We operate in two reportable business segments: generic pharmaceuticals (referred to as "Par Pharmaceutical" or "Par") and branded pharmaceuticals (referred to as "Strativa Pharmaceuticals" or "Strativa"). Branded products are marketed under brand names through marketing programs that are designed to generate physician and consumer loyalty. Branded products generally are patent protected, which provides a period of market exclusivity during which they are sold with little or no direct competition. Generic pharmaceutical products are the chemical and therapeutic equivalents of corresponding brand drugs. The Drug Price Competition and Patent Term Restoration Act of 1984 provides that generic drugs may enter the market upon the approval of an ANDA and the expiration, invalidation or circumvention of any patents on corresponding brand drugs, or the expiration of any other market exclusivity periods related to the brand drugs. Our chief operating decision maker is our President and Chief Executive Officer.

Our business segments were determined based on management's reporting and decision-making requirements in accordance with FASB ASC 280-10 Segment Reporting. We believe that our generic products represent a single operating segment because the demand for these products is mainly driven by consumers seeking a lower cost alternative to brand name drugs. Par's generic drugs are developed using similar methodologies, for the same purpose (e.g., seeking bioequivalence with a brand name drug nearing the end of its market exclusivity period for any reason discussed above). Par's generic products are produced using similar processes and standards mandated by the FDA, and Par's generic products are sold to similar customers. Based on the economic characteristics, production processes and customers of Par's generic products, management has determined that Par's generic pharmaceuticals are a single reportable business segment. Our chief operating decision maker does not review the Par (generic) or Strativa (brand) segments in any more granularity, such as at the therapeutic or other classes or categories. Certain of our expenses, such as the direct sales force and other sales and marketing expenses and specific research and development expenses, are charged directly to either of the two segments. Other expenses, such as general and administrative expenses and non-specific research and development expenses are allocated between the two segments based on assumptions determined by management.


	Three months ended						Six months ended
	June 30,			June 30,			June 30,			June 30,
	2011			2010			2011			2010
Revenues:
Par Pharmaceutical	$	202,449		$	231,938		$	412,193		$	503,977
Strativa		21,739			23,536			44,947			43,429
Total revenues	$	224,188		$	255,474		$	457,140		$	547,406

Gross margin:
Par Pharmaceutical	$	83,994		$	73,621		$	176,554		$	142,064
Strativa		15,032			17,838			32,125			32,905
Total gross margin	$	99,026		$	91,459		$	208,679		$	174,969

Operating income (loss):
Par Pharmaceutical	$	51,845		$	34,896		$	(80,901	)	$	80,918
Strativa		(34,038	)		(10,748	)		(39,854	)		(13,434	)
Total operating income (loss)	$	17,807		$	24,148		$	(120,755	)	$	67,484
Interest income		382			273			805			601
Interest expense		(150	)		(918	)		(301	)		(1,826	)
Provision (benefit) for income taxes		8,859			5,468			(20,587	)		21,798
Income (loss) from continuing operations	$	9,180		$	18,035		$	(99,664	)	$	44,461


	Three months ended				Six months ended
Product	June 30,		June 30,		June 30,		June 30,
	2011		2010		2011		2010
Par Pharmaceutical
Metoprolol succinate ER (Toprol-XL®)	$	63,706	$	119,596	$	127,124	$	302,887
Budesonide (Entocort® EC)		16,357		-		16,357		-
Sumatriptan succinate injection (Imitrex®)		15,284		17,463		31,983		34,747
Propafenone (Rythmol SR®)		13,311		-		35,350		-
Amlodipine and Benazepril HCI (Lotrel®)		12,505		-		30,675		-
Dronabinol (Marinol®)		8,118		7,183		14,989		11,274
Chlorpheniramine/Hydrocodone (Tussionex®)		7,022		-		19,701		-
Tramadol ER (Ultracet ER®)		5,873		5,676		11,954		10,962
Meclizine Hydrochloride (Antivert®)		4,562		9,398		9,437		19,552
Cholestyramine Powder (Questran®)		4,077		2,974		7,760		6,910
Nateglinide		3,815		3,470		8,120		4,988
Cabergoline (Dostinex®)		2,920		2,520		5,873		6,514
Methimazole (Tapazole®)		2,456		2,590		4,560		5,430
Clonidine TDS (Catapres TTS®)		-		26,290		4,793		44,751
Other (1)		33,398		31,679		66,583		51,709
Other product related revenues (2)		9,045		3,099		16,934		4,253
Total Par Pharmaceutical Revenues	$	202,449	$	231,938	$	412,193	$	503,977

Strativa
Megace® ES	$	14,050	$	15,493	$	28,135	$	29,291
Nascobal® Nasal Spray		6,274		4,407		10,152		8,002
OravigTM		1,027		-		1,776		-
Zuplenz®		263		-		485		-
Other product related revenues (2)		125		3,636		4,399		6,136
Total Strativa Revenues	$	21,739	$	23,536	$	44,947	$	43,429

(1)

The further detailing of revenues of the other approximately 60 generic drugs is impracticable due to the low volume of revenues associated with each of these generic products. No single product in the other category is in excess of 3% of total generic revenues for six-month periods ended June 30, 2011 or June 30, 2010.

(2)

Other product related revenues represents licensing and royalty related revenues from profit sharing agreements related to products such as diazepam rectal gel, the generic version of Diastat®, and fenofibrate, the generic version of Tricor®. Other product related revenues included in the Strativa segment related to a co-promotion arrangement with Solvay for Androgel® in 2010. This co-promotion arrangement with Solvay was terminated in December 2010 for an associated $2 million payment. During the six-month period ended June 30, 2011, Strativa earned $4.3 million of royalty income from its share of the proceeds from Optimer Pharmaceuticals' sale of certain rights in fidaxomicin to a third party. Under the terms of the 2007 termination agreement, we are also entitled to royalty payments on future sales of fidaxomicin.