##### Table of Contents



UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C. 20549
    FORM 10-K
    (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, 2005
  OR
  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 1-316161
  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
    registered6.375% Notes due March 15,
    2009

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




---



##### 



INTERNATIONAL
    LEASE FINANCE CORPORATION
  2005
    FORM 10-K
    ANNUAL REPORT
    TABLE OF CONTENTS
  PagePART
    IItem 1.

Business


1Item 1A.

Risk Factors


7Item 1B.

Unresolved Staff
    Comments


9Item 2.

Properties


9Item 3.

Legal
    Proceedings


11PART
    IIItem 5.

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


11Item 6.

Selected Financial
    Data


12Item 7.

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


14Item 7A.

Quantitative and
    Qualitative Disclosures About Market Risk


27Item 8.

Financial
    Statements and Supplementary Data


27Item 9.

Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


28Item 9A.

Controls and
    Procedures


28Item 9B.

Other
    Information


29PART
    IIIItem 10.

Directors and
    Executive Officers of the Registrant


30Item 14.

Principal
    Accountant Fees and Services


30PART
    IVItem 15.

Exhibits and
    Financial Statement Schedules


30Exhibit 4.13Exhibit 12Exhibit 23Exhibit 31.1Exhibit 31.2Exhibit 32.1




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##### Table of Contents



PART
    I  Item
    1.  Business  General
    Properties  Commitments.
      Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.
  (310) 788-1999, (310) 788-1990,
    Aircraft
    Leasing
   1




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##### Table of Contents



Properties  Flight Equipment
             2




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##### Table of Contents



Flight
    Equipment Marketing
  Managements Discussion and Analysis of Financial
    Condition and Results of Operations  Results of
    Operations
      Fleet
    Management Services
    Financing/Source
    of Funds
  Managements Discussion and Analysis
    of Financial Condition and Results of Operations.
 3




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##### Table of Contents



Customers
    Customers by Region2005


2004


2003Number





Number





Numberof





of





ofRegion

Customers


%


Customers


%


Customers


%Europe


66



45.2
%


66



47.2
%


65



47.1
%Asia and the Pacific


33



22.6



31



22.1



32



23.1United States and Canada


24



16.5



19



13.6



20



14.5Central and South America and
    Mexico


10



6.8



10



7.1



11



8.0Africa and Middle East


13



8.9



14



10.0



10



7.3146



100
%


140



100
%


138



100
%     Notes to Consolidated Financial
    Statements
    2005


2004


2003Amount


%


Amount


%


Amount


%(Dollars in thousands)Europe

$
1,694,841



48.4
%

$
1,432,441



48.5
%

$
1,315,851



46.9
%Asia and the Pacific


775,047



22.1



689,201



23.3



661,956



23.6United States and Canada


482,157



13.8



382,090



12.9



424,457



15.0Central and South America and
    Mexico


253,667



7.3



208,622



7.1



221,067



7.9Africa and the Middle East


294,623



8.4



243,170



8.2



183,880



6.6$
3,500,335



100
%

$
2,955,524



100
%

$
2,807,211



100
%     2005


2004


2003Amount


%


Amount


%


Amount


%(Dollars in thousands)France

$
442,402



12.6
%

$
351,394



11.9
%

$
326,010



11.6
%China


423,445



12.1



357,512



12.1



308,204



11.0United States


389,536



11.1



236,353



8.0



310,126



11.0   Competition
   4




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##### Table of Contents



Government
    Regulation
                  Employees
    Insurance
    co-insurance
 5




---



##### Table of Contents



Forward-Looking
    Statements
  Form 10-K Form 10-K
 6




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##### Table of Contents



Item
    1A.  Risk Factors  Risk
    Factors Affecting International Lease Finance
    Corporation
  Quantitative and Qualitative Disclosures about Market
    Risk
  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
    Security, terrorism and war
    Worldwide health concerns
    Equity and borrowing capacity
    Environmental concerns
    Government regulation
    Interest rates
    Overcapacity    
    a downward pressure on demand for the aircraft in our fleet and
    reduced market lease rates and lease margins;
    a higher incident of lessee defaults, lease restructurings and
    repossessions resulting in lower lease margins due to
    maintenance, consulting and legal costs associated with the
    repossession, as well as lost revenue for the time the aircraft
    are off lease and possibly lower lease rates from the new
    lessees;
    a higher incident of situations where we engage in restructuring
    lease rates for our troubled customers which reduces overall
    lease margins; and
    an inability to immediately place new and used aircraft when
    they become available through our purchase commitments and
    regular lease terminations on commercially acceptable terms,
    resulting in lower lease margins due to aircraft not earning
    revenue and resulting in storage, insurance and maintenance
    costs.
    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.  Airframe,
    Engine and Other Manufacturer Risks
    
    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; 7




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##### Table of Contents




    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 market place 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 some of the aircraft
    in our fleet.  Borrowing
    Risks
  Liquidity
  
    an inability to acquire aircraft, for which we have signed
    contracts, resulting in lower growth, lost revenue and strained
    manufacturer and customer relationships; and
    an inability to meet our debt maturities as they become due,
    resulting in payment defaults, non-compliance with debt
    covenants, reduced credit ratings and an inability to access
    certain debt markets.  Interest Rate Risks
  Other
    Risks
  Residual Value Managements Discussion and
    Analysis of Financial Condition and Results of
    Operations  Critical Accounting Polices and
    Estimates  Flight Equipment.
  Obsolescence Risk long-lived
  Key Personnel
  Foreign currency exchange rate risk
  Relationship with AIG 
 8




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##### Table of Contents



A-1+, (A1/Stable/P-1)
 Item
    1B.  Unresolved Staff Comments   Item
    2.  Properties  Flight
    Equipment
        Aircraft Type

2006


2007


2008


2009


2010


2011


2012


2013


2014


2015


2016


2017


2018


2019


2020


2021


Total737-300/
    400/500


8



11



25



9











4







































57737-600/
    700/800


10



19



14



4



11



29



21



13



1



7



1







9



2



2



1



144757-200


3



25



11



15



9



















1



























64767-200










2







1















































3767-300


8



15



16



6



1



2



4



1



































53777-200






5



4



2



3



5



8



6



































33777-300






2



1







3



6



1



















4



















17747-300














1



1















































2747-400










4



7



1



4



1







































17MD-82/83


1































































1MD-11






1



3



3



1















































8A300-600R


1



2



2







1















































6A310


1



1



5























































7A319


1



4



10



10



4



2



3



10



10



8



6



18



















86A320


3



9



17



20



14



9



13



8



6



1



6























106A321


4



8



3



18



6



6







4



2











2



















53A330-200






5



11



13



6



2



5



6



2































50A330-300


1



4







2



1



4



3







































15A340-300


2



8



1



2











2







































15A340-600






2



1



















1







2



1



2



















9Total


43



121



130



112



63



69



65



49



21



19



14



26



9



2



2



1



746     9




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##### Table of Contents



Commitments
    Aircraft Type

2006


2007


2008


2009


2010


2011


2012


2013


2014


2015


Total737-600/700/800(a)


24



24



21































69747-400(b)


2







































2777-200ER


6



3



































9777-300ER


5



7



3































15787-800


















10



10



















20A319-100(a)


21



16



14



10



























61A320-200(a)


19



17



22



13



























71A321-200(a)


10



6



10



5



























31A330-200/300(a)


8



9



7



4



























28A340-600


3



1



2































6A350-800


























2



6



4



4



16A380-800






2



3



3



2























10Total


98



85



82



35



12



10



2



6



4



4



338    (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)
    We are acquiring the aircraft used and they are committed to
    sale.    Aircraft Type

2007


2008


2009


Thereafter


Total737-700/800(a)


3







6







9777-200ER/300ER(a)










3







3787-800














4



4Total


3



0



9



4



16    (a)
    We have the right to designate the size of the aircraft within
    the specific model type at specific dates prior to contractual
    delivery.  Managements Discussion and
    Analysis of Financial Condition and Results of
    Operations.
  non-refundable
   10




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##### Table of Contents



Number of


NumberDelivery Year

Aircraft


Leased


% Leased2006


96



96



100
%2007


85



65



76
%2008


82



11



13
%Thereafter


73



0



0
%     Facilities
    Item 3.
    Legal
    Proceedings  737-300
   PART II  Item
    5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities   11




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##### Table of Contents



Item 6. Selected
    Financial Data  Managements Discussion
    and Analysis of Financial Condition and Results of
    Operations Form 10-K.
  Years Ended December
    31,2005


2004


2003


2002


2001(Dollar amounts in
    thousands)Operating Data:Rentals of flight equipment

$
3,500,335


$
2,955,524


$
2,807,211


$
2,546,142


$
2,411,576Flight equipment marketing


66,790



77,664



28,988



48,454



31,840Flight equipment
    marketing  securitization






32,854



23,245







Interest and other income


61,426



93,844



17,907



64,655



108,809Total revenues


3,628,551



3,159,886



2,877,351



2,659,251



2,552,225Expenses


2,978,145



2,491,779



2,236,545



2,037,784



1,859,054Income before income taxes and
    cumulative effect of accounting change


650,406



668,107



640,806



621,467



693,171Net income


422,960



462,006



435,481



417,406



471,058Lease margin(a)(b)


16.89%



18.22%



20.32%



19.96%



22.91%Profit margin(b)(c)


17.92%



21.14%



22.27%



23.37%



27.16%Ratio of Earnings to Fixed
    Charges and Preferred Stock Dividends(d):


1.48x



1.62x



1.58x



1.55x



1.65xBalance Sheet Data:Flight equipment under operating
    leases (net of accumulated depreciation)

$
34,748,932


$
30,505,422


$
28,190,689


$
24,864,055


$
20,613,524Net investment in finance and
    sales-type
    leases


308,471



307,466



303,373



150,611



142,013Total assets


37,529,871



34,007,900



31,291,562



27,148,615



22,940,830Total debt


26,104,165



23,175,596



21,852,743



18,977,268



15,826,296Shareholders equity


6,182,487



5,329,937



4,856,504



4,414,071



3,889,916Other Data:Aircraft lease portfolio at period
    end(e):Owned


746



667



611



543



453Leased in














13



18Subject to finance and sales-type
    leases


17



9



9



5



4Aircraft sold or remarketed during
    the period


29



49



39



8



7    12




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##### Table of Contents



(a)
    Lease margin is a non-GAAP measure. It is defined as
    Rentals of flight equipment less
    Expenses, adjusted for expenses related to variable
    interest entities and other expenses we consider not related to
    our core business operations, divided by Rentals of flight
    equipment. (See Item 7, Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Non-GAAP Financial
    Measures.)(b)
    Includes the unrealized gain (loss) attributable to economic
    hedges not qualifying for hedge accounting treatment under
    SFAS 133. This will increase the inter-period volatility in
    the operating and lease margin percentages.(c)
    Income before income taxes and cumulative effect of
    accounting change divided by Total revenues.    Properties  Flight Equipment.
 13




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##### Table of Contents



Item
    7.  Managements Discussion and Analysis of
    Financial Condition and Results of Operations  Overview
    and Industry Condition
          Managements Discussion and
    Analysis  Non-GAAP Financial
    Measures) Risk Factors.
     14




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##### Table of Contents



Critical
    Accounting Policies and Estimates
      Lease Revenue Past-due take-off
    Flight Equipment Marketing
 15




---



##### Table of Contents



Flight Equipment
        Risk Factors
  Capitalized Interest
  Provision for Overhauls
   16




---



##### Table of Contents



Derivative Financial Instruments:
  Financial
    Condition
  Properties  Commitments
  December 31,


December 31,


December 31,2005


2004


2003(Dollars in thousands)Public term debt with single
    maturities

$
13,813,700


$
11,544,575


$
10,663,275Public medium-term notes with
    varying maturities


4,689,365



5,972,171



5,960,236Capital lease obligations






39,580



143,254Synthetic lease obligations










464,222Bank term debt


4,014,573



2,973,525



3,070,120Junior subordinated debt


1,000,000







Subtotal


23,517,638



20,529,851



20,301,107Commercial paper


2,625,409



2,675,247



1,575,957Less: Deferred debt discount


(38,882
)


(29,502
)


(24,321
)Total debt financing

$
26,104,165


$
23,175,596


$
21,852,743Composite interest rate


5.00%



4.34%



4.53%Percentage of total debt at fixed
    rate


79.03%



66.21%



77.07%Composite interest rate on fixed
    debt


5.03%



5.07%



5.29%Bank prime rate


7.25%



5.25%



4.00%  17




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##### Table of Contents



Public
    Debt
    Maximum


Sold as of


Sold as ofOffering


December 31, 2005


March 10, 2006(Dollars in millions)Registration statement dated
    December 20, 2002 (including $2.88 billion Medium-Term
    Note program and $1.0 billion Retail Medium-Term Note
    Program)

$
6,080
(a)

$
5,710


$
5,710Registration statement dated
    December 28, 2004 (including $2.0 billion Medium-Term
    Note program)


7,045
(b)


2,950



3,250Euro Medium-Term Note Programme
    dated May 2004(c)(d)


7,000



4,979



4,979    (a)
    Includes $1.08 billion, which was incorporated into the
    registration statement from a prior registration statement,
    increasing the maximum offering from $5.0 billion to
    $6.08 billion.  (b)
    Includes $2.045 billion, which was incorporated into the
    registration statement from a prior registration statement,
    increasing the maximum offering from $5.0 billion to
    $7.045 billion.  (c)
    We have hedged the foreign currency risk of the notes through
    derivatives or through the offset provided by operating lease
    payments denominated in the related currency.  (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.  Capital
    Lease Obligations
    Bank Term
    Debt
     18




