EARNINGS PER SHARE (EPS) (Tables)

6 Months Ended

Jun. 30, 2011

EARNINGS PER SHARE ("EPS")

Shares included in diluted EPS calculation for convertible subordinated notes and warrants

	Three months ended				Six months ended
	June 30,				June 30,
	2011		2010		2011		2010
Average market price per share of Cephalon stock	$	78.67	$	61.73	$	68.89	$	64.53
Shares included in diluted EPS calculation (in thousands):
2.0% Notes	7,136		4,275		5,656		4,852
2.5% Notes	891		—		—		—
2010 Notes	—		296		—		438
Warrants related to 2.0% Notes	2,399		—		247		—
Warrants related to 2.5% Notes	—		—		—		—
Warrants related to New Zero Coupon Notes	—		—		—		—
Other	—		1		—		1
Total	10,426		4,572		5,903		5,291

Reconciliation of net income and weighted average common shares outstanding for calculating basic and diluted income per common share

	Three months ended				Six months ended
	June 30,				June 30,
	2011		2010		2011		2010
Basic income per common share computation:
Numerator:
Net income used for basic income per common share	$	118,175	$	89,064	$	329,263	$	199,629
Denominator (in thousands):
Weighted average shares used for basic income per common share	76,679		75,192		76,213		75,092
Basic income per common share	$	1.54	$	1.18	$	4.32	$	2.66

	Three months ended				Six months ended
	June 30,				June 30,
	2011		2010		2011		2010
Diluted income per common share computation:
Numerator:
Net income used for basic income per common share	$	118,175	$	89,064	$	329,263	$	199,629
Denominator (in thousands):
Weighted average shares used for diluted income per common share	76,679		75,192		76,213		75,092
Effect of dilutive securities:
Convertible subordinated notes and warrants	10,426		4,572		5,903		5,291
Employee stock options and restricted stock units	1,198		743		755		840
Weighted average shares used for diluted income per common share	88,303		80,507		82,871		81,223
Diluted income per common share	$	1.34	$	1.11	$	3.97	$	2.46

Anti-dilutive shares excluded from calculation of diluted income per common share

	Three months ended		Six months ended
	June 30,		June 30,
	2011	2010	2011	2010
Weighted average shares excluded (in thousands):
Convertible subordinated notes and warrants	24,805	28,218	24,805	28,277
Employee stock options	1,049	4,799	3,786	4,825
	25,854	33,017	28,591	33,102