##### Table of Contents





UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C. 20549
    FORM 10-K
 ANNUAL REPORT
    (Mark One)
 x
    ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934
  For the fiscal year ended December 31,
    2009
  OR
  o
    TRANSITION REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934
  For the transition period from _______________ to
    _______________
 Commission file number 001-31616
  INTERNATIONAL LEASE FINANCE
    CORPORATION
 (Exact name of registrant as
    specified in its charter)
  California

22-3059110(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)10250 Constellation Blvd., Suite 3400
    Los Angeles, California(Address of principal executive
    offices)

90067(Zip Code)       Title of each class

Name of each exchange on which registered6.625% Notes due November 15, 2013

New York Stock Exchange      x o
  o x
  x o
  Regulation S-T o o
   Regulation S-K Form 10-K Form 10-K. x
  12b-2
 Large accelerated
    filer o

Accelerated
    filer oNon-accelerated
    filer x

Smaller reporting
    company o(Do not check if a smaller reporting company)   o x
    Form 10-K




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##### 






INTERNATIONAL
    LEASE FINANCE CORPORATION
  2009
    FORM 10-K
    ANNUAL REPORT
    TABLE OF CONTENTS
  PagePART IItem 1.

Business


1Item 1A.

Risk Factors


7Item 1B.

Unresolved Staff Comments


13Item 2.

Properties


13Item 3.

Legal Proceedings


15PART IIItem 5.

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


16Item 6.

Selected Financial Data


16Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


17Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk


36Item 8.

Financial Statements and Supplementary Data


37Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


37Item 9A(T).

Controls and Procedures


37Item 9B.

Other Information


38PART IIIItem 14.

Principal Accountant Fees and Services


39PART IVItem 15.

Exhibits and Financial Statement Schedules


39EX-10.13EX-10.14EX-12EX-23EX-31.1EX-31.2Ex-32.1




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##### Table of Contents



PART
    I Item
    1.  Business  General
  and/or
  Properties  Flight
    Equipment Properties 
    Commitments.
      
    During 2009, we entered into two credit agreements aggregating
    $3.9 billion with AIG Funding, Inc., a subsidiary of our
    parent (AIG Funding), secured by a portfolio of
    aircraft and other assets related to the pledged aircraft.
    We guaranteed the repayment of AIGs obligations under its
    revolving credit facility and guarantee and pledge agreement
    with the Federal Reserve Bank of New York (FRBNY),
    as amended, (the FRBNY Credit Agreement) up to an
    amount equal to the aggregate outstanding balance of the loans
    from AIG Funding.
    We are currently seeking secured financings from third parties.
    We are currently exploring sales of portfolios of aircraft; the
    potential impairment or realized loss could be material to our
    results of operations for an individual period.
    We may need to seek additional funding from AIG, which funding
    would be subject to the consent of the FRBNY; AIG intends to
    provide support to us through February 28, 2011, to the extent
    that secured financing, aircraft sales and other sources of
    funds are not sufficient to meet liquidity needs.
    Without additional support from AIG or if we fail to obtain
    secured financing from a third party lender, in the future there
    could exist doubt concerning our ability to continue as a going
    concern.  Managements Discussion and
    Analysis of Financial Condition and Results of
    Operations  Consideration of ILFCs Ability to
    Continue as a Going Concern
   1




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##### Table of Contents



(310) 788-1999, (310) 788-1990,
  .
    Managements Discussion and Analysis of Financial Condition
    and Result of Operations  Our Relationship
    with AIG.
  Recent
    Developments
    Aircraft
    Leasing
    Properties  Flight
    Equipment
   2




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##### Table of Contents



. Managements Discussion
    and Analysis of Financial Condition and Result of
    Operations  Overview  Aircraft
    Industry.
  Flight
    Equipment Marketing
   3




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##### Table of Contents



Fleet
    Management Services
    Financing/Source
    of Funds
  Managements Discussion and Analysis of Financial
    Condition and Results of Operations  Consideration of
    ILFCs Ability to Continue as a Going Concern.
  Customers
    Customers by Region2009


2008


2007Number





Number





Numberof





of





ofRegion

Customers (a)


%


Customers (a)


%


Customers (a)


%Europe


80



44.9
%


84



48.3
%


82



48.0
%Asia and the Pacific


45



25.3



41



23.5



38



22.2The Middle East and Africa


24



13.5



19



10.9



16



9.4U.S. and Canada


18



10.1



17



9.8



25



14.6Central and South America and Mexico


11



6.2



13



7.5



10



5.8178



100.0
%


174



100
%


171



100
%    (a)
    A customer is an airline with its own operating certificate.  Notes to Consolidated Financial Statements
 4




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##### Table of Contents



2009


2008


2007Amount


%


Amount


%


Amount


%(Dollars in thousands)Europe

$
2,353,979



44.6
%

$
2,241,742



45.3
%

$
2,060,196



44.9
%Asia and the Pacific


1,583,389



30.0



1,432,252



29.0



1,229,141



26.8The Middle East and Africa


638,747



12.1



558,553



11.3



528,095



11.5U.S. and Canada


453,976



8.6



444,921



9.0



536,313



11.7Central and South America and Mexico


245,128



4.7



265,980



5.4



233,866



5.1$
5,275,219



100
%

$
4,943,448



100
%

$
4,587,611



100
%     2009


2008


2007Amount


%


Amount


%


Amount


%(Dollars in thousands)China

$
903,361



17.1
%

$
835,722



16.9
%

$
714,181



15.6
%France


537,698



10.2



515,165



10.4



448,538



9.8     Competition
    Government
    Regulation
             5




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##### Table of Contents



(i) (ii)
        Employees
    Risk
    Factors
  Insurance
       6




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##### Table of Contents



Code of
    Ethics and Conduct
  www.aigcorporate.com
  Forward-Looking
    Statements
  Form 10-K Form 10-K Risk
    Factors Form 10-K.
 Item
    1A.  Risk Factors   7




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##### Table of Contents



Quantitative and Qualitative Disclosures About Market
    Risk
  Liquidity
    Risk
    Managements Discussion and Analysis
    of Financial Condition and Results of Operations 
    Debt Financings
         8




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##### Table of Contents



Borrowing
    Risks
  Credit Ratings Downgrade Risk
  (i) (ii) (iii)
    Interest Rate Risk
      Relationship
    with AIG
  AIG as Our Parent Company
  Restrictive Covenants on Our Operations
 9




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##### Table of Contents




    incur debt;
    encumber our assets;
    dispose of certain assets;
    enter into sale-leaseback transactions;
    make equity or debt investments in other parties;
    make capital expenditures; and
    pay dividends and distributions.    AIG as Our Counterparty of Derivatives
  AIG Going Concern Consideration
  Key
    Personnel Risk
   10




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##### Table of Contents



Overall
    Airline Industry Risk
    
    Demand for air travel
    Competition between carriers
    Fuel prices and availability
    Labor costs and stoppages
    Maintenance costs
    Employee labor contracts
    Air traffic control infrastructure constraints
    Airport access
    Insurance costs and coverage
    Heavy reliance on automated systems
    Geopolitical events
    Security, terrorism and war
    Worldwide health concerns
    Equity and borrowing capacity
    Environmental concerns
    Government regulation
    Interest rates
    Overcapacity
    Natural disasters    
    lower demand for the aircraft in our fleet and reduced market
    lease rates and lease margins;
    a higher incidence of lessee defaults, lease restructurings and
    repossessions affecting net income due to maintenance,
    consulting and legal costs associated with the repossessions, as
    well as lost revenue for the time the aircraft are off lease and
    possibly lower lease rates from the new lessees;
    a higher incidence of situations where we engage in
    restructuring lease rates for our troubled customers which
    reduces overall lease revenue;
    an inability to immediately place new and used aircraft on
    commercially acceptable terms when they become available through
    our purchase commitments and regular lease terminations,
    resulting in lower lease margins due to aircraft not earning
    revenue and resulting in payments for storage, insurance and
    maintenance; and
    a loss if our aircraft is damaged or destroyed by an event
    specifically excluded from the insurance policy such as dirty
    bombs, bio-hazardous materials and electromagnetic pulsing.  Lessee
    Non-Performance Risk
  Overall Airline Industry Risk
    Airframe,
    Engine and Other Manufacturer Risks
   11




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
    missed or late delivery of aircraft ordered by us and an
    inability to meet our contractual obligations to our customers,
    resulting in lost or delayed revenues, lower growth rates and
    strained customer relationships;
    an inability to acquire aircraft and related components on terms
    which will allow us to lease those aircraft to customers at a
    profit, resulting in lower growth rates or a contraction in our
    fleet;
    a marketplace with too many aircraft available, creating
    downward pressure on demand for the aircraft in our fleet and
    reduced market lease rates;
    poor customer support from the manufacturers of aircraft and
    components resulting in reduced demand for a particular
    manufacturers product, creating downward pressure on
    demand for those aircraft in our fleet and reduced market lease
    rates for those aircraft; and
    reduction in our competitiveness due to deep discounting by the
    manufacturers, which may lead to reduced market lease rates and
    may impact our ability to remarket or sell aircraft in our fleet.  Aircraft
    Related Risks
  Residual Value (i) (ii) (iii) Managements Discussion and Analysis
    of Financial Condition and Results of Operations 
    Critical Accounting Policies and Estimates  Flight
    Equipment.
  Obsolescence Risk long-lived
  Greenhouse Gas Emissions Risk
  Other
    Risks
  Foreign Currency Risk
  Accounting Pronouncements
 12




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##### Table of Contents



Item
    1B.  Unresolved Staff Comments   Item
    2.  Properties  Flight
    Equipment
        Aircraft Type

2010


2011


2012


2013


2014


2015


2016


2017


2018


2019


2020


2021


Total737-300/400/500


5



13



11



13



7



4



























53737-600/700/800


3



27



41



33



22



25



26



15



7



3











202757-200


3



10



14



11



13



9



2























62767-200










1



1



1































3767-300


1



9



6



10



9



9



2



2



















48777-200


1



12



8



8



3







2



1



3















38777-300






3



1



2



1











11



10



7







1



36747-300






2











































2747-400


1



8



6



2



































17MD-11






2







3



3































8A300-600R/F


















2



2







1



1















6A310


1



1







2



































4A319


1



6



17



19



24



16



13



16



8



9



1



2



132A320


6



20



27



22



29



24



23



6



5



4



4







170A321


1



11



6



6



26



7



19



6



1



3











86A330-200


1



6



13



13



11



6



4



4











2



1



61A330-300


3



6



3



4



2



7



4























29A340-300


2



6



3



3



1































15A340-600














1



1



4



2



2



2



1











13Total


29



142



157



153



155



113



97



64



37



27



7



4



985    13




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##### Table of Contents



Commitments
    Aircraft Type

2010


2011


2012


2013


2014


2015


2016


2017


2018


2019


Total737-600/700/800(a)






