP results.
“We have reached a beneficial agreement for Teva and the Israel Tax Authority
concerning the release of trapped profits and the closure of pending tax
assessments." said Eyal Desheh, Acting President and CEO of Teva. “The
agreement generates sources for dividends to our shareholders for years to
come and settles tax assessments which had been in dispute for a long time.
Teva is a global company, headquartered in Israel, which has contributed,
currently contributes, and will continue to contribute to the Israeli economy.
We believe that such government policy strengthens the continued economic
growth of the State of Israel by offering an attractive business environment
for multinational companies like Teva to invest in Israel."
About Amendment 69 to the Law for the Encouragement of Capital Investments
A company which has elected, by November 11, 2013, to pay a corporate tax rate
as set forth in the amendment (rather than the regular corporate tax rate
applicable to approved enterprise income) with respect to undistributed exempt
income accumulated by the company up until December 31, 2011, will be entitled
to distribute a dividend from such income without being required to pay
additional corporate tax with respect to such dividend. A company that has so
elected must make certain qualified investments in Israel over the five-year
period commencing in 2013. A company that has elected to apply the amendment
cannot withdraw from its election.
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 branded businesses focus on CNS,
oncology, pain, respiratory and women's health therapeutic areas as well as
biologics. Teva currently employs approximately 46,000 people around the world
and reached $20.3 billion in net revenues in 2012.
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 risks relating to: the ability to reduce operating
expenses to the extent and during the timeframe intended by our cost
restructuring program; our ability to develop and commercialize additional
pharmaceutical products, including our ability to develop, manufacture, market
and sell biopharmaceutical 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, our
ability to achieve expected results through our specialty, including
innovative, R&D efforts, 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.
Teva Pharmaceutical Industries Ltd.
Kevin C. Mannix, (215) 591-8912
Ran Meir, (215) 591-3033
Tomer Amitai, 972 (3) 926-7656
Iris Beck Codner, 972 (3) 926-7687
Denise Bradley, (215) 591-8974
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