Moving to Slide 5. We reported adjusted EPS of $1.68 per share compared to $1.10 in the first quarter of 2018. This represents a 53% increase year-over-year. Adjusted EPS excludes the impact of the Asco acquisition, which includes deal transaction expenses and the impact from the FX derivative instrument to minimize the impact of euro currency fluctuations from the time we announced the deal until closing. The adjusted EPS improvement year-over-year was driven by higher production volumes and favorable model mix on the 737 program. The non-repeat of forward losses on the 787 program, higher margin on the A350 program as well as lower share count as we executed our share repurchases.
Turning to free cash flow on Slide 6. Adjusted free cash flow was strong for the quarter at $209 million compared to $118 million in the first quarter of 2018. This reflects a 77% increase year-over-year. Adjusted free cash flow excludes $8 million, which is the impact of the Asco acquisition. This amount is comprised of transaction payments and the cash-based on the FX derivative instrument. The adjusted free cash flow growth was driven by improved margin performance, better management of working capital and lower employee incentive compensation payments.
Turning next to capital deployment on Slide 7. In the first quarter, we repurchased approximately 800,000 shares for $75 million which leaves $925 million remaining under our current share repurchase authorization. We remain very confident in our ability to sustain operations and our long-term balanced cash deployment strategy remains unchanged. However, we feel it is prudent to pause additional share repurchases until we have further clarity surrounding the 737 MAX.
Now let's look at our segment performance. For our Fuselage segment results please turn to Slide 8. Fuselage segment revenue in the quarter was $1.1 billion, up 11% from the same period last year. This was due to higher production volumes on the 737 and 787 programs as well as higher revenue recognized on the 787 program. Operating margin for the quarter was 13% compared to 12.4% in the same period last year primarily driven by the non-repeat of forward losses on the 787 program and higher aftermarket activity. As planned, the first quarter absorbed most of the near-term costs associated with increasing rate as we have already begun the transition to 57 APM on the 737. As you know, the transition to the higher rate has been delayed.
Now turning to Slide 9 for our Propulsion segment results. In the first quarter, Propulsion revenue was $486 million up 23% compared to the same period last year primarily driven by higher production volume on the 737 program and higher revenue recognized on the 787 program. Operating margin for the quarter was solid at 19.7% compared to 13.4% in the first quarter of 2018 primarily due to favorable 737 model mix as we transition from the NG to the MAX. In Q1 over 75% of 737 deliveries were MAXs. In our Propulsion segment the 777x is going to be a very strong program with a large GE9X engine. The Nacelles and thrust reverser package will grow proportionately driving additional proportional revenue for Spirit. The 777x program is progressing well and executing according to plan. We have already delivered the first 8 shipments to Boeing including test units. This will be a very important program for Spirit.
For our Wing segment results, let's turn to Slide 10. Wind revenue in the quarter was $408 million, up 8% compared to the same period last year driven by higher production volume on the A320, 737, 777, and 787 as well as higher A350 wing deliveries. Operating margin for the quarter was 16.1% compared to 13.5% in the first quarter of 2018 primarily driven by performance on the A350 program.
As Tom mentioned, our previously issued 2019 financial guidance does not reflect the impacts of the 737 MAX production rate increased delay. Due to the uncertainty of the timing of the production schedule on the 737 program, we will issue new guidance at a future date. We're looking at all aspects of the business to lessen the financial impact of the delayed production rate increase. We will minimize overtime, reduce contractors and not hire for attrition. We're also tightening our belt to delay or reduce discretionary spend areas. At the same time, we will be thoughtful to maintain the resources necessary to transition smoothly to the previous planned higher production rates. We've taken a conservative and proactive approach to ensure adequate levels of liquidity. We have been prudent to maintain balance sheet flexibility and we are confident in our plans to manage working capital and pace fixed asset investments.
With that I will turn it back over to Tom for some closing comments.
Thomas C. Gentile -- President and Chief Executive Officer
Thanks Jose. And I'll make some closing comments before we take questions. This is a challenging time for our industry, and we're working with Boeing to support them as they focus on returning the MAX to service. Before the change to the MAX production schedule, we were executing to our previous schedule and delivered strong financial results for Q1. Overall, Spirit is performing very well across all of its programs and is well positioned for the future.
The changes in the MAX production schedule will result in us maintaining the production rate of 52 aircraft per month longer than previously planned. While this will result in fewer units produced this year, it will also give us more time to stabilize our production system and improve quality and efficiency. We have taken several actions to mitigate the impact of the new 737 production schedule. The cost actions, along with the working capital improvements and the changes to our capital expenditures will partially offset the impact of the MAX production changes on profit and cash flow. We will clarify the magnitude of these changes once we have better visibility to the production schedule after the MAX returns to service. Additionally, we are committed to closing and integrating Asco in Q2 and executing rate increases on the other programs specifically the A320 and the 787.
With that, we'll be happy to take your questions.
Operator
Thank you. We will now begin the question-and-answer session. (Operator Instructions) And today's first question comes from Myles Walton of UBS, please go ahead.
Louis H. Raffetto -- UBS -- Analyst
Good morning. This is Lou Raffetto on for Myles. Just wondering if you could dig a little bit deeper into the margin performance in fuselage. I know you talked about being down sequentially up year-over-year, but last year you did take a number of -- you had $15 million or so (inaudible) forward losses. So if we think about you staying at that 52 rate -- if you weren't going up, if you didn't have those extra cost for 57, where do you think you could have been?
Thomas C. Gentile -- President and Chief Executive Officer
Right, well, that was really the biggest driver of the fuselage margin performance was -- was on 737. And it had to do with the fact that we had already put all the costs in place for 57 aircraft per month, but we're still only delivering and getting paid for 52. In addition, in Q1 we were doing a lot of rehearsals for the 57 rate. That meant loading 3 units per day for several days in a row and we did that 6 or 7 times throughout the quarter. And it just, it drove more cost. So we expected that and also all of the cost reductions, a lot of them are basically sliding in over the course of the year. So we're on track for improved margin performance, but of course we're going to see some headwind now from the lower production rate at 52 versus 57 for the back half of the year.
The other thing I'd say about the fuselage margins, is that, it also had to do with the 787. We accelerated revenue based on the way we changed the pricing structure with Boeing on the 787 into this quarter from future periods and the 787 as you know is a zero margin program. And so, that was also a headwind on margin for the fuselage. But again, as we go forward for the year, we're going to get the cost down and align it to the 52, so that will be -- contractors will go down significantly over time, significantly -- and actually well below the rate that we had previously planned. And as Jose mentioned, we're not going to backfill on attrition, so the direct labor will come down as well, and we'll start to see margin improvement in the fuselage segment over the course of the year.
Louis H. Raffetto -- UBS -- Analyst
Okay, great. Thank you. Just one quick follow-up the unallocated costs was negative $8 million, was there another insurance proceed in there or anything else unique?
Jose I. Garcia -- Senior Vice President, Chief Financial Officer
No, there was a gain on the settlement of a long-standing warranty dispute, which we had reserved and the settlement was less than what we had in the reserved.
Thomas C. Gentile -- President and Chief Executive Officer
So it's just a release of that reserve.
Jose I. Garcia -- Senior Vice President, Chief Financial Officer
Yes. So we had a benefit there.
Louis H. Raffetto -- UBS -- Analyst
Okay, perfect. Thank you very much.
Operator
And our next question today comes from Doug Harned of Bernstein. Please go ahead.
Douglas Harned -- Sanford C. Bernstein & Company -- Analyst
Thank you. Good morning.
Thomas C. Gentile -- President and Chief Executive Officer
Good morning, Doug.
Jose I. Garcia -- Senior Vice President, Chief Financial Officer
Good morning.
Douglas Harned -- Sanford C. Bernstein & Company -- Analyst
If -- when you look at that Propulsion and Wing Systems, I know you talked about the strong margins you had, model mix in propulsion on the 737 and the Wing Systems A350, those factors are, I mean, those are only going to get better over time I would assume. So if you were to, for the moment, take away the issues around the MAX timing, I mean, structurally are these units set up to give the better kinds of margins that you're seeing in Q1?
Thomas C. Gentile -- President and Chief Executive Officer
Yes, exactly, Doug. We expect those trends to continue. And the simple reason is, when you look at the changes in the MAX and the 777x, a lot of the changes were bigger engines in both cases, which require bigger pylons and also bigger thrust reversers. And in the case of the 777x we also build the entire nacelle including the inlet and the fan cowls. And so the work packages grew substantially on those. And so, we've put a lot of effort in terms of our cost reduction programs in those areas.
And so, as we go forward, we will see better margins. In fact we signaled that in one of our previous calls, we said that, you're going to see the margins on propulsion go up faster than the wing and the fuselage. And that's going to be a key driver of our margin improvement not only this year, but into next year and beyond.
Douglas Harned -- Sanford C. Bernstein & Company -- Analyst
And just to make sure, some of the issues you've had in fuselage where you had the extra cost for the 57 a month rate, those should also exist in propulsion and wing to some extent. So is that something, I mean, is that -- was that a negative in there that we -- be aware of?
Thomas C. Gentile -- President and Chief Executive Officer
You're absolutely right, they did exist. It's just that the overall benefits in those areas are offset at more than they did in fuselage. But again we've got a lot of our cost reduction actions on fuselage that will be sliding in over the course of the year. So we expected Q1 to be a little bit lower and then for the margins to gain momentum as we went through the year. We'll still see that, although we will have the headwind of the MAX production change that I described before.
Douglas Harned -- Sanford C. Bernstein & Company -- Analyst
Okay. Well, very good. Thank you.
Thomas C. Gentile -- President and Chief Executive Officer
Thanks Doug.
Operator
And our next question today comes from Carter Copeland of Melius Research. Please go ahead. Hello, Carter...
Thomas C. Gentile -- President and Chief Executive Officer
Carter, you're there?
Operator
Your line is open.
Carter Copeland -- Melius Research LLC -- Analyst
Sorry, I was on mute.
Thomas C. Gentile -- President and Chief Executive Officer
Okay. We couldn't hear you. So...
Carter Copeland -- Melius Research LLC -- Analyst
You got me?
Thomas C. Gentile -- President and Chief Executive Officer
Yeah.
Carter Copeland -- Melius Research LLC -- Analyst
I've apparently still not learned how to use the mute button. So...
Thomas C. Gentile -- President and Chief Executive Officer
I knew you were there and I knew you were on mute. So...
Carter Copeland -- Melius Research LLC -- Analyst
No, that's great. So look, I wonder if you could just give us a little bit of detail on the propulsion, the mix impact in propulsion that you called out. Just what was going on there and then any commentary on the A350 profitability delta that you mentioned. So both those would be helpful. Thanks.
Thomas C. Gentile -- President and Chief Executive Officer
Okay, well, two things on 777x. The first is what I was just saying to Doug is that, the propulsion package just got bigger proportionately with the bigger engine. So if you look at the GE90-115B it was 128 inches in diameter. The GE9X for the 777x, the 777-9 is 132 inches diameter. So it's bigger, but everything grows proportionately. So if you look at the inlet and the fan cowls and the thrust reverser, it's just much bigger. And we have some pictures where we see people standing in front of them and it's significantly larger when you look at the 777-9 compared to the 777-300ER propulsion package.
So that's one thing is that, the work package is just bigger, significantly bigger. And we've been able to drive a lot of cost reduction as we've made the transition. The other fact to know about the 777 is, we did start to see a recovery in the volume in Q1 versus 2018. So there were 13 shipments versus 9. And again, as we get through this transition, we expect the 777 to get back up to higher levels of production per month. Perhaps not up to the 8 that we were at, but back to 5 from where we were. So those are the 2 things that are going to drive 777x. In terms of the A350, that is just something that we have been working on as we go forward, we are taking cost out of the program through a lot of the efforts that we've made in terms of supply chain. And those are now kicking in, not only on the Boeing programs, but also on the Airbus programs.
And then we've also just made some improvements in our factory productivity. We've invested in some new capital and that's driving productivity as well as improved quality and efficiency. So those are the things that are driving the A350 program, improved profitability.
Carter Copeland -- Melius Research LLC -- Analyst
Okay, great. Thanks for the color. I'll let somebody else ask.
Thomas C. Gentile -- President and Chief Executive Officer
Okay, thanks Cart.
Operator
And our next question today comes from Rajeev Lalwani of Morgan Stanley. Please go ahead.
Rajeev Lalwani -- Morgan Stanley -- Analyst
Good morning, gentlemen.
Thomas C. Gentile -- President and Chief Executive Officer
Good morning, Rajeev.
Rajeev Lalwani -- Morgan Stanley -- Analyst
Tom, I wanted to come back to some of the comments you made around the cost for 57, et cetera. Can you provide a little bit more color as to how quickly you can get some of those costs out? Can we see that as early as 2Q or is it really going to be a steady ramp through the year? And then you didn't talk too much about some of the surge costs that you were incurring as you were trying to catch up, did that show up in 1Q and is that an opportunity also where we can see maybe a quicker catch-up in to 2Q and so on?
Thomas C. Gentile -- President and Chief Executive Officer
Yes, absolutely. First of all, in terms of getting the cost down on the 737 production, we've already switched to those 3 lines that I mentioned and we have these buffer days. So those buffer days also act as unscheduled days where we can take our entire workforce that's present and basically apply them to travel work or fixing various quality issues that may have emerged.
And so, what we used to use for overtime and contractors will now be taken up with those unscheduled days with the active workforce. So we will start to see the contractors move down very quickly, as well as the overtime well below our previously planned levels. And so, that is going to start happening, so you will see an impact in Q2 on that. We've also identified as we mentioned a number of actions that we're taking on discretionary costs like purchase services, travel, as well as all of the other discretionary expenses. And so, this event has really instigated a significant activity in that area. So that's going to come down as well. And that's already started. Those changes are already under way.
The resources I mentioned in Q1 that were related to surge, again those go away now. Now that we aren't going to go to 57, we don't need those surge resources and of course the rehearsals stopped. So we're not going to do any more 57 rehearsals until much later in the year when we start to get ready to go back to 57. So all those things mean that, I think you'll start to see the improvements in Q2. And we've laid out all of the cost actions so that they kick in over the course of the year to mitigate and offset the impact of the MAX production changes.
Rajeev Lalwani -- Morgan Stanley -- Analyst
Thanks, Tom.
Thomas C. Gentile -- President and Chief Executive Officer
Okay. Thanks, Rajeev.
Operator
And our next question today comes from Seth Seifman of JPMorgan. Please go ahead.
Seth Seifman -- JPMorgan -- Analyst
Thanks very much and good morning.
Thomas C. Gentile -- President and Chief Executive Officer
Good morning.
Seth Seifman -- JPMorgan -- Analyst
I wonder if you could talk a little bit about cash flow, which was quite strong in the quarter. Now that payables were up and you know that had been a strong source of cash last year and you talked about some reversal on that front in 2019. Is that still in front of us?
Thomas C. Gentile -- President and Chief Executive Officer
Yeah, well, let me, I'm going to ask Jose to answer that because he's come on and really focused on this area and helped drive the strong cash flow performance. So Jose could you?
Jose I. Garcia -- Senior Vice President, Chief Financial Officer
Yeah, so, I mean, really the number one driver was improved margins. So, we had, even though the margin rate improvement was modest in fuselage, in terms of dollars, we did perform a lot better than last year. We also had a big benefit on the employee incentive compensation, which was lower and this was a result of the results in 2018. But also around working capital in general, we have a good momentum going into the year around collections, billing quality, getting past due resolved, payables especially days outstanding on payables were really moving our supply chain to longer payment terms in line with the industry, better inventory management, which we're in early days. And obviously these reduction in rate will put some pressure on some of our inventory target as we help the supply chain stay healthy. But we do have a big playbook, I would say, around all the working capital items that were. You probably noticed too that CapEx was slightly less, so that's the effect of the CapEx delay programs that we put in place, also starting to show in the first quarter.
