FuelCell Energy Reports Fourth Quarter Results and Business Highlights

FuelCell Energy Reports Fourth Quarter Results and Business Highlights

  *Secured largest order in Company history - 121.8 megawatt multi-year order
  *Executing Asian expansion including licensing agreement for local
    manufacturing
  *Delivering 14.9 megawatt fuel cell park to one of the largest utilities in
    the USA
  *Announced renewable biogas data center project with Microsoft Corporation
  *Expanding European activity with another showcase installation in London

DANBURY, Conn., Dec. 20, 2012 (GLOBE NEWSWIRE) -- FuelCell Energy, Inc.
(Nasdaq:FCEL), a global leader in the design, manufacture, operation and
service of ultra-clean, efficient and reliable fuel cell power plants, today
reported results for its fourth quarter and fiscal year ended October 31, 2012
along with an update on its key business highlights.

Financial Results

Fourth quarter 2012

FuelCell Energy (the Company) reported total revenues for the fourth quarter
of 2012 of $35.4 million, compared to total revenues of $34.7 million for the
fourth quarter of 2011. Product sales and revenues in the fourth quarter were
$33.9 million compared to $33.3 million in the prior year quarter. The Company
continues to produce at an annual run-rate of 56 megawatts (MW), unchanged
from the third quarter of 2012. Fourth quarter product revenue included $24.0
million of fuel cell kits and power plants, $5.1 million of power plant
component sales and installation services, and $4.8 million derived from
service and power purchase agreements.

Product sales and service backlog totaled $306.6 million as of October 31,
2012 compared to $209.9 million as of October 31, 2011.Product sales backlog
was $228.1 million and $131.8 million as of October 31, 2012 and 2011,
respectively, increasing as a result of the 121.8 megawatt order received
during the fourth quarter of 2012.Service agreement backlog was $78.5 million
and $78.1 million as of October 31, 2012 and 2011, respectively.The 14.9 MW
Bridgeport fuel cell park project was closed subsequent to fiscal year end
2012 and will increase product and service backlog in the first quarter of
2013 by approximately $125 million, including approximately $56 million for
product backlog and $69 million for service backlog. 

Research and development contract revenue was $1.6 million for the fourth
quarter of 2012 compared to $1.4 million for the fourth quarter of 2011.The
Company's research and development contract backlog totaled $12.2 million as
of October 31, 2012 compared to $15.9 million as of October 31, 2011.The
Versa Power Systems acquisition, as discussed in greater detail in the
Business Highlights section below, was closed subsequent to fiscal year end
2012 and will increase research and development contract backlog in the first
quarter of 2013 by approximately $6.0 million.

A gross profit of $0.9 million was generated in the fourth quarter of 2012
compared to a gross profit of $0.4 million generated in the fourth quarter of
2011, or $1.3 million in 2012 and essentially break-even in 2011, excluding
the charges as explained in the reconciliation of GAAP to non-GAAP information
at the end of this release.The sales mix shifted to fuel cell kits for the
fourth quarter of 2012 compared to a greater percentage of complete fuel cell
power plant sales recognized in the fourth quarter of 2011.Continued cost
reductions and the conclusion of select service contracts during 2012 for some
early generation higher-cost installations contributed to the improvement in
margins.

Fourth quarter 2012 loss from operations totaled $8.4 million compared to $7.9
million for the fourth quarter of 2011.Administrative and selling expenses
increased modestly for the fourth quarter of 2012 compared to the fourth
quarter of 2011, reflecting increased market development activity for a number
of power plant projects.The year-over-year decrease in research and
development costs reflects continued focus on initiatives that have near term
product implementation potential and product cost reduction opportunities.

Net loss to common shareholders for the fourth quarter of 2012 totaled $12.1
million, or $0.07 per basic and diluted share, or adjusted for the non-cash
charge of $3.6 million incurred in the fourth quarter of 2012 related to the
Company's impairment of its investment in Versa Power, was $8.5 million or
$0.05 per basic and diluted share.This compares to $7.9 million or $0.06 per
basic and diluted share in the fourth quarter of 2011.

