##### 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,
    2010
  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

(I.R.S. Employerincorporation or
    organization)

Identification No.)10250 Constellation Blvd., Suite 3400

90067Los Angeles, California

(Zip Code)(Address of principal executive
    offices)   (310) 788-1999
    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
  Rule 12b-2
 Large accelerated
    filer o

Accelerated
    filer oNon-accelerated
    filer x

Smaller reporting
    company o(Do not check if a smaller reporting company)   Rule 12b-2 o x
    Form 10-K




---



##### 






INTERNATIONAL
    LEASE FINANCE CORPORATION
  2010
    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


17Item 6.

Selected Financial Data


17Item 7.

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


18Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk


41Item 8.

Financial Statements and Supplementary Data


42Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


42Item 9A.

Controls and Procedures


42Item 9B.

Other Information


43PART IIIItem 14.

Principal Accountant Fees and Services


44PART IVItem 15.

Exhibits and Financial Statement Schedules


44EX-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. 737-800
        (310) 788-1999, (310) 788-1990,
  . Managements
    Discussion and Analysis of Financial Condition and Result of
    Operations  Our Relationship with AIG.
 1




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##### Table of Contents



Aircraft
    Leasing
    Properties  Flight
    Equipment
         2




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##### Table of Contents



. Managements Discussion and Analysis
    of Financial Condition and Results of Operations 
    Overview  Aircraft Industry and Sources of
    Revenue.
  Flight
    Equipment Marketing and Aircraft Sales
        Fleet
    Management Services
    Financing/Source
    of Funds
   3




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##### Table of Contents



Managements Discussion and
    Analysis of Financial Condition and Results of
    Operations  Liquidity.
  Customers
      Customers by Region2010


2009


2008Number





Number





Numberof





of





ofRegion

Customers(a)


%


Customers(a)


%


Customers(a)


%Europe


80



44.5
%


82
(b)


46.1
%


84



48.3
%Asia and the Pacific


45



25.0



45



25.3



41



23.5The Middle East and Africa


25



13.9



22
(b)


12.3



19



10.9U.S. and Canada


17



9.4



18



10.1



17



9.8Central and South America and Mexico


13



7.2



11



6.2



13



7.5180



100
%


178



100
%


174



100
%    (a)
    A customer is an airline with its own operating certificate.(b)
    Two customers have been reclassified from the Middle East and
    Africa to Europe to reflect the new geographical boundaries of
    the European Union.    2010


2009


2008Amount


%


Amount


%


Amount


%Europe

$
2,103,058



44.5
%

$
2,195,516
(a)


44.6
%

$
2,110,239



45.1
%Asia and the Pacific


1,455,873



30.8



1,503,241



30.5



1,372,454



29.3The Middle East and Africa


375,496



7.9



412,687
(a)


8.4



414,493



8.9U.S. and Canada


206,396



4.4



228,126



4.6



254,603



5.4Central and South America and Mexico


585,679



12.4



588,683



11.9



527,067



11.3$
4,726,502
(b)


100.0
%

$
4,928,253
(b)


100.0
%

$
4,678,856
(b)


100.0
%    (a)
    Revenues from rentals of flight equipment attributable to two
    countries have been reclassified from the Middle East and Africa
    to Europe to reflect the new geographical boundaries of the
    European Union.(b)
    Revenues from rentals of flight equipment have been reduced by
    $478.6 million (2010), $347.0 million (2009) and
    $264.6 million (2008), which was previously recorded as
    Overhaul provision in expenses. See Note A of Notes to
    Consolidated Financial Statements.   4




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##### Table of Contents



2010

2009

2008Amount

%

Amount

%

Amount

%(Dollars in thousands)China

$
815,683



17.3
%

$
879,073



18.3
%

$
819,371



17.5
%France


516,899



10.9



526,283



10.9



504,370



10.8     Competition
    Government
    Regulation
              (i) (ii)
   5




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##### Table of Contents



(i) and/or (ii)
  Employees
        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  Quantitative and Qualitative
    Disclosures About Market Risk
  Capital
    Structure Risk
   7




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##### Table of Contents




    making it more difficult for us to satisfy our obligations with
    respect to our indebtedness;
    requiring us to dedicate a substantial portion of our cash flow
    from operations to payments on our indebtedness, thereby
    reducing funds available for other purposes, including acquiring
    new aircraft and exploring business opportunities;
    increasing our vulnerability to adverse economic and industry
    conditions;
    limiting our flexibility in planning for, or reacting to,
    changes in our business and industry; and
    limiting our ability to borrow additional funds or refinance our
    existing indebtedness.  Liquidity
    Risk
           8




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##### Table of Contents



Borrowing
    Risks
  Credit Ratings Downgrade Risk
  (i) (ii)
  Interest Rate Risk
  (i) (ii)
 9




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##### Table of Contents



Restrictive
    Covenants on Our Operations
    
    incur debt;
    encumber our assets;
    dispose of certain assets;
    consolidate, merge, sell or otherwise dispose of all or
    substantially all of our assets;
    enter into sale-leaseback transactions;
    make equity or debt investments in other parties;
    enter into transactions with affiliates;
    make capital expenditures;
    designate our subsidiaries as unrestricted subsidiaries; and
    pay dividends and distributions.    Relationship
    with AIG
  AIG as Our Parent Company
  AIG Master Transaction Agreement with the Department of the
    Treasury
  
    amending or waiving any provisions of our articles of
    incorporation, bylaws, or similar organizational document in a
    manner that would adversely affect, in any material respect, the
    rights of our equity interests;
    authorizing or issuing any equity interests, unless to AIG, or a
    wholly-owned subsidiary of AIG;
    selling or disposing of assets for total consideration greater
    than or equal to $2.5 billion in any twelve-month period;
    acquiring assets after December 8, 2010, other than
    pursuant to existing purchase commitments at such date, with
    aggregate scheduled payments under the purchase contracts for
    such assets greater than or equal to $2.5 billion in any
    twelve-month period;
    engaging in any public offering or other sale or transfer of our
    equity interests;
    voluntarily liquidating, filing for bankruptcy, or taking any
    other legal action evidencing insolvency; and
    increasing our net indebtedness by more than $1 billion
    compared to the same date in the previous year, or compared to
    December 8, 2010, if the measurement is made before
    December 8, 2011.    AIG as Our Counterparty of Derivatives
 10




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##### Table of Contents



Key
    Personnel Risk
    Overall
    Airline Industry Risk
       demand for air travel

   geopolitical events   competition between carriers

   security, terrorism and war   fuel prices and availability

   worldwide health concerns   labor costs and stoppages

   equity and borrowing capacity   maintenance costs

   environmental concerns   employee labor contracts

   government regulation   air traffic control infrastructure
    constraints

   interest rates   airport access

   overcapacity   insurance costs and coverage

   natural disasters   heavy reliance on automated systems     
    lower demand for the aircraft in our fleet and, generally,
    reduced market lease rates and lease margins;
    a higher incidence of lessee defaults, lease restructurings and
    repossessions affecting net income due to maintenance
    obligations under aircraft liens and tariffs, 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
   11




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##### Table of Contents



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;
    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; and
    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.    Aircraft
    Related Risks
  Residual Value  (i) (ii) (iii) Notes to
    Consolidated Financial Statements
  Obsolescence Risk 
  Notes to
    Consolidated Financial Statements
 12




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##### Table of Contents



Greenhouse Gas Emissions Risk 
  Other
    Risks
  Foreign Currency Risk 
  Accounting Pronouncements 
  right-to-use (Right-of-Use Right-of-Use
      Tax Related Risk 
  Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties  Flight
    Equipment
   13




