Earnings Per Share

6 Months Ended

Jun. 30, 2012

Earnings Per Share

Earnings Per Share

E. Earnings Per Share

        Basic and diluted net income per share attributable to Vertex common shareholders are presented in conformity with the two-class method required for participating securities. Under the two-class method, earnings are allocated to (i) Vertex common shares, excluding shares of restricted stock that have been issued but have not yet vested, and (ii) participating securities, based on their respective weighted-average shares outstanding for the period. Shares of unvested restricted stock have the non-forfeitable right to receive dividends on an equal basis with other outstanding common stock. As a result, these unvested shares of restricted stock are considered participating securities that must be included in the calculation of basic and diluted net income per share attributable to Vertex common shareholders using the two-class method. Potentially dilutive shares result from the assumed exercise of outstanding stock options (the proceeds of which are then assumed to have been used to repurchase outstanding stock using the treasury stock method) and the assumed conversion of convertible notes.

        Basic net loss per share attributable to Vertex common shareholders is based upon the weighted-average number of common shares outstanding during the period, excluding restricted stock that has been issued but is not yet vested. Diluted net loss per share attributable to Vertex common shareholders is based upon the weighted-average number of common shares outstanding during the period plus additional weighted-average common equivalent shares outstanding during the period when the effect is dilutive.

        The following table sets forth the computation of basic and diluted net income (loss) per share for the three and six months ended June 30, 2012 and 2011:

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(in thousands, except per share amounts)
Basic net income (loss) attributable to Vertex per common share calculation:
Net income (loss) attributable to Vertex common shareholders	$	(64,931	)	$	(174,069	)	$	26,659		$	(350,165	)
Less: Undistributed earnings allocated to participating securities		—			—			(260	)		—
Net income (loss) attributable to Vertex common shareholders—basic	$	(64,931	)	$	(174,069	)	$	26,399		$	(350,165	)
Basic weighted-average common shares outstanding		211,344			204,413			209,681			203,377
Basic net income (loss) attributable to Vertex per common share	$	(0.31	)	$	(0.85	)	$	0.13		$	(1.72	)
Diluted net income (loss) attributable to Vertex per common share calculation:
Net income (loss) attributable to Vertex common shareholders	$	(64,931	)	$	(174,069	)	$	26,659		$	(350,165	)
Less: Undistributed earnings allocated to participating securities		—			—			(256	)		—
Net income (loss) attributable to Vertex common shareholders—diluted	$	(64,931	)	$	(174,069	)	$	26,403		$	(350,165	)
Weighted-average shares used to compute basic net income (loss) per common share		211,344			204,413			209,681			203,377
Effect of potentially dilutive securities:
Stock options		—			—			3,188			—
Other		—			—			88			—
Weighted-average shares used to compute diluted net income (loss) per common share		211,344			204,413			212,957			203,377
Diluted net income (loss) attributable to Vertex per common share	$	(0.31	)	$	(0.85	)	$	0.12		$	(1.72	)

        The Company did not include the securities described in the following table in the computation of the net income (loss) attributable to Vertex per common share calculations because the effect would have been anti-dilutive during each such period:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(in thousands)
Stock options		18,771		20,589		10,624		20,589
Convertible senior subordinated notes		8,192		8,192		8,192		8,192
Unvested restricted stock and restricted stock units		2,087		1,971		8		1,971