Year-to-Date 2012

For the twelve months ended October 31, 2012, the Company reported revenue of
$120.6 million compared to $122.6 million for the prior year period.Product
sales and revenues were $113.1 million compared to $115.1 million for the
prior year period.Research and development contract revenue was $7.5 million,
unchanged when compared to the prior year period.

For the twelve months ended October 31, 2012, the Company generated a gross
profit of $0.4 million compared to a gross loss of $12.6 million for the
twelve months ended October 31, 2011, or an adjusted gross profit of $0.9
million in 2012 and a gross loss of $4.3 million in 2011 that excludes the
charges as explained in the reconciliation of GAAP to non-GAAP information at
the end of this release.Continued focus on reducing product costs, enhancing
manufacturing processes and efficiencies, and increased service revenue
contributed to the year-over-year improvement of $5.2 million on a non-GAAP
basis.

Loss from operations for the twelve months ended October 31, 2012 was $32.1
million, compared to $45.7 million for the twelve months ended October 31,
2011.Excluding charges incurred in 2012 and 2011 as explained in the
reconciliation of GAAP to non-GAAP information at the end of this release,
adjusted loss from operations for the twelve months ended October 31, 2012 and
2011 was $31.7 million and $37.4 million, respectively.The year-over-year
improvement reflects lower product costs and decreased research and
development expenses.Research and development expenses decreased
year-over-year as prior improvements are incorporated into the product line
and the commercial DFC® product line requires less research and development
going forward.Research and development initiatives are focused on extending
the operating life of the fuel cell stack and enhancing the power output.

Net loss to common shareholders for the twelve months ended October 31, 2012
was $38.7 million or $0.23 per basic and diluted share, or $34.6 million or
$0.21 per basic and diluted share, adjusting for the charges as explained in
the reconciliation of GAAP to non-GAAP information at the end of this
release.The net loss to common shareholders for the comparable prior year
period was $57.9 million or $0.47 per basic and diluted share.Excluding
charges incurred in 2011 that are explained in the reconciliation of GAAP to
non-GAAP information at the end of this release, net loss to common
shareholders for the twelve months ended October 31, 2011 was $40.6 million or
$0.33 per basic and diluted share.

Cash and cash equivalents

Total cash and cash equivalents was $57.5 million at October 31, 2012, which
does not include $10.0 million received on November 1, 2012 from POSCO Energy
for a payment due under the license agreement.Net cash use for the fourth
quarter of 2012 was $16.3 million.Power plant components in inventory
totaled $11.3 million at October 31, 2012 and will be converted into cash in
2013 as the power plants are completed, installed and cash collected from the
owner of the Bridgeport fuel cell park, as discussed in greater detail in the
Business Highlights section below.Capital spending for the fourth quarter of
2012 was $1.8 million and depreciation expense was $1.0 million.

Business Highlights and Strategy Execution

POSCO Energy Order and License Agreement

"We announced the largest order in our history combined with a license
agreement to add manufacturing capacity in Asia that will provide a multitude
of benefits to FuelCell Energy," said Chip Bottone, President and CEO,
FuelCell Energy, Inc. "These actions, combined with the recent sale of a 14.9
megawatt fuel cell park in Bridgeport, Connecticut and initiatives in Europe,
have laid the foundation for global growth as we work to expand sales volume
and reduce product costs in our push to profitability."

During the fourth quarter of 2012, the Company announced a multi-year 121.8 MW
order for fuel cell kits and services, and a licensing agreement for
manufacturing of fuel cell components in South Korea by partner POSCO
Energy.Local manufacturing is needed in Asia to meet the growing demand.A
recently announced 59 megawatt fuel cell park in South Korea that will be
jointly owned by an electric utility, a gas distribution company, financial
investors and POSCO Energy, illustrates expanding demand for ultra-clean
distributed generation to meet the mandates of the country's Renewable
Portfolio Standard.

"The licensing agreement offers a number of value drivers for us beyond the
$26 million initial license fee," continued Mr. Bottone."The royalty has been
enhanced compared to the prior structure, both in terms of cash impact and
tenure; increased production, whether in the USA or South Korea, will help us
leverage our integrated global supply chain to further reduce product costs; a
second manufacturing source is valued by some project investors; the
agreements will result in additional revenue streams such as balance of plant
sales and consulting revenue for design and equipment procurement for the
POSCO Energy production facility; and as we work to further leverage our
collective strengths, we expect to further enhance the value proposition for
customers and our business."

As a result of entering into this license agreement, commencing with the first
quarter 2013 financial results, license and royalty income will be classified
under Revenues on the Consolidated Statements of Operations reflecting the
Asian business model for the Company's core technology and growing license and
royalty stream. 

Bridgeport Project

The Company announced the sale of a 14.9 MW fuel cell park in Bridgeport,
Connecticut with the power plants sold to Dominion, one of the largest
utilities in the USA with operations in 15 States.Five 2.8 MW DFC3000® power
plants will supply 14.0 megawatts of ultra-clean electricity and heat from the
fuel cells will be converted into an additional 0.9 MW of virtually emission
free electricity through use of an organic rankine cycle
configuration.Connecticut Light & Power will purchase the electricity from
Dominion under a 15 year energy purchase agreement.The inter-connection work
to connect the fuel cell park to the electric grid is currently in process and
being performed by United Illuminating.Fuel cell parks assist utilities in
adding environmentally friendly and economical baseload power generation
throughout their service area, reducing congestion of their existing
transmission and distribution grid.

Microsoft Project

The proven ability of Direct FuelCell® (DFC®) power plants to utilize on-site
biogas as a fuel source provides a solution for generating carbon-neutral and
environmentally friendly power and heat.These attributes provide a compelling
solution to the needs of Microsoft Corporation for low-carbon on-site power
generation for their data centers.As part of a project with the State of
Wyoming, Microsoft is buying a DFC plant to operate on renewable biogas
generated by a wastewater treatment facility and to power an adjacent data
center.Data centers represent a large potential market for efficient and
ultra-clean fuel cell power plants.

California and Europe

The State of California recently adopted AB32, a cap-and-trade program to
minimize the emission of greenhouse gases.This legislation is expected to
drive demand for fuel cell power plants as facilities with combustion based
power generation, heating and/or cooling can reduce or eliminate their
compliance costs by deploying fuel cells.Fuel cells operating on either clean
natural gas or renewable biogas are excluded from the compliance obligation
under the program.

FuelCell Energy Solutions, GmbH (FCES), the German based engineering,
manufacturing, sales, and service business for the European market, announced
another installation in a London, England.The London installation is a high
visibility office development.The low carbon footprint and virtual lack of
pollutants in the fuel cell power plant were primary contributors to obtaining
the contract.

Versa Power acquisition

In December 2012, the Company acquired the remaining 61 percent ownership
position of Versa Power Systems, Inc. (Versa), a leading global developer of
solid oxide fuel cell technology (SOFC) used for power generation and
storage.The Versa SOFC technology is incorporated in programs involving a
broad range of leading global companies including the Boeing Company.The
potential market opportunity for the SOFC technology is with sub-megawatt
applications for customers that need on-site power generation in either
combined heat and power or electric-only configurations.The DFC® product
line utilizes carbonate technology and is well-suited for the megawatt class
market as the technology and the economics scale very well with greater
size.SOFC technology is complementary and will target adjacent market
opportunities in the sub-megawatt market, such as commercial buildings and
high rise residential complexes.FuelCell Energy is currently in advanced
discussion with several potential global partners to commercialize the SOFC
technology.

The Company exchanged approximately 3.5 million shares of its common stock,
valued at approximately $3.3 million, as the total consideration for the
remaining Versa shares held by other Versa shareholders.The purchase price
offered by FuelCell Energy resulted in an impairment charge of the Company's
prior investment classified as Investment in and loans to affiliate on the
Consolidated Balance Sheets and recorded in the fourth quarter of 2012.

Versa will be consolidated in the Company's financial statements as of the
acquisition date. Versa receives revenue under a number of research contracts
including the U.S. Department of Energy Solid State Energy Conversion Alliance
(SECA) coal-based systems program and a research contract with The Boeing
Company.Revenue and associated costs are expected to be recognized under
Research and development contracts in the consolidated financial statements of
FuelCell Energy, Inc.

