XML 41 R18.htm IDEA: XBRL DOCUMENT
v3.4.0.3

Income Taxes | 12 Months Ended
--- | ---
Mar. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | 11. Income Taxes Income (loss) before income taxes for the fiscal years ended March 31, 2016, 2015, and 2014 are provided in the table as follows (in thousands):
| Fiscal years ended March 31, |
| 2016 |  |  | 2015 |  |  | 2014 |
Income (loss) before income tax expense: |  |  |  |  |  |  |  |  |  |  |
U.S. | $ | (29,436 | ) |  | $ | (40,277 | ) |  | $ | (91,558 | )
Foreign |  | 8,688 |  |  |  | (8,563 | ) |  |  | 36,152 |
Total | $ | (20,748 | ) |  | $ | (48,840 | ) |  | $ | (55,406 | )
The components of income tax expense (benefit) attributable to continuing operations consist of the following (in thousands):
| Fiscal years ended March 31, |
| 2016 |  |  | 2015 |  |  | 2014 |
Current |  |  |  |  |  |  |  |  |  |  |
Federal | $ | 459 |  |  | $ | 47 |  |  | $ | 287 |
State |  | - |  |  |  | - |  |  |  | - |
Foreign |  | 1,950 |  |  |  | (274 | ) |  |  | 614 |
Total current |  | 2,409 |  |  |  | (227 | ) |  |  | 901 |
Deferred |  |  |  |  |  |  |  |  |  |  |
Federal |  | (18 | ) |  |  | 43 |  |  |  | (49 | )
State |  | - |  |  |  | - |  |  |  | - |
Foreign |  | - |  |  |  | - |  |  |  | - |
Total deferred |  | (18 | ) |  |  | 43 |  |  |  | (49 | )
Income tax (benefit) expense | $ | 2,391 |  |  | $ | (184 | ) |  | $ | 852 |
The reconciliation between the statutory federal income tax rate and the Company’s effective income tax rate is shown below.
| Fiscal years ended March 31,
| 2016 |  | 2015 |  | 2014
Statutory federal income tax rate |  | (34 | ) | % |  | (34 | ) | % |  | (34 | ) | %
State income taxes, net of federal benefit |  | 1 |  |  |  | 2 |  |  |  | - |  |
Deemed dividend and dividends paid |  | 5 |  |  |  | 1 |  |  |  | 1 |  |
Foreign income tax rate differential |  | 5 |  |  |  | 6 |  |  |  | (6 | ) |
Stock options |  | 1 |  |  |  | 1 |  |  |  | 2 |  |
Nondeductible expenses |  | - |  |  |  | 1 |  |  |  | 1 |  |
Research and development tax credit |  | (5 | ) |  |  | - |  |  |  | - |  |
Deferred warrants |  | - |  |  |  | (3 | ) |  |  | (1 | ) |
Interest expense |  | - |  |  |  | - |  |  |  | 5 |  |
Extinguishment of debt |  | - |  |  |  | - |  |  |  | 3 |  |
Reversal of uncertain tax benefits |  | - |  |  |  | (6 | ) |  |  | - |  |
True-up of foreign NOLs |  | 19 |  |  |  | - |  |  |  | - |  |
Settlement of intercompany balances |  | (9 | ) |  |  | - |  |  |  | - |  |
Nondeductible foreign currency exchange remeasurement loss |  | 10 |  |  |  | - |  |  |  | - |  |
Valuation allowance |  | 18 |  |  |  | 32 |  |  |  | 30 |  |
Effective income tax rate |  | 11 |  | % |  | - |  | % |  | 1 |  | %
The following is a summary of the principal components of the Company’s deferred tax assets and liabilities (in thousands):
| March 31, |  |  | March 31, |
| 2016 |  |  | 2015 |
Deferred tax assets: |  |  |  |  |  |  |
Net operating loss carryforwards | $ | 281,098 |  |  | $ | 272,498 |
Research and development and other tax credit carryforwards |  | 11,878 |  |  |  | 10,655 |
Accruals and reserves |  | 28,088 |  |  |  | 37,153 |
Fixed assets and intangible assets |  | 2,393 |  |  |  | 2,432 |
Other |  | 14,494 |  |  |  | 18,514 |
Gross deferred tax assets |  | 337,951 |  |  |  | 341,252 |
Valuation allowance |  | (301,393 | ) |  |  | (294,860 | )
Total deferred tax assets |  | 36,558 |  |  |  | 46,392 |
Deferred tax liabilities: |  |  |  |  |  |  |
Intercompany debt |  | (27,117 | ) |  |  | (36,298 | )
Other |  | (9,408 | ) |  |  | (10,174 | )
Total deferred tax liabilities |  | (36,525 | ) |  |  | (46,472 | )
Net deferred tax asset (liability) | $ | 33 |  |  | $ | (80 | )
The Company has provided a full valuation allowance against its net deferred income tax assets since it is more likely than not that its deferred tax assets are not currently realizable due to the net operating losses incurred by the Company since its inception and net operating losses forecasted in the future. The Company has recorded a deferred tax asset of approximately $13.0 million reflecting the benefit of deductions from the exercise of stock options. This deferred tax asset has been fully reserved since it is more likely than not that the tax benefit from the exercise of stock options will not be realized. The tax benefit will be recorded as a credit to additional paid-in capital if realized. At March 31, 2016, the Company had aggregate net operating loss carryforwards in the U.S. for federal and state income tax purposes of approximately $791.0 million and $177.0 million, respectively, which expire in the years ending March 31, 2017 through 2036. Included in the U.S. net operating loss is $3.7 million of acquired losses from Power Quality Systems, Inc. and $52.5 million from excess tax deductions from stock options exercised in the years ending March 31, 2006 through 2016. Pursuant to the guidance on accounting for stock-based compensation, the deferred tax asset relating to excess tax benefits from these exercises was not recognized for financial statement purposes. The future