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##### Table of Contents



Junior
    Subordinated Debt
  (ii) 10-year (iii) 30-year
  Commercial
    Paper
  Bank Commitments
  Bank
    Commitments
  364-day
  Other
    Variable Interest Entities
   19




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##### Table of Contents



Notes to
    Consolidated Financial Statements
  Notes to Consolidated Financial Statements
    Derivatives
    
    Contracts entered into with the intention of fixing the interest
    rate on part of our commercial paper program, and our bank term
    debt and interest rate and currency on our Euro denominated
    debt, which do not qualify because our documentation on how to
    calculate ineffectiveness was deemed insufficient.
    A contract entered into with the intention to hedge the interest
    rate on our capital lease obligations, where the debt and the
    contract dates were slightly different and the hedge thereby
    fell outside of the hedge ineffectiveness range, as defined by
    SFAS 133.
    One contract we obtained as a result of an exercise of a
    guarantee that has no hedged item.        Common
    Stock
    Market
    Liquidity Risks
   20




---



##### Table of Contents



Existing
    Commitments
  Commitments Due by
    YearTotal


2006


2007


2008


2009


2010


Thereafter(Dollars in thousands)Medium Term and Long Term Debt

$
23,517,638


$
4,018,942


$
3,799,466


$
4,311,619


$
3,832,951


$
3,298,522


$
4,256,138Commercial Paper


2,625,409



2,625,409



















Interest Payments on Debt
    Outstanding(a)(b)


7,177,609



1,102,692



908,630



723,186



513,740



315,239



3,614,122Operating Leases


94,027



8,635



8,952



9,303



9,594



9,969



47,574Pension Obligations(c)


12,515



1,939



2,209



2,160



2,112



2,064



2,031Tax Benefit Sharing Agreement Due
    to AIG


245,000







160,000







85,000







Purchase Commitments(d)


23,319,600



6,037,100



5,599,400



4,924,100



2,134,200



1,641,200



2,983,600Total

$
56,991,798


$
13,794,717


$
10,478,657


$
9,970,368


$
6,577,597


$
5,266,994


$
10,903,465   Contingent
    Commitments
  Contingency Expiration by
    YearTotal


2006


2007


2008


2009


2010


Thereafter(Dollars in thousands)Purchase Options on New Aircraft(d)

$
1,539,700


$



$
131,400


$



$
867,900


$



$
540,400Put Options(e)


343,550























343,550Asset Value Guarantees(e)


58,889



2,626



5,341



8,178











42,744Loan Guarantees(e)


87,676



48,444



















39,232Lines of Credit


50,000























50,000Total

$
2,079,815


$
51,070


$
136,741


$
8,178


$
867,900


$



$
1,015,926    (a)
    Future interest payments on floating rate debt are estimated
    using floating interest rates in effect at December 31, 2005  (b)
    Includes the effect of interest rate derivative instruments.  (c)
    Our pension obligations are a part of intercompany expenses,
    which AIG allocates to us on an annual basis. The amount is an
    estimate of such allocation. The column Thereafter
    consists of the 2011 estimated allocation. The amount allocated
    has not been material to date.  (d)
    The recorded basis of aircraft may be adjusted to reflect
    notional credits provided by the manufacturers in connection
    with the leasing of aircraft.  (e)
    From time to time we participate with airlines, banks, and other
    financial institutions to assist in financing aircraft by
    providing asset guarantees, put options or loan guarantees
    collateralized by aircraft. As a result, 21




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should we be called upon to fulfill our obligations, we would
    have recourse to the value of the underlying aircraft. To the
    extent that the value of the underlying aircraft is less than
    the guarantee, we would record a contingent loss. Guarantees
    entered into after December 31, 2002, are recorded at fair
    value in accordance with FIN No. 45 Guarantors
    Accounting and Disclosure Requirements for Guarantees, Including
    Indirect Guarantees at Indebtedness of Others. See
    Note A of Notes to Consolidated Financial Statements.  Non-GAAP
    Financial Measures
  Lease
    Margin
    2005


2004


2003


2002


2001(Dollars in millions)Total revenues (A)

$
3,628.5


$
3,159.9


$
2,877.4


$
2,659.3


$
2,552.2Flight equipment marketing


(66.8
)


(77.7
)


(29.0
)


(48.5
)


(31.8
)Flight equipment
    marketing  securitization






(32.9
)


(23.2
)






Interest and other


(61.4
)


(93.8
)


(17.9
)


(64.7
)


(108.8
)Rental of flight equipment (B)


3,500.3



2,955.5



2,807.3



2,546.1



2,411.6Total expenses (C)


2,978.1



2,491.8



2,236.5



2,037.8



1,859.1VIE expenses


(19.1
)


(20.8
)


0.4







Other expenses


(50.0
)


(53.9
)










Adjusted total expenses (D)


2,909.0



2,417.1



2,236.9



2,037.8



1,859.1Profit Margin
    (A)(C)=(E)

$
650.4


$
668.1


$
640.9


$
621.5


$
693.1Lease Margin
    (B)(D)=(F)

$
591.3


$
538.4


$
570.4


$
508.3


$
552.5Profit Margin % (E) divided by (A)


17.92
%


21.14
%


22.27
%


23.37
%


27.16
%Lease Margin % (F) divided by (B)


16.89
%


18.22
%


20.32
%


19.96
%


22.91
%      22




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##### Table of Contents



Results
    of Operations
  2005
    Compared to 2004
  and/or
      Notes to Consolidated Financial
    Statements
     23




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##### Table of Contents



ILFC
    Composite Interest Rates and Prime Rates
  
  Notes to Consolidated
    Financial Statements
          
    (2005) $38.3 million related to the restructuring of
    ownership of aircraft in certain lease transactions in
    Australia. See Note K of Notes to Consolidated Financial
    Statements. $11.7 million related to a write-down of
    notes receivable.
    (2004) In connection with a global aircraft lease transaction
    entered into in 2000 for a total of 14 aircraft, we acquired
    certain securities and assumed certain obligations of ATA. On
    October 26, 2004, ATA filed for bankruptcy protection and we
    recorded impairment losses in the amount of $28.9 million on out
    investment in ATA non-voting preferred stock and a $25.0 million
    charge for the assumed liabilities. 24




---



##### Table of Contents



Notes to the Consolidated Financial Statements
    2004
    Compared to 2003
  and/or
      Notes to Consolidated Financial Statements
     25