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##### Table of Contents



Aircraft Type

2011


2012


2013


2014


2015


2016


2017


2018


2019


2020


2021


Total737-300/400/500


7



10



14



12



8



1























52737-600/700/800


15



37



29



22



24



30



19



6



3











185757-200


5



15



11



16



9



4























60767-200






1



1



1































3767-300


2



7



13



11



11



3



3



















50777-200






10



9



7







2



4



5















37777-300






1



3



3











8



9



7







1



32747-400


3



7



2



3



1



























16MD-11










3



3































6A300-600R/F














2



2







1



1















6A310


1







2



































3A319


1



10



17



20



19



19



17



6



8



1



2



120A320


9



20



21



24



25



42



8



5



5



4







163A321


4



4



5



27



7



24



7



1



3



1







83A330-200






10



10



11



8



6



9



4







2



1



61A330-300






3



4



2



10



5



4



















28A340-300


2



2



4



3



2



2























15A340-600










1



1



4



2



2



2



1











13Total


49



137



149



168



130



140



82



39



27



8



4



933     Commitments
    Aircraft Type

2011


2012


2013


2014


2015


2016


2017


2018


2019


Total737-700/800(a)


5



5































10787-8/9(a)(b)






4



10



7



3



5



12



17



16



74A320-200(a)


1



































1A350XWB-800/900(a)














2



4



8



6











20A380-800(c)














5



3



2















10Total


6



9



10



14



10



15



18



17



16



115     (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)
    
    Pending official notice from Boeing
    related to firm delivery dates, we anticipate the first delivery
    to be delayed to the first quarter of 2013.(c)
    
    As of March 2011, we are no longer
    required to take delivery of the A380s on order.     14




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##### Table of Contents



33 737-800
    Number of

NumberDelivery Year

Aircraft(a)

Leased

% Leased2011


6



6



100
%2012


9



8



892013


10



10



1002014


14



9



642015


10



7



70Thereafter


66



9



14     (a)
    Excludes new orders    Facilities
    Item 3.
    Legal
    Proceedings  Flash Airlines, Yemen Airways-Yemenia and Airblue
    Limited: 737-300
 15




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##### Table of Contents



Estate of Volare Airlines:
  Krasnoyarsk Airlines: 757-200ER
   16




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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 31,2010


2009


2008


2007


2006(Dollar amounts in thousands)Operating Data:Rentals of flight equipment(a)

$
4,726,502


$
4,928,253


$
4,678,856


$
4,297,477


$
3,735,767Flight equipment marketing and gain on aircraft sales


10,637



15,536



46,838



30,613



71,445Interest and other income


61,741



58,209



98,260



111,599



86,304Total revenues(a)


4,798,880



5,001,998



4,823,954



4,439,689



3,893,516Aircraft impairment charges and fair value adjustments


1,498,713



87,668











Other expenses


3,892,035



3,518,163



3,729,233



3,524,804



3,177,409Total expenses(a)


5,390,748



3,605,831



3,729,233



3,524,804



3,177,409(Loss) income before income taxes


(591,868
)


1,396,167



1,094,721



914,885



716,107Net (loss) income


(383,758
)


895,629



703,125



604,366



499,267Ratio of Earnings to Fixed Charges and Preferred Stock
    Dividends(b):



(b)


2.00
x


1.66
x


1.52
x


1.43
xBalance Sheet Data:Flight equipment under operating leases (net of accumulated
    depreciation)

$
38,526,165


$
43,929,801


$
43,220,139


$
41,797,660



38,475,949Net investment in finance and sales-type leases


67,620



261,081



301,759



307,083



283,386Total assets


43,318,846



45,967,042



47,315,514



44,830,590



42,035,528Total secured debt(c)


9,556,634



7,067,446



2,436,296



3,625,274



3,818,688Total unsecured debt(d)


17,997,466



22,644,293



30,040,372



26,826,005



25,041,554Shareholders equity


8,232,004



8,550,176



7,625,213



7,028,779



6,574,998Other Data:Aircraft lease portfolio at period end(e):Owned


933



993



955



900



824Subject to finance and sales-type leases


4



11



9



9



10Aircraft sold or remarketed during the period


59



9



11



9



21     (a)
    Presented net of estimated reimbursements of overhaul rentals in
    the amounts of $478.6 million (2010), $347.0 million
    (2009), $264.6 million (2008), $290.1 million
    (2007) and $249.2 million (2006). Prior period amounts
    previously recorded as Provision for overhauls were reclassified
    as a reduction of Rentals of flight equipment to conform to
    current period presentation.  (b)
    See Exhibit 12. In the twelve months ended
    December 31, 2010, earnings were insufficient to cover
    fixed charges by $598.4 million due to non-cash aircraft
    impairment charges and fair value adjustments aggregating
    $1.5 billion and lease related charges aggregating
    $91.2 million.  (c)
    Includes subordinated debt and loans from AIG Funding when
    applicable. We repaid the loan to AIG Funding in 2010.  (d)
    Does not include foreign currency adjustment related to foreign
    currency denominated debt swapped into US dollars.  (e)
    See Item 2. Properties  Flight
    Equipment. 17




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Overview
    (i) (ii) (iii)
  Debt Financings
    
    transitioning our focus from liquidity to long-term capital
    strategy as we further strengthen our already diversified
    financing profile and re-establish backup sources of liquidity;
    implementing a long-term portfolio strategy which may include
    the acquisition of new aircraft to support airlines
    comprehensive fleet solutions while selling some of our existing
    aircraft from time to time; and
    focusing on our customers through increased interaction,
    including the opening of regional offices, to further enhance
    our marketing performance.  Operating
    Results
  (i) (ii) (iii)
  Impairment charges and fair value adjustments of aircraft
    sold, agreed to be sold, held for sale or designated for
    part-out: (i) (ii) (iii)
   18




---



##### Table of Contents



Impairment of our fleet held for use: Our Fleet Aircraft Industry and Sources of
    Revenue
    December 31,2010


2009Impairment





ImpairmentCharges and





Charges andAircraft


Fair Value


Aircraft


Fair ValueImpaired


Adjustments


Impaired


Adjustments(Dollars in millions)Impairment charges and fair value adjustments on Flight
    equipment held for sale or aircraft designated for part-out


62


$
(394.9
)


2


$
(10.6
)Impairment charges and fair value adjustments of aircraft likely
    to be sold or sold


15



(155.1
)


5



(24.1
)Aircraft Impairment charges and fair value adjustments on flight
    equipment sold or to be disposed of


77



(550.0
)


7



(34.7
)Impairment charges on aircraft held for use due to Airbus
    announcement of its neo aircraft


61



(557.4
)


0



0Impairment charges on aircraft held for use due to recurring
    assessments


17



(391.3
)


3



(52.9
)Aircraft Impairment charges on flight equipment held for use


78



(948.7
)


3



(52.9
)Total Impairment charges and fair value adjustments on flight
    equipment


155


$
(1,498.7
)


10


$
(87.6
)   Cost of borrowing:
  Our
    Fleet
    737-800
 19




---



##### Table of Contents



Number ofAircraftFlight equipment under operating leases at December 31, 2009


993Aircraft reclassified from Net investment in finance and
    sales-type leases


7Aircraft purchases


5Aircraft sold(a)


(8
)Aircraft transferred to Flight equipment held for sale(b)


(60
)Aircraft designated for part-out


(2
)Total loss


(2
)Flight equipment under operating leases at December 31, 2010


933         (i) (ii) (iii) (iv)
    747-400s 747-400s 747-400s 747-400 747-400s,
 20




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##### Table of Contents



747-400s Notes to Consolidated
    Financial Statements
    Operating Results
      Aircraft
    Industry and Sources of Revenue
         21




---



##### Table of Contents



737-800
  Liquidity
           22




---



##### Table of Contents



Our
    Relationship with AIG
  Potential
    Change in Ownership
    AIG Loans
    from the FRBNY and Department of the Treasury
  Form 10-K
  Master
    Transaction Agreement
      Debt
    Financings
    (i)
 23




---



##### Table of Contents



(ii) (iii) (iv)
    December 31,2010


2009(Dollars in thousands)SecuredSenior Secured Notes

$
3,900,000


$
ECA Financings


2,777,285



3,004,763Bank Debt(a)(b)


1,465,400



Other Secured Financings(c)


1,436,258



153,116Loans from AIG Funding






3,909,567Less: Deferred Debt Discount


(22,309
)


9,556,634



7,067,446UnsecuredBonds and Medium-Term Notes


16,810,843



16,566,099Bank Debt(a)(b)


234,600



5,087,750Less: Deferred Debt Discount


(47,977
)