5



5































10787-8/9(a)










4



10



5



4



6



12



17



16



74A319-100


1



1



































2A320-200(a)


3







































3A321-200(a)


1







































1A350XWB-800/900(a)


















2



4



8



6











20A380-800(b)














5



3



2



















10Total


5



6



9



15



10



10



14



18



17



16



120    (a)
    We have the right to designate the size of the aircraft within
    the specific model type at specific dates prior to contractual
    delivery.(b)
    Subject to cancellation options before December 31, 2010.
    Subsequent to December 31, 2009, we delayed the
    deliveries of the A380s, each by one year.    non-refundable
    Number of


NumberDelivery Year

Aircraft


Leased


% Leased2010


5



5



100
%2011


6



2



332012


9



3



332013(a)


10



9



902014(a)


12



7



58Thereafter(a)


78



14



18     (a)
    
    Subsequent to December 31, 2009, the A380 aircraft on order
    were delayed, each by one year. The original delivery dates were
    five in 2013, three in 2014 and two in 2015, respectively.    Facilities
   14




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##### Table of Contents



Item 3.
    Legal
    Proceedings  Flash Airlines: Boeing 737-300
  Krasnoyarsk Airlines (KrasAir): 757-200ER
  Estate of Volare Airlines
    (Volare):
   15




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##### Table of Contents



PART II  Item
    5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities   Item 6. Selected
    Financial Data    Years Ended December 31,2009


2008


2007


2006


2005(Dollar amounts in thousands)Operating Data:Rentals of flight equipment

$
5,275,219


$
4,943,448


$
4,587,611


$
3,984,948


$
3,482,210Flight equipment marketing


(11,687
)


46,838



30,613



71,445



66,737Interest and other income


58,209



98,260



111,599



86,304



61,426Total revenues


5,321,741



5,088,546



4,729,823



4,142,697



3,610,373Expenses


3,925,574



3,993,825



3,814,938



3,426,590



2,936,190Income before income taxes


1,396,167



1,094,721



914,885



716,107



674,183Net income


895,629



703,125



604,366



499,267



438,349Ratio of Earnings to Fixed Charges and Preferred Stock
    Dividends(a):


2.00
x


1.66
x


1.52
x


1.43
x


1.50
xBalance Sheet Data:Flight equipment under operating leases (net of accumulated
    depreciation)

$
43,929,801


$
43,220,139


$
41,797,660


$
38,475,949


$
34,748,932Net investment in finance and
    sales-type
    leases


261,081



301,759



307,083



283,386



308,471Total assets


45,967,042



47,315,514



44,830,590



42,035,528



37,530,327Total debt(b)


29,711,739



32,476,668



30,451,279



28,860,242



26,104,165Shareholders equity


8,550,176



7,625,213



7,028,779



6,574,998



6,172,562Other Data:Aircraft lease portfolio at period end(c):Owned


993



955



900



824



746Subject to finance and sales-type leases


11



9



9



10



17Aircraft sold or remarketed during the period


9



11



9



21



29       (b)
    Includes subordinated debt, synthetic lease obligations and
    loans from AIG Funding when applicable and does not include
    foreign currency adjustment related to foreign currency
    denominated debt swapped into $US.  Properties 
    Flight Equipment.
 16




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##### Table of Contents



Item
    7.  Managements Discussion and Analysis of
    Financial Condition and Results of Operations  Overview
  and/or
  Our
    Fleet
      Debt
    Financing
  Liquidity Liquidity Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Debt Financings.
  Aircraft
    Industry and Sources of Revenues
   17




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##### Table of Contents



out-of-production
         18




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##### Table of Contents



Liquidity
      Debt
    Financings  Loans from AIG Funding
     19




---



##### Table of Contents



Consideration
    of ILFCs Ability to Continue as a Going Concern
  Current Situation
  Liquidity,
    
    incur debt;
    encumber our assets;
    dispose of certain assets;
    enter into sale-leaseback transactions;
    make equity or debt investments in other parties;
    make capital expenditures; and
    pay dividends and distributions.    Managements
    Plans
    Liquidity
  
    We intend to continue to seek financing available under our 2004
    ECA facility. At December 31, 2009, we had approximately
    $682 million available for the financing of Airbus aircraft
    under our 2004 ECA facility. As a result of our current
    long-term debt ratings, we are required to receive written
    consent from the security trustee before we can fund future
    Airbus aircraft deliveries. We obtained consent for 19 of the 24
    Airbus aircraft we purchased since March 17, 2009, when the
    security trustees consent became required. We financed the
    19 aircraft under the facility during 2009, and subsequent to
    December 31, 2009, we obtained consent for and expect to
    finance the remaining five aircraft delivered in the fourth
    quarter of 2009 in March 2010.
    We are currently seeking secured financings aggregating
    $750 million from various institutions. Under our existing
    debt agreements we and our subsidiaries have certain
    restrictions, as mentioned above, and currently have
    approximately $800 million available to us for additional
    secured financings.
    We are currently pursuing potential aircraft sales that could
    aggregate up to $3.5 billion in proceeds. Significant
    uncertainties exist regarding whether we could reach an
    agreement with buyers, what the terms of any potential sale
    would be and whether the FRBNY would approve any agreement
    reached by our Board of Directors. Because the current market
    for aircraft is depressed due to the economic downturn and
    limited availability of buyer financing, a sale would likely
    result in a realized loss, which could be material to our
    results of operations for an individual reporting period. If the
    sales portfolios on offer result in sales, there will be an
    aging of the ILFC aircraft fleet. The portfolios are not cross
    sections of the ILFC aircraft fleet, but consist of primarily
    younger aircraft.   20




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##### Table of Contents



Managements
    Assessment and Conclusion
    
    credit ratings downgrade risk which could further reduce our
    ability to access public debt markets and our private debt;
    financing requirements for future debt repayments and aircraft
    purchase commitments;
    the potential financing sources discussed above;
    cash flows from operations, including potential non-performance
    of lessees and the mitigation of such impact on revenue due to
    repossession rights, security deposits and overhaul rentals; and
    cash flows generated from potential sales of aircraft portfolios
    and any uncertainties associated with those sales.        Our
    Relationship with AIG
    The FRBNY
    Credit Agreement
  10-K
 21




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##### Table of Contents



AIG Going
    Concern Consideration
  Form 10-K Form 10-K
  Debt
    Financings
     22




---



##### Table of Contents



December 31,2009


2008(Dollars in thousands)SecuredECA Financings

$
3,004,763


$
2,436,296Loans from AIG Funding


3,909,567



Other Secured Financings(a)


153,116



7,067,446



2,436,296UnsecuredCommercial Paper






1,752,000Public Bonds and Medium-Term Notes


16,566,099



19,748,541Bank Debt


5,087,750



7,558,75021,653,849



29,059,291Total Secured and Unsecured Debt Financing


28,721,295



31,495,587Less: Deferred Debt Discount


(9,556
)


(18,919
)28,711,739



31,476,668Subordinated Debt


1,000,000



1,000,000$
29,711,739


$
32,476,668Selected interest rates and ratios which include the effect of
    derivative instruments:Composite interest rate


4.35%



4.51%Percentage of total debt at fixed rate


58.64%



63.89%Composite interest rate on fixed debt


5.42%



5.41%Bank prime rate


3.25%



3.25%    (a)
    Of this amount, $129.6 million is non-recourse to ILFC. These
    secured financings were incurred by Variable Interest Entities
    and consolidated.    ECA
    Financings
  Export Credit Facilities:
   23




---



##### Table of Contents



(i) (ii) (iii)
  Liquidity
  Loans
    from AIG Funding
  3-month
  (i) (ii) (iii)
 24




---



##### Table of Contents



(i) (ii) (iii)
  (i) (ii) (iii) paid-in-kind
  Other
    Secured Financing Arrangements
  Notes to Consolidated Financial Statements.
   25




---



##### Table of Contents



Commercial
    Paper and Other Short-Term Debt
  Commercial Paper: Liquidity,
  Other short-term financing: 90-day
  Public
    Bonds and Medium-Term Notes
    Maximum


Issued as ofOffering


December 31, 2009(Dollars in millions)Registration statement dated August 7, 2009(a)


Unlimited
(b)

$
Euro Medium-Term Note Programme dated September 4,
    2009(b)(d)


7,000



1,903
(c)     (a)
    We may establish new medium-term note programs under this new
    shelf registration statement when the public debt markets become
    fully available to us again. We currently have the ability to
    issue debt under the shelf registration statement in individual
    transactions, although the cost of funding has not been
    attractive to us.(b)
    As a result of our Well Known Seasoned Issuer (WKSI)
    status, we have an unlimited amount of debt securities
    registered for sale.(c)
    We have hedged the foreign currency risk of the notes through
    foreign currency swaps.(d)
    This is a perpetual program. As a bond issue matures, the
    principal amount of that bond becomes available for new
    issuances under the program.    Bank
    Debt
  Revolving Credit Facilities:
  Term Loans:
 26




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##### Table of Contents



Subordinated
    Debt
  (i) (ii) 10-year (iii) 30-year
  Derivatives
          Credit
    Ratings
    Rating Agency

Long-Term Debt

Corporate Rating

Credit Watch/Review

Date of Last ActionFitch

BB

Not rated

Negative

February 17, 2010Moodys

B1

Not rated

Negative

December 18, 2009S&P

BB+

BBB−

Negative

January 25, 2010    27




---



##### Table of Contents



(i) (ii) (iii)
      Existing
    Commitments
  Commitments Due by YearTotal


2010


2011


2012


2013


2014


Thereafter(Dollars in thousands)Public, Bonds and Medium-term Notes

$
16,566,099


$
4,021,085


$
4,379,556


$
3,571,492


$
3,541,687


$
1,041,717


$
10,562Bank Credit Facilities


4,500,000



2,000,000



2,500,000















Bank Term Loans


587,750



102,750



335,000



150,000











ECA Financings


3,004,763



513,202



425,185



396,138



396,138



391,041



883,059Loans from AIG Funding


3,909,567















3,909,567







Other Secured Financings


153,116



13,280



13,901



14,878



15,963



36,716



58,378Subordinated Debt


1,000,000























1,000,000Interest Payments on Debt Outstanding(a)(b)(c)


6,890,948



1,279,554



1,030,568



740,569



484,324



146,584



3,209,349Operating Leases(d)(e)


71,312



11,524



11,968



12,448



12,947



13,362



9,063Pension Obligations(f)


8,483



1,268



1,319



1,370



1,431



1,512



1,583Tax Benefit Sharing Agreement Due to AIG


85,000



85,000



















Purchase Commitments


13,698,800



242,700



247,600



639,400



2,150,000



1,396,300



9,022,800Total

$
50,475,838


$
8,270,363


$
8,945,097


$
5,526,295


$
10,512,057


$
3,027,232


$
14,194,794   Contingent
    Commitments
  Contingency Expiration by YearTotal


2010


2011


2012


2013


2014


Thereafter(Dollars in thousands)Asset Value Guarantees(g)

$
529,708


$



$
27,841


$
78,950


$
96,003


$
14,300


$
312,614Loan Guarantees


26,891



2,520



















24,371Total(h)

$
556,599


$
2,520


$
27,841


$
78,950


$
96,003


$
14,300


$
336,985    (a)
    Includes interest on loans from AIG Funding.(b)
    Future interest payments on floating rate debt are estimated
    using floating interest rates in effect at December 31,
    2009.(c)
    Includes the effect of interest rate and foreign currency
    derivative instruments.(d)
    Excludes fully defeased aircraft sale-lease back transactions.(e)
    Minimum rentals have not been reduced by minimum sublease
    rentals of $7.9 million receivable in the future under
    non-cancellable subleases.  (f)
    Our pension obligations are part of intercompany expenses, which
    AIG allocates to us on an annual basis. The amount is an
    estimate of such allocation. The column 2010
    consists of total estimated allocations for 2010 and
    Thereafter has not been estimated. The amount
    allocated has not been material to date.  (g)
    From time to time, we participate with airlines, banks and other
    financial institutions in the financing of aircraft by providing
    asset guarantees, put options, or loan guarantees collateralized
    by aircraft. As a result, should we be called upon to fulfill
    our obligations, we would have recourse to the value of the
    underlying aircraft. 28




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##### Table of Contents



(h)
    Excluded from total contingent commitments are
    $165.8 million of uncertain tax liabilities and any effect
    of net tax liabilities. See Note I of Notes to
    Consolidated Financial Statements. The future cash flows to
    these liabilities are uncertain and we are unable to make
    reasonable estimates of the outflows.  Variable
    Interest Entities
      Results
    of Operations
  2009
    Compared to 2008
  (i) (ii) (iii) (i) (ii) (iii) (iv)
   29




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##### Table of Contents



(i) (ii) (iii) (iv) (i) (ii)
      ILFC
    Composite Interest Rates and Prime Rates
  
  Notes to Consolidated Financial Statements
 30




---



##### Table of Contents



(i) (ii) (iii)
  (i) (ii) (iii) (i) (ii)
  (i) (ii)
  (i) Notes to the Consolidated Financial Statements (ii)
      Notes to the Consolidated
    Financial Statements
  Results
    of Operations
  2008
    Compared to 2007
  (i) (ii) (iii) (i) (ii) (iii)
 31




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##### Table of Contents



(iv)
    (i) (ii) (iii) (i) (ii)
  (i) (ii)
  Notes to
    Consolidated Financial Statements
    (i) (ii)
  (i) (ii)
  (i) Notes to the Consolidated Financial
    Statements (ii)
   32




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##### Table of Contents



Notes to the Consolidated Financial Statements
  Critical
    Accounting Policies and Estimates
      Lease Revenue Past-due take-off
  Initial Indirect Costs:
  Flight Equipment Marketing
 33




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##### Table of Contents



Provision for Overhauls
    Flight Equipment 25-year 25-year
    Risk
    Factors.  Fair Value Measurements.
    Derivative Financial Instruments:
 34




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##### Table of Contents



Fair Value Measurements:
    Income Taxes:
  New
    Accounting Pronouncements
  Recent
    Accounting Pronouncements:
             35




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##### Table of Contents



other-than-temporary
          Future
    Application of Accounting Standards:
      Notes to
    Consolidated Financial Statements.
 Item
    7A. Quantitative and Qualitative Disclosures About
    Market Risk        re-pricing re-priced.
 36




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##### Table of Contents



ILFC
    Market Risk
  December 31, 2009


December 31, 2008Average


High


Low


Average


High


Low(Dollars in millions)Combined

$
46.5


$
80.0


$
35.9


$
53.2


$
96.2


$
36.1Interest Rate


46.6



80.0



36.2



53.7



97.6



36.5Currency


0.3



0.7



0.1



1.0



1.6



0.7    Item
    8.  Financial Statements and Supplementary
    Data    Item
    9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure   Item 9A(T).  Controls
    and Procedures  (A) Evaluation
    of Disclosure Controls and Procedures
    Rules 13a-15(e) 15d-15(e)
  (B) Managements
    Report on Internal Control over Financial Reporting
      Internal Control 
    Integrated Framework Internal
    Control  Integrated Framework
 37




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##### Table of Contents



Variable
    Interest Entities
    (C) Changes
    in Internal Control Over Financial Reporting
     Udvar-Hazy, Form 10-K
 Item
    9B. Other Information   38




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##### Table of Contents



PART
    III Item
    14.  Principal Accountant Fees and
    Services    2009


2008Audit Fees(a)

$
2,200,000


$
1,300,000Tax Fees(b)


139,400



412,000Total Fees

$
2,339,400


$
1,712,000      (a)
    
    Audit Fees consist of fees for professional services provided in
    connection with the audits of our financial statements, services
    rendered in connection with our registration statements filed
    with the Securities and Exchange Commission, the delivery of
    consents and the issuance of comfort letters. This also includes
    Sarbanes-Oxley Section 404 work performed at ILFC for
    AIGs 2009 and 2008 assessment.(b)
    
    Tax Fees consist of the aggregate fees for services rendered for
    tax compliance, tax planning and tax advice.   PART
    IV Item
    15.  Exhibits and Financial Statement
    Schedules     39




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  FORM 10-K
 Items 8, 15(a), and 15(b)
  INDEX OF CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE
    PageReport of Independent Registered Public
    Accounting Firm


44Consolidated Financial Statements:Balance Sheets at December 31, 2009 and
    2008


45Statements of Income for the years ended
    December 31, 2009, 2008 and 2007


46Statements of Shareholders Equity for the
    years ended December 31, 2009, 2008 and 2007


47Statements of Cash Flows for the years ended
    December 31, 2009, 2008 and 2007


48Notes to Consolidated Financial Statements


50     Report of Independent Registered Public
    Accounting Firm on Financial Statements Schedule


86   Schedule Number


Description

PageII


Valuation
    and Qualifying Accounts


87       ExhibitNumber


Description3.1


Restated Articles of Incorporation of the Company (filed as an
    exhibit to Form 10-Q for the quarter ended September 30,
    2008 and incorporated herein by reference).3.2


Amended and Restated By-Laws of the Company (filed as an exhibit
    to Form 10-Q for the quarter ended September 30, 2009 and
    incorporated herein by reference).4.1


Indenture dated as of November 1, 1991, between the Company and
    U.S. Bank Trust National Association (successor to Continental
    Bank, National Association), as Trustee (filed as an exhibit to
    Registration Statement
    No. 33-43698
    and incorporated herein by reference).4.2


First supplemental indenture, dated as of November 1, 2000,
    to the Indenture between the Company and U.S. Bank Trust
    National Association (filed as an exhibit to
    Form 10-K
    for the year ended December 31, 2000 and incorporated
    herein by reference).4.3


Second Supplemental Indenture, dated as of February 28, 2001, to
    the Indenture between the Company and U.S. Bank Trust
    National Association (filed as an exhibit to
    Form 10-Q
    for the quarter ended March 31, 2001 and incorporated
    herein by reference).4.4


Third Supplemental Indenture, dated as of September 26,
    2001, to the Indenture between the Company and U.S. Bank
    Trust National Association (filed as an exhibit to
    Form 10-Q
    for the quarter ended September 30, 2000 and incorporated
    herein by reference).4.5


Fourth Supplemental Indenture, dated as of November 6,
    2002, to the indenture between the Company and U.S. Bank
    National Association (filed as an exhibit to
    Form 10-K
    for the year ended December 31, 2002 and incorporated
    herein by reference).4.6


Fifth Supplemental Indenture, dated as of December 27,
    2002, to the indenture between the Company and U.S. Bank
    National Association (filed as an exhibit to
    Form 10-K
    for the year ended December 31, 2002 and incorporated
    herein by reference).4.7


Sixth Supplemental Indenture, dated as of June 2, 2003, to
    the indenture between the Company and U.S. Bank National
    Association (filed as an exhibit to Form 10-Q for the
    quarter ended September 30, 2003 and incorporated herein by
    reference). 40




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##### Table of Contents



ExhibitNumber


Description4.8


Seventh Supplemental Indenture, dated as of October 8,
    2004, to the indenture between the Company and U.S. Bank
    National Association (filed as an exhibit to
    Form 8-K
    dated October 14, 2004 and incorporated herein by
    reference).4.9


Eighth Supplemental Indenture, dated as of October 5, 2005,
    to the indenture between the Company and U.S. Bank National
    Association (filed as an exhibit to
    Form 10-K
    for the year ended December 31, 2005 and incorporated
    herein by reference).4.10


Ninth Supplemental Indenture, dated as of October 5, 2006,
    to the indenture between the Company and U.S. Bank National
    Association (filed as an exhibit to
    Form 10-K
    for the year ended December 31, 2007 and incorporated
    herein by reference).4.11


Tenth Supplemental Indenture, dated as of October 9, 2007,
    to the indenture between the Company and U.S. Bank National
    Association (filed as an exhibit to
    Form 10-K
    for the year ended December 31, 2007 and incorporated
    herein by reference).4.12


Indenture dated as of November 1, 2000, between the Company
    and the Bank of New York, as Trustee (filed as an exhibit to
    Registration
    No. 333-49566
    and incorporated herein by reference).4.13


First Supplemental Indenture, dated as of August 16, 2002
    to the indenture between the Company and the Bank of New York
    (filed as Exhibit 4.2 to Registration Statement
    No. 333-100340
    and incorporated herein by reference).4.14


Agency Agreement (Amended and Restated), dated
    September 15, 2006, by and among the Company, Citibank,
    N.A. and Dexia Banque Internationale à Luxembourg,
    société anonyme (filed as an exhibit to
    Form 8-K,
    event date September 20, 2006, and incorporated herein by
    reference).4.15


Supplemental Agency Agreement, dated September 7, 2007,
    among the Company, Citibank, N.A. and Dexia Banque
    Internationale à Luxembourg, société anonyme
    (filed as an exhibit to
    Form 8-K,
    event date September 7, 2007, and incorporated herein by
    reference).4.16


Supplemental Agency Agreement, dated September 5, 2008,
    among the Company, Citibank, N.A. and Dexia Banque
    Internationale à Luxembourg, société anonyme
    (filed as an exhibit to
    Form 8-K,
    event date September 8, 2008, and incorporated herein by
    reference).4.17


Supplemental Agency Agreement, dated September 4, 2009,
    among the Company, Citibank, N.A. and Dexia Banque
    Internationale à Luxembourg, société anonyme
    (filed as an exhibit to Form
    8-K filed on
    September 10, 2009 and incorporated herein by reference).4.18


Indenture, dated as of August 1, 2006, between the Company
    and Deutsche Bank Trust Company Americas, as Trustee (filed
    as Exhibit 4.1 to Registration Statement
    No. 333-136681
    and incorporated herein by reference).4.19


The Company agrees to furnish to the Commission upon request a
    copy of each instrument with respect to issues of long-term debt
    of the Company and its subsidiaries, the authorized principal
    amount of which does not exceed 10% of the consolidated assets
    of the Company and its subsidiaries.10.1


Aircraft Facility Agreement, dated as of May 18, 2004,
    among Whitney Leasing Limited, as borrower, the Company, as
    guarantor and the Bank of Scotland and the other banks listed
    therein providing up to $2,643,660,000 (plus related premiums)
    for the financing of aircraft (filed as an exhibit to
    Form 10-Q
    for the quarter ended June 30, 2004 and incorporated herein
    by reference) and, as most recently amended as of May 30,
    2006, to increase the size of the facility to $3,643,660,000, as
    of May 30, 2007, to extend the termination until May 2008,
    as of May 29, 2008, to extend the termination until May
    2009, and as of May 11, 2009 to increase the size of the
    facility to $4,643,660,000 and to extend the termination until
    June 2010. (filed as an exhibit to Form 10-Q for the
    quarter ended June 30, 2009 and incorporated herein by
    reference).10.2


$2,000,000,000 Five-Year Revolving Credit Agreement dated as of
    October 14, 2005, among the Company, CitiCorp USA, Inc
    as Administrative Agent, and the other financial institutions
    listed therein (filed as an exhibit to Form 8-K, event date
    October 14, 2005, and incorporated herein by reference). 41




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##### Table of Contents



ExhibitNumber


Description10.3


Amendment No. 1 to the $2,000,000,000 Five-Year Revolving
    Credit Agreement dated as of October 14, 2005, among the
    Company, CitiCorp USA, Inc., as Administrative Agent, and the
    other financial institutions listed therein (filed as an exhibit
    to
    Form 8-K,
    event date October 18, 2006, and incorporated herein by
    reference).10.4


$2,500,000,000
    Five-Year
    Revolving Credit Agreement, dated as of October 13, 2006,
    among the Company, CitiCorp USA, Inc., as Administrative Agent,
    and the other financial institutions listed therein (filed as an
    exhibit to
    Form 8-K
    event date October 18, 2006 and incorporated herein by
    reference).10.5


$2,000,000,000 Credit Agreement dated as of October 13, 2009,
    among International Lease Finance Corporation, certain
    subsidiaries of International Lease Finance Corporation named
    therein, AIG Funding, Inc., as lender, and Wells Fargo Bank
    Northwest, National Association, as security trustee (portions
    of this exhibit have been omitted pursuant to a request for
    confidential treatment) (filed as an exhibit to the form 8-K
    filed on October 19, 2009 and incorporated herein by reference).10.6


$1,700,000,000 Amended and Restated Credit Agreement dated as of
    October 13, 2009, among International Lease Finance Corporation,
    certain subsidiaries of International Lease Finance Corporation
    named therein, AIG Funding, Inc., as lender, and Wells Fargo
    Bank Northwest, National Association, as security trustee
    (portions of this exhibit have been omitted pursuant to a
    request for confidential treatment) (filed as an exhibit to the
    form 8-K filed on October 19, 2009 and incorporated herein by
    reference).10.7


First Lien Borrower Party Guarantee Agreement dated as of
    October 13, 2009, among International Lease Finance Corporation,
    certain subsidiaries of International Lease Finance Corporation
    named therein for the benefit of the Federal Reserve Bank of New
    York (filed as an exhibit to the Form 8-K filed on
    October 19, 2009 and incorporated herein by reference).10.8


Third Lien Borrower Party Guarantee Agreement dated as of
    October 13, 2009, among International Lease Finance Corporation,
    certain subsidiaries of International Lease Finance Corporation
    named therein for the benefit of the Federal Reserve Bank of New
    York (filed as an exhibit to the Form 8-K filed on October 19,
    2009 and incorporated herein by reference).10.9


Amendment Agreement, dated as of November 23, 2009, among
    International Lease Finance Corporation named therein, AIG
    Funding, Inc., as lender, and Wells Fargo Bank Northwest,
    National Association, as security trustee, and the Federal
    Reserve Bank of New York (filed as an exhibit to the Form 8-K
    filed on December 7, 2009 and incorporated herein by reference).10.10


Temporary Waiver and Amendment dated as of December 1, 2009,
    among International Lease Finance Corporation, certain
    subsidiaries of International Lease Finance Corporation named
    therein, AIG Funding Inc., as lender, and the Federal Reserve
    Bank of New York (filed as an exhibit to the Form 8-K filed on
    December 7, 2009 and incorporated herein by reference).10.11


Temporary Waiver and Amendment No. 2, dated as of December
    4, 2009, among International Lease Finance Corporation, certain
    subsidiaries of International Lease Finance Corporation named
    therein, AIG Funding Inc., as lender, and the Federal Reserve
    Bank of New York (filed as an exhibit to the Form 8-K filed on
    December 7, 2009 and incorporated herein by reference).10.12


Amendment to Credit Agreements and First Lien Guarantee
    Agreement made and entered into as of December 4, 2009, by and
    among International Lease Finance Corporation, certain
    subsidiaries of International Lease Finance Corporation named
    therein, AIG Funding Inc., as lender, and the Federal Reserve
    Bank of New York (filed as an exhibit to the Form 8-K filed on
    December 7, 2009 and incorporated herein by reference).10.13


Amendment to Schedules of Certain Loan Documents made and
    entered into as of December 15, 2009, by and among
    International Lease Finance Corporation, certain subsidiaries of
    International Lease Finance Corporation named therein, AIG
    Funding Inc., as lender, the Federal Reserve Bank of New York
    and Wells Fargo Bank Northwest, National Association, as
    trustee. (Portions of this exhibit have been omitted pursuant to
    a request for confidential treatment.) 42




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##### Table of Contents



ExhibitNumber


Description10.14


Amendment No. 2 to Schedules of Certain Loan Documents made
    and entered into as of January 29, 2010, by and among
    International Lease Finance Corporation, certain subsidiaries of
    International Lease Finance Corporation named therein, AIG
    Funding Inc., as lender, the Federal Reserve Bank of New York
    and Wells Fargo Bank Northwest, National Association, as
    trustee. (Portions of this exhibit have been omitted pursuant to
    a request for confidential treatment.)12


Computation of Ratio of Earnings to Fixed Charges and Preferred
    Stock Dividends.23


Consent of PricewaterhouseCoopers LLP.31.1


Rule 13a-14(a)/15d-14(a)
    Certification of Active Chief Executive Officer, President and
    Chief Operating Officer.31.2


Rule 13a-14(a)/15d-14(a)
    Certification of Vice Chairman, Chief Financial Officer and
    Chief Accounting Officer.32.1


Certification under 18 U.S.C., Section 1350.  43




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm  To The
    Shareholders and Board of Directors
           44




---



##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands, except share and per share
    amounts)
  December 31,2009


2008ASSETSCash, including interest bearing accounts of
    $324,827 (2009) and $2,382,068 (2008)

$
336,911


$
2,385,948Restricted cash, including interest bearing accounts of $246,115
    (2009)


315,156



Notes receivable, net of allowance


112,060



81,327Net investment in finance and sales-type leases


261,081



301,759Flight equipment under operating leases


57,718,323



55,372,328Less accumulated depreciation


13,788,522



12,152,18943,929,801



43,220,139Deposits on flight equipment purchases


163,221



568,549Lease receivables and other assets


477,218



478,944Derivative assets, net


190,857



88,203Variable interest entities assets


79,720



98,746Deferred debt issue costs  less accumulated amortization
    of
    $146,933 (2009) and $131,527 (2008)


101,017



91,899$
45,967,042


$
47,315,514LIABILITIES AND SHAREHOLDERS EQUITYAccrued interest and other payables

$
474,971


$
441,656Current income taxes


80,924



32,083Tax benefit sharing payable to AIG


85,000



85,000Loans from AIG Funding


3,909,567



Debt financing, net of deferred debt discount of
    $9,556 (2009) and $18,919 (2008)


24,802,172



31,476,668Subordinated debt


1,000,000



1,000,000Foreign currency adjustment related to foreign currency
    denominated debt


391,100



338,100Security deposits on aircraft, overhauls and other deposits


1,469,956



1,527,884Rentals received in advance


315,154



299,961Deferred income taxes


4,881,558



4,478,250Variable interest entities liabilities


6,464



10,699Commitments and contingencies  Note LSHAREHOLDERS EQUITYMarket Auction Preferred Stock, $100,000 per share liquidation
    value; Series A and  B, each series having 500 shares
    issued and outstanding


100,000



100,000Common stock  no par value; 100,000,000 authorized shares,
    45,267,723 shares issued and outstanding


1,053,582



1,053,582Paid-in capital


603,542



600,237Accumulated other comprehensive (loss) income


(138,206
)


(168,065
)Retained earnings


6,931,258



6,039,459Total shareholders equity


8,550,176



7,625,213$
45,967,042


$
47,315,514    45




---



##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF INCOME
 (Dollars in thousands)
  Years Ended December 31,2009


2008


2007REVENUES:Rental of flight equipment

$
5,275,219


$
4,943,448


$
4,587,611Flight equipment marketing


(11,687
)


46,838



30,613Interest and other


58,209



98,260



111,5995,321,741



5,088,546



4,729,823EXPENSES:Interest


1,365,490



1,576,664



1,612,886Effect from derivatives, net of change in hedged items due to
    changes in foreign exchange rates


(21,450
)


39,926



5,310Depreciation of flight equipment


1,959,448



1,864,730



1,736,277Provision for overhauls


346,966



264,592



290,134Flight equipment rent


18,000



18,000



18,000Selling, general and administrative


196,675



183,356



152,331Other expenses


60,445



46,557



3,925,574



3,993,825



3,814,938INCOME BEFORE INCOME TAXES


1,396,167



1,094,721



914,885Provision for income taxes


500,538



391,596



310,519NET INCOME

$
895,629


$
703,125


$
604,366    46




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##### Table of Contents





INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF SHAREHOLDERS
    EQUITY
 (Dollars in thousands)
  Market Auction











AccumulatedPreferred Stock


Common Stock





OtherNumber





Number








Comprehensiveof





of





Paid-in


Income


RetainedShares


Amount


Shares


Amount


Capital


(Loss)


Earnings


TotalBalance at December 31, 2006


1,000



100,000



45,267,723



1,053,582



591,757



2,718



4,826,941



6,574,998Common stock dividends


























(38,000
)


(38,000
)Preferred stock dividends


























(5,346
)


(5,346
)Comprehensive Income:Net income


























604,366



604,366Other comprehensive income:Cash flow derivative transactions (net of tax of $58,565)






















(108,762
)






(108,762
)Change in unrealized appreciation securities available-for-sale
    (net of tax of $94)






















(175
)






(175
)Comprehensive income






























495,429Other(a)


















1,698











1,698Balance at December 31, 2007


1,000



100,000



45,267,723



1,053,582



593,455



(106,219
)


5,387,961



7,028,779Common stock dividends


























(46,400
)


(46,400
)Preferred stock dividends


























(5,227
)


(5,227
)Comprehensive Income:Net income


























703,125



703,125Other comprehensive income:Cash flow derivative transactions (net of tax of $33,145)






















(61,555
)






(61,555
)Change in unrealized appreciation securities available-for-sale
    (net of tax of $157)






















(291
)






(291
)Comprehensive income






























641,279Other(a)


















6,782











6,782Balance at December 31, 2008


1,000


$
100,000



45,267,723


$
1,053,582


$
600,237


$
(168,065
)

$
6,039,459


$
7,625,213Common stock dividendsPreferred stock dividends


























(3,830
)


(3,830
)Comprehensive Income:Net income


























895,629



895,629Other comprehensive income:Cash flow derivative transactions (net of tax of ($15,929))






















29,583







29,583Change in unrealized appreciation securities available-for-sale
    (net of tax of ($149))






















276







276Comprehensive income






























925,488Other(a)


















3,305











3,305Balance at December 31, 2009


1,000


$
100,000



45,267,723


$
1,053,582


$
603,542


$
(138,206
)

$
6,931,258


$
8,550,176     (a)
    We recorded $1,698 in Paid-in Capital during 2007, $6,782 during
    2008 and $3,305 during 2009 for compensation expenses, debt
    issue cost and other expenses paid by AIG on our behalf for
    which we were not required to pay.   47




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##### Table of Contents





INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Dollars in thousands)
  Years Ended December 31,2009


2008


2007OPERATING ACTIVITIES:Net income

$
895,629


$
703,125


$
604,366Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation of flight equipment


1,959,448



1,864,730



1,736,277Deferred income taxes


387,230



376,416



446,655Derivative instruments


(57,141
)


680,816



(292,426
)Foreign currency adjustment of non-US$ denominated debt


114,620



(507,050
)


503,600Amortization of deferred debt issue costs


40,232



31,325



30,229Amortization of prepaid lease cost


51,899



51,108



52,624Write-off of notes receivable






46,557



Aircraft valuation adjustments


60,445







Other, including foreign exchange adjustments on foreign
    currency denominated cash


(9,939
)


(28,274
)


(331
)Changes in operating assets and liabilities:Lease receivables and other assets


(13,417
)


(63,333
)


51,707Accrued interest and other payables


10,478



1,382



28,440Current income taxes


48,841



170,488



309,938Tax benefit sharing payable to AIG










(160,000
)Rentals received in advance


15,193



48,580



28,068Unamortized debt discount


9,363



13,651



4,322Net cash provided by operating activities


3,512,881



3,389,521



3,343,469INVESTING ACTIVITIES:Acquisition of flight equipment under operating leases


(2,577,410
)


(3,236,848
)


(4,705,376
)Payments for deposits and progress payments


(40,444
)


(290,748
)


(485,234
)Proceeds from disposal of flight equipment  net
    of (loss) or gain


196,934



390,868



186,912Advances on notes receivable






(43,854
)


Restricted cash


(315,156
)






Collections on notes receivable


15,999



9,885



17,607Collections on finance and sales-type leases  net of
    income amortized


90,241



20,900



55,774Other


(10
)






5,749Net cash used in investing activities


(2,629,846
)


(3,149,797
)


(4,924,568
)FINANCING ACTIVITIES:Net change in commercial paper


(1,752,000
)


(2,746,555
)


1,740,908Loan from AIG


3,900,000



1,671,268



Repayment of loan to AIG






(1,671,268
)


Proceeds from debt financing


1,394,868



9,389,394



3,783,374Payments in reduction of debt financing


(6,388,347
)


(4,754,551
)


(4,146,181
)Debt issue costs


(49,350
)


(23,092
)


(23,702
)Payment of common and preferred dividends


(3,830
)


(55,887
)


(39,086
)Customer deposits


(34,107
)


156,165



289,038Net cash (used in) provided by financing activities


(2,932,766
)


1,965,474



1,604,351Net (decrease) increase in cash


(2,049,731
)


2,205,198



23,252Effect of exchange rate changes on cash


694



(2,022
)


2,400Cash at beginning of year


2,385,948



182,772



157,120Cash at end of year


336,911


$
2,385,948


$
182,772   (Table continued on following page)
 48




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Dollars in thousands)
   Years Ended December 31,2009


2008


2007SUPPLEMENTAL DISCLOSURE OF CASH FLOW  INFORMATION:Cash paid (received) during the year for:Interest, excluding interest capitalized of $10,360 (2009),
    $26,597 (2008), and $37,192 (2007)

$
1,370,585


$
1,548,492


$
1,606,049Income taxes, net


13,754



(155,305
)


(286,763
)   2009:$419,937 of Deposits on flight equipment purchases was applied
    to Acquisition of flight equipment under operating leases.Three aircraft with a cumulative net book value of $58,965 were
    reclassified as sales-type leases.An aircrafts net book value of $20,921 and released
    overhaul reserves in the amount of $6,891 were reclassified to
    Lease receivables and other assets of $33,223 to reflect pending
    proceeds from the loss of an aircraft. The receivable of $33,223
    was paid in full in the third quarter and is included in
    Proceeds from disposal of flight equipment.An aircrafts net book value of $10,521 was reclassified to
    Lease receivables and other assets in the amount of $2,400 with
    a $7,507 charge to income when reclassified to an asset held for
    sale. See Note F of Notes to Consolidated Financial
    Statements.$5,335 was reclassified from Security deposits on aircraft,
    overhauls and other to Deposits on flight equipment purchases
    for concessions received from manufacturers.A reduction in certain credits from aircraft and engine
    manufacturers in the amount of $742 increased the basis of
    Flight equipment under operating leases and decreased Lease
    receivables and other assets.2008:$462,065 of Deposits on flight equipment purchases was applied
    to Acquisition of flight equipment under operating leases.$53,898 was reclassified from Security deposits on aircraft,
    overhauls and other to Deposits on flight equipment purchases
    for concessions received from manufacturers.An aircraft previously accounted for as an operating lease was
    converted into a sales-type lease in the amount of $15,576.Deferred debt issue Cost and Paid-in capital were reduced by
    $5,742 for debt issue cost paid by AIG on our behalf, which we
    were not required to pay.2007:$640,981 of Deposits on flight equipment purchases was applied
    to Acquisition of flight equipment under operating leases.$127,458 was reclassed from Security and other deposits to
    Deposits on flight equipment for concessions received from
    manufacturers.An aircraft previously accounted for as an operating lease was
    converted into a sales-type lease in the amount of $74,426.Certain credits from aircraft and engine manufacturers in the
    amount of $41,680 reduced the basis of Flight equipment
    under operating leases and increased Lease receivables and other
    assets.$9,120 of Notes receivable and $5,529 of Lease receivable
    and other assets were exchanged for Flight equipment
    of $14,649.    49




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Dollars in thousands)
  Organization:
  Parent Company:
  Note A
     Consideration of ILFCs Ability to Continue as a
    Going Concern:
  Current Situation
        
    incur debt;
    encumber our assets;
    dispose of certain assets;
    enter into sale-leaseback transactions;
    make equity or debt investments in other parties;
    make capital expenditures; and
    pay dividends and distributions.     50




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note A  Consideration of ILFCs Ability to
    Continue as a Going Concern (Continued)
      Managements
    Plans
      
    We intend to continue to seek financing available under our 2004
    ECA facility. At December 31, 2009, we had approximately
    $682,000 available for the financing of Airbus aircraft under
    our 2004 ECA facility. As a result of our current long-term debt
    ratings, we are required to receive written consent from the
    security trustee before we can fund future Airbus aircraft
    deliveries. We obtained consent for 19 of the 24 Airbus aircraft
    we purchased since March 17, 2009, when the security
    trustees consent became required. We financed the 19
    aircraft under the facility during 2009, and subsequent to
    December 31, 2009, we obtained consent for and expect to
    finance the remaining five aircraft delivered in the fourth
    quarter of 2009 in March 2010.
    We are currently seeking secured financings aggregating $750,000
    from various institutions. Under our existing debt agreements we
    and our subsidiaries have certain restrictions, as mentioned
    above, and currently have approximately $800,000 available to us
    for additional secured financings.
    We are currently pursuing potential aircraft sales that could
    aggregate up to $3,500,000 in proceeds. Significant
    uncertainties exist regarding whether we could reach an
    agreement with buyers, what the terms of any potential sale
    would be and whether the FRBNY would approve any agreement
    reached by our Board of Directors. Because the current market
    for aircraft is depressed due to the economic downturn and
    limited availability of buyer financing, a sale would likely
    result in a realized loss, which could be material to our
    results of operations for an individual reporting period. If the
    sales portfolios on offer result in sales, there will be an
    aging of the ILFC aircraft fleet. The portfolios are not cross
    sections of the ILFC aircraft fleet, but consist of primarily
    younger aircraft.
    The FRBNY collateral pool is very large and consists of younger,
    in production aircraft. The FRBNY must approve all sales and
    secured borrowing, other than borrowing under the 2004 ECA
    facility. We cannot predict how this will impact the timing and
    conclusion of any potential sales.   51




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note A  Consideration of ILFCs Ability to
    Continue as a Going Concern (Continued)
  Managements
    Assessment and Conclusion
    
    credit ratings downgrade risk which could further reduce our
    ability to access public debt markets and our private debt;
    financing requirements for future debt repayments and aircraft
    purchase commitments;
    the potential financing sources discussed above;
    cash flows from operations, including potential non-performance
    of lessees and the mitigation of such impact on revenue due to
    repossession rights, security deposits and overhaul rentals; and
    cash flows generated from potential sales of aircraft portfolios
    and any uncertainties associated with those sales.        Note B
     Summary of Significant Accounting Policies
  Principles of Consolidation: Variable Interest Entities
  Variable Interest Entities: (i) (ii) (iii) (iv) (i) (ii) (iii) (iv) (v)
  re-evaluation
 52




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note B  Summary of Significant Accounting Policies
    (Continued)
    Lease Revenue:
        Initial Direct Costs:
  Flight Equipment Marketing:
  Provision for Overhauls:
    Cash: Debt Financing.
 53




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note B  Summary of Significant Accounting Policies
    (Continued)
  Restricted Cash: Debt Financing.
  Foreign Currency:
  Flight Equipment:
  25-year 25-year
         54




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note B  Summary of Significant Accounting Policies
    (Continued)
  Fair Value Measurements.
  Capitalized Interest:
  Deferred Debt Issue Costs:
  Derivative Financial Instruments:
    (i) (ii) (iii)
   55




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note B  Summary of Significant Accounting Policies
    (Continued)
  Fair Value Measurements: Fair Value
    Measurements
  Other Comprehensive Income (Loss):
  Guarantees:
  Income Taxes:
     56




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note B  Summary of Significant Accounting Policies
    (Continued)
    Stock-based Compensation: Employee Benefit Plans
  Use of Estimates:
  Reclassifications:
  Recent
    Accounting Pronouncements:
    Business Combinations:
  Non-controlling Interests in Consolidated Financial
    Statements:
  Disclosures about Derivative Instruments and Hedging
    Activities: (i)
 57




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note B  Summary of Significant Accounting Policies
    (Continued)
  (ii) (iii) Derivative Financial
    Instruments
  Employers Disclosures about Postretirement Benefit Plan
    Assets: Employee Benefit Plans
  Disclosures about Transfers of Financial Assets and Variable
    Interest Entities: Variable Interest Entities
  Interim Disclosures about Fair Value of Financial
    Instruments:
  Recognition and Presentation of Other-Than-Temporary
    Impairments:
  Determining Fair Value When the Volume and Level of Activity
    for the Asset or Liability Have Significantly Decreased and
    Identifying Transactions That Are Not Orderly:
  Subsequent Events:
 58




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note B  Summary of Significant Accounting Policies
    (Continued)
  Form 10-K,
  FASB Accounting Standards Codification:
  Measuring Liabilities at Fair Value: Fair Value
    Disclosures of Financial Instruments
  Future
    Application of Accounting Standards:
  Accounting for Transfers of Financial
    Assets:
  Consolidation of Variable Interest
    Entities: (i) (ii)
  Subsequent Events:
 59




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
    Note C
     Related Party Transactions
  Intercompany Allocations and Fees: Shareholders Equity.
  Credit Agreements with AIG Funding:
  Debt Financings
  Derivatives and Insurance Premiums: Fair Value Measurements Derivative Financial
    Instruments
    December 31,Income Statement

2009


2008


2007(Dollars in thousands)Expense (income):Interest expense on loan from AIG

$
100,504


$
6,825


$
Effect from derivatives on contracts with AIGFP(a)


(22,097
)


39,926



5,310Lease revenue related to hedging of lease receipts with AIGFP(a)


723



6,718



(799
)Allocation of corporate costs from AIG


8,683



13,167



12,877Management fees received


(9,457
)


(9,808
)


(9,878
)Management fees paid to subsidiaries of AIG


910



839



726   December 31,Balance Sheet

2009


2008(Dollars in thousands)Asset (liability):Loans from AIG Funding

$
3,909,567


$
Derivative assets, net(a)


186,771



88,203Income taxes (payable) receivable to/from AIG


(80,924
)


(32,083
)Taxes benefit sharing payable to AIG


(85,000
)


(85,000
)Accrued corporate costs payable to AIG


(5,298
)


(6,092
)Accrued interest payable to AIG


(672
)


Net (payable) receivable for management fees and other






(3
)     (a)
    See Note O  Derivative Financial
    Instruments for all derivative transactions 60




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
   Note
    D  Notes Receivable
    2009


2008Fixed rate notes with varying interest rates up to 10.3%

$
52,060


$
6,767LIBOR based notes with spreads ranging from 1.3% to 3.3%


60,000



74,560$
112,060


$
81,327     2010(a)

$
67,1612011


8,8652012


8,9372013


11,8342014


15,263$
112,060     (a)
    Includes a balloon payment for a note related to a sale of
    flight equipment.    Note
    E  Net Investment in Finance and Sales-type
    Leases
    December 31,


December 31,2009


2008Total lease payments to be received

$
171,549


$
165,503Estimated residual values of leased flight equipment
    (unguaranteed)


138,665



195,737Less: Unearned income


(49,133
)


(59,481
)Net investment in finance and sales-type leases

$
261,081


$
301,759     2010

$
39,3232011


32,3332012


32,0402013


24,5262014


21,596Thereafter


21,731Total minimum lease payments to be received

$
171,549  61




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note C  Net Investment in Finance Leases
    (Continued)
   Note
    F  Debt Financing
    December 31,2009


2008SecuredECA Financings

$
3,004,763


$
2,436,296Loans from AIG Funding


3,909,567



Other Secured Financings(a)


153,116



7,067,446



2,436,296UnsecuredCommercial Paper






1,752,000Public Bonds and Medium-Term Notes


16,566,099



19,748,541Bank Debt


5,087,750



7,558,75021,653,849



29,059,291Total Secured and Unsecured Debt Financing


28,721,295



31,495,587Less: Deferred Debt Discount


(9,556
)


(18,919
)28,711,739



31,476,668Subordinated Debt


1,000,000



1,000,000$
29,711,739


$
32,476,668     (a)
    Of this amount, $129,583 is non-recourse to ILFC. These secured
    financings were incurred by VIEs and consolidated.    ECA
    Financings
  Export Credit Facilities:
     62




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note F  Debt Financing (Continued)
    (i) (ii) (iii)
  Loans
    from AIG Funding
  3-month
  (i) (ii) (iii)
  (i) (ii) (iii)
 63




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note F  Debt Financing (Continued)
    (i) (ii) (iii) paid-in-kind
  Other
    Secured Financing Arrangements
  Variable Interest Entities.
  Variable Interest
    Entities.
 64




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note F  Debt Financing (Continued)
  Commercial
    Paper and Other Short-Term Debt
  Commercial Paper:
    Commercial Paper Funding Facility:
  Other Short-Term Financing: 90-day
  Public
    Bonds and Medium-Term Notes
    Maximum


Issued as ofOffering


December 31, 2009Registration statement dated August 7, 2009

$
Unlimited
(a)

$
Euro Medium-Term Note Programme dated September 2009(b)(d)


7,000,000



1,903,000
(c)    (a)
    As a result of our Well Known Seasoned Issuer (WKSI)
    status, we have an unlimited amount of debt securities
    registered for sale.(b)
    This is a perpetual program. As a bond issue matures, the
    principal amount of that bond becomes available for new
    issuances under the program.(c)
    We have hedged the foreign currency risk of the notes through
    foreign currency swaps.(d)
    This is a perpetual program. As a bond issue matures, the
    principal amount of that bond becomes available for new
    issuances under the program.   65




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note F  Debt Financing (Continued)
    Bank
    Debt
  Revolving Credit Facilities:
  Term Loans:
  Subordinated
    Debt
  (i) (ii) 10-year (iii) 30-year
 66




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note F  Debt Financing (Continued)
  Existing
    Commitments
    2010

$
6,650,3172011


7,653,6422012


4,132,5082013


7,863,3552014


1,469,474Thereafter


1,951,999$
29,721,295   Other
    Note
    G  Shareholders Equity
  Market
    Auction Preferred Stock
    Paid-in
    Capital
    Accumulated
    Other Comprehensive (Loss) Income
      2009


2008Cumulative unrealized (loss) gain related to cash flow hedges,
    net of tax of $74,566 (2009) and $90,497 (2008)

$
(138,482
)

$
(168,065
)Cumulative unrealized gain related to securities available for
    sale, net of tax of $149 (2009)


276



Total accumulated other comprehensive (loss) income

$
(138,206
)

$
(168,065
)  67




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note G  Shareholders Equity (Continued)
   Note
    H  Rental Income
    Year Ended2010

$
4,670,3272011


4,170,9382012


3,473,1532013


2,725,3812014


2,072,724Thereafter


3,736,884$
20,849,407     Lease receivables and other assets
  Note
    I  Income Taxes
    2009


2008


2007Current:Federal(a)

$
110,579


$
14,527


$
(145,650
)State


1,467



(557
)


7,209Foreign


1,262



1,210



2,305113,308



15,180



(136,136
)Deferred(b):Federal


379,813



370,968



455,569State(c)


7,417



5,448



(8,914
)387,230



376,416



446,655$
500,538


$
391,596


$
310,519    (a)
    Including U.S. tax on foreign income.(b)
    Deferred taxes were also provided (charged) to other
    comprehensive income of $(16,078), $33,302, and $58,659 for the
    years ended December 31, 2009, 2008, and 2007, respectively.(c)
    Includes a charge of $3,669 in 2009, a charge of $1,080 in 2008,
    and a benefit of $12,854 in 2007 for revaluation of state
    deferred taxes as a result of a change in our California
    apportionment factor. 68




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note I  Income Taxes (Continued)
    2009


2008Deferred Tax LiabilitiesAccelerated depreciation on flight equipment

$
5,394,198


$
4,951,176Straight line rents


37,586



39,565Derivatives


14,381



10,260Other


1,970



2,211Total Deferred Tax Liabilities

$
5,448,135


$
5,003,212Deferred Tax AssetsExcess of state income taxes not currently deductible

$
(17,668
)

$
(14,709
)Provision for overhauls


(137,997
)


(148,139
)Capitalized overhauls


(64,628
)


(30,214
)Rent received in advance


(92,129
)


(80,233
)Other comprehensive income


(74,419
)


