XML 70 R23.htm IDEA: XBRL DOCUMENT
v2.4.1.9

Income Taxes | 12 Months Ended
--- | ---
Oct. 31, 2014
Note 15. Income Taxes [Abstract] |
Income Taxes | Note 15. Income Taxes The components of loss from continuing operations before income taxes for the years ended October 31, 2014, 2013, and 2012 were as follows:
|  | 2014 |  | 2013 |  | 2012
U.S. |  | $ | (35,167 | ) |  | $ | (31,044 | ) |  | $ | (35,535 | )
Foreign |  | (3,228 | ) |  | (3,904 | ) |  | (302 | )
Loss before income taxes |  | $ | (38,395 | ) |  | $ | (34,948 | ) |  | $ | (35,837 | )
There was current income tax expense of $0.5 million, $0.4 million and $0.07 million related to foreign withholding taxes and income taxes in South Korea and no deferred federal income tax expense (benefit) for each of the years ended October 31, 2014, 2013 and 2012, respectively. Franchise tax expense, which is included in administrative and selling expenses, was $0.2 million for the years ended October 31, 2014, 2013 and 2012, respectively. The reconciliation of the federal statutory income tax rate to our effective income tax rate for the years ended October 31, 2014, 2013 and 2012 was as follows:
|  | 2014 |  | 2013 |  | 2012
Statutory federal income tax rate |  | (34.0 | )% |  | (34.0 | )% |  | (34.0 | )%
Increase (decrease) in income taxes resulting from: |  |  |  |  |  |
State taxes net of Federal benefits |  | (1.8 | )% |  | (1.7 | )% |  | (2.6 | )%
Foreign withholding tax |  | 1.0 | % |  | 0.9 | % |  | 0.2 | %
Net operating loss adjustment and true-ups |  | (25.4 | )% |  | 0.1 | % |  | (34.9 | )%
Nondeductible expenditures |  | 14.5 | % |  | 0.8 | % |  | 1.2 | %
Change in state tax rate |  | (0.8 | )% |  | 10.5 | % |  | (6.8 | )%
Other, net |  | 0.4 | % |  | 4.1 | % |  | (0.1 | )%
Valuation allowance |  | 47.1 | % |  | 20.3 | % |  | 77.2 | %
Effective income tax rate |  | 1.0 | % |  | 1.0 | % |  | 0.2 | %
Our deferred tax assets and liabilities consisted of the following at October 31, 2014 and 2013:
|  | 2014 |  | 2013
Deferred tax assets: |  |  |  |
Compensation and benefit accruals |  | $ | 7,591 |  |  | $ | 6,452 |
Bad debt and other reserves |  | 1,859 |  |  | 1,841 |
Capital loss and tax credit carry-forwards |  | 13,486 |  |  | 13,582 |
Net operating losses (domestic and foreign) |  | 247,170 |  |  | 228,154 |
Deferred license revenue |  | 8,894 |  |  | 8,033 |
Lower of cost or market inventory reserves |  | 521 |  |  | 509 |
Investment in partnerships |  | 404 |  |  | 419 |
Accumulated depreciation |  | 590 |  |  | 625 |
Gross deferred tax assets: |  | 280,515 |  |  | 259,615 |
Valuation allowance |  | (280,515 | ) |  | (259,615 | )
Deferred tax assets after valuation allowance |  | — |  |  | — |
Deferred tax liability: |  |  |  |
In process research and development |  | (3,377 | ) |  | (3,377 | )
Net deferred tax liability |  | $ | (3,377 | ) |  | $ | (3,377 | )
We continually evaluate our deferred tax assets as to whether it is “more likely than not” that the deferred tax assets will be realized. In assessing the realizability of our deferred tax assets, management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies. Based on the projections for future taxable income over the periods in which the deferred tax assets are realizable, management believes that significant uncertainty exists surrounding the recoverability of the deferred tax assets. As a result, we recorded a full valuation allowance against our deferred tax assets. Approximately $4.3 million of the valuation allowance will reduce additional paid in capital upon subsequent recognition of any related tax benefits. In connection with our acquisition of Versa we recorded a deferred tax liability for IPR&D, which has an indefinite life. Accordingly, we do not consider it to be a source of taxable income in evaluating the recoverability of our deferred tax assets. At October 31, 2014, we had federal and state NOL carryforwards of $655.0 million and $396.0 million, respectively, for which a portion of the NOL has not been recognized in connection with share-based compensation. The Federal NOL carryforwards expire in varying amounts from 2020 through 2034 while state NOL carryforwards expire in varying amounts from fiscal year 2014 through 2034. Additionally, we had $10.4 million of state tax credits available, of which $1.0 million expires in fiscal year 2018. The remaining credits do not expire. Certain transactions involving the Company’s beneficial ownership occurred in fiscalyear 2014 and prior years, which could have resulted in a stock ownership change for purposes of Section 382 of the Internal Revenue Code of 1986, as amended. We have completed a detailed Section 382 study in fiscal year 2014 to determine if any of our NOL and credit carryovers will be subject to limitation. Based on that study we have determined that there was no ownership change as of the end of our fiscal year 2014 under Section 382. The acquisition of VERSA in the prior fiscal year triggered a Section 382 ownership change which will limit the future usage of some of the Federal and state NOLs. The Federal and state NOLs that are non 382-limited are included in the NOL deferred tax assets as disclosed. As discussed in Note 1, the Company’s financial statements reflect expected future tax consequences of uncertain tax positions that the Company has taken or expects to take on a tax return (including a decision whether to file or not file a return in a particular jurisdiction) presuming the taxing authorities’ full knowledge of the position and all relevant facts. The liability for unrecognized tax benefits at October 31, 2014 and 2013 was $15.7 million. This amount is directly associated with a tax position taken in a year in which federal and state NOL carryforwards were generated. Accordingly, the amount of unrecognized tax benefit has been presented as a reduction in the reported amounts of our federal and state NOL carryforwards. It is our policy to record interest and penalties on unrecognized tax benefits as income taxes; however, because of our significant NOLs, no provision for interest or penalties has been recorded. We file income tax returns in the U.S. and various states, primarily Connecticut and California, as well as income tax returns required internationally for South Korea and Germany. We are open to examination by the Internal Revenue Service and various states in which we file for fiscal years 1998 to the present. We are currently not under any income tax examinations.

X
- Details
Name: | fcel_Note15IncomeTaxesAbstract
Namespace Prefix: | fcel_
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 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: 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 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 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 Reference 6: 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 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration