Discontinued Operations

6 Months Ended

Jun. 30, 2013

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

DISCONTINUED OPERATIONS

In June 2012, DOC, a subsidiary of Tessera Technologies, Inc., completed its acquisition of certain assets of Vista Point Technologies, from Flextronics International Ltd. (the "Zhuhai Transaction"). At the time of the closing of the Zhuhai Transaction, the Company intended to use the acquired assets and related manufacturing business to accelerate its strategy of building the DigitalOptics segment into a manufacturer and supplier of camera modules in the mobile phone market. However, in the first quarter of 2013, the Company determined the DigitalOptics business was to be restructured and announced its plans to close the facility in Zhuhai, China (the "Zhuhai Facility"). As a result of this restructuring, certain assets acquired in the transaction were considered impaired or written off entirely. For further discussion of affected assets, see Note 4 – "Composition of Certain Financial Statement Captions" and Note 8 – "Goodwill and Identified Intangible Assets."

In the second quarter of 2013, the Company continued to restructure its DigitalOptics business by pursuing the sale of its business located in Charlotte, North Carolina. Originally purchased in 2006, this business focuses on diffractive optical elements, refractive optical elements, and integrated microoptic sub-assemblies. The Company has determined these offerings are no longer part of its long-term strategy for the DigitalOptics business. The Company owns the land and building for this facility and currently plans to retain those assets. All other assets are held for sale and included as current assets of discontinued operations on the balance sheet.

In accordance with the accounting guidance, the businesses discussed above qualify as discontinued operations, and accordingly, the Company has reported the results of operations and financial position of these businesses in discontinued operations within the statements of operations and the balance sheets for all periods presented.

The results from discontinued operations were as follows:

	Three Months Ended						Six Months Ended
	June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012
Revenues:
Product and service revenues	$	2,663		$	3,109		$	5,123		$	6,244
Total revenues	2,663			3,109			5,123			6,244
Operating expenses:
Cost of revenues	3,292			3,480			9,420			7,323
Research, development and other related costs	2,252			3,349			4,796			6,084
Selling, general and administrative	1,695			1,138			2,932			2,279
Restructuring, impairment of long-lived assets and other charges	544			—			4,646			—
Impairment of goodwill	—			—			6,664			—
Total operating expenses	7,783			7,967			28,458			15,686
Operating loss before taxes	(5,120		)	(4,858		)	(23,335		)	(9,442		)
Benefit from income taxes	(13,284		)	(2,785		)	(12,403		)	(3,500		)
Net income (loss) from discontinued operations	$	8,164		$	(2,073	)	$	(10,932	)	$	(5,942	)

The current and non-current assets and current liabilities of discontinued operations were as follows (in thousands):

	June 30, 2013
Accounts receivable, net	$	1,264
Inventories	741
Property and equipment, net	8,933
Intangible assets, net	2,099
Other current assets	3,533
Total current assets of discontinued operations (1)	$	16,570
Other assets	730
Long-term assets of discontinued operations	$	730
Accounts payable	$	157
Accrued legal fees	97
Accrued liabilities	4,604
Deferred revenue	16
Total current liabilities of discontinued operations	$	4,874

(1) All current assets of discontinued operations are assets held for sale.