(90,497
)Accruals and reserves


(85,008
)


(55,545
)Net operating loss carry forward(a)


(58,899
)


(75,386
)Losses of VIEs


(29,281
)


(23,756
)Other


(6,548
)


(6,483
)Total Deferred Tax Assets(b)

$
(566,577
)

$
(524,962
)Net Deferred Tax Liability

$
4,881,558


$
4,478,250    (a)
    Represents operating losses generated from tax years 2007 and
    2008. Deferred tax assets related to the losses generated are
    reclassified from current to deferred tax liabilities due to
    uncertainties with regard to the timing of their future
    utilization in the consolidated tax return of AIG. Deferred
    taxes related to the losses will be reclassified to current in
    future years when we are notified by AIG of amounts utilized in
    future tax years or through a carry back to prior tax years.(b)
    In making our assessment of the realization of deferred tax
    assets including net operating loss carry forwards, we
    considered all available evidence, including
    (i) current and projected financial reporting
    results; (ii) the carry forward periods for all
    taxable losses; (iii)the projected amount, nature
    and timing of the realization of deferred tax liabilities;
    (iv) implications of our tax sharing agreement with
    AIG; and (v)tax planning strategies that would be
    implemented, if necessary, to accelerate taxable amounts.    2009


2008


2007Computed expected provision at 35%

$
488,659


$
383,152


$
320,210State income tax, net of Federal


5,774



3,179



(1,108
)Foreign Taxes


10



97



1,062IRS Audit Adjustments(a)


2,185



2,863



1,709Other(b)


3,910



2,305



(11,354
)Provision for Income Taxes

$
500,538


$
391,596


$
310,519    (a)
    We are periodically advised of certain IRS and other adjustments
    identified in the U.S. Consolidated AIG tax return which are
    attributable to our operations. Under our tax sharing
    arrangement, we provide a charge or credit for the effect of the
    adjustments and the related interest in the period we are
    advised of such adjustments and interest.(b)
    Consists principally of permanent items related to current and
    prior year tax returns. 69




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note I  Income Taxes (Continued)
           Balance at January 1, 2007

$
38,381Additions based on tax positions related to 2007(a)


51,600Additions for tax positions of prior years(b)


(12,423
)Reductions for tax positions of prior years


Settlements(c)


(13,782
)Balance at December 31, 2007


63,776Additions based on tax positions related to 2008(a)


50,980Additions for tax positions of prior years(b)


6,726Reductions for tax positions of prior years


Balance at December 31, 2008(d)


121,482Additions based on tax positions related to 2009(a)


50,823Additions for tax positions of prior years(b)


1,121Reductions for tax positions of prior years


Settlements(c)


(7,602
)Balance at December 31, 2009(d)

$
165,824    (a)
    Consists principally of FSC and ETI benefits.(b)
    Items attributable to prior restatements submitted to the IRS as
    adjustments. 70




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note I  Income Taxes (Continued)
   (c)
    Amounts paid to AIG related to the settlement of prior year
    audit adjustments for the years 1991 to 1999. In addition, we
    paid $10,158, $0 and $4,550 in interest during the years ended
    December 31, 2007, 2008, and 2009, respectively.(d)
    $13,782, $29,544 and $7,972 is recorded in current taxes at
    December 2007, 2008, and 2009, respectively, and $0, $91,938 and
    $107,139 is recorded in deferred taxes at December 31,
    2007, 2008, and 2009, respectively. In addition, we recorded
    $50,713 in Accrued interest and other payables for the year
    ended December 31, 2009.      (i) (ii) (iii) (i) (ii) (iii)
  Note
    J  Other Information
  Concentration
    of Credit Risk
      Segment
    Information
    Geographical
    Concentration
   71




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INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note J  Other Information (Continued)
    2009


2008


2007Amount


%


Amount


%


Amount


%Europe

$
2,353,979



44.6


$
2,241,742



45.3
%

$
2,060,196



44.9
%Asia/Pacific


1,583,389



30.0



1,432,252



29.0



1,229,141



26.8The Middle East and Africa


638,747



12.1



558,553



11.3



528,095



11.5U.S. and Canada


453,976



8.6



444,921



9.0



536,313



11.7Central and South America and Mexico


245,128



4.7



265,980



5.4



233,866



5.1$
5,275,219



100
%

$
4,943,448



100
%

$
4,587,611



100
%     2009


2008


2007Amount


%


Amount


%


Amount


%China

$
903,361



17.1
%

$
835,722



16.9
%

$
714,181



15.6
%France


537,698



10.2



515,165



10.4



448,538



9.8   Currency
    Risk
  Interest and other
  Note K  Employee
    Benefit Plans
    Pension
    Plans
      Stock-Based
    and Other Compensation Plans
  (i) (ii) (iii) 2005-2006 (iv)
 72




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note K  Employee Benefit Plans
    (Continued)
  (v) (vi) (vii)
    Note
    L  Commitments and Contingencies
  Aircraft
    Orders
        Guarantees
  Asset Value Guarantees:
  Aircraft Loan Guarantees:
   73




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note L  Commitments and Contingencies
    (Continued)
  Leases
    2010

$
11,5242011


11,9682012


12,4482013


12,9472014


13,362Thereafter


9,063Total(a)

$
71,312     (a)
    
    Minimum rentals have not been reduced by minimum sublease
    rentals of $7,914 in the future under non-cancelable subleases.  Contingencies
  Flash Airlines: Boeing 737-300
  Krasnoyarsk Airlines (KrasAir): 757-200ER
 74




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INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note L  Commitments and Contingencies
    (Continued)
    Estate of Volare Airlines
    (Volare):
    Note M 
    Variable
    Interest Entities      Investment
    Activities
     75




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
   Note M 
    Variable
    Interest Entities (Continued)    Non-Recourse
    Financing Structures
  Debt
    Financing
  Debt Financing
  Wholly-Owned
    ECA Financing Vehicles
  Debt
    Financing
  Wholly-Owned
    Leasing Entities
    Note N 
    Fair Value Measurements
  Fair
    Value Measurements on a Recurring Basis
     76




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INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
   Note N 
    Fair Value Measurements (Continued)
    Derivative
    Contracts
  Derivative Financial
    Instruments
  
    Credit Valuation Adjustment (CVA)  The
    CVA adjusts the valuation of derivatives to account for
    nonperformance risk of our counterparty with respect to all net
    derivative assets positions.    
    Market Valuation Adjustment (MVA)  The
    MVA adjusts the valuation of derivatives to reflect the fact
    that we are an end-user of derivative products. As
    such the valuation is adjusted to take into account the
    bid-offer spread (the liquidity risk), as we are not a dealer of
    derivative products. The MVA is accounted for as a decrease to
    the net derivative position with the corresponding increase or
    decrease reflected in OCI for derivatives designated as cash
    flow hedges.    Marketable
    Securities
    Fair
    Value Measurements on a Non-Recurring Basis
   77




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
   Note N 
    Fair Value Measurements (Continued)
    
    Aircraft: We record aircraft at fair value when we
    determine the carrying value may not be recoverable. The fair
    value is measured using an income approach based on the present
    value of cash flows from contractual lease agreements and
    projected future lease payments, including contingent rentals,
    net of expenses, which extend to the end of the aircrafts
    economic life in its highest and best use configuration, as well
    as a disposition value, based on expectations of market
    participants.
    Notes Receivable: We evaluate the fair value of our
    secured notes receivables using an income approach, which is
    based upon the present value of the expected cash flows of the
    underlying aircraft measured using the methodology described
    above. With regard to unsecured notes receivable, we also
    measure the fair value using an income approach based upon the
    net present value of expected cash flows of the underlying loan
    agreement.
    AVGs: We measure the fair value of AVGs at the inception
    of the agreement based upon the proceeds received. Subsequent
    non-recurring fair value measurements are based upon the
    differential between the contractual strike price and the fair
    value of the underlying aircraft, measured using the methodology
    described above.  Fair
    Value Hierarchy
    
    Level 1: Fair value measurements that are quoted
    prices (unadjusted) in active markets. Market price data
    generally is obtained from exchange markets. Our actively traded
    listed common stocks are measured at fair value on a recurring
    basis and classified as level 1 inputs.
    Level 2: Fair value measurements based on inputs
    other than quoted prices included in Level 1 that are
    observable for the asset or liability, either directly or
    indirectly. Level 2 inputs include quoted prices for similar
    assets and liabilities in active markets other than quoted
    prices that are observable for the asset or liability, such as
    interest rates and yield curves that are observable at commonly
    quoted intervals. Our derivative assets and liabilities are
    measured on a recurring basis and classified as level 2.
    Level 3: Fair value measurement based on valuation
    techniques that use significant inputs that are unobservable.
    These measurements include circumstances in which there is
    little, if any, market activity for the asset or liability. In
    certain cases, the inputs used to measure fair value may fall
    into different levels of the fair value hierarchy. In such
    cases, the level in the fair value hierarchy, within which the
    fair value measurement in its entirety falls, is determined
    based on the lowest level input that is significant to the fair
    value measurement in its entirety. Our assessment of the
    significance of a particular input to the fair value measurement
    in its entirety requires judgment. In making the assessment, we
    consider factors specific to the asset or liability. Assets and
    liabilities measured at fair value on a non-recurring basis and
    classified as level 3 include aircraft, notes receivable,
    net investment in finance leases, and AVGs. 78




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INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
   Note N 
    Fair Value Measurements (Continued)
   Assets
    and Liabilities Measured at Fair Value on a Recurring
    Basis
    CounterpartyLevel 1


Level 2


Level 3


Netting (a)


Total(Dollars in thousands)December 31, 2009:Derivative assets

$



$
258,347
(b)

$



$
(67,490
)

$
190,857Derivative liabilities






(67,490
)






67,490



Total derivative assets, net

$



$
190,857


$



$



$
190,857December 31, 2008:Derivative assets

$



$
192,568
(b)

$



$
(104,365
)

$
88,203Derivative liabilities






(104,365
)






104,365



Total derivative assets, net

$



$
88,203


$



$



$
88,203     (a)
    
    As permitted under GAAP, we have
    elected to offset derivative assets and derivative liabilities
    under our master netting agreement.(b)
    
    The balance includes CVA and MVA
    adjustments of $24,165 and $19,800 as of December 31, 2009
    and 2008, respectively. 79




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
   Note N 
    Fair Value Measurements (Continued)
     (Dollars in thousands)Derivatives:Total fair value at January 1, 2008

$
850,234Change in fair value subsequent to January 1, 2008:Effective portion recorded in OCI