Thomas C. Gentile -- President and Chief Executive Officer
So from the standpoint of cash we have more levers over the course of the year. So we expect to be able to mitigate, most of the impact from the 737 production slowdown. We're going to see more headwinds on the profit side, but on cash, we've got good momentum after Q1, and we're going to continue to drive the initiatives that Jose just described.
Seth Seifman -- JPMorgan -- Analyst
Excellent. Thank you very much.
Operator
And our next question today comes from Ronald Epstein of Bank of America Merrill Lynch. Please go ahead.
Kristine Liwag -- Bank of America Merrill Lynch -- Analyst
Hi, good morning guys, it's Kristine Liwag calling for Ron.
Thomas C. Gentile -- President and Chief Executive Officer
Good morning.
Jose I. Garcia -- Senior Vice President, Chief Financial Officer
Hello.
Kristine Liwag -- Bank of America Merrill Lynch -- Analyst
Hey, Tom for the 787 and A350, how should we think about unit cash profit for each of these programs? And how are you trending versus your expected learning curve?
Thomas C. Gentile -- President and Chief Executive Officer
Right. Well, 787 is still in a forward loss position and it will be up to line unit 1405. So it's a zero margin program and will remain at that level until then. At that point, as we said last year when we signed our new agreement with Boeing, from 1405 up to line unit 2205 we've put in place pricing that will exceed cost. Now. initially it will just exceed what the projected cost is at line unit 1405. But our goal is to continue working with Boeing to take cost down on that program. So we get up to healthier margins, but that's all out beyond 1405 which impacts in about 2022, mid-2022.
With regard to A350 as you recall, when we did the global settlement with Airbus back in 2016, we had at that point about $700 million of deferred, with the forward losses that we had announced was about $250 million. And so, the goal was to collect basically $400 million over the last 700 units. And we're more or less on track to that. There have been some changes and adjustments along the ways, but when we went to the new revenue recognition system, ASC 606 we basically reset that program and it became cash flow positive. And it's cash flow positive now and generating positive margins.
Team is working of course very hard to improve productivity and efficiency to get the margins higher, but it's contributing positively right now to our overall results. So we're pleased with that.
Kristine Liwag -- Bank of America Merrill Lynch -- Analyst
That's great. And then, in the quarter, you recorded a few favorable changes on forward loss programs in across all your segments in fuselage, propulsion and wing. Can you discuss what's driving that? And are these related to the contract changes that you mentioned? Or were these adjustments because of better execution?
Thomas C. Gentile -- President and Chief Executive Officer
It was really better execution. It was mostly related to the 787 program and the team has been driving supply chain savings, process improvements, factory automation, data analytics. So whole series of initiatives that just drove improved performance, which resulted in the reversal of the forward loss and the improvement in that program.
Kristine Liwag -- Bank of America Merrill Lynch -- Analyst
Great, thank you.
Thomas C. Gentile -- President and Chief Executive Officer
Welcome.
Operator
And our next question today comes from Sheila Kahyaoglu of Jefferies. Please go ahead.
Sheila Kahyaoglu -- Jefferies -- Analyst
Hi, good morning and thank you.
Thomas C. Gentile -- President and Chief Executive Officer
Good morning Sheila.
Sheila Kahyaoglu -- Jefferies -- Analyst
I guess you're deferring some non-essential CapEx. Can we talk about, what that means for maybe other programs potentially. And just kind of on a somewhat related note, when we think about the NMA how has the 737 if at all changed your discussion in that aircraft? Thank you.
Thomas C. Gentile -- President and Chief Executive Officer
Right. With regard to the capital expenditure, again with a ve