---



##### Table of Contents



Notes to Consolidated
    Financial Statements
          Notes to Consolidated Financial
    Statements.
  Notes to the
    Consolidated Financial Statements.
  New
    Accounting Pronouncements
   26




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##### Table of Contents



Item
    7A. Quantitative and Qualitative Disclosures About
    Market Risk        re-pricing re-priced.
  ILFC
    Market Risk
  December 31, 2005


December 31, 2004Average


High


Low


Average


High


Low(Dollars in millions)Combined

$
135.0



238.7



84.2


$
69.6


$
86.3


$
34.6Interest Rate


135.4



240.3



83.9



69.7



86.4



35.0Currency


2.1



4.2



0.5



0.3



0.5



0.2    Item
    8.  Financial Statements and Supplementary
    Data   27




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##### Table of Contents



Item
    9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure   Item 9A.  Controls
    and Procedures  (A) Evaluation
    of Disclosure Controls and Procedures
          Variable
    Interest Entities
    (B) Changes
    in Internal Control Over Financial Reporting
    28




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##### Table of Contents



(C) Remediation
    of Material Weaknesses in Internal Control Over Financial
    Reporting
      Form 10-K,
 Item
    9B. Other Information   29




---



##### Table of Contents



PART
    III  Item
    10.  Directors and Executive Officers of the
    Registrant  Code of
    Ethics and Conduct
  www.aigcorporate.com
 Item
    14.  Principal Accountant Fees and
    Services    2005


2004Audit Fees(a)

$
1,892,500


$
1,792,600Audit-Related Fees(b)






215,400Tax Fees(c)


362,309



473,226Total Fees

$
2,254,809


$
2,481,226      (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 2005 and 2004 assessment.(b)
    
    Audit-Related Fees consist of fees for consulting on various
    accounting issues.(c)
    
    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     30




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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


34Consolidated Financial Statements:Balance Sheets at
    December 31, 2005 and 2004


35Statements of Income for the years
    ended December 31, 2005, 2004 and 2003


36Statements of Shareholders
    Equity for the years ended December 31, 2005, 2004 and 2003


37Statements of Cash Flows for the
    years ended December 31, 2005, 2004 and 2003


38Notes to Consolidated Financial
    Statements


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


61   Schedule Number


Description

PageII


Valuation and Qualifying Accounts


62       ExhibitNumber


Description3.1


Restated Articles of Incorporation
    of the Company, as amended through December 9, 1992, filed
    November 3, 1993 (filed as an exhibit to Registration
    Statement
    No. 33-50913
    and incorporated herein by reference).3.2


Certificate of Determination of
    Preferences of Series A Market Auction Preferred Stock
    (filed December 9, 1992 as an exhibit to Registration
    Statement
    No. 33-54294
    and incorporated herein by reference).3.3


Certificate of Determination of
    Preferences of Series B Market Auction Preferred Stock
    (filed December 9, 1992 as an exhibit to Registration
    Statement
    33-54294 and
    incorporated herein by reference).3.4


Certificate of Determination of
    Preferences of Series C Market Auction Preferred Stock
    (filed as an exhibit to
    Form 10-K
    for the year ended December 31, 1994 and incorporated
    herein by reference).3.5


Certificate of Determination of
    Preferences of Series D Market Auction Preferred Stock
    (filed as an exhibit to
    Form 10-K
    for the year ended December 31, 1994 and incorporated
    herein by reference).3.6


Certificate of Determination of
    Preferences of Series E Market Auction Preferred Stock
    (filed as an exhibit to
    Form 10-K
    for the year ended December 31, 1994 and incorporated
    herein by reference).3.7


Certificate of Determination of
    Preferences of Series F Market Auction Preferred Stock
    (filed as an exhibit to
    Form 10-K
    for the year ended December 31, 1994 and incorporated
    herein by reference).3.8


Certificate of Determination of
    Preferences of Series G Market Auction Preferred Stock
    (filed as an exhibit to
    Form 10-K
    for the year ended December 31, 1995 and incorporated
    herein by reference).3.9


Certificate of Determination of
    Preferences of Series H Market Auction Preferred Stock
    (filed as an exhibit to
    Form 10-K
    for the year ended December 31, 1995 and incorporated
    herein by reference).3.10


Certificate of Determination of
    Preferences of Preferred Stock of the Company (filed as an
    exhibit to
    Form 10-K
    for the year ended December 31, 2001 and incorporated
    herein by reference).3.11


By-Laws of the Company, including
    amendment thereto dated August 31, 1990 (filed as an
    exhibit to Registration Statement
    No. 33-37600
    and incorporated herein by reference). 31




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##### Table of Contents



ExhibitNumber


Description3.12


Unanimous Written Consent of Sole
    Stockholder of the Company, dated January 2, 2002, amending
    the By-Laws
    of the Company (filed as an exhibit to Form 10-Q for the
    quarter ended June 30, 2003 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


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. 33-49566
    and incorporated herein by reference).4.6


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.4.7


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).4.8


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).4.9


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).4.10


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).4.12


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).4.13


Eighth Supplemental Indenture,
    dated as of October 5, 2005, to the indenture between the
    Company and U.S. Bank National Association.4.14


Agency Agreement (amended and
    restated), dated as of September 15, 2005, among the
    Company, Citibank, N.A., and Dexia Banque Internationale A
    Luxembourg, Societe Anonyme (filed as an exhibit to
    Form 8-K, event date September 15, 2005, and
    incorporated herein by reference).10.1


Aircraft Facility Agreement, dated
    as of January 19, 1999, among the Company, Halifax PLC and
    the other banks listed therein providing up to $4,327,260,000
    for the financing of approximately
    seventy-five
    Airbus aircraft (filed as an exhibit to Form 10-K for the
    year ended December 31, 1998 and incorporated herein by
    reference).10.2


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 $2,643,550,000
    (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). 32




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##### Table of Contents



ExhibitNumber


Description10.3


$2,000,000,000 Five-Year Revolving
    Credit Agreement, dated as of October 15, 2004, among the
    Company, CitiCorp USA, Inc., as Administrative Agent, and the
    other financial institutions listed therein (filed as an exhibit
    to
    Form 10-K
    for the year ended December 31, 2004 and incorporated
    herein by reference).10.4


$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).10.5


$2,000,000,000
    364-Day
    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).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 Chairman of the Board and Chief Executive
    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.  33




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
  To The
    Shareholders and Board of Directors
         34




---



##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands, except share and per share amounts)
  December 31,2005


2004ASSETSCash, including interest bearing
    accounts of
    $155,953 (2005) and $97,682 (2004)

$
157,960


$
99,747Current income taxes


148,399



6,507Notes receivable


181,951



212,273Net investment in finance and
    sales-type leases


308,471



307,466Flight equipment under operating
    leases


42,067,504



36,580,296Less accumulated depreciation


7,318,572



6,074,87434,748,932



30,505,422Deposits on flight equipment
    purchases


1,148,462



1,250,168Accrued interest, other
    receivables and other assets


289,979



199,653Derivative assets


293,576



1,191,602Investments


20,313



22,979Variable interest entities assets


138,277



152,417Deferred debt issue
    costs  less accumulated amortization of
    $65,377 (2005) and $77,112 (2004)


93,551



59,666$
37,529,871


$
34,007,900LIABILITIESAccrued interest and other payables

$
351,221


$
264,276Tax benefit sharing payable to AIG


245,000



245,000Debt financing, net of deferred
    debt discount of
    $38,882 (2005) and $29,502 (2004)


25,104,165



23,136,016Subordinated debt


1,000,000



Foreign currency adjustment


197,074



1,215,809Derivative liabilities


49,549



38,810Capital lease obligations






39,580Security and other deposits on
    flight equipment


1,071,676



876,590Rentals received in advance


187,957



160,878Deferred income taxes


3,075,545



2,630,118Variable interest entities
    liabilities


65,197



70,886Commitments and
    contingencies  Note KSHAREHOLDERS EQUITYMarket Auction Preferred Stock,
    $100,000 per share liquidation value; Series A and  B (2005
    and 2004), 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
    (2005) and 42,198,119 (2004) issued and outstanding


1,053,582



653,582Paid-in capital


587,484



579,955Accumulated other comprehensive
    income (loss)


91,715



22,825Retained earnings


4,349,706



3,973,575Total shareholders equity


6,182,487



5,329,937$
37,529,871


$
34,007,900    35




---



##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF INCOME
 (Dollars in thousands)
  Years Ended December
    31,2005


2004


2003REVENUES:Rental of flight equipment

$
3,500,335


$
2,955,524


$
2,807,211Flight equipment marketing


66,790



77,664



28,988Flight equipment
    marketing  securitization






32,854



23,245Interest and other


61,426



93,844



17,9073,628,551



3,159,886



2,877,351EXPENSES:Interest


1,157,282



942,527



919,961Depreciation of flight equipment


1,372,103



1,214,048



1,083,909Provision for overhauls


260,008



164,322



112,581Flight equipment rent










43,314Selling, general and administrative


138,767



116,956



76,780Other expenses


49,985



53,926



2,978,145



2,491,779



2,236,545INCOME BEFORE INCOME TAXES AND
    CUMULATIVE EFFECT OF ACCOUNTING CHANGE


650,406



668,107



640,806Provision for income taxes


227,446



206,101



196,683INCOME BEFORE CUMULATIVE EFFECT OF
    ACCOUNTING CHANGE


422,960



462,006



444,123Cumulative effect of accounting
    change (net of tax)










(8,642
)NET INCOME

$
422,960


$
462,006


$
435,481    36




---



##### 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, 2002


1,000


$
100,000



42,198,119


$
653,582


$
579,955


$
(87,771
)

$
3,168,305


$
4,414,071Common stock dividends


























(49,000
)


(49,000
)Preferred stock dividends


























(3,891
)


(3,891
)Comprehensive Income:Net income


























435,481



435,481Other comprehensive income:Cash flow derivative transactions
    (net of tax of $32,223)






















59,843







59,843Comprehensive Income






























495,324Balance at December 31, 2003


1,000



100,000



42,198,119



653,582



579,955



(27,928
)


3,550,895



4,856,504Common stock dividends


























(35,500
)


(35,500
)Preferred stock dividends


























(3,826
)


(3,826
)Comprehensive Income:Net income


























462,006



462,006Other comprehensive income:Cash flow derivative transactions
    (net of tax of $25,786)






















47,887







47,887Change in unrealized appreciation
    securities available-for-sale (net of tax of $1,543)






















2,866







2,866Comprehensive Income






























512,759Balance at December 31, 2004


1,000



100,000



42,198,119



653,582



579,955



22,825



3,973,575



5,329,937Issuance of common stock










3,069,604



400,000















400,000Common stock dividends


























(37,000
)


(37,000
)Preferred stock dividends


























(4,650
)


(4,650
)Comprehensive income:Net income


























422,960



422,960Other comprehensive incomeCash flow derivative transactions
    (net of tax of $37,954)






















70,486







70,486Change in unrealized appreciation
    securities available-for-sale (net of tax of ($859))






















(1,596
)






(1,596
)Comprehensive income






























491,850Other(a)


















7,529







(5,179
)


2,350Balance at December 31, 2005


1,000


$
100,000



45,267,723


$
1,053,582


$
587,484


$
91,715


$
4,349,706


$
6,182,487     (a)
    In March 2005, we reclassified $5,179 from Retained Earnings to
    Paid-in Capital as a result of an adjustment for certain prior
    period compensation costs related to an incentive plan of AIG.
    We also recorded $2,350 in Paid-in Capital during the year for
    compensation expense related to the same incentive plan.   37




---



##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Dollars in thousands)
  Years Ended December
    31,2005


2004


2003OPERATING ACTIVITIES:Net income

$
422,960


$
462,006


$
435,481Adjustments to reconcile net income
    to net cash provided by operating activities:Depreciation of flight equipment


1,372,103



1,214,048



1,083,909Deferred income taxes


408,333



249,331



195,813Change in derivative instruments


1,017,204



(443,174
)


(534,362
)Foreign currency adjustment of cash
    and non-US$ denominated debt


(1,006,631
)


393,902



538,024Amortization of deferred debt issue
    costs


22,692



26,162



36,645Losses related to customer
    bankruptcy






53,926



Other


6,118



(10,724
)


(6,992
)Changes in operating assets and
    liabilities:Decrease (increase) in notes
    receivable


20,585



(32,104
)


47,713Change in unamortized debt discount


(9,380
)


(5,181
)


7,607Decrease (increase) in accrued
    interest, other receivables and other assets


112,478



253,852



(31,703
)Increase in accrued interest and
    other payables


81,256



11,961



104,317(Increase) decrease in current
    income taxes


(141,892
)


(24,474
)


184,260Increase in tax benefit sharing
    payable to AIG






245,000



Increase in rentals received in
    advance


27,079



14,007



17,627Net cash provided by operating
    activities


2,332,905



2,408,538



2,078,339INVESTING ACTIVITIES:Acquisition of flight equipment for
    operating leases


(6,276,420
)


(5,007,201
)


(5,053,712
)Acquisition of flight equipment for
    finance leases






(43,247
)


(165,202
)Decrease (increase) in deposits and
    progress payments


101,706



4,906



(97,210
)Proceeds from disposal of flight
    equipment  net of gain


454,512



1,355,422



953,897Advance on notes receivable


(39,100
)


(80,750
)


(30,198
)Collections on notes receivable


25,035



46,793



42,570Collections on finance and
    sales-type leases (net of income amortized)


29,163



14,393



13,670Other


7,709



1,188



1,432Net cash used in investing
    activities


(5,697,395
)


(3,708,496
)


(4,334,753
)FINANCING ACTIVITIES:Issuance of common stock


400,000







Net change in commercial paper


(49,839
)


1,099,290



(2,642,547
)Proceeds from debt financing


7,421,098



4,311,742



8,654,736Payments in reduction of debt
    financing and capital lease obligations


(4,433,311
)


(4,082,998
)


(3,608,543
)Debt issue costs


(56,577
)


(33,964
)


(52,939
)Payment of common and preferred
    dividends


(41,650
)


(39,326
)


(52,892
)Increase (decrease) in customer
    deposits


195,086



32,676



(20,139
)Net cash provided by financing
    activities


3,434,807



1,287,420



2,277,676Effect of exchange rate changes on
    cash


(12,104
)


10,044



9,284Net increase (decrease) in cash


70,317



(12,538
)


21,262Cash at beginning of year


99,747



102,241



71,695Cash at end of year

$
157,960


$
99,747


$
102,241  38




---



##### Table of Contents



Years Ended December
    31,2005


2004


2003SUPPLEMENTAL DISCLOSURE OF CASH
    FLOW  INFORMATION:Cash paid (received) during the
    year for:Interest (net of amount capitalized
    $54,097 (2005) $48,390 (2004) and $49,679 (2003)

$
1,101,409


$
945,991


$
926,274Income taxes, net


(38,994
)


(263,757
)


(189,690
)   2005Accounts receivable in the amount
    of $29,706 were received as a payment for flight equipment sold.
    Full cash payment was subsequently received.Notes receivable in the amount of
    $23,802 were used as payment for the acquisition of aircraft
    ($19,765) and investments ($4,037).Aircraft previously accounted for
    as operating leases were converted into finance and sales-type
    leases in the amount of $30,168.$5,179 was reclassified from
    Retained earnings to Paid-in capital as a result of an
    adjustment for certain prior period compensation costs related
    to an incentive plan of ILFCs parent, AIG.Certain payments from aircraft and
    engine manufacturers in the amount of $161,648 reduced the basis
    of Flight equipment under operating leases and increased Other
    assets.2004:One aircraft was received for
    investment in finance leases and notes receivables in the amount
    of $23,456.Notes in the amount of $2,700 were
    received as partial payment in exchange for flight equipment
    sold with a net book value of $30,000.A note in the amount of $4,500 was
    used towards a purchase of an aircraft.Certain payments from aircraft and
    engine manufacturers in the amount of $147,065 reduced the basis
    of Flight equipment for operating leases and increased Accrued
    interest, other receivables and other assets.2003:Progress payments in the amount of
    $6,700 were exchanged for an aircraft with net book value at
    $4,043.Flight equipment increased in the
    amount of $462,705 and synthetic lease obligations increased in
    the amount of $464,222 as a result of consolidation of
    sale-leaseback transaction related to seven aircraft in
    connection with the Companys adoption of FIN 46R.Variable interest entity assets in
    the amount of $164,481 and liabilities in the amount of $79,211
    were received in exchange for notes receivables in the amount of
    $82,493 and preferred stock in the amount of $11,706 in
    connection with the Companys adoption of FIN 46R.Variable interest entity assets in
    the amount of $13,731 were received as partial payment in
    exchange for flight equipment with a net book value of $14,043.One aircraft was received in
    exchange for notes receivable in the amount of $28,715 and
    preferred stock in the amount of $2,202.Notes in the amount of $72,281 were
    received as partial payment for flight equipment sold with a net
    book value of $75,630.Certain payments from aircraft and
    engine manufacturers in the amount of $90,506 reduced the basis
    of Flight equipment for operating leases and increased Accrued
    interest, other receivables and other assets.    39




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Dollars in thousands)
  Note
    A  Summary of Significant Accounting
    Policies
  Organization:
  Parent Company:
  Principles of Consolidation:
  Intercompany Allocations and Fees:
  Lease Revenue:
        Initial Direct Costs:
 40




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note A  Summary of Significant Accounting
    Policies (Continued)
     Flight Equipment Marketing:
  Provision for Overhauls:
    Cash:
    Flight Equipment:
         41




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note A  Summary of Significant Accounting
    Policies (Continued)
     Capitalized Interest:
  Deferred Debt Issue Costs:
  Derivative Financial Instruments:
       42




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note A  Summary of Significant Accounting
    Policies (Continued)
    Marketable Securities:
  Variable Interest Entities:
  Other Comprehensive Income (Loss):
  Guarantees:
  Income Taxes:
     43




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note A  Summary of Significant Accounting
    Policies (Continued)
     Use of Estimates:
  Reclassifications:
  New Accounting Pronouncement: Stock-Based share-based
    Note
    B  Notes Receivable
    2005


2004Fixed rate notes receivable due in
    varying installments to 2025:Below 6.00%

$
130,491


$
150,9276% to 7.99%


33,698



25,0928% to 9.99%


17,762



36,254$
181,951


$
212,273    44




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note B  Notes Receivable (Continued)
      2006

$
22,4052007(a)


74,3862008


22,7872009


10,0902010


8,415Thereafter


43,868$
181,951     (a)
    Includes a balloon payment for a note related to a sale of
    flight equipment.  Note
    C  Net Investment in Finance Leases
    December 31,


December 31,2005


2004Total lease payments to be received

$
414,283


$
406,112Estimated residual values of
    leased flight equipment (unguaranteed)


135,028



132,558Less: Unearned income


(240,840
)


(231,204
)Net investment in finance leases

$
308,471


$
307,466     2006

$
43,2802007


35,6672008


35,8222009


31,9042010


30,404Thereafter


237,206Total minimum lease payments to be
    received

$
414,283     Note
    D  Investments
   December 31,


December 31,2005


2004Marketable securities; at value

$
8,248


$
9,223Other securities


12,065



13,756$
20,313


$
22,979    45




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note D  Investments (Continued)
     FIN-46R,
  Note
    E  Debt Financing and Capital Lease
    Obligations
    2005


2004Commercial Paper

$
2,625,409


$
2,675,247Public Term Debt with Single
    Maturities


13,813,700



11,544,575Public Medium-Term Notes with
    Varying Maturities


4,689,365



5,972,171Bank Term Debt


4,014,573



2,973,525Junior Subordinated Debt


1,000,000



Capital Lease Obligations






39,580Less: Deferred Debt Discount


(38,882
)


(29,502
)$
26,104,165


$
23,175,596     Commercial
    Paper
    Bank
    Commitments
  364-day
 46




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note E  Debt Financing and Capital Lease
    Obligations (Continued)
    Public
    Debt
    Maximum