Cautionary Language

This news release contains forward-looking statements within the meaning of
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995, including, without limitation, statements with respect to the Company's
anticipated financial results and statements regarding the Company's plans and
expectations regarding the continuing development, commercialization and
financing of its fuel cell technology and business plans. All forward-looking
statements are subject to risks and uncertainties that could cause actual
results to differ materially from those projected. Factors that could cause
such a difference include, without limitation, changes to projected deliveries
and order flow, changes to production rate and product costs, general risks
associated with product development, manufacturing, changes in the regulatory
environment, customer strategies, changes in critical accounting
policies,potential volatility of energy prices, rapid technological change,
competition, and the Company's ability to achieve its sales plans and cost
reduction targets, as well as other risks set forth in the Company's filings
with the Securities and Exchange Commission. The forward-looking statements
contained herein speak only as of the date of this press release. The Company
expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any such statement to reflect any change in the
Company's expectations or any change in events, conditions or circumstances on
which any such statement is based.

About FuelCell Energy

Direct FuelCell® power plants are generating ultra-clean, efficient and
reliable power at more than 50 locations worldwide. With approximately 300
megawatts of power generation capacity installed or in backlog, FuelCell
Energy is a global leader in providing ultra-clean baseload distributed
generation to utilities, industrial operations, universities, municipal water
treatment facilities, government installations and other customers around the
world. The Company's power plants have generated more than one billion
kilowatt hours of ultra-clean power using a variety of fuels including
renewable biogas from wastewater treatment and food processing, as well as
clean natural gas. For more information please visit our website at
www.fuelcellenergy.com

See us on YouTube at www.youtube.com/user/FuelCellEnergyInc?feature=watch

Direct FuelCell, DFC, DFC/T, DFC-H2 and FuelCell Energy, Inc. are all
registered trademarks of FuelCell Energy, Inc. DFC-ERG is a registered
trademark jointly owned by Enbridge, Inc. and FuelCell Energy, Inc.

The FuelCell Energy, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=3284

Conference Call Information

FuelCell Energy management will host a conference call with investors
beginning at 10:00 a.m. Eastern Time on December 21, 2012 to discuss the
fourth quarter and fiscal year 2012 results. An accompanying slide
presentation for the earnings call will be available
athttp://fcel.client.shareholder.com/events.cfm immediately prior to the
call.

Participants can access the live call via webcast on the Company website or by
telephone as follows:

  *The live webcast of this call will be available on the Company website at
    www.fuelcellenergy.com.To listen to the call, select 'Investors' on the
    home page, then click on 'events & presentations' and then click on
    'Listen to the webcast'
  *Alternatively, participants in the U.S. or Canada can dial 877-303-7005
  *Outside the U.S. and Canada, please call 678-809-1045
  *The passcode is 'FuelCell Energy'

The webcast of the conference call will be available on the Company's
Investors' page at www.fuelcellenergy.com.Alternatively, the replay of the
conference call will be available approximately two hours after the conclusion
of the call until midnight Eastern Time on December 27, 2012:

  *From the U.S. and Canada please dial 855-859-2056
  *Outside the U.S. or Canada please call 404-537-3406
  *Enter confirmation code75752647

FUELCELL ENERGY, INC.
Consolidated Balance Sheets
(Unaudited)
(Amounts in thousands, except share and per share amounts)
                                                                
                                                    October 31, October 31,
                                                    2012         2011
ASSETS                                                           
Current assets:                                                  
Cash and cash equivalents                           $57,514    $51,415
Investments — U.S. treasury securities              --           12,016
License fee receivable                              10,000       --
Accounts receivable, net                            25,984       21,950
Inventories, net                                    47,701       40,101
Other current assets                                4,727        7,466
Total current assets                                 145,926      132,948
                                                                
Property, plant and equipment, net                   23,258       23,925
Investment in and loans to affiliate                 6,115        10,466
Other assets, net                                    16,186       16,291
Total assets                                         $191,485   $183,630
                                                                
