Discontinued Operations

3 Months Ended

Dec. 31, 2015

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

Sale of Photovoltaics Business

On September 17, 2014, EMCORE entered into the Photovoltaics Agreement with SolAero pursuant to which the Company agreed to sell the Photovoltaics Business for $150.0 million in cash, prior to a working capital adjustment of $0.1 million. On December 10, 2014, EMCORE completed the Photovoltaics Asset Sale.

In connection with this transaction, we sold net assets of $60.3 million to SolAero and incurred transaction costs of $2.7 million. During the three months ended December 31, 2014, we recognized a gain of $56.8 million, net of tax on the sale of the Photovoltaics Business which is recorded within discontinued operations in the consolidated statements of operations and comprehensive income.

On December 22, 2015, we settled all of the outstanding rights and obligations of a solar power venture in Spain, including outstanding non-current receivables, for a payment of $0.7 million. The outstanding non-current receivables had a net book value of $0 at the time of settlement as they were fully allowed for previously. The resulting gain has been recorded in the discontinued operations of the Photovoltaics Business for the three months ended December 31, 2015.

No assets and liabilities of the Photovoltaics Business that were sold remain on the condensed consolidated balance sheet as of December 31, 2015 and September 30, 2015. The financial results of the Photovoltaics Business are reported as discontinued operations for the three months ended December 31,2015 and 2014, respectively.

The following table presents the statements of operations for the discontinued operations of the Photovoltaics Business:

	For the three months ended December 31,
(in thousands)	2015			2014
Revenue	$	—		$	12,614
Cost of revenue	—			8,245
Gross profit	—			4,369
Operating (income) expense	(787		)	2,703
Other income	—			779
Gain on sale of discontinued operations	—			87,022
Income from discontinued operations before income tax	787			89,467
Income tax expense	(9		)	(30,203		)
Income from discontinued operations, net of tax	$	778		$	59,264

Included in discontinued operations during the three months ended December 31, 2015 were $0.1 million of New Mexico incentive tax credits received. There were no incentive tax credits received for the three months ended December 31, 2014. The credit received resulted in a cash refund.

Sale of Digital Products Business

On October 22, 2014, EMCORE entered into an Asset Purchase Agreement with NeoPhotonics, pursuant to which the Company sold certain assets, and transferred certain liabilities, of the Company's telecommunications business to NeoPhotonics for an aggregate purchase price of $17.5 million, subject to certain adjustments.

On January 2, 2015, EMCORE completed the sale of the Digital Products Business for $1.5 million in cash and an adjusted Promissory Note balance of $15.5 million. On April 17, 2015, NeoPhotonics paid in full the outstanding balance of the Promissory Note of $15.5 million, plus accrued interest of $0.2 million.

The financial results of the Digital Products Business were reported as discontinued operations in the three months ended December 31, 2014.

In December 2015, we entered into an agreement to terminate our lease and related obligations in Newark, California associated with a facility we abandoned effective February 2016 following the sale of the Digital Products Business for a payment of $0.2 million. As a result of the agreement, we recorded a gain of $0.3 million on the lease termination. The resulting gain has been recorded in the discontinued operations of the Digital Products Business for the three months ended December 31, 2015.

No assets or liabilities from the Digital Products Business remain on the condensed consolidated balance sheet as of December 31, 2015 and September 30, 2015. The financial results of the Digital Products Business are reported as discontinued operations for the three months ended December 31, 2015 and 2014. Also see Note 8 - Accrued Expenses and Other Current Liabilities.

The following table presents the statements of operations for the discontinued operations of the Digital Products Business:

	For the three months ended December 31,
(in thousands)	2015			2014
Revenue	$	—		$	11,815
Cost of revenue	(49		)	9,112
Gross profit	49			2,703
Operating (income) expense	(298		)	2,712
Income (loss) from discontinued operations before income tax	347			(9		)
Income tax (expense) benefit	(4		)	3
Income (loss) from discontinued operations	$	343		$	(6	)