Sold as ofOffering


December 31, 2005Registration statement dated
    December 20, 2002 (including $2.88 billion Medium-Term
    Note program and $1.0 billion Retail Medium-Term Note
    Program)

$
6,080,000
(a)

$
5,710,000Registration statement dated
    December 28, 2004 (including $2.0 billion Medium-Term
    Note program)


7,045,000
(b)


2,950,000Euro Medium-Term Note Programme
    dated May 2004(c)(d)


7,000,000



4,979,000    (a)
    Includes $1,080,000, which was incorporated into the
    registration statement from a prior registration statement,
    increasing the maximum offering from $5,000,000 to $6,080,000.  (b)
    Includes $2,045,000, which was incorporated into the
    registration statement from a prior registration statement,
    increasing the maximum offering from $5,000,000 to $7,045,000.  (c)
    We have hedged the foreign currency risk of the notes through
    derivatives or through the offset provided by operating lease
    payments denominated in the related currency.  (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. 47




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note E  Debt Financing and Capital Lease
    Obligations (Continued)
    Public
    Term Debt with Single Maturities
   InitialTerm

2005


2004Floating Rate Notes due
    January 13, 2005

2 years

$



$
625,0004.375% Notes due December 15,
    2005

3 years






160,0002.95% Notes due May 23, 2006

3 years


325,000



325,0005.75% Notes due October 15, 2006

5 years


700,000



700,0005.75% Notes due February 15,
    2007

5 years


500,000



500,0005.625% Notes due June 1, 2007

5 years


900,000



900,0003.75% Notes due Aug 1, 2007

4 years


250,000



250,0005.491% Notes due November 30,
    2007

5 years


110,000



110,0004.75% Notes due February 15,
    2008

5 years


250,000



250,0004.50% Notes due May 1, 2008

5 years


400,000



400,0004.35% Notes due September 15,
    2008

5 years


400,000



400,00063/8%
    Notes due March 15, 2009

7 years


750,000



750,0003.50% Notes due April 1, 2009

5 years


600,000



600,0004.75% Notes due July 1, 2009

5 years


500,000



500,0005.00% Notes due April 15, 2010

5 years


800,000



4.875% Notes due September 1,
    2010

5 years


600,000



5.125% Notes due November 1,
    2010

5 years


350,000



4.75% Notes due January 13,
    2012

7 years


500,000



5.00% Notes due September 15,
    2012

7 years


300,000



5.875% Notes due May 13, 2013

10 years


600,000



600,000Foreign Currency Denominated Medium
    Term Notes:4.00% Euro Notes due April 25,
    2005 (swapped to US$ at 5.4714%)

3 years






666,375Floating Rate Euro Notes due
    June 26, 2006 (swapped to US$)

3 years


702,600



702,6006.00% Euro Notes due
    October 24, 2007 (partially swapped to US$ at 6.398%)

5 years


444,250



444,2504.125% Euro Notes due
    October 9, 2008 (swapped to US$ at 4.225%)

5 years


584,900



584,900Floating Rate Euro Notes due
    November 12, 2008 (swapped to US$ at 4.370%)

5.5 years


912,750



912,7506.625% Sterling Notes due
    December 7, 2009 (swapped to US$ at 6.9326%)

7 years


431,700



431,700Floating Rate Euro Notes due
    July 6, 2010 (swapped to US$ at 4.615%)

6 years


732,000



732,000Floating Rate Euro Notes due
    August 15, 2011 (swapped to US$ at 5.367%)

6 years


876,375



Floating Rate Euro Notes due
    August 15, 2011 (swapped to US$ at 5.355%)

6 years


294,125



$
13,813,700


$
11,544,575    48




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note E  Debt Financing and Capital Lease
    Obligations (Continued)
     Public
    Medium-Term Notes with Varying Maturities
    Bank
    Term Debt
        Junior
    Subordinated Debt
  (ii) 10-year (iii) 30-year
 49




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note E  Debt Financing and Capital Lease
    Obligations (Continued)
    Capital
    Lease Obligations
      2006

$
4,018,9422007


3,799,4662008


4,311,6192009


3,832,9512010


3,298,522Thereafter


4,256,138$
23,517,638   Other
      Note
    F  Shareholders Equity
  Preferred
    Stock
    Market
    Auction Preferred Stock
    Common
    Stock
   50




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note F  Shareholders Equity
    (Continued)
    Accumulated
    Other Comprehensive Income
  broker-dealer.
  Note
    G  Rental Income
    Year Ended2006


3,226,9882007


2,813,1892008


2,295,7932009


1,820,2752010


1,489,679Thereafter


3,740,564$
15,386,488     Note
    H  Flight Equipment Rent and Off Balance Sheet
    Arrangements
   51




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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
    2005


2004


2003Current:Federal(a)

$
(180,243
)

$
(43,912
)

$
(5,521
)State


(1,461
)


7



746Foreign


818



675



993(180,886
)


(43,230
)


(3,782
)Deferred(b):Federal


409,058



244,212



196,276State(c)


(726
)


5,119



4,189408,332



249,331



200,465$
227,446


$
206,101


$
196,683    (a)
    Including U.S. tax on foreign income  (b)
    Deferred taxes were also provided (charged) to other
    comprehensive income of $35,115 (2005), $(27,329) (2004), and
    $(32,223) (2003) and for cumulative effect of accounting change
    of $4,653 (2003).  (c)
    Includes a benefit of $6,027 (2005) and a charge of $564 (2004)
    for revaluation of state deferred taxes as a result of a change
    in our California apportionment factor.    2005


2004Deferred Tax LiabilitiesAccelerated depreciation on flight
    equipment

$
3,207,552


$
2,758,768Indirect payment for manufactures


36,546



15,414Straight line rents


20,474



20,486Other comprehensive income


49,386



12,291Total Deferred Tax Liabilities

$
3,313,958


$
2,806,959Deferred Tax AssetsExcess of state income taxes not
    currently deductible

$
(11,384
)

$
(12,114
)Provision for overhauls


(50,326
)


(24,097
)Capitalized overhauls


(32,615
)


(32,360
)Rent received in advance


(74,334
)


(61,931
)Investments


(5,316
)


(6,965
)Derivatives


(25,068
)


(24,307
)Accruals and reserves


(32,858
)


(6,665
)Other


(6,512
)


(8,402
)Total Deferred Tax Assets


(238,413
)


(176,841
)Net Deferred Tax Liability

$
3,075,545


$
2,630,118  52




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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)
       2005


2004


2003Computed expected provision @ 35%

$
227,642


$
233,838


$
224,282State income tax, net of Federal


(1,421
)


3,332



3,208FSC & ETI


(36,338
)


(30,979
)


(29,598
)Foreign Taxes


976



721



(1,242
)Audit Adjustments (a)


24,770







Other


11,817



(811
)


