Discontinued Operations

3 Months Ended

Dec. 31, 2013

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

3. Discontinued Operations

Beginning in the first quarter of fiscal 2012, the results of operations, cash flows, assets and liabilities of SurModics Pharmaceuticals, Inc. (“SurModics Pharmaceuticals”), which were previously reported in the Pharmaceuticals segment as a separate operating segment, are classified as discontinued operations.

On November 1, 2011, the Company entered into a definitive agreement (the “Purchase Agreement”) to sell substantially all of the assets of its wholly-owned subsidiary, SurModics Pharmaceuticals, to Evonik Degussa Corporation (“Evonik”). Under the terms of the Purchase Agreement, the entire portfolio of products and services of SurModics Pharmaceuticals, including the Company’s Current Good Manufacturing Practices (“cGMP”) development and manufacturing facility located in Birmingham, Alabama, were sold. The Company retained all accounts receivable and the majority of liabilities associated with SurModics Pharmaceuticals incurred prior to closing. The sale (the “Pharma Sale”) closed on November 17, 2011. The total consideration received from the Pharma Sale was $30.0 million in cash. As part of the Pharma Sale, SurModics agreed not to compete in the restricted business (as defined in the Purchase Agreement) for a period of five years and to indemnify Evonik against specified losses in connection with SurModics Pharmaceuticals, including certain contingent consideration obligations related to the acquisition by SurModics Pharmaceuticals of the portfolio of intellectual property and drug delivery projects from PR Pharmaceuticals, Inc. (“PR Pharma”) SurModics retained responsibility for repayment obligations related to an agreement with various governmental authorities associated with creation of jobs in Alabama. These obligations were settled or terminated in fiscal 2013 with payments totaling $325,000 repaid to the governmental authorities and a gain of $1.3 million recognized in the fiscal year ended September 30, 2013.

There was no condensed consolidated statement of income impact associated with discontinued operations for the three months ended December 31, 2013 and 2012.

The major classes of assets and liabilities of discontinued operations as of December 31, 2013 and September 30, 2013 were as follows:

	December 31,		September 30,
(Dollars in thousands)	2013		2013
Other current assets	$	46	$	46
Current assets of discontinued operations		46		46
Total assets of discontinued operations	$	46	$	46
Other current liabilities payable	$	126	$	139
Current liabilities of discontinued operations		126		139
Total liabilities of discontinued operations	$	126	$	139

The assets and liabilities of discontinued operations as of December 31, 2013 are based on accruals associated with the Southern Research Institute (“SRI”) litigation matter and a related deferred tax asset balance. See Note 17 for further discussion of the SRI litigation matter.