Spirit Airlines, Inc.
Spirit Airlines, Inc. (Form: 8-K, Received: 04/28/2017 08:19:13)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) : April 28, 2017
____________________
SPIRIT AIRLINES, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)

001-35186
(Commission File Number)
38-1747023
(IRS Employer Identification Number)

2800 Executive Way
Miramar, Florida 33025
(Address of principal executive offices, including Zip Code )

(954) 447-7920
(Registrant's telephone number, including area code)
____________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
[]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
[]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
[]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
  






The information in this report furnished pursuant to Item 2.02 shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that section. It may only be incorporated by reference in another filing under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), if such subsequent filing specifically references the information furnished pursuant to Item 2.02 of this report.

Item 2.02.
Results of Operations and Financial Condition.
On April 28, 2017 , Spirit Airlines, Inc. (the “Company” or “Spirit”) issued a press release announcing its unaudited financial results for the first quarter and full year 2017 . A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Non-GAAP financial measures that reflect adjustments from historical financial data prepared under GAAP, including adjustments for special items, are included in the press release as supplemental disclosures because the Company believes they are useful indicators of the Company's operating performance for comparative purposes. These non-GAAP financial measures are well recognized performance measurements in the airline industry that are frequently used by investors, securities analysts and other interested parties in comparing the operating performance of companies in the airline industry. The non-GAAP financial measures provided have limitations as an analytical tool. Because of these limitations, non-GAAP financial measures should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. The Company has also provided in the press release reconciliations of these non-GAAP financial measures to the appropriate GAAP financial measures.


Item 9.01.
Financial Statements and Exhibits.
(d)      Exhibits

The following is furnished as an exhibit to this report and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act:

Exhibit No.
Description
 
 
99.1
Press Release regarding first quarter 2017 financial results.










SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Date: April 28, 2017
SPIRIT AIRLINES, INC.


By: /s/ Thomas Canfield     
Name: Thomas Canfield
Title: Senior Vice President and General Counsel




EXHIBIT INDEX

Exhibit No.
Description
 
 
99.1
Press Release regarding first quarter 2017 financial results.






CONTACTS1014A02A01A05.JPG
EXHIBIT 99.1

Spirit Airlines Reports First Quarter 2017 Results

MIRAMAR, Fla., April 28, 2017 - Spirit Airlines, Inc. (NASDAQ: SAVE) today reported first quarter 2017 financial results.
GAAP net income for the first quarter 2017 was $31.9 million ( $0.46 per diluted share), or $35.6 million ( $0.51 per diluted share) 1 excluding special items.

GAAP operating margin for the first quarter 2017 was 10.0 percent , or 11.0 percent excluding special items 1 .

Spirit ended the first quarter 2017 with unrestricted cash, cash equivalents, and short-term investments of $918.4 million .

Spirit's return on invested capital (before taxes and excluding special items) for the twelve months ended March 31, 2017 was 21.0 percent 2 .

“During the first quarter, our team did an excellent job serving our customers while overcoming challenges caused by the tragic Fort Lauderdale airport event in early January, as well as dealing with various winter storms. Despite these and other challenges, we continue to make progress in improving our operational reliability. Our on-time performance 3 improved 10.2 percentage points to 75.5 percent for the first quarter 2017. While we still have a ways to go to reach our desired operational goals, I thank the entire Spirit team for their contributions,” said Bob Fornaro, Spirit’s President and Chief Executive Officer. 

Revenue Performance
For the first quarter 2017 , Spirit's total operating revenue was $591.7 million , an increase of 10.0 percent compared to the first quarter 2016 , driven by an 11.9 percent increase in flight volume.

Total revenue per available seat mile (TRASM) for the first quarter 2017 decreased 4.2 percent compared to the same period last year, driven primarily by the calendar shift of Easter which is estimated to have accounted for approximately 3.5 percentage points of the year-over-year decline.  In addition, it is estimated that the tragic Fort Lauderdale airport event and winter storm Helena together contributed another 0.75 percentage points of decline year over year in the first quarter 2017 TRASM.   

On a per passenger flight segment basis, total revenue for the first quarter 2017 decreased 1.5 percent year over year to $106.24 .


1




Cost Performance
For the first quarter 2017 , total GAAP operating expense, including special items of $5.9 million 4 primarily related to lease termination charges, increased 21.9 percent, or $95.5 million , year over year to $532.3 million . Adjusted operating expense for the first quarter 2017 increased 25.2 percent , or $106.0 million to $526.5 million 5 . The increase in both GAAP and adjusted operating expense was primarily driven by higher fuel rates and an increase in flight volume.

Aircraft fuel expense increased in the first quarter 2017 by 62.6 percent , or $53.8 million , compared to the same period last year, due to a 45.1 percent increase in the cost of fuel per gallon and a 12.1 percent increase in fuel gallons consumed.
 
Spirit reported first quarter 2017 cost per available seat mile ("ASM"), excluding special items and fuel (“Adjusted CASM ex-fuel”), of 5.62 cent s 5 , an increase of 0.5 percent compared to the same period last year, driven primarily by higher depreciation and amortization and other operating expenses per ASM, largely offset by lower salaries, wages and benefits and lower aircraft rent per ASM.

"Although our TRASM for the first quarter 2017 was down year over year, primarily due to the timing shift of Easter, we continue to see good traction from our ticket and non-ticket revenue initiatives. Furthermore, our booking trends for the second quarter 2017 indicate we will see solid sequential improvement in TRASM, even without including the benefit from the Easter holiday shift," said Ted Christie, Spirit's Executive Vice President and Chief Financial Officer. "On the cost side, our team did a good job holding the line on Adjusted CASM ex-fuel despite headwinds from amortization expense related to heavy maintenance events, depreciation related to purchased aircraft, and higher ground handling rates and other inflationary pressures that resulted in higher other operating expense."

Labor
Spirit and its pilots, represented by the Airline Pilots Association, remain in open contract negotiations under the supervision of the National Mediation Board.

Fleet
Spirit took delivery of three new A321ceo aircraft and two used A319 aircraft during the first quarter 2017 , ending the quarter with 100 aircraft in its fleet.

Conference Call/Webcast Detail
Spirit will conduct a conference call to discuss these results today, April 28, 2017 , at 9:00 a.m. ET. A live audio webcast of the conference call will be available to the public on a listen-only basis at http://ir.spirit.com . An archive of the webcast will be available under Webcasts & Presentations for 60 days.

About Spirit Airlines:
Spirit Airlines (NASDAQ: SAVE) is committed to offering the lowest total price to the places we fly, on average much lower than other airlines. Our customers start with an unbundled, stripped-down Bare Fare™ and get Frill Control™ which allows them to pay only for the options they choose - like bags, seat assignments and refreshments - the things other airlines bake right into their ticket prices. We help people save money and travel more often, create new jobs and stimulate business growth in the communities we serve. With our Fit Fleet™, the youngest fleet of any major U.S. airline, we operate more than 440 daily flights to 60 destinations in the U.S., Latin America and the Caribbean. Come save with us at www.spirit.com .

2




Investors are encouraged to read the Company's periodic and current reports filed with or furnished to the Securities and Exchange Commission, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, for additional information regarding the Company.

End Notes
(1)
See "Reconciliation of Adjusted Net Income, Adjusted Pre-tax Income, and Adjusted Operating Income to GAAP Net Income" table below for more details.
(2)
See "Calculation for Return on Invested Capital" table below for more details.
(3) As defined by the Department of Transportation.
(4)
See "Special Items" table for more details.
(5)
See "Reconciliation of Adjusted Operating Expense to GAAP Operating Expense" table below for more details.



Forward-Looking Statements
Statements in this release and certain oral statements made from time to time by representatives of the Company contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), which are subject to the “safe harbor” created by those sections. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. All statements other than statements of historical facts are “forward-looking statements” for purposes of these provisions. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential,” and similar expressions intended to identify forward-looking statements. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Furthermore, such forward-looking statements speak only as of the date of this release. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. Risks or uncertainties (i) that are not currently known to us, (ii) that we currently deem to be immaterial, or (iii) that could apply to any company, could also materially adversely affect our business, financial condition, or future results. References in this report to “Spirit,” “we,” “us,” “our,” or the “Company” shall mean Spirit Airlines, Inc., unless the context indicates otherwise. Additional information concerning certain factors is contained in the Company's Securities and Exchange Commission filings, including but not limited to the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.


3




SPIRIT AIRLINES, INC.
Statement of Operations
(unaudited, in thousands, except per share data)


 
Three Months Ended

 
 
 
March 31,
 
Percent
 

2017

2016

Change
 
Operating revenues:
 
 
 


 
Passenger
$
299,762

 
$
272,626


10.0

 
Non-ticket
291,984

 
265,517


10.0

 
Total operating revenues
591,746

 
538,143


10.0

 
 
 
 
 

 
 
Operating expenses:
 
 
 

 
 
Salaries, wages and benefits
127,138

 
116,410


9.2

 
Aircraft fuel
139,782

 
85,982


62.6

 
Aircraft rent
57,070

 
52,202


9.3

 
Landing fees and other rents
40,448

 
34,807


16.2

 
Depreciation and amortization
31,509

 
23,109


36.3

 
Maintenance, materials and repairs
26,312

 
20,940


25.7

 
Distribution
26,498

 
22,933


15.5

 
Special charges
4,776

 
16,202

 
nm

 
Loss on disposal of assets
1,105

 
214

 
nm

 
Other operating
77,703

 
64,045


21.3

 
Total operating expenses
532,341

 
436,844


21.9

 
 
 
 
 

 
 
Operating income
59,405

 
101,299


(41.4
)
 
 
 
 
 

 
 
Other (income) expense:
 
 
 

 
 
Interest expense
12,473

 
8,060


54.8

 
Capitalized interest
(3,580
)
 
(3,325
)

7.7

 
Interest income
(1,313
)
 
(1,566
)

(16.2
)
 
Other expense
3

 
70


nm

 
Total other (income) expense
7,583

 
3,239


nm

 
 
 
 
 

 
 
Income before income taxes
51,822

 
98,060


(47.2
)
 
Provision for income taxes
19,887

 
36,140


(45.0
)
 
Net income
$
31,935

 
$
61,920


(48.4
)
 
Basic earnings per share
$
0.46

 
$
0.87


(47.1
)
 
Diluted earnings per share
$
0.46

 
$
0.86


(46.5
)
 

 
 
 

 
 
Weighted average shares, basic
69,348

 
71,572


(3.1
)
 
Weighted average shares, diluted
69,592

 
71,777


(3.0
)
 






4




SPIRIT AIRLINES, INC.
Statements of Comprehensive Income
(unaudited, in thousands)

 
Three Months Ended
 
March 31,
 
2017
 
2016
Net income
$
31,935

 
$
61,920

Unrealized gain (loss) on short-term investment securities, net of deferred taxes of ($8) and $0
(13
)
 

Interest rate derivative losses reclassified into earnings, net of taxes of $31 and $33
53

 
57

Other comprehensive income (loss)
$
40

 
$
57

Comprehensive income
$
31,975

 
$
61,977





5




SPIRIT AIRLINES, INC.
Balance Sheets
(unaudited, in thousands)
 
March 31,
 
December 31,
 
2017
 
2016
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
818,110

 
$
700,900

Short-term investment securities
100,294

 
100,155

Accounts receivable, net
48,692

 
41,136

Aircraft maintenance deposits
125,758

 
87,035

Prepaid expenses and other current assets
53,677

 
46,619

Total current assets
1,146,531

 
975,845

 
 
 
 
Property and equipment:
 
 
 
Flight equipment
1,608,959

 
1,461,525

Ground property and equipment
136,126

 
126,206

Less accumulated depreciation
(140,535
)
 
(122,509
)
 
1,604,550

 
1,465,222

Deposits on flight equipment purchase contracts
330,523

 
325,688

Long-term aircraft maintenance deposits
170,631

 
199,415

Deferred heavy maintenance, net
71,870

 
75,534

Other long-term assets
114,509

 
110,223

Total assets
$
3,438,614

 
$
3,151,927

 
 
 
 
Liabilities and shareholders’ equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
39,612

 
15,193

Air traffic liability
308,958

 
206,392

Current maturities of long-term debt
92,672

 
84,354

Other current liabilities
231,932

 
226,011

Total current liabilities
673,174

 
531,950

 
 
 
 
Long-term debt, less current maturities
991,722

 
897,359

Deferred income taxes
327,660

 
308,143

Deferred gains and other long-term liabilities
17,712

 
19,868

Shareholders’ equity:
 
 
 
Common stock
7

 
7

Additional paid-in-capital
553,820

 
551,004

Treasury stock, at cost
(219,726
)
 
(218,692
)
Retained earnings
1,095,568

 
1,063,633

Accumulated other comprehensive loss
(1,323
)
 
(1,345
)
Total shareholders’ equity
1,428,346

 
1,394,607

Total liabilities and shareholders’ equity
$
3,438,614

 
$
3,151,927



6




SPIRIT AIRLINES, INC.
Statement of Cash Flows
(unaudited, in thousands)
 
Three Months Ended March 31,
 
2017
 
2016
Operating activities:
 
 
 
Net income
$
31,935

 
$
61,920

Adjustments to reconcile net income to net cash provided by operations:
 
 
 
Losses reclassified from other comprehensive income
84

 
90

Equity-based compensation
2,816

 
1,790

Allowance for doubtful accounts (recoveries)
(30
)
 
25

Amortization of deferred gains and losses and debt issuance costs
3,351

 
1,968

Depreciation and amortization
31,509

 
23,109

Deferred income tax expense
19,474

 
21,066

Loss on disposal of assets
1,105

 
214

Lease termination costs
4,776

 
16,202

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
(7,526
)
 
(4,229
)
Aircraft maintenance deposits
(12,774
)
 
(12,311
)
Prepaid income taxes
(846
)
 
72,278

Long-term deposits and other assets
(21,267
)
 
(8,495
)
Accounts payable
18,937

 
4,703

Air traffic liability
102,207

 
46,473

Other liabilities
298

 
33,296

Other
113

 

Net cash provided by operating activities
174,162

 
258,099

Investing activities:
 
 
 
Purchase of available-for-sale investment securities
(24,490
)
 

Proceeds from the maturity of available-for-sale investment securities
24,219

 

Pre-delivery deposits for flight equipment, net of refunds
(44,752
)
 
(50,358
)
Capitalized interest
(1,647
)
 
(2,575
)
Purchase of property and equipment
(112,265
)
 
(159,829
)
Net cash used in investing activities
(158,935
)
 
(212,762
)
Financing activities:
 
 
 
Proceeds from issuance of long-term debt
115,526

 
73,914

Proceeds from stock options exercised

 
88

Payments on debt and capital lease obligations
(10,235
)
 
(9,749
)
Excess tax (deficiency) benefit from equity-based compensation

 
(778
)
Repurchase of common stock
(1,034
)
 
(9,601
)
Debt issuance costs
(2,274
)
 
(34
)
Net cash provided by financing activities
101,983

 
53,840

Net (decrease) increase in cash and cash equivalents
117,210

 
99,177

Cash and cash equivalents at beginning of period
700,900

 
803,632

Cash and cash equivalents at end of period
$
818,110

 
$
902,809

Supplemental disclosures
 
 
 
Cash payments for:
 
 
 
Interest, net of capitalized interest
$
3,943

 
$
3,430

Income taxes paid, net of refunds
$
2,881

 
$
(64,158
)
Non-cash transactions:
 
 
 
Capital expenditures funded by capital lease borrowings
$
(130
)
 
$
(31
)

7




SPIRIT AIRLINES, INC.
Selected Operating Statistics (unaudited)
 
Three Months Ended March 31,

 
Operating Statistics
2017

2016

Change
Available seat miles (ASMs) (thousands)
6,875,899


5,983,005


14.9
 %
Revenue passenger miles (RPMs) (thousands)
5,613,422


5,070,313


10.7
 %
Load factor (%)
81.6


84.7


(3.1) pts

Passenger flight segments (thousands)
5,570


4,988


11.7
 %
Block hours
104,035


93,545


11.2
 %
Departures
39,330


35,160


11.9
 %
Total operating revenue per ASM (TRASM) (cents)
8.61


8.99


(4.2
)%
Average yield (cents)
10.54


10.61


(0.7
)%
Average ticket revenue per passenger flight segment ($)
53.82


54.65


(1.5
)%
Average non-ticket revenue per passenger flight segment ($)
52.42


53.23


(1.5
)%
Total revenue per passenger flight segment ($)
106.24


107.88


(1.5
)%
CASM (cents)
7.74


7.30


6.0
 %
Adjusted CASM (cents) (1)
7.66


7.03


9.0
 %
Adjusted CASM ex-fuel (cents) (2)
5.62


5.59


0.5%

Fuel gallons consumed (thousands)
79,064


70,550


12.1
 %
Average economic fuel cost per gallon ($)
1.77


1.22


45.1
 %
Aircraft at end of period
100


83


20.5
 %
Average daily aircraft utilization (hours)
11.9


12.8


(7.0)%

Average stage length (miles)
985


995


(1.0
)%
 
 
 
 
 
 


(1)
Excludes special items.
(2)
Excludes economic fuel expense and special items.



8





The Company is providing a reconciliation of GAAP financial information to non-GAAP financial information as it believes that non-GAAP financial measures provide management and investors the ability to measure the performance of the Company on a consistent basis. These non-GAAP financial measures have limitations as analytical tools. Because of these limitations, determinations of the Company's operating performance excluding unrealized gains and losses or special items should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.
Special Items
(unaudited)
 
Three Months Ended
 
March 31,
(in thousands)
2017

2016
Operating special items include the following (1):
 
 
 
Loss on disposal of assets
1,105

 
214

Special charges
4,776

 
16,202

Total operating special items
$
5,881

 
$
16,416


Reconciliation of Adjusted Operating Expense to GAAP Operating Expense
(unaudited)

 
Three Months Ended

March 31,
(in thousands, except CASM data in cents)
2017

2016
Total operating expenses, as reported
$
532,341

 
$
436,844

Less operating special items (1)
5,881

 
16,416

Adjusted operating expenses, non-GAAP (2)
526,460

 
420,428

Less: Economic fuel expense
139,782

 
85,982

Adjusted operating expenses excluding fuel, non-GAAP (3)
$
386,678

 
$
334,446


 
 
 
Available seat miles
6,875,899

 
5,983,005


 
 
 
CASM (cents)
7.74

 
7.30

Adjusted CASM (cents) (2)
7.66

 
7.03

Adjusted CASM ex-fuel (cents) (3)
5.62

 
5.59


(1)
Special items include loss on disposal of assets and special charges. Special charges are primarily related to lease termination costs.
(2)
Excludes operating special items.
(3)
Excludes operating special items and economic fuel expense as described in the "Reconciliation of Economic Fuel Expense to GAAP Fuel Expense" table below.

9




Reconciliation of Adjusted Net Income, Adjusted Pre-Tax Income, and Adjusted Operating Income to GAAP Net Income
(unaudited)


 
Three Months Ended
 
March 31,
(in thousands, except per share data)
2017
 
2016
Net income, as reported
$
31,935

 
$
61,920

Add: Provision for income taxes
19,887

 
36,140

Income before income taxes, as reported
51,822

 
98,060

Pre-tax margin, GAAP
8.8
%
 
18.2
%
Add operating special items (1)
$
5,881

 
$
16,416

Adjusted income before income taxes, non-GAAP (2)
57,703

 
114,476

Adjusted pre-tax margin, non-GAAP (2)
9.8
%
 
21.3
%
Add: Total other (income) expense
7,583

 
3,239

Adjusted operating income, non-GAAP(2)
65,286

 
117,715

Adjusted operating margin, non-GAAP(2)
11.0
%
 
21.9
%
 
 
 
 
Provision for adjusted income taxes (3)
22,144

 
42,190

Adjusted net income, non-GAAP (2)(3)
$
35,559

 
$
72,286

 
 
 
 
Weighted average shares, diluted
69,592

 
71,777

 
 
 
 
Adjusted net income per share, diluted (2)(3)
$0.51
 
$1.01
 
 
 
 
Total operating revenues
$
591,746

 
$
538,143











(1)
See "Special Items" for more details.
(2)
Excludes operating special items.
(3)
Assumes same marginal tax rate as is applicable to GAAP net income.










10




The Company believes economic fuel expense is the best measure of the effect fuel prices are currently having on its business, because it most closely approximates the net cash outflow associated with purchasing fuel used for its operations during the period. Economic fuel expense is defined as into-plane fuel expense, realized gains or losses on derivative contracts, plus the economic premium expense related to fuel option contracts in the period the option is benefiting. The key difference between aircraft fuel expense as recorded in its statement of operations and economic fuel expense is unrealized mark-to-market changes in the value of aircraft fuel derivatives outstanding and the timing of premium gain or loss recognition on its outstanding fuel option contracts. Many industry analysts evaluate airline results using economic fuel expense, and it is used in our internal management reporting.
Reconciliation of Economic Fuel Expense to GAAP Fuel Expense
(unaudited)
 
Three Months Ended
 
March 31,
(in thousands, except per gallon data)
2017
 
2016
Fuel expense



Aircraft fuel, as reported
$
139,782

 
$
85,982





Fuel gallons consumed
79,064


70,550





Economic fuel cost per gallon, non-GAAP
$
1.77


$
1.22


Calculation of Return on Invested Capital
(unaudited)
 
Twelve Months Ended
(in thousands)
March 31, 2017
Operating income
$
401,767

Add operating special items (1)
30,841

Adjustment for aircraft rent
206,543

Adjusted operating income (2)
639,151

Tax (37.1%) (3)
237,125

Adjusted operating income, after-tax
$
402,026

Invested capital:
 
Total debt
$
1,084,394

Book equity
1,428,346

Less: Unrestricted cash, cash equivalents & short-term investments
918,404

Add: Capitalized aircraft operating leases (7x Aircraft Rent)
1,445,801

Total invested capital
$
3,040,137

 
 
Return on invested capital (ROIC), pre-tax (2)
21.0
%
Return on invested capital (ROIC), after-tax (2)(3)
13.2
%

(1)
See "Special Items" for more details.
(2)
Excludes special items.
(3)
Assumes same marginal tax rate as is applicable to GAAP net income for the twelve months ended March 31, 2017 .


###

11