Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Income Taxes (Tables)

v3.6.0.2
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2016
Income Taxes [Abstract]  
Summary Of Income Tax Expense (Benefit) By Tax Jurisdiction

The following table presents our provision for income taxes by tax jurisdiction for the years ended December 31, 2016,  2015 and 2014:



 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



Year Ended December 31,



2016

 

2015

 

2014

Deferred tax expense (benefit)

 

 

 

 

 

 

 

 

Ireland

$

141,364 

 

$

151,623 

 

$

87,147 

The Netherlands

 

(8,346)

 

 

(7,453)

 

 

1,339 

United States of America

 

(41,163)

 

 

(65,341)

 

 

26,267 

Other

 

14,124 

 

 

22,130 

 

 

(5,744)



 

105,979 

 

 

100,959 

 

 

109,009 



 

 

 

 

 

 

 

 

Deferred tax expense (benefit) related to an increase (decrease) in changes in valuation allowance of deferred tax assets

 

 

 

 

 

 

 

 

Ireland

 

1,562 

 

 

 —

 

 

 —

The Netherlands

 

12,843 

 

 

13,915 

 

 

 —

United States of America

 

54,056 

 

 

10,074 

 

 

 —

Other

 

(13,100)

 

 

(13,922)

 

 

6,850 



 

55,361 

 

 

10,067 

 

 

6,850 



 

 

 

 

 

 

 

 

Current tax expense (benefit)

 

 

 

 

 

 

 

 

Ireland

 

4,730 

 

 

(99)

 

 

229 

The Netherlands

 

1,164 

 

 

37,512 

 

 

5,290 

United States of America

 

3,166 

 

 

39,358 

 

 

15,553 

Other

 

3,096 

 

 

2,008 

 

 

442 



 

12,156 

 

 

78,779 

 

 

21,514 

Provision for income taxes

$

173,496 

 

$

189,805 

 

$

137,373 



Reconciliation Of Statutory Income Tax Expense/(Benefit)

The following table provides a reconciliation of the statutory income tax expense to provision for income taxes for the years ended December 31, 2016,  2015 and 2014:  



 

 

 

 

 

 

 

 

 



Year Ended December 31,

 



2016

 

2015 (a)

 

2014 (a)

 

Income tax expense at statutory income tax rate of 12.5%

$

150,050 

 

$

170,712 

 

$

114,612 

 



 

 

 

 

 

 

 

 

 

Non-taxable items (permanent differences)

 

29,057 

(b)

 

29,555 

(c)

 

15,010 

(d)

Foreign rate differential

 

(5,611)

 

 

(10,462)

 

 

7,751 

 



 

23,446 

 

 

19,093 

 

 

22,761 

 

Provision for income taxes

$

173,496 

 

$

189,805 

 

$

137,373 

 

                   



(a)

Effective February 1, 2016, we moved our headquarters and executive officers from Amsterdam to Dublin, and as of February 1, 2016, we became tax resident in Ireland. Accordingly, we have updated the figures for the years ended December 31, 2015 and 2014 as compared to those previously reported in the financial statements contained in our 2015 annual report on Form 20-F to reflect the permanent differences being taxed at the Irish statutory rate of 12.5% rather than the Dutch statutory rate of 25%.

(b)

The 2016 non-taxable items included non-deductible share-based compensation in Ireland and in the Netherlands, non-deductible intercompany interest allocated to the United States of America and a valuation allowance taken in respect of U.S., Dutch and Irish tax losses. It also included the non-taxable income arising from aircraft with a higher tax basis in general.

(c)

The 2015 non-taxable items included the non-deductible intercompany interest allocated to the United States of America, non-deductible share-based compensation in the Netherlands, non-deductible costs relating to the transfer of certain functions from the Netherlands to Ireland, and a valuation allowance taken in respect of U.S. and Dutch tax losses. It also included the non-taxable income arising from aircraft with a higher tax basis in general.

(d)

The 2014 non-taxable items included the non-deductible intercompany interest allocated to the United States of America, non-deductible share-based compensation in the Netherlands and the non-deductible transaction costs from the ILFC Transaction. It also included the non-taxable income arising from aircraft with a higher tax basis in general.

Schedule Of Global Tax Activities

The following tables present our foreign rate differential by tax jurisdiction for the years ended December 31, 2016,  2015 and 2014:





 

 

 

 

 

 

 

 

 

 

 



Year Ended December 31, 2016



Pre-tax income (loss)

 

Local statutory tax rate (a)

 

Variance to Irish statutory tax rate of 12.5%

 

Tax variance as a result of global activities (b)

Tax jurisdiction

 

 

 

 

 

 

 

 

 

 

 

Ireland

$

1,151,387 

 

12.5 

%

 

0.0 

%

 

$

 —

The Netherlands

 

37,580 

 

25.0 

%

 

12.5 

%

 

 

4,698 

United States of America

 

44,238 

 

36.3 

%

 

23.8 

%

 

 

10,529 

Isle of Man

 

181,286 

 

0.0 

%  

 

(12.5)

%  

 

 

(22,661)

Other

 

18,989 

 

22.1 

%  

 

9.6 

%  

 

 

1,823 



$

1,433,480 

 

 

 

 

 

 

 

$

(5,611)

Non-taxable items (c)

 

(233,084)

 

 

 

 

 

 

 

 

 

Income from continuing operations before income tax

$

1,200,396 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Year Ended December 31, 2015 (d)



Pre-tax income (loss)

 

Local statutory tax rate (a)

 

Variance to Irish statutory tax rate of 12.5%

 

Tax variance as a result of global activities (b)

Tax jurisdiction

 

 

 

 

 

 

 

 

 

 

 

Ireland

$

1,212,190 

 

12.5 

%

 

0.0 

%

 

$

 —

The Netherlands

 

175,897 

 

25.0 

%

 

12.5 

%

 

 

21,987 

United States of America

 

(43,825)

 

36.3 

%

 

23.8 

%

 

 

(10,430)

Isle of Man

 

181,118 

 

0.0 

%  

 

(12.5)

%  

 

 

(22,640)

Other

 

77,671 

 

13.3 

%  

 

0.8 

%  

 

 

621 



$

1,603,051 

 

 

 

 

 

 

 

$

(10,462)

Non-taxable items (e)

 

(237,352)

 

 

 

 

 

 

 

 

 

Income from continuing operations before income tax

$

1,365,699 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Year Ended December 31, 2014 (d)



Pre-tax income (loss)

 

Local statutory tax rate (a)

 

Variance to Irish statutory tax rate of 12.5%

 

Tax variance as a result of global activities (b)

Tax jurisdiction

 

 

 

 

 

 

 

 

 

 

 

Ireland

$

694,605 

 

12.5 

%

 

0.0 

%

 

$

 —

The Netherlands

 

26,081 

 

25.0 

%

 

12.5 

%

 

 

3,260 

United States of America

 

95,585 

 

38.3 

%

 

25.8 

%

 

 

24,661 

Isle of Man

 

167,689 

 

0.0 

%

 

(12.5)

%

 

 

(20,961)

Other

 

7,528 

 

23.0 

%  

 

10.5 

%  

 

 

791 



$

991,488 

 

 

 

 

 

 

 

$

7,751 

Non-taxable items (f)

 

(74,590)

 

 

 

 

 

 

 

 

 

Income from continuing operations before income tax

$

916,898 

 

 

 

 

 

 

 

 

 

                   



(a)

The local statutory income tax expense for our significant tax jurisdictions (Ireland, the Netherlands, the United States of America and Isle of Man) does not differ from the actual income tax expense.

(b)

The tax variance as a result of global activities is primarily caused by our operations in countries with a higher or lower statutory tax rate than the statutory tax rate in Ireland.

(c)

The 2016 non-taxable items included non-deductible share-based compensation in Ireland and in the Netherlands, non-deductible intercompany interest allocated to the United States of America and a valuation allowance taken in respect of U.S., Dutch and Irish tax losses. It also included the non-taxable income arising from aircraft with a higher tax basis in general.

(d)

Due to our migration from the Netherlands to Ireland as of February 1, 2016, we have updated the tax rate reconciliation for the years ended December 31, 2015 and 2014. The tax variance as a result of the global activities has been calculated as the difference between the local statutory tax rate in the relevant jurisdictions and the Irish statutory tax rate of 12.5%.

(e)

The 2015 non-taxable items included the non-deductible intercompany interest allocated to the United States of America, non-deductible share-based compensation in the Netherlands, non-deductible costs relating to the transfer of certain functions from the Netherlands to Ireland, and a valuation allowance taken in respect of U.S. and Dutch tax losses. It also included the non-taxable income arising from aircraft with a higher tax basis in general.

(f)

The 2014 non-taxable items included the non-deductible intercompany interest allocated to the United States of America, non-deductible share-based compensation in the Netherlands and the non-deductible transaction costs from the ILFC Transaction. It also included the non-taxable income arising from aircraft with a higher tax basis in general.

Deferred Tax Liabilities And Assets

The following tables provide details regarding the principal components of our deferred income tax liabilities and assets by jurisdiction as of December 31, 2016 and 2015:  





 

 

 

 

 

 

 

 

 

 

 

 

 

 



As of December 31, 2016



Ireland

 

The
Netherlands

 

United States
of America

 

Other

 

Total

Depreciation/Impairment

$

(1,030,901)

 

$

8,547 

 

$

(16,322)

 

$

(63)

 

$

(1,038,739)

Intangibles

 

(6,353)

 

 

 —

 

 

(16,242)

 

 

 —

 

 

(22,595)

Interest expense

 

 —

 

 

 —

 

 

(588)

 

 

 —

 

 

(588)

Accrued maintenance liability

 

(6,028)

 

 

 —

 

 

12,810 

 

 

 —

 

 

6,782 

Obligations under capital leases and debt obligations

 

(3,151)

 

 

 —

 

 

 —

 

 

 —

 

 

(3,151)

Investments

 

 —

 

 

 —

 

 

(12,641)

 

 

 —

 

 

(12,641)

Deferred losses

 

 —

 

 

 —

 

 

66,119 

 

 

 —

 

 

66,119 

Accrued expenses

 

 —

 

 

 —

 

 

13,942 

 

 

 —

 

 

13,942 

Valuation allowance

 

(1,562)

 

 

(26,758)

 

 

(89,130)

 

 

(9,911)

 

 

(127,361)

Losses and credits forward

 

666,214 

 

 

26,759 

 

 

92,215 

 

 

20,693 

 

 

805,881 

Other

 

(46,133)

 

 

(4,399)

 

 

5,539 

 

 

(6,190)

 

 

(51,183)

Net deferred income tax (liabilities) assets

$

(427,914)

 

$

4,149 

 

$

55,702 

 

$

4,529 

 

$

(363,534)







 

 

 

 

 

 

 

 

 

 

 

 

 

 



As of December 31, 2015



Ireland

 

The
Netherlands

 

United States
of America

 

Other

 

Total

Depreciation/Impairment

$

(876,219)

 

$

11,580 

 

$

5,393 

 

$

963 

 

$

(858,283)

Intangibles

 

(10,071)

 

 

 —

 

 

(18,763)

 

 

 —

 

 

(28,834)

Interest expense

 

 —

 

 

 —

 

 

(5,435)

 

 

 —

 

 

(5,435)

Accrued maintenance liability

 

(7,003)

 

 

 —

 

 

11,880 

 

 

 —

 

 

4,877 

Obligations under capital leases and debt obligations

 

(3,411)

 

 

 —

 

 

 —

 

 

 —

 

 

(3,411)

Investments

 

 —

 

 

 —

 

 

(10,155)

 

 

 —

 

 

(10,155)

Deferred losses

 

 —

 

 

 —

 

 

66,543 

 

 

 —

 

 

66,543 

Accrued expenses

 

 —

 

 

 —

 

 

14,554 

 

 

 —

 

 

14,554 

Valuation allowance

 

 —

 

 

(13,915)

 

 

(35,074)

 

 

(23,011)

 

 

(72,000)

Losses and credits forward

 

630,302 

 

 

13,915 

 

 

32,342 

 

 

39,282 

 

 

715,841 

Other

 

(20,647)

 

 

(2,936)

 

 

7,350 

 

 

(11,651)

 

 

(27,884)

Net deferred income tax (liabilities) assets

$

(287,049)

 

$

8,644 

 

$

68,635 

 

$

5,583 

 

$

(204,187)



Summary Of Valuation Allowance

The following table presents the movements in the valuation allowance for deferred income tax assets during the years ended December 31, 2016 and 2015:





 

 

 

 

 



 

 

 

 

 



Year Ended December 31,



2016

 

2015

Valuation allowance at beginning of period

$

72,000 

 

$

61,933 

Increase of allowance to income tax provision

 

55,361 

 

 

10,067 

Valuation allowance at end of period

$

127,361 

 

$

72,000