(9,556
)Total Senior Debt Financings


16,997,466



21,644,29326,554,100



28,711,739Subordinated Debt


1,000,000



1,000,000$
27,554,100


$
29,711,739Selected interest rates which include the effect of derivative
    instruments:Composite interest rate(b)


5.66%



4.35%Percentage of total debt at fixed rate


79.30%



58.64%Composite interest rate on fixed debt


6.38%



5.42%Bank prime rate


3.25%



3.25%     (a)
    On April 16, 2010, we entered into an amendment to our
    credit facility dated October 13, 2006. Upon effectiveness
    of this amendment, approximately $2.2 billion of the
    $2.5 billion of our previously unsecured bank debt became
    secured by the equity interests in certain of our non-restricted
    subsidiaries, of which approximately $1.5 billion remained
    outstanding at December 31, 2010. Those subsidiaries hold a
    pool of aircraft with an appraised value of at least 133% of the
    principal amount of the outstanding loans.(b)
    In the fourth quarter of 2010, we repaid in full and terminated
    our $2.0 billion revolving credit facility dated
    October 14, 2005 and repaid $800 million aggregate
    principal amount of loans outstanding under our
    $2.5 billion credit facility dated October 13, 2006.
    These obligations had interest rates of 0.91% and 3.25%,
    respectively, at the time of each prepayment. As a result of the
    repayment of these obligations, as well as other scheduled
    maturities, our composite interest rate increased from 4.35% at
    December 31, 2009, to 5.66% at December 31, 2010.(c)
    Of this amount, $113.7 million (2010) and
    $129.6 million (2009) is non-recourse to ILFC. These
    secured financings were incurred by VIEs and consolidated into
    our financial statements.   24




---



##### Table of Contents



Results of Operations, Regulation S-K
    Notes to Consolidated Financial Statements
    As of December 31,2010


Number ofDebt Outstanding


Net Book Value


Aircraft(Dollars in thousands)Senior Secured Notes

$
3,900,000


$
7,400,737



174ECA Financings


2,777,285



5,926,831



120Bank Debt


1,465,400



5,023,767



137Other Secured Financings


1,436,258



2,786,602



80Total

$
9,578,943


$
21,137,937



511   Senior
    Secured Notes
    (i) (ii) (iii) (iv) (v) (vi)
 25




---



##### Table of Contents



ECA
    Financings
          (i) (ii) (iii) loan-to-value (iv)
 26




---



##### Table of Contents



(i) (ii)
    Secured
    Bank Debt
    
    revise certain restrictive and financial covenants included in
    the credit agreement;
    extend the scheduled maturity date of their loans to October
    2012. The extended loans, of which approximately
    $1.5 billion remained outstanding at December 31,
    2010, bear interest at LIBOR plus a margin of 2.15%, plus
    facility fees of 0.2% on the outstanding principal
    balance; and
    permit liens securing the loans held by the Electing Lenders.        (i) (ii) (iii)
 27




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##### Table of Contents



Other
    Secured Financings
      loan-to-value loan-to-value loan-to-value
  Loans
    from AIG Funding
    Senior Secured
    Notes Unsecured Bonds and Medium-Term
    Notes.
  Unsecured
    Bonds and Medium-Term Notes
  Automatic Shelf Registration:
 28




---



##### Table of Contents



(i) (ii)
  Euro Medium-Term Note Programme:
  Other Senior Notes:
  (i) (ii)
  (i) (ii) (iii) (iv) (v)
    Unsecured
    Bank Debt
  Revolving Credit Facilities:
   29




---



##### Table of Contents



Secured Bank Debt
    Term Loans:
  Subordinated
    Debt
  (i) (ii) 10-year (iii) 30-year (i) (ii) 10-year (iii) 30-year
  Commercial
    Paper
  Commercial Paper:
  Derivatives
       30




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##### Table of Contents



Credit
    Ratings
  (i) (ii)
      Rating Agency

Long-Term Debt

Corporate Rating

Outlook

Date of Last ActionFitch

BB

BB

Evolving

April 30, 2010Moodys

B1

B1

Stable

August 11, 2010S&P

BB+

BBB−

Negative

June 9, 2010   Secured
    Debt Ratings
  $750 Million

$550 Million

$3.9 Billion SeniorRating Agency

Term Loan

Term Loan

Secured NotesFitch

BBB−

BB

BBB−Moodys

Ba2

Ba3

Ba3S&P

BBB

BBB-

BBB−     Existing
    Commitments
    Commitments Due by YearTotal


2011


2012


2013


2014


2015


Thereafter(Dollars in thousands)Bonds and medium-term notes

$
16,810,843


$
4,398,955


$
3,570,607


$
3,540,881


$
1,040,136


$
1,260,264


$
3,000,000Unsecured bank loans


234,600



234,600



















Senior secured bonds


3,900,000















1,350,000







2,550,000Secured bank loans


1,465,400







1,465,400















ECA financings


2,777,285



442,138



428,960



428,960



423,862



335,794



717,571Other secured financings


1,436,258



13,901



14,877



15,963



36,716



760,370



594,431Subordinated debt


1,000,000























1,000,000Interest payments on debt outstanding(a)(b)


9,141,617



1,459,570



1,262,521



1,050,685



856,440



679,989



3,832,412Operating leases(c)(d)


59,802



11,973



12,453



12,951



13,362



9,063



Pension obligations(e)


9,770



1,539



1,577



1,639



1,676



1,676



1,663Purchase commitments(f)


13,532,700



281,700



639,400



1,103,000



2,086,100



1,436,800



7,985,700Total

$
50,368,275


$
6,844,376


$
7,395,795


$
6,154,079


$
5,808,292


$
4,483,956


$
19,681,777  31




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##### Table of Contents



Contingent
    Commitments
  Contingency Expiration by YearTotal

2011

2012

2013

2014

2015

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

$
552,439


$
27,841


$
78,950


$
96,003


$
37,031


$
157,132


$
155,982Total(h)

$
552,439


$
27,841


$
78,950


$
96,003


$
37,031


$
157,132


$
155,982    (a)
    
    Future interest payments on
    floating rate debt are estimated using floating interest rates
    in effect at December 31, 2010.(b)
    
    Includes the effect of interest
    rate and foreign currency derivative instruments.(c)
    
    Excludes fully defeased aircraft
    sale-lease back transactions.(d)
    
    Minimum rentals have not been
    reduced by minimum sublease rentals of $6.5 million
    receivable in the future under non-cancellable subleases.(e)
    
    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
    2011 consists of total estimated allocations for
    2011 and Thereafter has not been estimated. The
    amount allocated has not been material to date. (f)
    
    In the first quarter of 2011, we
    signed agreements to purchase 75 A320neos and 25 A321neos from
    Airbus, which will replace our previous A380 deliveries, and 33
    737-800
    aircraft from Boeing. The estimated aggregate purchase price for
    the 133 aircraft is approximately $7.5 billion and the
    aircraft will deliver through 2019. (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.(h)
    
    Excluded from total contingent
    commitments are $225.4 million of uncertain tax liabilities
    and any effect of net tax liabilities. See Note K 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
  (i) (ii) Notes to Consolidated
    Financial Statements Notes to Consolidated Financial
    Statements
 32




---



##### Table of Contents



2010
    Compared to 2009
  (i) (ii) (iii) (iv)
    (i) (ii) (iii) (vi) (i) (ii)
   33




---



##### Table of Contents



ILFC
    Composite Interest Rates and Prime Rates
  
  Notes to Consolidated Financial Statements
      Notes to
    Consolidated Financial Statements
 34




---



##### Table of Contents



(i) (ii) (iii) (i) (ii) (iii)
      Notes to the Consolidated
    Financial Statements
  2009
    Compared to 2008
  (i) (ii) (iii) (i) (ii) (iii) (iv)
    (i) (ii) (iii) (iv)
 35




---



##### Table of Contents



(i) (ii)
    Notes to Consolidated Financial Statements
    (i) (ii) (iii) (i) (ii)
  (i) Notes to the Consolidated Financial
    Statements (ii)
      Notes to the Consolidated
    Financial Statements
  Critical
    Accounting Policies and Estimates
   36




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##### Table of Contents



Overhaul Rentals (i) (ii) (iii) (iv) (vi) (vii)
  Flight Equipment
  Recoverability Assessments:
    Recurring Recoverability Assessment:
 37




---



##### Table of Contents



Overall Airline Industry Risk
  (i) (ii) (iii) (iv) (v) (vi)  Fair Value Measurements.
      Recoverability Assessments  Potential Sales: (i) (ii) (iii)
   38




---



##### Table of Contents



Flight Equipment Held for Sale:
    Overview
  Depreciable Lives and Residual Values: 25-year
  Derivative
    Financial Instruments
    Fair
    Value Measurements
   39




---



##### Table of Contents




    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. The CVA also accounts for our own credit risk, in the
    fair value measurement of all net derivative liabilities
    positions, when appropriate.
    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).     Lease
    Revenue
    Income
    Taxes
     40




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##### Table of Contents



New
    Accounting Pronouncements
  Recent
    Accounting Pronouncements:
    Accounting for Transfers of Financial
    Assets:
  Consolidation of Variable Interest
    Entities: (i) (ii)
  Measuring Liabilities at Fair Value:
  Subsequent Events:
  Disclosures of the Credit Quality of Financing Receivables
    and the Allowance for Credit Losses:
  Notes to Consolidated
    Financial Statements.
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk         41




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##### Table of Contents



ILFC
    Market Risk
  December 31, 2010

December 31, 2009Average

High

Low

Average

High

Low(Dollars in millions)Combined

$
88.9


$
158.6


$
20.0


$
46.5


$
80.0


$
35.9Interest Rate


88.9



158.5



20.0



46.6



80.0



36.2Currency


0.2



0.3



0.0



0.3



0.7



0.1   Item 8.
    Financial
    Statements and Supplementary Data    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    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
   42




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##### Table of Contents



Variable
    Interest Entities
    (C)
    Changes in
    Internal Control Over Financial Reporting    Item 9B.
    Other
    Information   43




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##### Table of Contents



PART III  Item 14.
    Principal
    Accountant Fees and Services    2010


2009Audit Fees(a)

$
2,494,129


$
2,200,000Tax and Other Fees(b)


148,812



139,400Total Fees

$
2,642,941


$
2,339,400     (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 2010 and
    2009 assessment.(b)
    
    Tax and Other Fees consist of the
    aggregate fees for services rendered for tax compliance, tax
    planning, tax advice and customs related services.   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules     44




---



##### Table of Contents



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


49Consolidated Financial Statements:Balance Sheets at December 31, 2010 and 2009


50Statements of Operations for the years ended December 31,
    2010, 2009 and 2008


51Statements of Shareholders Equity for the years ended
    December 31, 2010, 2009 and 2008


52Statements of Cash Flows for the years ended December 31,
    2010, 2009 and 2008


53Notes to Consolidated Financial Statements


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


99   Schedule Number

Description

PageII

Valuation
    and Qualifying Accounts


100       ExhibitNumber

Description2
.1


Aircraft Sale Agreement, dated as of April 13, 2010,
    between Macquarie Aerospace Limited, as buyer, and the Company,
    as seller (filed as an exhibit to
    Form 10-Q
    for the quarter ended June 30, 2010 and incorporated herein
    by reference).3
.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, as adopted on
    April 13, 2010 (filed as an exhibit to
    Form 10-Q
    for the quarter ended June 30, 2010 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). 45




---



##### Table of Contents



ExhibitNumber

Description4
.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).4
.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


First Supplemental Indenture, dated as of August 20, 2010,
    to the indenture dated as of August 1, 2006 between the
    Company and Deutsche Bank Trust Company Americas as trustee
    (filed as an exhibit to
    Form 8-K
    filed on August 20, 2010 and incorporated herein by
    reference).4
.20


Second Supplemental Indenture, dated as of December 7,
    2010, to the indenture dated as of August 1, 2006 between
    the Company and Deutsche Bank Trust Company Americas, as
    trustee (filed as an exhibit to
    Form 8-K
    filed on December 7, 2010 and incorporated herein by
    reference).4
.21


Officers Certificate, dated as of August 20, 2010,
    establishing the terms of the 8.875% senior notes due 2017
    (filed as an exhibit to
    Form 8-K
    filed on August 20, 2010 and incorporated herein by
    reference).4
.22


Officers Certificate, dated as of December 7, 2010,
    establishing the terms of the 8.25% senior notes due 2020
    (filed as an exhibit to
    Form 8-K
    filed on December 7, 2010 and incorporated herein by
    reference).4
.23


Indenture, dated as of March 22, 2010, among the Company,
    Wilmington Trust FSB, as trustee, and Deutsche Bank
    Trust Company Americas, as paying agent, security registrar
    and authentication agent (filed as an exhibit to the
    Form 8-K
    filed on March 24, 2010 and incorporated herein by
    reference). 46




---



##### Table of Contents



ExhibitNumber

Description4
.24


Registration Rights Agreement, dated as of March 22, 2010,
    among the Company and Banc of America Securities LLC, Citigroup
    Global Markets Inc., Credit Suisse Securities (USA) LLC and UBS
    Securities LLC, as representatives of the initial purchasers
    (filed as an exhibit to the
    Form 8-K
    filed on March 24, 2010 and incorporated herein by
    reference).4
.25


Registration Rights Agreement, dated as of April 6, 2010,
    among the Company and Banc of America Securities LLC, Barclays
    Capital Inc., Citigroup Global Markets Inc., Credit Suisse
    Securities (USA) LLC, J.P. Morgan Securities Inc. and UBS
    Securities LLC, as representatives of the initial purchasers
    (filed as an exhibit to the
    Form 8-K
    filed on April 6, 2010 and incorporated herein by
    reference).4
.26


Indenture, dated as of August 11, 2010, between the Company
    and The Bank of New York Mellon Trust Company, N.A., as
    paying agent, security registrar and authentication agent and
    trustee (filed as an exhibit to
    Form 8-K
    filed on August 20, 2010 and incorporated herein by
    reference).4
.27


Registration Rights Agreement, dated as of August 20, 2010,
    among the Company and Banc of America Securities LLC, Citigroup
    Global Markets Inc., and J.P. Morgan Securities Inc., as
    representatives of the initial purchasers (filed as an exhibit
    to
    Form 8-K
    filed on August 20, 2010 and incorporated herein by
    reference).4
.28


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


Side Letter Agreement, dated as of February 27, 2010, among
    the Company, Whitney Leasing Limited, Aircraft SPC-12, Inc.,
    Bank of Scotland PLC, Bank of Scotland PLC, Paris Branch, and
    Bank of Scotland PLC, Frankfurt Branch (filed as an exhibit to
    Form 10-Q
    for the quarter ended March 31, 2010 and incorporated
    herein by reference).10
.3


$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
.4


Amendment No. 1, dated as of April 16, 2010, to the
    $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 (portions of this exhibit have been omitted
    pursuant to a request for confidential treatment) (filed as an
    exhibit to
    Form 10-Q
    for the quarter ended March 31, 2010 and incorporated
    herein by reference).10
.5


Amendment No. 2, dated as of December 17, 2010, to the
    $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
    filed on December 23, 2010 and incorporated herein by
    reference).10
.6


Term Loan 1 Credit Agreement, dated as of March 17, 2010,
    among the Company, ILFC Ireland Limited and ILFC (Bermuda) III,
    Ltd., as initial intermediate lessees, the lenders from time to
    time party thereto, Bank of America, N.A., as administrative
    agent and collateral agent and Goldman Sachs Lending Partners
    LLC, as syndication agent (portions of this exhibit have been
    omitted pursuant to a request for confidential treatment) (filed
    as an exhibit to
    Form 10-Q
    for the quarter ended March 31, 2010 and incorporated
    herein by reference). 47




---



##### Table of Contents



ExhibitNumber

Description10
.7


Term Loan 1 Aircraft Mortgage and Security Agreement, dated as
    of March 17, 2010, among the Company, ILFC Ireland Limited,
    ILFC (Bermuda) III, Ltd., additional grantors from time to time
    party thereto and Bank of America, N.A., as collateral agent
    (filed as an exhibit to
    Form 10-Q
    for the quarter ended March 31, 2010 and incorporated
    herein by reference).10
.8


Term Loan 2 Credit Agreement, dated as of March 17, 2010,
    among Delos Aircraft Inc., as borrower, the Company and certain
    other subsidiaries as guarantors party thereto, the lenders from
    time to time party thereto, Bank of America, N.A., as
    administrative agent and collateral agent and Goldman Sachs
    Lending Partners LLC, as syndication agent (portions of this
    exhibit have been omitted pursuant to a request for confidential
    treatment) (filed as an exhibit to
    Form 10-Q
    for the quarter ended March 31, 2010 and incorporated
    herein by reference).10
.9


Term Loan 2 Security Agreement, dated as of March 17, 2010,
    among Hyperion Aircraft Inc., Delos Aircraft Inc., Artemis
    (Delos) Limited, Apollo Aircraft Inc., the additional grantors
    from time to time party thereto and Bank of America, N.A., as
    collateral agent (filed as an exhibit to
    Form 10-Q
    for the quarter ended March 31, 2010 and incorporated
    herein by reference).10
.10


Security and Guarantee Agreement, dated as of April 16,
    2010, among Citicorp USA, Inc., as collateral agent, and Flying
    Fortress Inc., Flying Fortress US Leasing Inc., Flying Fortress
    Ireland Leasing Limited and the additional guarantors named
    therein, as the guarantors (filed as an exhibit to
    Form 10-Q
    for the quarter ended March 31, 2010 and incorporated
    herein by reference).10
.11


Employment Letter, dated May 17, 2010, between Henri
    Courpron and American International Group, Inc. (filed as an
    exhibit to the
    Form 8-K
    filed on May 19, 2010 and incorporated herein by reference).10
.12


Aircraft Mortgage and Security Agreement and Guaranty, dated as
    of August 11, 2010, among the Company, ILFC Ireland
    Limited, ILFC (Bermuda) III, Ltd., the additional grantors
    referred to therein, and Wells Fargo Bank Northwest, National
    Association (portions of this exhibit have been omitted pursuant
    to a request for confidential treatment) (filed as an exhibit to
    Form 10-Q
    for the quarter ended September 30, 2010 and incorporated
    herein by reference).10
.13


$2,000,000,000 Three-Year Revolving Credit Agreement, dated as
    of January 31, 2011, among the Company, the banks named
    therein and Citibank, N.A., as administrative agent (filed as an
    exhibit to
    Form 8-K
    filed on January 31, 2011 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 Chief Executive Officer.31
.2


Rule 13a-14(a)/15d-14(a)
    Certification of Senior Vice President and Chief Financial
    Officer.32
.1


Certification under 18 U.S.C., Section 1350     
    
    Indicates a management contract or
    compensatory plan or arrangement. 48




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm  To The
    Shareholders and Board of Directors
         49




---



##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands, except share
    and per share amounts)
  December 31,2010


2009ASSETSCash, including interest bearing accounts of
    $3,058,747 (2010) and $324,827 (2009)

$
3,067,697


$
336,911Restricted cash, including interest bearing accounts of $402,373
    (2010) and $246,115 (2009)


457,053



315,156Notes receivable, net of allowance


65,065



102,213Net investment in finance and sales-type leases


67,620



261,081Flight equipment under operating leases


51,646,586



57,718,323Less accumulated depreciation


13,120,421



13,788,52238,526,165



43,929,801Flight equipment held for sale


255,178



13,040Deposits on flight equipment purchases


184,410



163,221Lease receivables and other assets


402,932



474,025Derivative assets, net


60,150



190,857Variable interest entities assets






79,720Deferred debt issue costs  less accumulated amortization
    of
    $181,460 (2010) and $146,933 (2009)


232,576



101,017$
43,318,846


$
45,967,042LIABILITIES AND SHAREHOLDERS EQUITYAccrued interest and other payables

$
689,606


$
474,971Current income taxes


108,898



80,924Tax benefit sharing payable to AIG






85,000Loans from AIG Funding






3,909,567Secured debt financing, net of deferred debt discount of
    $22,309 (2010) and $0 (2009)


9,556,634



3,157,879Unsecured debt financing, net of deferred debt discount of
    $47,977 (2010) and $9,556 (2009)


16,997,466



21,644,293Subordinated debt


1,000,000



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


165,400



391,100Security deposits, overhaul rental and other customer deposits


1,620,784



1,469,956Rentals received in advance


284,115



315,154Deferred income taxes


4,663,939



4,881,558Variable interest entities liabilities






6,464Commitments and contingencies  Note NSHAREHOLDERS 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


606,367



603,542Accumulated other comprehensive (loss) income


(58,944
)


(138,206
)Retained earnings


6,530,999



6,931,258Total shareholders equity


8,232,004



8,550,176$
43,318,846


$
45,967,042    50




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF
    OPERATIONS
 (Dollars in thousands)
  Years Ended December 31,2010


2009


2008REVENUES AND OTHER INCOME:Rental of flight equipment

$
4,726,502


$
4,928,253


$
4,678,856Flight equipment marketing and gain on aircraft sales


10,637



15,536



46,838Interest and other


61,741



58,209



98,2604,798,880



5,001,998



4,823,954EXPENSES:Interest


1,567,369



1,365,490



1,576,664Effect from derivatives, net of change in hedged items due to
    changes in foreign exchange rates


47,787



(21,450
)


39,926Depreciation of flight equipment


1,954,883



1,959,448



1,864,730Aircraft impairment charges and fair value adjustments on flight
    equipment sold or to be disposed of


550,034



34,730



Aircraft impairment charges on flight equipment held for use


948,679



52,938



Flight equipment rent


18,000



18,000



18,000Selling, general and administrative


212,780



196,675



183,356Other expenses


91,216







46,5575,390,748



3,605,831



3,729,233(LOSS) INCOME BEFORE INCOME TAXES


(591,868
)


1,396,167



1,094,721(Benefit) provision for income taxes


(208,110
)


500,538



391,596NET (LOSS) INCOME

$
(383,758
)

$
895,629


$
703,125    51




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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


(Loss)


RetainedShares


Amount


Shares


Amount


Capital


Income


Earnings


TotalBalance 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 (loss) 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 (loss) 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



7,625,213Preferred stock dividends


























(3,830
)


(3,830
)Comprehensive (loss) Income:Net income


























895,629



895,629Other comprehensive (loss) 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 (loss) 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



8,550,176Preferred stock dividends


























(601
)


(601
)Deconsolidation of VIEs


























(15,900
)


(15,900
)Comprehensive (loss) Income:Net loss


























(383,758
)


(383,758
)Other comprehensive (loss) income:Cash flow derivative transactions (net of tax of ($42,542))






















79,006







79,006Change in unrealized appreciation securities
    available-for-sale
    (net of tax of ($138))






















256







256Comprehensive (loss) income






























(304,496
)Other(a)


















2,825











2,825Balance at December 31, 2010


1,000


$
100,000



45,267,723


$
1,053,582


$
606,367


$
(58,944
)

$
6,530,999


$
8,232,004     (a)
    We recorded $6,782 during 2008, $3,305 during 2009 and $2,825
    during 2010 for compensation expenses, debt issue cost and other
    expenses paid by AIG on our behalf for which we were not
    required to pay.   52




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##### Table of Contents





INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Dollars in thousands)
   Years Ended December 31,2010


2009


2008OPERATING ACTIVITIES:Net (loss) income

$
(383,758
)

$
895,629


$
703,125Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation of flight equipment


1,954,883



1,959,448



1,864,730Deferred income taxes


(251,603
)


387,230



376,416Derivative instruments


252,254



(57,141
)


680,816Foreign currency adjustment of non-US$ denominated debt


(200,320
)


114,620



(507,050
)Amortization of deferred debt issue costs


56,227



40,232



31,325Amortization of debt discount


11,968



9,363



13,651Amortization of prepaid lease cost


47,809



51,899



51,108Write-off of notes receivable


13,913







46,557Aircraft impairment charges and fair value adjustments


1,498,713



87,668



Lease expenses related to aircraft sales


91,217







Other, including foreign exchange adjustments on foreign
    currency denominated cash and gain on aircraft sales


(32,308
)


(36,529
)


(65,757
)Changes in operating assets and liabilities:Lease receivables and other assets


64,111



(43,288
)


(63,333
)Accrued interest and other payables


214,651



(70
)


(1,372
)Current income taxes


27,974



48,841



170,488Tax benefit sharing payable to AIG


(85,000
)






Rentals received in advance


(22,388
)


15,193



48,580Net cash provided by operating activities


3,258,343



3,473,095



3,349,284INVESTING ACTIVITIES:Acquisition of flight equipment


(240,320
)


(2,577,410
)


(3,236,848
)Payments for deposits and progress payments


(61,085
)


(40,444
)


(290,748
)Proceeds from disposal of flight equipment


2,123,581



212,492



428,065Advances on notes receivable










(43,854
)Restricted cash


(141,897
)


(315,156
)


Collections of notes receivable


72,015



15,999



9,885Collections of finance and sales-type leases


32,928



101,170



25,443Other


(5,370
)


(10
)


Net cash provided by (used in) investing activities


1,779,852



(2,603,359
)


(3,108,057
)FINANCING ACTIVITIES:Net change in commercial paper






(1,752,000
)


(2,746,555
)Loan from AIG






3,900,000



1,671,268Repayment of loan to AIG


(3,909,567
)






(1,671,268
)Proceeds from debt financing


9,704,094



1,394,868



9,389,394Payments to reduce debt financing


(7,989,514
)


(6,388,347
)


(4,754,551
)Debt issue costs


(189,376
)


(49,350
)


(23,092
)Payment of common and preferred dividends


(601
)


(3,830
)


(55,887
)Security and rental deposits received


193,831



79,452



139,232Security and rental deposits returned


(52,367
)


(58,280
)


(41,003
)Transfers of security and rental deposits on sales of
    aircraft


(168,209
)


(9,540
)


(12,942
)Overhaul rentals collected


500,701



346,966



264,592Overhaul rentals reimbursed


(313,974
)


(383,577
)


(212,021
)Transfer of overhaul rentals on sales of aircraft


(96,114
)


(4,234
)


(11,324
)Net change in other deposits


15,600



8,405



28,128Net cash (used in) provided by financing activities


(2,305,496
)


(2,919,467
)


1,963,971Net increase (decrease) in cash


2,732,699



(2,049,731
)


2,205,198Effect of exchange rate changes on cash


(1,913
)


694



(2,022
)Cash at beginning of year


336,911



2,385,948



182,772Cash at end of year

$
3,067,697


$
336,911


$
2,385,948   (Table continued on following page)
 53




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Dollars in thousands)
   Years Ended December 31,2010


2009


2008SUPPLEMENTAL DISCLOSURE OF CASH FLOW  INFORMATION:Cash paid (received) during the year for:Interest, excluding interest capitalized of $6,539 (2010),
    $10,360 (2009), and $26,597 (2008)

$
1,373,045


$
1,370,585


$
1,548,492Income taxes, net


15,519



13,754



(155,305
)   2010:Flight equipment under operating leases in the amount of
    $2,236,055 was transferred to Flight equipment held for sale, of
    which $1,992,507 was subsequently sold.Net investment in finance leases of $192,161 was transferred to
    Flight equipment under operating leases.Two aircraft with aggregate net book value of $66,581 were
    converted into sales-type leases aggregating $30,230 with
    $36,351 charged to income.Flight equipment under operating leases with a net book value of
    $60,780 was transferred to Lease receivable and other assets,
    with $10,400 recorded in income, to record proceeds receivable
    for the total loss of two aircraft.$36,799 of Deposits on flight equipment purchases were applied
    to Acquisition of flight equipment under operating leases.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 P 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.    54




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS
  Organization:
  Parent Company:
  Note A
    
    Basis of
    Preparation  Recent Accounting Pronouncements Variable Interest Entities Out of Period
    Adjustments
   (i) (ii) Quarterly Financial Information
  55




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note A
    
    Basis of
    Preparation (Continued)  2009

2008Previously



PreviouslyReported

Revised

Reported

Revised(Dollars in thousands)Statements of OperationsRental of flight equipment

$
5,275,219


$
4,928,253


$
4,943,448


$
4,678,856Flight equipment marketing and gain on aircraft sales


(11,687
)


15,536



46,838



46,838Total revenues


5,321,741



5,001,998



5,088,546



4,823,954Provision for overhauls


346,996







264,592



Aircraft impairment charges and fair value adjustments on flight
    equipment sold or to be disposed of






34,730







Aircraft impairment charges on flight equipment held for use






52,938







Other expenses


60,445







46,557



46,557Total expenses


3,925,574



3,605,831



3,993,825



3,729,233Statements of Cash FlowsCash flows from operating activities


3,512,881



3,473,095



3,389,521



3,349,284Cash flows from investing activities


(2,629,846
)


(2,603,359
)


(3,149,797
)


(3,108,057
)Cash flows from financing activities


(2,932,766
)


(2,919,467
)


1,965,474



1,963,971   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)
  Lease Revenue:
 56




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note B
    
    Summary
    of Significant Accounting Policies (Continued)    Flight Equipment
  Overhaul Rentals:
  (i) (ii) (iii) (iv) (v) (vi) (vii) Capitalized Overhaul Costs Initial Direct Costs
    and Lease Incentive Costs
  Capitalized Overhaul Costs:
  Return Condition Payments:
 57




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note B
    
    Summary
    of Significant Accounting Policies (Continued)      Initial Direct Costs and Lease Incentive
    Costs:
  Flight Equipment Marketing and Gain on Aircraft
    Sales:
  Cash:
  Restricted Cash: Debt
    Financing.
  Foreign Currency:
  Flight Equipment under Operating
    Leases: 25-year
   58




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note B
    
    Summary
    of Significant Accounting Policies (Continued)    Impairments on Flight Equipment Held for
    Use:
  (i) (ii) (iii) (iv) (v) (vi)  Fair Value
    Measurements.
  Flight Equipment Held for Sale:
   59




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note B
    
    Summary
    of Significant Accounting Policies (Continued)  Investment in finance and
    sales-type-leases:
  Allowance and Provision for Credit Losses:
    Collectability:
  Capitalized Interest:
  Deferred Debt Issue Costs:
  Derivative Financial Instruments:
 60




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note B
    
    Summary
    of Significant Accounting Policies (Continued)      (i) (ii) (iii)
    Other Comprehensive Income (Loss): available-for-sale
  Guarantees: Commitments and
    Contingencies
  Fair Value Measurements: Fair Value Measurements
  Income Taxes:
 61




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note B
    
    Summary
    of Significant Accounting Policies (Continued)          Stock-based Compensation: Employee Benefit
    Plans
  Recent
    Accounting Pronouncements:
    Accounting
    for Transfers of Financial Assets
    Consolidation
    of Variable Interest Entities
  (i) (ii)
 62




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note B
    
    Summary
    of Significant Accounting Policies (Continued)  Variable Interest Entities.
  Measuring
    Liabilities at Fair Value
    Subsequent
    Events
    Disclosures
    of the Credit Quality of Financing Receivables and the Allowance
    for Credit Losses
      Business Combinations:
  Non-controlling Interests in Consolidated Financial
    Statements:
 63




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note B
    
    Summary
    of Significant Accounting Policies (Continued)    Disclosures about Derivative Instruments and Hedging
    Activities: (i) (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: other-than-temporary other-than-temporary
 64




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note B
    
    Summary
    of Significant Accounting Policies (Continued)  other-than-temporary
  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:
  FASB Accounting Standards Codification:
  Measuring Liabilities at Fair Value: Fair Value
    Disclosures of Financial Instruments
    Fair Value Measurements: .
 65




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note B
    
    Summary
    of Significant Accounting Policies (Continued)  Application of Accounting Pronouncements That Address Fair
    Value Measurements for Purposes of Lease Classification or
    Measurement: ,
  Determining the Fair Value of a Financial Asset When the
    Market for That Asset Is Not Active:
  The Fair Value Option for Financial Assets and Financial
    Liabilities: instrument-by-instrument
  Modification to Offsetting of Amounts Related to Certain
    Contracts:
  Disclosures about Credit Derivatives and Certain
    Guarantees:  Commitments and
    Contingencies
  Disclosures by Public Entities (Enterprises) about Transfers
    of Financial Assets and Interests in Variable Interest
    Entities:  Variable Interest
    Entities
  Amendments to the Impairment Guidance: other-than-temporary other-than-temporary
 66




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
  Note C 
    Related
    Party Transactions  Intercompany Allocations and Fees: Shareholders Equity.
  Loans from AIG Funding Inc.: Debt
    Financings
  Derivatives and Insurance Premiums: Fair
    Value Measurements Derivative
    Financial Instruments
    Statement of Operations

2010

2009

2008(Dollars in thousands)Expense (income):Interest expense on loan from AIG

$
157,926


$
100,504


$
6,825Effect from derivatives on contracts with AIGFP(a)


45,725



(22,097
)


39,926Interest on derivative contracts with AIGFP


91,988



86,327



24,385Lease revenue related to hedging of lease receipts with AIGFP(a)


224



723



6,718Allocation of corporate costs from AIG


30,512



8,683



13,167Management fees received


(9,429
)


(9,457
)


(9,808
)Management fees paid to subsidiaries of AIG


425



910



839   December 31,Balance Sheet

2010

2009(Dollars in thousands)Asset (liability):Loans payable to AIG Funding

$



$
3,909,567Derivative assets, net(a)


58,187



186,771Income taxes (payable) to AIG


(108,784
)


(80,924
)Taxes benefit sharing payable to AIG






(85,000
)Accrued corporate costs payable to AIG


(20,753
)


(5,298
)Accrued interest payable to AIG






(672
)     (a)
    
    See Note Q 
    Derivative Financial Instrumentsfor all derivative
    transactions 67




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
  Note D 
    Aircraft
    Impairment    December 31,2010

2009Impairment



ImpairmentCharges and



Charges andAircraft

Fair Value

Aircraft

Fair ValueImpaired

Adjustments

Impaired

Adjustments(Dollars in millions)Impairment charges and fair value adjustments on Flight
    equipment held for sale or aircraft designated for part-out


62


$
(394.9
)


2


$
(10.6
)Impairment charges and fair value adjustments of aircraft likely
    to be sold or sold


15



(155.1
)


5



(24.1
)Aircraft Impairment charges and fair value adjustments on flight
    equipment sold or to be disposed of


77



(550.0
)


7



(34.7
)Impairment charges on aircraft held for use due to Airbus
    announcement of its neo aircraft


61



(557.4
)


0



0Impairment charges on aircraft due to recurring assessments


17



(391.3
)


3



(52.9
)Aircraft Impairment charges on flight equipment held for use


78



(948.7
)


3



(52.9
)Total Impairment charges and fair value adjustments on flight
    equipment


155


$
(1,498.7
)


10


$
(87.6
)   Impairment
    charges and fair value adjustments on Flight equipment sold or
    to be disposed of
  (i) (ii)
  Impairment
    charges and fair value adjustments on Flight equipment held for
    sale, or aircraft designated for part-out:
  
    On April 13, 2010, we signed an agreement to sell 53
    aircraft from our existing fleet to a third party for an
    aggregate purchase price of $1.987 billion. We performed an
    analysis to determine the fair value of these aircraft, and due
    to current market conditions we recorded impairment charges and
    fair value adjustments aggregating $323.9 million for the
    year ended December 31, 2010. At the time they met the
    criteria, we transferred these 53 aircraft to Flight equipment
    held for sale.
    On July 6, 2010, we signed an agreement to sell six
    aircraft to a third party. As a result, we performed an analysis
    to determine the fair value of these aircraft and recorded
    impairment charges and fair value adjustments aggregating
    $36.1 million during the year ended December 31, 2010,
    related to these aircraft. At the time they met the criteria, we
    transferred these six aircraft to Flight equipment held for sale.
    During the year ended December 31, 2010, we agreed to sell
    one aircraft to a third party as part of our ongoing fleet
    strategy and we recorded impairment charges and fair value
    adjustments of $9.8 million to 68




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note D 
    Aircraft
    Impairment (Continued)  record the aircraft at its fair value. At the time it met the
    criteria, we transferred this aircraft to Flight equipment held
    for sale.  
    In addition, we deemed two aircraft that we designated for
    part-out to be impaired. During the year ended December 31,
    2010, we recorded impairment charges and fair value adjustments
    aggregating $25.1 million related to these aircraft. At the
    time they met the criteria, we transferred these two aircraft to
    Flight equipment held for sale.  Impairment
    charges and fair value adjustments of aircraft likely to be sold
    or sold:
  
    During the year ended December 31, 2010, we sold eight
    aircraft from our fleet held for use, two of which were
    accounted for as sales type leases. As a result, we recorded
    charges of $101.6 million.
    During the year ended December 31, 2010, we recorded
    impairment charges of $53.5 million related to seven
    aircraft that we were in discussions to sell to third parties.
    As of December 31, 2010, we considered the sales more
    likely than not to occur and deemed the aircraft to be impaired.      Impairments
    on Flight equipment held for use
    
    At the end of the third quarter of 2010, we had 13 passenger
    configured
    747-400s
    and 11 A321-100s in our fleet. After consideration of
    current marketplace factors, managements estimate of the
    future lease rates for
    747-400s
    and A321-100s had declined significantly. The decline in
    expected lease rates for the
    747-400s
    was due to a number of unfavorable trends, including lower
    overall demand, as airlines replace their
    747-400s
    with more efficient newer generation wide-body aircraft. As a
    result, the global supply of
    747-400
    aircraft that are for sale, or idle, had increased. It was
    expected that these unfavorable trends would persist and that
    the global supply of
    747-400s
    that were for sale or idle would continue to increase in the
    future. The decline in A321-100 lease rates was primarily due to
    continued and accelerated decrease in demand for this aircraft
    type, which is attributable to its age and limited mission
    application.  747-400s, 747-400s
  
    On December 1, 2010, Airbus S.A.S. (Airbus)
    announced the new narrow body neo aircraft with new fuel
    efficient geared turbofan engine options. The re-engineered
    aircraft is expected to provide up to 15% fuel savings and
    greater range or more payload capacity. Airbus expects to start
    deliveries of the neo aircraft in 2016. 69




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note D 
    Aircraft
    Impairment (Continued)     
    At the end of the fourth quarter of 2010, we performed a
    recoverability assessment of our entire fleet. The results of
    this assessment indicated that two aircraft were not recoverable
    and were deemed impaired as of December 31, 2010. As a
    result, we performed a fair value analysis and recorded
    impairment charges of $34.8 million in the fourth quarter
    2010.
    We recorded an impairment charge of $8.1 million relating
    to an aircraft that was subject to litigation. The aircraft was
    subsequently designated for part-out and removed from our fleet
    held for use.      Note E 
    Notes
    Receivable    2010

2009(Dollars in thousands)Fixed rate notes with varying interest rates from 5.3% to 10.3%

$
55,065


$
42,213
(a)LIBOR based notes with spreads ranging from 1.8% to 3.3%


10,000



60,000$
65,065


$
102,213     (a)
    
    Certain 2009 receivables were
    reclassed to Lease receivables and other assets to conform with
    our 2010 presentation.    (Dollars in thousands)2011

$
22,3472012


21,3562013


11,3622014


10,0002015


Thereafter


$
65,065      70




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
  Note F 
    Net
    Investment in Finance and Sales-type Leases    December 31,

December 31,2010

2009(Dollars in thousands)Total lease payments to be received

$
59,234


$
171,549Estimated residual values of leased flight equipment
    (unguaranteed)


29,543



138,665Less: Unearned income


(21,157
)


