Teva Pharmaceutical Industries Limited (NYSE:TEVA) Q4 2022 Earnings Call Transcript

Eli Kalif : Yes. So when we actually set the market, you will appreciate that the interest rate environment is higher than what we expected to tender on our debt take, and that means that we will have an impact on our — that will flow through impact on our free cash flow. This is one. The second thing is that as we move forward and we see ourselves now more inside of positive momentum with the opioid, we actually want to make sure that we have enough cushion to manage that liability. And coming back to your first question, and that’s actually already embedded there. So we used to have kind of a 2.1, 2, 1.9 range on the debt take. Currently, the ’23 is 2.1, ’24 is 1.9. We’re going to take it lower a bit in order to make sure that we have enough cushion there to manage it, and it will be part of the upcoming refinancing, which majority will be focused on the debt take of ’25.

Rishi Parekh : And then with the drop-down in your AR financing next year to $500 million, one, can you walk us through why it’s declining by $500 million next year? And is that also affecting your thoughts around how you’re looking to address your debt maturities this year?

Eli Kalif : Yes. So I don’t understand the drop on the AR for next year. Where you’re actually considering that one? But I can mention the dynamics. This year, in terms of working capital, we were able to optimize our outstanding tables as well DSO. And that actually offset part of inventory increase in order to support our production plan for mostly for the first half of the year.

Rishi Parekh : Yes. Sorry, I was just referring to the new AR facility that you entered into. I think it’s $1 billion through November of this year, and then it drops to $500 million from November ’23 onwards to November ’25. And I was just hoping for an explanation behind that drop?

Eli Kalif : Yes. So actually, the facility is around $1 billion. We are not using the full of it. We use the 800 million as an opportunity for us to be flexible on that program by actually initiating further enhancement on other elements of working capital that will allow us to be more flexible and you reduce that program going forward.

Rishi Parekh : Okay. Great. I follow with my direct questions later.

Richard Francis : Thank you for your questions. I’d like to thank everybody for the questions and interest in the call today. And I’d like to also apologize for some of the technical issues at the start. That’s always out of our control, but I appreciate you bearing with us. And on that, I’d like to close the call. Once again, thank you for your interest and look forward to talking to you on future calls.

Operator: Thank you. This does conclude the conference for today. Thank you for participating, and you may now disconnect.