benefit from these deductions will be recorded as a credit to additional paid-in capital when realized. Research and development and other tax credit carryforwards amounting to approximately $9.3 million and $2.9 million are available to offset federal and state income taxes, respectively, and will expire in the years ending March 31, 2017 through 2036. At March 31, 2016, the Company had aggregate net operating loss carryforwards for its Austrian subsidiary, AMSC Austria GmbH, of approximately $42.6 million which can be carried forward indefinitely subject to certain annual limitations. At March 31, 2016, the Company had aggregate net operating loss carryforwards for its Chinese operation of approximately $32.0 million, which can be carried forward for five years and begin to expire December 31, 2016. At March 31, 2016, the Company had aggregate net operating loss carryforwards from Romania of $0.5 million, which can be carried forward through March 31, 2023. Also the Company had immaterial amounts of current and net operating loss carryforwards for its other foreign operations which can be carried forward indefinitely. Section 382 of the U.S. Internal Revenue Code of 1986, as amended (the “IRC”), provides limits on the extent to which a corporation that has undergone an ownership change (as defined) can utilize any NOL and general business tax credit carryforwards it may have. The Company conducted a study as a result of the April 2015 equity offering to determine whether Section 382 could limit the use of its carryforwards in this manner. After completing this study, the Company has concluded that the limitation will not have a material impact on its ability to utilize its net operating loss carryforwards. If there were material ownership changes subsequent to the study it could limit the ability to utilize its net operating loss carryforwards. The Company has not recorded a deferred tax asset for the temporary difference associated with the excess of its tax basis over the book basis in its Austrian and Chinese subsidiaries as the future tax benefit is not expected to reverse in the foreseeable future. The Company has recorded a deferred tax liability as of March 31, 2016 for the undistributed earnings of its remaining foreign subsidiaries for which it can no longer assert are permanently reinvested. The total amount of undistributed earnings available to be repatriated at March 31, 2016 was $1.2 million resulting in the recording of a $0.4 million net deferred federal and state income tax liability. Accounting for income taxes requires a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if, based on the technical merits, it is more likely than not that the position will be sustained upon audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. The Company reevaluates these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit and new audit activity. Any changes in these factors could result in the recognition of a tax benefit or an additional charge to the tax provision. The Company did not identify any uncertain tax positions at March 31, 2016. The Company did not have any gross unrecognized tax benefits at March 31, 2016 or 2015. During the fiscal year ended March 31, 2015, the Company concluded a tax audit for the period April 1, 2008 through March 31, 2011 with its foreign subsidiary in Austria. The results of this audit found no material exceptions to the Company’s tax positions. A tabular roll-forward of the Company’s uncertainties in income tax provision liability is presented below (in thousands):
Balance at March 31, 2014 | $ | 1,061 |
Reversal of uncertain tax positions |  | (1,061 | )
Balance at March 31, 2015 | $ | - |
Reversal of uncertain tax positions |  | - |
Balance at March 31, 2016 | $ | - |
The Company accounts for interest and penalties related to uncertain tax positions as part of its provision for federal and state income taxes. Any unrecognized tax benefits, if recognized, would favorably affect its effective tax rate in any future period. The Company does not expect that the amounts of unrecognized benefits will change significantly within the next twelve months. Interest and penalties recorded in prior periods were immaterial and subsequently reversed in the year ended March 31, 2015. The Company conducts business globally and, as a result, its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. Major tax jurisdictions include the U.S., China, Romania and Austria. All U.S. income tax filings for fiscal years ended March 31, 1995 through 2016 remain open and subject to examination and all fiscal years from the year ended March 31, 2012 through 2016 remain open and subject to examination in Austria. The Company’s tax filings in China for calendar years 2013 and 2014 are currently being examined. Tax filings in China for calendar years 2008 through 2012 remain open and subject to examination. Tax filings in Romania for the years ended March 31, 2014 through 2016 remain open and subject to examination.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration