Discontinued Operations

Sale of Photovoltaics Business

In the fiscal year ended September 30, 2015, EMCORE completed the sale of the Company's Photovoltaics Business to SolAero pursuant to the Photovoltaics Agreement under which SolAero acquired substantially all of the assets, and assumed substantially all of the liabilities, primarily related to or used in connection with the Company's Photovoltaics Business for $149.9 million in cash.

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 was recorded in the discontinued operations of the Photovoltaics Business for the nine months ended June 30, 2016.

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



	For the three months ended June 30,						For the nine months ended June 30,
(in thousands)	2017			2016			2017			2016
Revenue	$	—		$	—		$	—		$	—
Cost of revenue	—			—			12			—
Gross loss	—			—			(12		)	—
Operating expense (income)	5			(17		)	13			(838		)
(Loss) income from discontinued operations before income tax expense	(5		)	17			(25		)	838
Income tax benefit (expense)	—			23			—			(5		)
(Loss) income from discontinued operations, net of tax	$	(5	)	$	40		$	(25	)	$	833

Included in discontinued operations of the Photovoltaics Business during the three and nine months ended June 30, 2016 were $0 and $0.1 million, respectively, of New Mexico incentive tax credits received. There were no incentive tax credits received during the three and nine months ended June 30, 2017.

Sale of Digital Products Business

In the fiscal year ended September 30, 2015, EMCORE completed the sale of the Company's Digital Products Business to NeoPhotonics pursuant to the Digital Products Agreement, under which NeoPhotonics acquired certain assets, and certain liabilities, related to the Company's Digital Products Business for an aggregate purchase price of $17.5 million.

In December 2015, we entered into an agreement to terminate our lease and related obligations associated with a facility in Newark, California which we abandoned effective February 2016 following the sale of the Digital Products Business. As a result of this agreement, we paid $0.2 million and recorded a gain of $0.3 million on the lease termination in the discontinued operations of the Digital Products Business during the nine months ended June 30, 2016. Also see Note 9 - Accrued Expenses and Other Current Liabilities.

Included in cost of revenue for the nine months ended June 30, 2016 is $0.4 million due to a reduction in expected product warranty liabilities from a settlement associated with the Digital Products Business.

During the nine months ended June 30, 2016, we recognized the deferred gain of $3.4 million and reversal of other liabilities of $0.4 million, that had been recorded as of September 30, 2015, resulting in a credit of $3.8 million to deferred gain on sale of assets within discontinued operations of the Digital Products Business as the result of the favorable ruling from the Sumitomo Electric Industries, LTD (“SEI”) arbitration. Also see Note 12- Commitments and Contingencies.

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



	For the three months ended June 30,						For the nine months ended June 30,
(in thousands)	2017			2016			2017			2016
Revenue	$	—		$	—		$	—		$	—
Cost of revenue	—			—			—			(494		)
Gross profit	—			—			—			494
Operating expense (income)	6			45			2			(285		)
Recognition of previously deferred gain on sale of assets	—			—			—			3,804
(Loss) income from discontinued operations before income tax expense	(6		)	(45		)	(2		)	4,583
Income tax benefit (expense)	—			128			—			(28		)
(Loss) income from discontinued operations, net of tax	$	(6	)	$	83		$	(2	)	$	4,555