Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. Aircastle LTD (1362988) 10-Q published on May 03, 2018 at 5:17 pm
Reporting Period: Mar 30, 2018
As part of the Company’s adoption of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), we have reclassified Gain on sale of flight equipment from Other income (expense) to Revenues on our Consolidated Statement of Income as of March 31, 2018. We believe this better reflects the sale of flight equipment as part of our ordinary activities and conforms our presentation to those of our publicly traded peers. The presentation for the three months ended March 31, 2017 has also been reclassified to conform to the current period presentation:
Effective January 1, 2018, the Company adopted FASB ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) and related updates, as noted above. Lease contracts within the scope of Accounting Standards Codification (“ASC”) 840, Leases, are specifically excluded from ASU No. 2014-09. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. The update is applied using the modified
retrospective approach. The standard did not have a material impact on our consolidated financial statements and related disclosures.
The Company’s effective tax rate (“ETR”) for the three months ended March 31, 2018 was (1.5)%, compared to 4.4%, for the three months ended March 31, 2017. First quarter 2018 included a tax benefit of $2,779 related to the Singapore rate reduction from 10% to 8%, which was treated as a discrete item. Excluding this tax benefit, the ETR would have been 3.6%. Movements in the ETR are generally caused by changes in the proportion of the Company’s pre-tax earnings in taxable and non-tax jurisdictions.
Gain on sale of flight equipment increased by $5.0 million to $5.8 million for the three months ended March 31, 2018, as compared to gains of $0.8 million for the same period in 2017. During the three months ended March 31, 2018, we sold four aircraft as compared to the sale of one aircraft during the same period in 2017.
Cash flow provided by operations was $142.4 million and $131.6 million for the three months ended March 31, 2018 and 2017, respectively. The increase in cash flow provided by operations of $10.8 million for the three months ended March 31, 2018 versus the same period in 2017 was primarily a result of a $9.4 million increase in cash received from maintenance revenue and a $3.4 million net increase in cash from lease rentals and finance and sales-type leases. These inflows were offset by a $3.0 million increase in cash paid for taxes.