LIABILITIES AND EQUITY                                           
Current liabilities:                                             
Current portion of long-term debt                  $5,161     $5,056
Accounts payable                                    12,254       14,143
Accounts payable due to affiliate                  203          104
Accrued liabilities                                 20,265       26,894
Deferred revenue                                     45,939       64,114
Preferred stock obligation of subsidiary            1,075        3,854
Total current liabilities                            84,897       114,165
                                                                
Long-term deferred revenue                           15,533       7,000
Long-term preferred stock obligation of subsidiary   13,095       12,878
Long-term debt and other liabilities                 3,975        4,105
Total liabilities                                    117,500      138,148
Redeemable preferred stock (liquidation preference   59,857       59,857
of $64,020 at October 31, 2012 and October 31, 2011)
Total Equity (Deficit):                                          
Shareholders' equity (deficit)                                   
Common stock ($.0001 par value; 275,000,000 shares
authorized; 185,856,123 and 138,400,497 shares       18           13
issued and outstanding at October 31, 2012and
October 31, 2011, respectively)
Additional paid-in capital                           751,256      687,857
Accumulated deficit                                  (736,831)   (701,336)
Accumulated other comprehensiveincome               66           15
Treasury stock, Common, at cost (5,679 shares at     (53)         (53)
October 31, 2012 and October 31, 2011)
Deferred compensation                                53           53
Total shareholders' equity (deficit)                14,509       (13,451)
Noncontrolling interest in subsidiaries              (381)       (924)
Total equity (deficit)                               14,128       (14,375)
Total liabilities and equity (deficit)              $191,485   $183,630
                                                                


FUELCELL ENERGY, INC.
Consolidated Statements of Operations
(unaudited)
(Amounts in thousands, except share and per share amounts)
                                                           
                                                Three Months Ended
                                                October 31,
                                                2012        2011
Revenues:                                                   
Product sales and revenues                      $33,853   $33,289
Research and development contracts              1,567       1,434
Total revenues                                  35,420      34,723
                                                           
Costs of revenues:                                          
Cost of product sales and revenues              32,859      32,698
Cost of research and development contracts     1,683       1,586
Total cost of revenues                          34,542      34,284
                                                           
Gross profit                                     878         439
                                                           
Operating expenses:                                         
Administrative and selling expenses             5,874       4,217
Research and development expenses               3,422       4,106
Total operating expenses                         9,296       8,323
                                                           
Loss from operations                             (8,418)    (7,884)
                                                           
Interest expense                                (555)      (749)
Income (loss) from equity investment            (91)       207
License fee and royalty income                  341         431
Impairment of equity investment                 (3,602)    --
Other income (expense), net                     806         874
                                                           
Loss before provision for income taxes           (11,519)   (7,121)
                                                           
Benefit for income taxes                         --          (8)
                                                           
Net loss                                        (11,519)   (7,129)
                                                           
Net loss attributable to noncontrolling interest 181         64
                                                           
Net loss attributable to FuelCell Energy, Inc.   (11,338)   (7,065)
                                                           
Preferred stock dividends                       (800)      (800)
                                                           
Net loss to common shareholders                  $(12,138) $(7,865)
                                                           
Loss per share basic and diluted                            
Basic                                            $(0.07)   $(0.06)
Diluted                                          $(0.07)   $(0.06)
                                                           
Weighted average shares outstanding                         
Basic                                            185,905,702 131,000,920
Diluted                                          185,905,702 131,000,920


FUELCELL ENERGY, INC.
Consolidated Statements of Operations
(unaudited)
(Amounts in thousands, except share and per share amounts)
                                                                 
                                                      Twelve Months Ended
                                                      October 31,
                                                      2012        2011
Revenues:                                                         
Product sales and revenues                            $113,133  $115,104
Research and development contracts                    7,470       7,466
Total revenues                                        120,603     122,570
                                                                 
Costs of revenues:                                                
Cost of product sales and revenues                    112,921     127,350
Cost of research and development contracts           7,237       7,830
Total cost of revenues                                120,158     135,180
                                                                 
