Good day, ladies and gentlemen, and welcome to the FuelCell Energy Reports Fourth Quarter 2012 Results. [Operator Instructions] As a reminder, today's conference call is being recorded. I would now like to turn the conference over to your host, Kurt Goddard, Vice President, Investor Relations. Please begin.

Good morning, and welcome to the fourth quarter 2012 earnings call for FuelCell Energy. Delivering remarks today will be Chip Bottone, President and Chief Executive Officer; and Mike Bishop, Senior Vice President and Chief Financial Officer. The earnings release, as well as an accompanying slide presentation, is posted on our website at www.fuelcellenergy.com, and a replay of this call will be posted 2 hours after its conclusion. The telephone numbers for the replay are listed in the press release. Once again, for those of you listening to this call via the dial-in phone number rather than via the Internet, management will be referencing a fourth quarter 2012 slide presentation that is available on the Investor Relations section of our website at www.fuelcellenergy.com. Before proceeding with the call, I would like to remind everyone that this call is being recorded, and that the discussion today will contain forward-looking statements, including the company's plans and expectations for the continuing development and commercialization of our fuel cell technology. I would like to direct listeners to read the company's cautionary statement on forward-looking information and other risk factors in our filings with the U.S. Securities and Exchange Commission. Now I'd like to turn the call over to Chip Bottone. Chip?

Thank you, Kurt. Good morning, everyone. Happy holidays, and welcome. Please turn to Slide 4, fourth quarter 2012 highlights. We are executing on our global strategy, building a solid foundation for growth and diversifying our revenue sources. During 2012, we set the stage for our future growth, executing our strategic initiatives on 3 continents as we planned. As we embark on fiscal 2013, we are solidly positioned for growth. Our focus is on driving orders, with these initiatives serving as catalysts that are expected to accelerate order flow in our markets. During the fourth quarter, we received a 121.8-megawatt order from POSCO Energy, our Asian partner, and successfully concluded a license agreement with them. This is the largest order ever received in the fuel cell industry. It greatly increases our backlog, and guarantees a solid base level of production for several years. The license agreement leverages our partnership with POSCO to meet the growing demand under South Korea's RPS and expand the Asian market, again, without requiring a commitment of capital by us. Persistent effort to close projects in North America was rewarded with the sale of a 14.9-megawatt fuel cell park in Connecticut to Dominion, one of the largest utilities in the U.S. This milestone project involves 3 different utilities and enjoys strong support from state, local and federal governments. Other utilities or regulatory bodies are taking notice of this multi-megawatt installation, which, in many aspects, is a replicable model for other projects around the globe. We are pleased to announce recently the sale of a power plant to Microsoft Corporation using renewable biogas to power data center. We are excited to be entering the rapidly growing data center market, which we believe holds considerable potential. And we are pleased to be working with such a well-known and large…

Thank you, Chip. Good morning, and thank you for joining our call today. Please turn to Slide 5, titled financial highlights, quarterly. FuelCell Energy reported total revenues for the fourth quarter of 2012 of $35.4 million, compared to $34.7 million in the same period last year. Product sales and revenues for the fourth quarter totaled $33.9 million, compared to $33.3 million reported in the prior year. Research and development contract revenue was $1.6 million for the fourth quarter 2012, compared to $1.4 million for the prior year quarter. The following discussion includes non-GAAP adjustments. Please also refer to the GAAP to non-GAAP reconciliation in the earnings release. For the fourth quarter 2012, a gross profit of approximately $1.3 million was realized compared to breakeven in the prior year quarter. 14 megawatts was produced in the fourth quarter leading to an annualized production volume of 56 megawatts, unchanged from the prior year period. Total operating expenses were $9.3 million for the fourth quarter, compared to $8.3 million in the prior year. The year-over-year increase is primarily the result of market development expenses in the U.S. and Europe. Net loss to common shareholders was $8.1 million, or $0.05 per basic and diluted share, compared to $8.3 million, or $0.06 per basic and diluted share in the fourth quarter of 2011. EBITDA, which is earnings before interest, taxes, depreciation and amortization, totaled negative $6.5 million, which increased year-over-year, primarily due to the increase in SG&A. Sequentially, EBITDA improved by $2.2 million from the third quarter of 2012 due to higher production volumes and associated revenue, which drove improved absorption of fixed costs. Included in fourth quarter results was a noncash charge totaling $3.6 million due to the revaluation of our investment in Versa related to the acquisition announced yesterday. Please turn to Slide…

Thank you, Mike. Please turn to Slide 9, Asian market update. South Korea's far reaching renewable portfolio standard continues to drive the growing market for fuel cell power plants in that country. Large fuel cell parks are now being constructed, demonstrating the market potential for distributed generation fuel cell power plants and the need for local manufacturing in South Korea. One of these is a 58.8-megawatt fuel cell park southeast of Seoul. Currently the largest fuel cell park in the world, it will consist of 21 DFC3000 power plants, each generating 2.8 megawatts of ultra-clean, reliable electrical power, with the heat energy to be used for district heating purposes. POSCO Energy will lead the construction of the fuel cell park and maintain and service the power plants under a long-term service agreement. Construction has commenced. This high-profile park demonstrates the attractiveness of large-scale distributed generation fuel cell projects to developers, utility companies, gas companies and investors. This and other fuel cell parks illustrate our product suitability for power grid applications. Their combination of near 0 pollutants, modest land-use needs and quiet operating characteristics make them easy to cite urban locations, mitigating the need to construct and maintain costs for distribution and transmission infrastructure. These fuel cell power projects support demand for POSCO's 121.8-megawatt order and manufacturing license agreement that we finalized during the fourth quarter. Valued at $181 million, the multi-year order for fuel cell kits nearly triples our product backlog and has triggered a planned increase in the production rate at our manufacturing facility in Torrington to 70 megawatts in 2013, increasing our workforce by 10%. The license agreement gives POSCO Energy the right to manufacture carbonate fuel cell components in South Korea, based on our direct fuel cell technology and grants commercial rights to Asian markets. The agreement…

[Operator Instructions] I have a question from Sanjay Shrestha with Lazard Capital Markets.

A couple of question. First off, congrats on this Bridgeport project. But the question on that, though, is given that price of fuel is a pass-through and the PPA is already in place, seems like there is a debt component, which is long-term in nature. How should we think about pricing and profitability in that project for you guys?

Sanjay, it's Mike. What I would say about this project, like all projects, we look for anything that we put in backlog to be profitable, both at the product sale level, as well as the service agreement level. We don't comment specifically on individual projects. But for the company to get to EBITDA net income positive, we would expect overall gross margins to be in the teens.

Okay, okay. So maybe if you could help us with this a bit more. Would you consider -- I know you guys won't specifically comment on the projects. But would this be more profitable than, let's say, what your backlog was at the end of the fiscal year? Would this project be more profitable than the current backlog?

Well, this project is obviously a complete power plant, an EPC construction turnkey project. So if you look at the backlog that we had coming into Q4, it's primarily kits [ph] to POSCO. You didn't have the company power plant. So certainly, this is the complete power plant, along with a 15-year service agreement.

Okay. So now a few follow-up question, if I may. Now when we look at sort of this $450 million in pro forma backlog for you guys, right, and sort of taking a step back and maybe just thinking about fiscal '13 for you guys, right, you've talked about that 55-megawatt clear visibility and things like that. How should we model sort of the shipment from a megawatt standpoint service revenue for you guys? And is fiscal '13 the year, by exiting that year, we will actually see you guys get to that EBITDA breakeven, given the visibility that you have now?

Right. So based on the visibility we have right now, Sanjay, we've said that we expect to get to EBITDA positive at a annualized run rate of 80 megawatts. We're entering the year at 56-megawatt run rate, and we are ramping right now up to a level of 70 megawatts. We would expect to achieve that early to mid-2013. Beyond that, order flow will dictate how much further and when we go beyond 70 megawatts. As far as revenue during the year, I commented in my script that at the current production level, product sales and revenues are basically where we were this quarter. So we will increase from there at a 70-megawatt run rate. Product sales and revenues are in the range of $39 million to $43 million a quarter. And then you would also add R&D on top of that. R&D would certainly increase over this year as we bring Versa on. Versa has a backlog of about $6 million, most of which will be recognized in 2013. And we continue to grow our current advanced program backlog as well.

Got it. One final question then, for me guys, so 2-part. One, so cash will come in the door, given the amount of the finished goods inventory, right? And that -- just one point of clarification. And where does this cash take you guys? Can this get you to that cash flow breakeven level or not? And two, obviously, it's been such a nice win for you guys really on Asia and both U.S. How do you think about sort of a pipeline of business that are out there? And what are some of the other large-scale projects or things that we should be tracking over the course of next 12 months?

So Sanjay, let me take the first piece of that on cash, and then I'll turn it over to Chip. So what I said in my script is we're comfortable with the cash balance that we ended the year with, $57.5 million. You also add to that a $10-million payment that we got right in the beginning of the fiscal year. That cash balance and expected cash flow from the orders in backlog and working capital usage is sufficient for the year. We are targeting ending next fiscal year end with at least a $50-million cash balance. And that includes making capital expenditures during the year of $68 million and also dividend payments. So expect positive operating cash flow and certainly, strong ability to manage the current backlog that we have right now.

Sanjay, this is Chip. To maybe just answer the second part of that question. I think you were talking about future order flow adding to the backlog. I think if we reflect on the last quarter's call, we kind of signaled that certain things would happen. And I think those things have happened. I think I mentioned it a couple times that, that is a huge catalyst to not just U.S. but Europe. So our strategy, as you have heard many times, is really to sell larger projects, which, as Mike said, have higher margin and things like that, which is great. And more revenue streams opportunity from that as well. So I feel pretty good about both the East and the West Coast. This is a big boost to -- this Bridgeport project is a big boost to the credibility for financing because a significant portion of the opportunities require financing. And I think we have a great story and a great answer. So I guess stay tuned is the answer, but I would expect to turn more volume on, like we've been able to close here recently.

Our next question comes from Jacob Hughes of FBR. Jacob W. Hughes - FBR Capital Markets & Co., Research Division: I just had a quick question. With this POSCO deal about done, what's the strategy in Asia going forward? I mean, is there a jumping off point beyond Korea in terms of additional licensing fees and additional recurring revenue?

Jacob, it's Mike Bishop. So what I would say there is POSCO is our Asian partner. They are growing the Korean market rapidly. They can certainly grow beyond Korea. They're looking at other regions in Asia to grow that will, by nature of our license agreement, certainly grow our royalty revenue and cash flow streams from POSCO. We work very closely with POSCO as they enter new markets, leverage our combined resources. So it is a royalty model for us in Asia. But as you've seen with the past order closure, we expect it to grow significantly here over the 15-year term of this core technology license agreement.

Jacob, this is Chip. Just to add to what Mike said, I mean, they're currently planning to build a building for 140 megawatts. And then we're going to basically build it out equipment wise at 70 megawatts. So it kind of signals how big they think the opportunity is. So with the, I would call it, enhanced royalty payment, it's a win-win for everybody. There's also some other opportunities for revenue streams. I mean, we work closely with these guys. It's not autopilot. I kind of like -- they got a strong balance sheet. Obviously, they're a big company, lot of contacts in a lot of places. They just installed their first system in Southeast Asia. We're looking at Japan. I think there's a lot of stories around that. So yes, I think we've got a good partner there. And I guess it's a win-win. Jacob W. Hughes - FBR Capital Markets & Co., Research Division: Okay, great. And I just had one follow-up question. I know there was another question on this. But on the guidance where you're ramping the 70 megawatts. I mean, how should we think about that? Is that in the second quarter? Or is that more towards year end?

Well, we've ramped in the past. We entered -- previously, going into 2011, we're about 22 megawatts. We ramped up to 56 megawatts. That was about a 6-month process. So we have -- we certainly have the experience of that. We have the capital in place. It's not a matter of adding capital. It's really a matter of adding staffing, making sure that they've gone through proper training, that you've ramped up the supply chain, that you have the materials. And as I said, we're already in the process of ramping to 70 megawatts. So we would expect that to be completed early to mid-2013.

