Inventories:

($ amounts in thousands)



	December 31, 2013		December 31, 2012
	(Successor)		(Successor)
Raw materials and supplies		$44,403		$37,457
Work-in-process	9,834		10,063
Finished goods	63,070		64,654
		$117,307		$112,174

Inventory write-offs (inclusive of pre-launch inventories detailed below)

($ amounts in thousands)

For the Year Ended

For the period

For the Year Ended

December 31,

September 29, 2012 to

January 1, 2012 to

December 31,

2013

December 31, 2012

September 28, 2012

2011

(Successor)

(Predecessor)

Inventory write-offs

$18,299

$2,567

$17,209

$7,200

Par capitalizes inventory costs associated with certain products prior to regulatory approval and product launch, based on management's judgment of reasonably certain future commercial use and net realizable value, when it is reasonably certain that the pre-launch inventories will be saleable. The determination to capitalize is made once Par (or its third party development partners) has filed an Abbreviated New Drug Application (“ANDA”) that has been acknowledged by the FDA as containing sufficient information to allow the FDA to conduct its review in an efficient and timely manner and management is reasonably certain that all regulatory and legal hurdles will be cleared. This determination is based on the particular facts and circumstances relating to the expected FDA approval of the generic drug product being considered, and accordingly, the time frame within which the determination is made varies from product to product. Par could be required to write down previously capitalized costs related to pre-launch inventories upon a change in such judgment, or due to a denial or delay of approval by regulatory bodies, or a delay in commercialization, or other potential factors. As of December 31, 2013, Par had approximately $5.8 million in inventories related to generic products that were not yet available to be sold.

Strativa also capitalizes inventory costs associated with in-licensed branded products subsequent to FDA approval but prior to product launch based on management’s judgment of probable future commercial use and net realizable value. We believe that numerous factors must be considered in determining probable future commercial use and net realizable value including, but not limited to, Strativa’s limited number of historical product launches, as well as the ability of third party partners to successfully manufacture commercial quantities of product. Strativa could be required to expense previously capitalized costs related to pre-launch inventory upon a change in such judgment, due to a delay in commercialization, product expiration dates, projected sales volume, estimated selling price or other potential factors. As of December 31, 2013 Strativa had approximately $0.7 million in inventories related to a brand product that was not yet available to be sold.

The amounts in the table below represent inventories related to products that were not yet available to be sold and are also included in the total inventory balances presented above.

Pre-Launch Inventories

($ amounts in thousands)



	December 31, 2013		December 31, 2012
	(Successor)		(Successor)
Raw materials and supplies		$6,308		$4,019
Work-in-process	93		655
Finished goods	118		0
		$6,519		$4,674

For the Year Ended

For the period

For the Year Ended

December 31,

September 29, 2012 to

January 1, 2012 to

December 31,

2013

December 31, 2012

September 28, 2012

2011

(Successor)

(Predecessor)

Pre-launch inventory write-offs, net of partner allocation

$2,310

$1,730

$10,208

$1,607