Gross profit/(loss)                                    445         (12,610)
                                                                 
Operating expenses:                                               
Administrative and selling expenses                   18,220      16,299
Research and development expenses                     14,354      16,768
Total operating expenses                               32,574      33,067
                                                                 
Loss from operations                                   (32,129)   (45,677)
                                                                 
Interest expense                                      (2,304)    (2,578)
Income (loss) from equity investment                  (645)      58
License fee and royalty income                        1,599       1,718
Impairment of equity investment                       (3,602)    --
Other income (expense), net                           1,244       1,047
                                                                 
Loss before redeemable preferred stock of subsidiary   (35,837)   (45,432)
                                                                 
Accretion of redeemable preferred stock of            --          (525)
subsidiary
                                                                 
Loss before provision for income taxes                 (35,837)    (45,957)
                                                                 
Provision for income taxes                             (69)       (17)
                                                                 
Net loss                                              (35,906)   (45,974)
                                                                 
Net loss attributable to noncontrolling interest       411         261
                                                                 
Net loss attributable to FuelCell Energy, Inc.         (35,495)   (45,713)
                                                                 
Adjustment for modification of redeemable preferred   --          (8,987)
stock of subsidiary
Preferred stock dividends                             (3,201)    (3,200)
                                                                 
Net loss to common shareholders                        $(38,696) $(57,900)
                                                                 
Net loss per share to common shareholders                         
Basic                                                  $(0.23)   $(0.47)
Diluted                                                $(0.23)   $(0.47)
                                                                 
Weighted average shares outstanding                               
Basic                                                  165,471,261 124,498,073
Diluted                                                165,471,261 124,498,073


FUELCELL ENERGY, INC.
Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations
(Unaudited)
(Amounts in thousands, except share and per share amounts)
                                                                                 
             Three Months Ended October 31,
             2012                                        2011
             GAAP        Non-GAAP          Non-GAAP    GAAP        Non-GAAP         Non-GAAP
                                              As                                        As
             As         Adjustments        Adjusted    As Reported Adjustments       Adjusted
              Reported
Cost of
product sales $32,859   $ (462)    (2)     $32,397   $32,698   $471      (2)    $33,169
and revenues
Gross         $878      $ 462             $1,340    $439      $(471)          $(32)
profit/(loss)
Loss from     $(8,418)  $ 462             $(7,956)  $(7,884)  $(471)          $(8,355)
operations
Net loss     $(11,519) $ 4,064    (1)(2) $(7,455)  $(7,129)  $(471)          $(7,600)
Net loss to
common        $(12,138) $ 4,064           $(8,074)  $(7,865)  $(471)          $(8,336)
shareholders
                                                                                 
Net loss per
share to                                                                          
common
shareholders
Basic         $(0.07)   $0.02            $(0.05)   $(0.06)   $—               $(0.06)
Diluted       $(0.07)   $0.02            $(0.05)   $(0.06)   $ —               $(0.06)
                                                                                 
             Twelve Months Ended October 31,
             2012                                        2011
             GAAP        Non-GAAP          Non-GAAP    GAAP        Non-GAAP         Non-GAAP
                                              As                                        As
             As         Adjustments        Adjusted    As Reported Adjustments       Adjusted
              Reported
Cost of
product sales $112,921  $ (462)    (2)     $112,459  $127,350  $(8,281)  (2)    $119,069
and revenues
Gross         $445      $462              $907      $(12,610) $8,281          $(4,329)
profit/(loss)
Loss from     $(32,129) $462              $(31,667) $(45,677) $8,281          $(37,396)
operations
Loss before
redeemable
preferred     $(35,837) $4,064     (1)(2) $(31,773) $(45,432) $8,281          $ (37,151)
stock of
subsidiary
                                                                                 
Net loss     $(35,906) $4,064            $(31,842) $(45,974) $8,281          $(37,693)
Adjustment
for
modification
of redeemable $ —         $—                $—         $(8,987)  $8,987    (2)(3) $ —
preferred
stock of
subsidiary
                                                                                 