Our next question comes from Jeff Osborne of Stifel, Nicolaus. Jeffrey D. Osborne - Stifel, Nicolaus & Co., Inc., Research Division: Just a couple points of clarification, Chip. You talked a lot about the top line growth, but I was just wondering if you can take us maybe as of year-end what you've done in terms of cost improvement either in the quarter for the year-on-year on year basis would be great.

Okay. You're talking product cost, Jeff? It's Chip. Are you talking product cost, overall cost, structure, which specific...

In particular, on production cost or product cost.

Okay. I'll take a stab at that and maybe have Mike add in if I miss anything, Jeff. But clearly, we've -- our guys are focused on reducing cost. And that really comes in 2 ways, right? I mean, one, it comes with just engineering and things like that, which we got a lot of that out. But the supply chain and the inefficiencies in the supply chain, I think the guys will work really, really hard on that this coming year. And as Mike said, we're in the process of ramping to 70 megawatts. And it's -- 80% of the benefit that we get now on cost reduction or product is volume related. So the good news is we're on the upswing, which means we're going to get more, Jeff. From an overhead perspective, again, when we ramp up here, the good news is we're really just talking about direct labor. So we're really not talking about, as Mike said, there's no capital involved really. And so that's kind of nicely some leverage off of that as well, that obviously goes against our margins. So we're attacking it that way, holding spending down from an overhead perspective and obviously, getting more benefit through the supply chain. Mike, did I miss anything?

No, Jeff, I'd echo that. Certainly above -- 50 megawatts is really the breakeven level at a gross margin basis. And we get strong leverage as we ramp over that as you've seen come through our numbers. But beyond just product cost, there's expanding margin opportunities, as we add additional service agreements for our core products and then go a bit beyond that with some of the expertise that we have, whether it be EPC-type work like the Bridgeport project, for instance, is turnkey. So we're doing EPC work there, or ancillary equipment-type services at our customer sites. So there's margin opportunities beyond just product costs as well. Jeffrey D. Osborne - Stifel, Nicolaus & Co., Inc., Research Division: Excellent. And just a few other quick ones here. Chip, I was wondering if you can give us an update on the Abengoa partnership and anything specific in terms of the demonstration unit that was installed there in Spain and potential opportunity to move that down to South America? And maybe just 2 other ones if you want to answer them all of the same time is an update on the multi-drilling unit development efforts that you had with POSCO for a smaller sub-megawatt facility. Is that something you could use Versa for? Or are you going to stick with your incumbent technology there? And then just lastly, on the data center space, is that something you need to offer leasing for? Or would you expect folks like Microsoft and others to outright buy the units?

Well, okay, I'll try to remember those in order, Jeff. I think I'll take Abengoa first. Yes. So Abengoa, the reason for hooking up with those folks was they wanted to put an installation in their facility there at Seville. They're in the process of doing that. And then they also participate with growing markets in Europe and outside of Europe i.e. Latin America, which is about 50% of their business, I think, last time I checked. But it's -- we -- they're working with us on a couple of projects that we hope to close within the European Union as part of our team. Don't forget, we have Fraunhofer and some other folks there. So that's progressing well. They got their hands in that. And then in fact, we're going to meet with them in January. And we met with them in December to really kind of map out the expansion strategy for other parts of the world. So I guess I'd say stay tuned on that, but I'm kind of pleased where that's going. The 100-kilowatt or the building application, you're exactly right. The product size and the power density and such that Versa can produce a product would fit very, very nicely into that building application, be it slightly larger than 100 kilowatts or maybe slightly smaller than 100 kilowatts. And that's one of the nice fits. I guess I would say that people look at this Versa acquisition. And I would say that we were probably uniquely qualified in the world to do this deal because all of the infrastructure that we've invested in over time is available to be used there, which completely accelerates both learning and expenses. And again, if you deploy the model, like I said, where we use frankly other people's capital…

I'm not showing any other questions in the queue at this time.

Okay. Well, operator, thank you very much. And to the callers and the people on the phone, we'd like to thank you for calling in. We look forward to sharing our further progress next quarter and have a safe and a happy holiday season. Take care. Thank you very much, and have a great day.

Thank you, ladies and gentlemen. Thank you for your participation in today's conference. This does conclude the conference. You may now disconnect. Good day.