(587,523
)Ineffective portion recorded in income


(18,518
)Change in accrued interest


(10,430
)Swap maturity settlements


(123,450
)Loss on matured swaps


(22,110
)Total fair value at December 31, 2008

$
88,203Change in fair value subsequent to December 31, 2008:Effective portion recorded in OCI

$
160,617Ineffective portion recorded in income


11,923Change in accrued interest


(22,041
)Swap maturity settlements


(61,620
)Gain on matured swaps recorded in income


9,689Contracts entered into during the current year not designated as
    hedges


5,500Change in fair value of derivatives not accounted for as hedges
    recorded in income


(1,414
)Total Fair Value at December 31, 2009

$
190,857   Assets
    and Liabilities Measured at Fair Value on a Non-recurring
    Basis
      80




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INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
   Note O
     Derivative Financial Instruments
        Fair Value Measurements
    Asset Derivatives


Liability DerivativesNotional Value


USD Fair Value


Notional Value


USD Fair Value(In thousands)December 31, 2009:Derivatives designated as hedging instruments:Interest rate swap agreements(a)

$



$



$
1,070,513


$
(66,916
)Foreign exchange swap agreements


1,600,000



254,261


$
14,191



(574
)Total derivatives designated as hedging instruments





$
254,261






$
(67,490
)Derivatives not designated as hedging instruments:Interest rate cap agreements

$
100,631


$
4,086


$



$
Total derivatives





$
258,347






$
(67,490
)December 31, 2008:Derivatives designated as hedging instruments:Interest rate swap agreements(a)

$



$



$
1,215,309


$
(103,622
)Foreign exchange swap agreements


1,600,000



187,589


$
72,100



(743
)£
300,000



4,979


$




Total derivatives designated as hedging instruments





$
192,568






$
(104,365
)     (a)
    
    Converts floating interest rate
    debt into fixed rate debt. 81




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
   Note O
     Derivative Financial Instruments (Continued)
     December 31Gain (Loss)

2009


2008


2007(Dollars in thousands)Effective portion of change in fair market value of
    derivatives(a)(b)

$
160,617


$
(601,008
)

$
301,030Amortization of balances of de-designated hedges and other
    adjustments


(485
)


(742
)


(2,498
)Foreign exchange component of cross currency swaps (credited)
    charged to income


(114,620
)


507,050



(465,859
)Income tax effect


(15,929
)


33,145



58,565Net changes in cash flow hedges, net of taxes

$
29,583


$
(61,555
)

$
(108,762
)     (a)
    
    Includes gains(losses) realized on
    swaps that matured during 2009, 2008, and 2007 that did not have
    hedge accounting treating, or were not perfectly effective, for
    the entire term of the contracts. The amounts included are
    $9,689, ($22,110), and ($3,732) in 2009, 2008, and 2007,
    respectively.(b)
    
    2009 and 2008 include ($12,658) and
    ($19,800) of combined CVA and MVA, respectively.    Amount of UnrealizedGain or (Loss)Recorded in OCI onDerivatives(Effective Portion)December 31,Derivatives Designated as Cash Flow Hedges

2009


2008


2007(Dollars in thousands)Interest rate swap agreements

$
7,260


$
(79,575
)

$
(40,077
)Foreign exchange swap agreements(a)


66,037



(503,765
)


419,942Total

$
73,297


$
(583,340
)

$
379,865     (a)
    
    2009 and 2008 include ($12,658) and
    ($19,800) of combined CVA and MVA, respectively. 82




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INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
   Note O
     Derivative Financial Instruments (Continued)
     Amount of Gain or(Loss) Reclassifiedfrom AOCI IntoIncome(Effective Portion)Location of Gain or (Loss) Reclassified from AOCI

December 31,into Income (Effective Portion)

2009


2008


2007(Dollars in thousands)Interest rate swap agreements  interest expense

$
(36,916
)

$
(14,613
)

$
4,131Foreign exchange swap agreements  interest expense


(49,681
)


38,999



73,905Foreign exchange swap agreements  lease revenue


(723
)


(6,718
)


799Total

$
(87,320
)

$
17,668


$
78,835       Amount of Gain or (Loss)Recognized in Income onDerivatives (IneffectivePortion)(a)September 30,2009


2008


2007(Dollars in thousands)Derivatives Designated as Cash Flow Hedges:Interest rate swap agreements

$
(868
)

$
(1,768
)

$
10,557Foreign exchange swap agreements


12,791



(16,750
)


872Total


11,923



(18,518
)


11,429Derivatives Not Designated as a Hedge:Interest rate cap agreements(b)


(647
)






Interest rate swap agreements










(158
)Foreign exchange swap agreements










17,704Reconciliation to Consolidated Statements of Income:Change in fair value of foreign denominated debt related to swap
    agreements not designated as a hedge










(33,572
)Income effect of maturing derivative contracts


9,689



(22,110
)


(3,732
)Reclassification of amounts de-designated as hedges recorded in
    AOCI


485



702



3,019Effect from derivatives, net of change in hedged items due to
    changes in foreign exchange rates

$
21,450


$
(39,926
)

$
(5,310
)     (a)
    
    All components of each
    derivatives gain or loss were included in the assessment
    of effectiveness.(b)
    
    An additional ($767) of
    amortization of premium paid to the derivative counterparty was
    recognized in Interest expense during the year ended
    December 31, 2009. 83




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
   Note
    P  Fair Value Disclosures of Financial
    Instruments
    Cash:
  Notes receivable:
  Debt Financing: long-term fixed-rate year-end.
  Derivatives:
  AVGs:
    2009


2008Carrying





CarryingAmount


Fair Value


Amount


Fair Valueof Asset


of Asset


of Asset


of Asset(Liability)


(Liability)


(Liability)


(Liability)Cash

$
652,067
(a)

$
652,067


$
2,385,948


$
2,385,948Notes receivable


112,060



107,063



81,327



71,012Debt financing (including foreign currency adjustment and
    subordinated debt and excluding debt discount)


(30,112,395
)


(26,762,955
)


(32,833,687
)


(28,818,662
)Derivative assets, net


190,857



190,857



88,203



88,203AVGs


(10,860
)


(12,886
)


(12,778
)


(15,209
)     (a)
    
    Includes restricted cash of
    $315,156.  Note
    Q  Flight Equipment Rent
   84




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND
    SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
   Note
    R  Quarterly Financial Information
    (Unaudited)
    QuarterFirst


Second


Third


Fourth


TotalYear Ended December 31, 2009Total Revenues

$
1,278,080


$
1,330,153


$
1,347,179


$
1,366,329


$
5,321,741Pre-tax Income


314,902



364,397



380,887



335,981
(a)


1,396,167Net Income


202,957



236,925



245,813



209,934



895,629Year Ended December 31, 2008Total Revenues

$
1,215,214


$
1,313,114


$
1,298,953


$
1,261,265


$
5,088,546Pre-tax Income(b)


231,985



332,210



349,266



181,260
(c)


1,094,721Net Income


149,502



214,063



224,606



114,954



703,125     (a)
    In the fourth quarter of 2009, we recorded impairment charges
    aggregating $52,938 related to three aircraft.(b)
    In the third quarter of 2008, we recorded an out-of-period
    adjustment which increased pretax income by $51,238. The
    out-of-period adjustment resulted from the adoption of new fair
    value accounting standards as of January 1, 2008. During
    the first and second quarters of 2008, we recorded charges to
    pre-tax income of $39,958 and $11,281, respectively, for CVA and
    MVA on our cash flow hedges. In the third quarter, we concluded
    that the CVA and MVA on our cash flow hedges should have been
    recorded in OCI. The Board of Directors was informed of this
    out-of-period adjustment. We do not believe the effect of the
    out-of-period adjustment is material to any period affected.(c)
    In the fourth quarter of 2008, we recorded the following:
    (i) charges aggregating $46,557 to writedown two
    secured notes to fair value and (ii) charges aggregating
    $51,414 related to put fees on maturing debt and losses on
    matured swaps.  85




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
    on
    Financial Statement Schedule  To the
    Shareholders and Board of Directors
    of International Lease Finance Corporation:
  Form 10-K Form 10-K.
      86




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  SCHEDULE II  VALUATION AND
    QUALIFYING ACCOUNTS
  COL. A

COL. B


COL. C


COL. D


COL. EADDITIONSCharged toBalance at


Charged to


OtherBeginning of


Costs and


Accounts 


Deductions 


Balance atDescription

Period


Expenses


Describe


Describe(a)


End of Period(Dollars in thousands)Reserve for overhaul:Year ended December 31, 2009

$
419,329


$
346,966






$
375,989


$
390,306Year ended December 31, 2008


372,324



264,592







217,587



419,329Year ended December 31, 2007


245,369



290,134







163,179



372,324     (a)
    Reimbursements to lessees for overhauls performed and amounts
    transferred to buyers for aircraft sold. 87




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##### Table of Contents



SIGNATURES
      INTERNATIONAL LEASE FINANCE CORPORATION
  By
    /s/ALAN
    H. LUND        Signature

Title

Date/s/  DOUGLAS
    M. STEENLANDDouglas
    M. Steenland

Director and Chairman of the Board

March 1, 2010/s/  JOHN
    L. PLUEGERJohn
    L. Plueger

Director, Acting Chief Executive Officer, President and Chief
    Operating Officer
    (Principal Executive Officer)

March 1, 2010/s/  ALAN
    H. LUNDAlan
    H. Lund

Director, Vice Chairman of the Board
    and Chief Financial Officer
    (Principal Financial Officer)

March 1, 2010/s/  ALAIN
    KARAOGLANAlain
    Karaoglan

Director

March 1, 2010/s/  ALAN
    M. PRYORAlan
    M. Pryor

Director

March 1, 2010/s/  DAVID
    L. HERZOGDavid
    L. Herzog

Director

March 1, 2010/s/  LESLIE
    L. GONDALeslie
    L. Gonda

Director, Chairman of the Executive Committee

March 1, 2010/s/  LOUIS
    L. GONDALouis
    L. Gonda

Director

March 1, 2010/s/  ROBERT
    A. GENDERRobert
    A. Gender

Director

March 1, 2010/s/  WILLIAM
    N. DOOLEYWilliam
    N. Dooley

Director

March 1, 2010/s/  KURT
    H. SCHWARZKurt
    H. Schwarz

Senior Vice President, Chief Accounting Officer and
    Controller
    (Principal Accounting Officer)

March 1, 2010  88




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##### Table of Contents



SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED
    PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH
    HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF
    THE ACT.
   89