33Provision for Income Taxes

$
227,446


$
206,101


$
196,683   (a)
    During the fourth quarter of 2005, we were advised of certain
    IRS and other adjustments identified in the U.S. Consolidated
    AIG tax return which were attributable to our operations. Under
    our tax sharing arrangement, we were charged for the effect of
    the adjustments and the related interest attributable to our
    operations.        Note
    J  Other Information
  Concentration
    of Credit Risk
     53




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note J  Other Information (Continued)
    Segment
    Information
        2005


2004


2003Amount


%


Amount


%


Amount


%Europe

$
1,694,841



48.4
%

$
1,432,441



48.5
%

$
1,315,851



46.9
%Asia/Pacific


775,047



22.1



689,201



23.3



661,956



23.6United States and Canada


482,157



13.8



382,090



12.9



424,457



15.0Central, South America and Mexico


253,667



7.3



208,622



7.1



221,067



7.9Africa and the Middle East


294,623



8.4



243,170



8.2



183,880



6.6$
3,500,335



100
%

$
2,955,524



100
%

$
2,807,211



100
%     2005


2004


2003Amount


%


Amount


%


Amount


%France

$
442,402



12.6
%

$
351,394



11.9
%

$
326,010



11.6
%China


423,445



12.1



357,512



12.1



308,204



11.0United States


389,536



11.1



236,353



8.0
%


310,126



11.0   Currency
    Risk
    Employee
    Benefit Plans
   54




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note J  Other Information (Continued)
      Note
    K  Commitments and Contingencies
  Aircraft
    Orders
        Asset
    Value Guarantees
    Other
    Guarantees
   55




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note K  Commitments and Contingencies
    (Continued)
      Stand
    by Lines of Credit
    Leases
    2006

$
8,6352007


8,9522008


9,3032009


9,5942010


9,969Thereafter


47,574Total

$
94,027   Contigencies
     56




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note K  Commitments and Contingencies
    (Continued)
       Note
    L  Derivative Financial Instruments
           2005


2004


2003Related to non-hedging instruments:Changes in fair value of
    non-hedging instruments

$
10,427


$
12,201


$
(29,020
)Changes in fair value of
    previously designated fair value hedging relationships no longer
    effective






(381,572
)


Offsetting changes in fair value
    of the previously designated hedged item


3,800



374,866



Related to designated fair value
    hedging relationships:Changes in fair value of hedging
    instruments


(175,297
)






152,969Offsetting changes in fair value
    of hedged items


172,203







(153,685
)Ineffectiveness of cash flow hedges


(777
)


515



Total effect on earnings

$
10,356


$
6,010


$
(29,736
)     2005


2004Cumulative cash flow hedge loss
    adjustment, net of tax

$
90,445


$
19,959Mark to market of securities held
    for sale, net of tax


1,270



2,866Total accumulated other
    comprehensive income (loss)

$
91,715


$
22,825  57




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note L  Derivative Financial Instruments
    (Continued)
          Note
    M  Fair Value Disclosures
    Cash:
  Notes receivable:
  Investments:
  Debt financing:
  Derivatives:
  Guarantees:
 58




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##### Table of Contents



INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (Dollars in thousands)
  Note M  Fair Value Disclosures (Continued)
      2005


2004Carrying Amount


Fair Value


Carrying Amount


Fair Valueof Asset


of Asset


of Asset


of Asset(Liability)


(Liability)


(Liability)


(Liability)Cash

$
157,960


$
157,960


$
99,747


$
99,747Notes receivable


181,951



153,829



212,273



211,692Investments


20,313



20,313



22,979



22,979Debt financing (including foreign
    currency adjustment and capital lease obligations (2004) and
    excluding debt discount)


(26,340,121
)


(26,650,800
)


(24,420,907
)


(24,750,855
)Derivative assets


293,576



293,576



1,191,602



1,191,602Derivative liabilities


(49,549
)


(49,549
)


(38,810
)


(38,810
)Guarantees


(10,037
)


(10,037
)


(5,507
)


(5,507
)    Note
    N  Flight Equipment
    Marketing  Securitization
       59




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##### Table of Contents



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


Second


Third


Fourth


TotalFiscal 2005Total Revenues

$
828,824


$
893,686


$
947,569


$
958,472


$
3,628,551Pre-tax Income


189,018



183,917



174,231



103,240
(a)


650,406Net Income


128,922



123,557



120,919



49,562
(b)


422,960Fiscal 2004Total Revenues

$
762,895


$
779,524


$
806,427


$
811,040


$
3,159,886Pre-tax Income


189,744



173,617



187,996



116,750



668,107Net Income


129,108



118,737



127,386



86,775



462,006     (a)
    In the fourth quarter of 2005, we accrued $16.9 million of
    additional overhaul revenue based on estimated hours flown, net
    of overhaul provision. Previously such revenues have been
    recorded when received. As discussed in Note K, in the
    fourth quarter of 2005, we recorded a charge of $38,275 to
    settle the Australian Tax Office assessment.  (b)
    As discussed in Note I, in the fourth quarter we recorded
    additional tax expense of $36,587 related to audit and other
    adjustments.  60




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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.
      61




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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, 2005

$
67,849


$
260,008






$
185,804


$
142,053Year ended December 31, 2004

$
68,900


$
164,322






$
165,373


$
67,849Year ended December 31, 2003

$
118,244


$
112,581






$
161,925


$
68,900     (a)
    Reimbursements to lessees for overhauls performed and amounts
    transferred to buyers for aircraft sold. 62




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##### Table of Contents



SIGNATURES
      INTERNATIONAL LEASE FINANCE CORPORATION
  By
    /s/  STEVEN
    F. UDVAR-HAZY  Steven F. Udvar-Hazy
 Chairman of the Board and
 Chief Executive Officer
    Signature

Title

Date/s/  STEVEN
    F. UDVAR-HAZYSteven
    F. Udvar-Hazy

Chairman of the Board and Chief
    Executive Officer

March 16, 2006/s/  LESLIE
    L. GONDALeslie
    L. Gonda

Director, Chairman of the
    Executive Committee

March 16, 2006/s/  JOHN
    L. PLUEGERJohn
    L. Plueger

Director, President and Chief
    Operating Officer

March 16, 2006/s/  LOUIS
    L. GONDALouis
    L. Gonda

Director

March 16, 2006/s/  MARTIN
    J. SULLIVANMartin
    J. Sullivan

Director

March 16, 2006/s/  WILLIAM
    N. DOOLEYWilliam
    N. Dooley

Director

March 16, 2006/s/  STEVEN
    J. BENSINGERSteven
    J. Bensinger

Director

March 16, 2006/s/  ALAN
    H. LUNDAlan
    H. Lund

Director, Vice Chairman,
    Chief Financial Officer and Chief Accounting Officer

March 16, 2006  63




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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.
   64