Basis of Presentation and Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Schedule of cash and cash equivalents

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 nine months ended September 30, 2018 and 2017 consisted of the following:

	Nine Months Ended September 30, 2018				Nine Months Ended September 30, 2017
	Beginning of period		End of period		Beginning of period		End of period
	(in thousands)
Cash and cash equivalents	$	1,665,412	$	2,478,302	$	1,183,945	$	1,384,966
Restricted cash and cash equivalents (VIE)	1,489		8,143		47,762		1,803
Prepaid expenses and other current assets	625		606		—		—
Cash, cash equivalents and restricted cash per statement of cash flows	$	1,667,526	$	2,487,051	$	1,231,707	$	1,386,769

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 September 30, 2018 was as follows:

	As of September 30, 2018
	As Reported under ASC 606			Balances without Adoption of ASC 606			Effect of Change Higher/(Lower)
Assets	(in thousands)
Accounts receivable, net	$	379,755		$	345,180		$	34,575
Inventories	124,150			124,245			(95		)
Prepaid expenses and other current assets	118,678			143,826			(25,148		)
Total assets	$	4,620,840		$	4,611,508		$	9,332
Liabilities and Shareholders’ Equity
Accrued expenses	$	504,240		$	515,880		$	(11,640	)
Early access sales accrual	324,251			342,136			(17,885		)
Other liabilities, current portion	60,357			38,950			21,407
Accumulated other comprehensive income	307			186			121
Accumulated deficit	(4,540,005		)	(4,557,334		)	17,329
Total liabilities and shareholders’ equity	$	4,620,840		$	4,611,508		$	9,332

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

	Three Months Ended September 30, 2018
	As Reported under ASC 606		Balances without Adoption of ASC 606		Effect of Change Higher/(Lower)
	(in thousands)
Product revenues, net	$	782,511	$	777,117	$	5,394
Cost of sales	111,255		109,533		1,722
Income from operations	205,649		201,977		3,672
Net income attributable to Vertex	$	128,746	$	125,074	$	3,672
Amounts per share attributable to Vertex common shareholders:
Net income:
Basic	$	0.51	$	0.49	$	0.02
Diluted	$	0.50	$	0.48	$	0.02

	Nine Months Ended September 30, 2018
	As Reported under ASC 606		Balances without Adoption of ASC 606		Effect of Change Higher/(Lower)
	(in thousands)
Product revenues, net	$	2,170,152	$	2,156,156	$	13,996
Cost of sales	287,250		282,303		4,947
Income from operations	507,428		498,379		9,049
Net income attributable to Vertex	$	546,369	$	537,320	$	9,049
Amounts per share attributable to Vertex common shareholders:
Net income:
Basic	$	2.15	$	2.11	$	0.04
Diluted	$	2.11	$	2.07	$	0.04