Net loss to
common        $(38,696) $4,064            $(34,632) $(57,900) $17,268         $(40,632)
shareholders
                                                                                 
Net loss per
share to                                                                          
common
shareholders
Basic         $(0.23)   $0.02            $(0.21)   $(0.47)   $0.14           $(0.33)
Diluted       $(0.23)   $0.02            $(0.21)   $(0.47)   $0.14           $(0.33)

    Notes to Reconciliation of GAAP to Non-GAAP Consolidated Statements of
                                  Operations

       For the Three and Twelve Months Ended October 31, 2012 and 2011

Results of Operations are presented in accordance with accounting principles
generally accepted in the United States ("GAAP") and as adjusted for certain
items referenced below which relate to fiscal year 2011 only. Management also
uses non-GAAP measures which exclude non-recurring items in order to measure
operating periodic performance.We have added this information because we
believe it helps in understanding the results of our operations on a
comparative basis. This adjusted information supplements and is not intended
to replace performance measures required by U.S. GAAP disclosure.

Notes to the reconciliation of GAAP to non-GAAP Consolidated Statements of
Operations information are as follows:

(1)Adjustment for the three and twelve months ended October 31, 2012 of $3.6
million represents a non-cash impairment charge of the Company's equity
investment in Versa.

(2)FuelCell Energy, Inc. has committed to a repair and upgrade program to fix
a performance shortfall for a select group of 1.2 MW fuel cell modules
produced between 2007 and early 2009.Second quarter 2011 earnings was
impacted by a charge of approximately $8.8 million, which was accounted for as
an increase to cost of goods sold.The estimate for the repair and upgrade
program was revised in the fourth quarter of 2011 resulting in a decrease to
cost of goods sold of approximately $0.5 million.The full fiscal year 2011
impact was a charge of $8.3 million.The estimate for the repair and upgrade
program was further revised in the fourth quarter of 2012 to adjust for the
cost of modules which are expected to be deployed as field replacements when
needed.This resulted in a charge to cost of goods sold in the fourth quarter
of 2012 of $0.5 million.Product sales, cost of product sales and revenue,
gross profit and product sales cost-to-revenue ratio for the three and twelve
months ended October 31, 2012 and 2011 were as follows:

                             Three Months Ended     Twelve Months Ended
                             October 31,            October 31,
                             2012        2011       2012        2011
GAAP Revenue and Cost of                                      
Sales
Product sales and revenues   $ 33,853    $ 33,289   $ 113,133   $ 115,104
Cost of product sales and    32,859      32,698     112,921     127,350
revenues
Gross profit/(loss) from     $ 994       $ 591      $ 212       $(12,246)
product salesand revenues
Product Sales                0.97        0.98       1.00        1.11
Cost-to-revenue ratio^(a)
                                                             
Non-GAAP Adjustment to cost
of product sales and                                          
revenues:
Repair and Upgrade Cost      $ 462       $(471)   $ 462       $ 8,281
                                                             
Gross Profit (non-GAAP):                                      
Gross profit/(loss) from     $1,456      $ 120      $ 674       $(3,965)
product sales and revenues
Gross profit/(loss)
fromresearch and development (116)      (152)     233         (364)
contracts
                             
Total                         $ 1,340     $(32)    $ 907       $(4,329)
                                                             
Product Sales
Cost-to-revenue ratio         0.96        1.00       0.99        1.03
(non-GAAP) ^(a)
                                                             
(a) Cost-to-revenue ratio is calculated as cost of product sales and revenues
divided by product sales and revenues.

(3)During the three months ended April 30, 2011 the Company entered into an
agreement with Enbridge, Inc. to modify an agreement for the Series1
preferred shares.While this modification did not result in a material change
to future cash flows, it did result in a revaluation of the instrument and a
reclassification of amounts due as short and long term liabilities.An
adjustment to additional paid in capital and loss to common shareholders of
$9.0 million was incurred in the second quarter of 2011 to adjust the historic
carrying value of the Series I preferred shares to the current fair value.

CONTACT: FuelCell Energy, Inc.
         Kurt Goddard, Vice President Investor Relations
         203-830-7494
         ir@fce.com

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