Basis of Presentation and Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2018

The cash, cash equivalents and restricted cash at the beginning and ending of each period presented in the Company’s condensed consolidated statements of cash flows for the six months ended June 30, 2018 and 2017 consisted of the following:



	Six Months Ended June 30, 2018				Six Months Ended June 30, 2017
	Beginning of period		End of period		Beginning of period		End of period

Cash and cash equivalents	$	1,665,412	$	2,145,359	$	1,183,945	$	1,223,130
Restricted cash and cash equivalents (VIE)	1,489		8,510		47,762		64,628
Prepaid expenses and other current assets	625		199		—		—
Cash, cash equivalents and restricted cash per statement of cash flows	$	1,667,526	$	2,154,068	$	1,231,707	$	1,287,758

Schedule of new accounting pronouncements and changes in accounting principles

The cumulative effect of applying ASC 606 to the Company’s contracts with customers that were not completed as of January 1, 2018 was as follows:



	Balance as of						Balance as of
	December 31, 2017			Adjustments			January 1, 2018
Assets	(in thousands)
Accounts receivable, net	$	281,343		$	29,881		$	311,224
Inventories	111,830			(90		)	111,740
Prepaid expenses and other current assets	165,635			(17,166		)	148,469
Total assets	$	3,546,014		$	12,625		$	3,558,639
Liabilities and Shareholders’ Equity
Accrued expenses	$	443,961		$	8,586		$	452,547
Early access sales accrual	232,401			(7,273		)	225,128
Other liabilities, current portion	34,373			2,083			36,456
Accumulated other comprehensive loss	(11,572		)	949			(10,623		)
Accumulated deficit	(5,119,723		)	8,280			(5,111,443		)
Total liabilities and shareholders’ equity	$	3,546,014		$	12,625		$	3,558,639

The impact of adoption on the Company’s condensed consolidated balance sheet as of June 30, 2018 was as follows:



	As of June 30, 2018
	As Reported under ASC 606			Balances without Adoption of ASC 606			Effect of Change Higher/(Lower)
Assets	(in thousands)
Accounts receivable, net	$	393,439		$	359,103		$	34,336
Inventories	115,025			115,117			(92		)
Prepaid expenses and other current assets	122,694			142,704			(20,010		)
Total assets	$	4,335,386		$	4,321,152		$	14,234
Liabilities and Shareholders’ Equity
Accrued expenses	$	479,120		$	480,892		$	(1,772	)
Early access sales accrual	290,457			303,637			(13,180		)
Other liabilities, current portion	59,629			44,295			15,334
Accumulated other comprehensive loss	(4,605		)	(4,801		)	196
Accumulated deficit	(4,668,751		)	(4,682,407		)	13,656
Total liabilities and shareholders’ equity	$	4,335,386		$	4,321,152		$	14,234

The impact of adoption on the Company’s condensed consolidated statement of operations for the three and six months ended June 30, 2018 was as follows:



	Three Months Ended June 30, 2018
	As Reported under ASC 606		Balances without Adoption of ASC 606		Effect of Change Higher/(Lower)
	(in thousands)
Product revenues, net	$	749,912	$	745,975	$	3,937
Cost of sales	104,382		102,688		1,694
Income from operations	172,878		170,635		2,243
Net income attributable to Vertex	$	207,360	$	205,117	$	2,243

Amounts per share attributable to Vertex common shareholders:
Net income:
Basic	$	0.82	$	0.81	$	0.01
Diluted	$	0.80	$	0.79	$	0.01



	Six Months Ended June 30, 2018
	As Reported under ASC 606		Balances without Adoption of ASC 606		Effect of Change Higher/(Lower)
	(in thousands)
Product revenues, net	$	1,387,641	$	1,379,039	$	8,602
Cost of sales	175,995		172,769		3,226
Income from operations	301,779		296,403		5,376
Net income attributable to Vertex	$	417,623	$	412,247	$	5,376

Amounts per share attributable to Vertex common shareholders:
Net income:
Basic	$	1.65	$	1.62	$	0.03
Diluted	$	1.61	$	1.59	$	0.02