(49,133
)Net investment in finance and sales-type leases

$
67,620


$
261,081     (Dollars in thousands)2011

$
12,7592012


12,1792013


10,1722014


7,5452015


5,874Thereafter


10,704Total minimum lease payments to be received

$
59,234   Note G 
    Debt
    Financing    December 31,2010

2009(Dollars in thousands)SecuredSenior Secured Notes

$
3,900,000


$
ECA Financings


2,777,285



3,004,763Bank Debt(a)(b)


1,465,400



Other Secured Financings(c)


1,436,258



153,116Loans from AIG Funding






3,909,567Less: Deferred Debt Discount


(22,309
)


9,556,634



7,067,446UnsecuredBonds and Medium-Term Notes


16,810,843



16,566,099Bank Debt(a)(b)


234,600



5,087,750Less: Deferred Debt Discount


(47,977
)


(9,556
)Total Senior Debt Financings


16,997,466



21,644,29326,554,100



28,711,739Subordinated Debt


1,000,000



1,000,000$
27,554,100


$
29,711,739     (a)
    
    On April 16 2010, we entered into
    an amendment to our credit facility dated October 13, 2006.
    Upon effectiveness of this amendment, approximately
    $2.2 billion of our previously $2.5 billion unsecured
    bank debt became secured by the equity interests in certain of
    our non- 71




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note G 
    Debt
    Financing (Continued)  restricted subsidiaries, of which
    approximately $1.5 billion remained outstanding at
    December 31, 2010. Those subsidiaries hold a pool of
    aircraft with an appraised value of at least 133% of the
    principal amount of the outstanding loans.(b)
    
    In the fourth quarter of 2010, we
    repaid in full and terminated our $2.0 billion revolving
    credit facility dated October 14, 2005 and repaid
    $800 million aggregate principal amount of loans
    outstanding under our $2.5 billion credit facility dated
    October 13, 2006. These floating rate obligations had
    interest rates of 0.91% and 3.25%, respectively, at the time of
    each prepayment. As a result of the repayment of these
    obligations, as well as other scheduled maturities, our
    composite interest rate increased from 4.35% at
    December 31, 2009 to 5.66% at December 31, 2010.(c)
    
    Of this amount, $113.7 million
    (2010) and $129.6 million (2009) is non-recourse
    to ILFC. These secured financings were incurred by VIEs and
    consolidated.    Variable Interest Entities
    As of December 31,2010


Number ofDebt Outstanding


Net Book Value


Aircraft(Dollars in thousands)Senior Secured Notes

$
3,900,000


$
7,400,737



174ECA Financings


2,777,285



5,926,831



120Bank Debt


1,465,400



5,023,767



137Other Secured Financings


1,436,258



2,786,602



80Total

$
9,578,943


$
21,137,937



511   Senior
    Secured Notes
   72




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note G 
    Debt
    Financing (Continued)    (i) (ii) (iii) (iv) (v) (vi)
      Export
    Credit Facilities
         73




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note G 
    Debt
    Financing (Continued)    (i) (ii) (iii) loan-to-value (iv)
  (i) (ii)
    Secured
    Bank Debt
    
    revise certain restrictive covenants included in the credit
    agreement;
    extend the scheduled maturity date of their loans to October
    2012. The extended loans, of which approximately
    $1.5 billion remained outstanding at December 31,
    2010, bear interest at LIBOR plus a margin of 2.15%, plus
    facility fees of 0.2% on the outstanding principal
    balance; and
    permit liens securing the loans held by the Electing Lenders.   74




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note G 
    Debt
    Financing (Continued)      (i) (ii) (iii)
  Other
    Secured Financing Arrangements
      loan-to-value loan-to-value
 75




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note G 
    Debt
    Financing (Continued)  loan-to-value
  Loans
    from AIG Funding
    Senior Secured
    Notes Unsecured Bonds and Medium-Term
    Notes.
  Unsecured
    Bonds and Medium-Term Notes
    Automatic Shelf Registration:
  (i) (ii)
  Euro Medium-Term Note Programme:
 76




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note G 
    Debt
    Financing (Continued)    (Dollars in thousands)Foreign currency adjustment related to foreign currency
    denominated debt at December 31, 2009

$
391,100Foreign currency adjustment of non-US$ denominated debt


(200,320
)Repayment of debt principal from cash receipts under derivative
    contracts at the maturity of the debt and the derivative contract


(25,380
)Foreign currency adjustment related to foreign currency
    denominated debt at December 31, 2010

$
165,400   Other Senior Notes:
  (i) (ii)
  (i) (ii) (iii) (iv) (v)
    Unsecured
    Bank Debt
  Revolving Credit Facilities:
   77




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note G 
    Debt
    Financing (Continued)  Secured Bank Debt
    Term Loans:
  Subordinated
    Debt
  (i) (ii) 10-year (iii) 30-year (i) (ii) 10-year (iii) 30-year
  Existing
    Commitments
    (Dollars in thousands)2011

$
5,089,5942012


5,479,8442013


3,985,8042014


2,850,7142015


2,356,428Thereafter


7,862,002$
27,624,386   Other
   78




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
  Note H 
    Security
    Deposits on Aircraft, Overhaul Rentals and Other Customer
    Deposits    As of December 31,2010


2009(Dollars in thousands)Security deposits paid by lessees

$
1,081,021


$
1,069,721Overhaul rentals


529,834



390,306Other customer deposits


9,929



9,929Total

$
1,620,784


$
1,469,956     Note I 
    Shareholders
    Equity  Market
    Auction Preferred Stock
    Paid-in
    Capital
    Accumulated
    Other Comprehensive (Loss) Income
  available-for-sale.
    2010


2009(Dollars in thousands)Cumulative unrealized (loss) gain related to cash flow hedges,
    net of tax of $32,026 (2010) and $74,566 (2009)

$
(59,476
)

$
(138,482
)Cumulative unrealized gain related to securities available for
    sale, net of tax of $287 (2010) and $149 (2009)


532



276Total accumulated other comprehensive (loss) income

$
(58,944
)

$
(138,206
)   79




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
  Note J 
    Rental
    Income    Year Ended

(Dollars in thousands)2011

$
4,170,9392012


3,590,5182013


2,930,6672014


2,247,0082015


1,647,128Thereafter


2,517,784$
17,104,044     Lease receivables and other
    assets
  Note K 
    Income
    Taxes    2010

2009

2008(Dollars in thousands)Current:Federal(a)

$
41,357


$
110,579


$
14,527State


677



1,467



(557
)Foreign


1,459



1,262



1,21043,493



113,308



15,180Deferred(b):Federal


(229,262
)


379,813



370,968State(c)


(22,341
)


7,417



5,448(251,603
)


387,230



376,416$
(208,110
)

$
500,538


$
391,596     (a)
    
    Including U.S. tax on foreign
    income.(b)
    
    Deferred taxes were also provided
    (charged) to other comprehensive (loss) income of
    $(42.7) million, $(16.1) million and
    $33.3 million for the years ended December 31, 2010,
    2009, and 2008, respectively.(c)
    
    Includes a benefit of
    $20.7 million in 2010, a charge of $3.7 million in
    2009 and a charge of $1.1 million in 2008 for revaluation
    of state deferred taxes as a result of a change in our
    California apportionment factor. 80




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note K 
    Income
    Taxes (Continued)     2010


2009(Dollars in thousands)Deferred Tax LiabilitiesAccelerated depreciation on flight equipment

$
5,215,054


$
5,394,198Straight line rents


17,472



37,586Derivatives


2,507



14,381Other


911



1,970Total Deferred Tax Liabilities

$
5,235,944


$
5,448,135Deferred Tax AssetsExcess of state income taxes not currently deductible

$
(9,625
)

$
(17,668
)Estimated reimbursements of overhaul rentals


(195,548
)


(137,997
)Capitalized overhauls


(71,610
)


(64,628
)Rent received in advance


(94,890
)


(92,129
)Other comprehensive income


(31,739
)


(74,419
)Accruals and reserves


(150,726
)


(85,008
)Net operating loss carry forward(a)


(14,353
)


(58,899
)Losses of VIEs






(29,281
)Other


(3,514
)


(6,548
)Total Deferred Tax Assets(b)

$
(572,005
)

$
(566,577
)Net Deferred Tax Liability(c)

$
4,663,939


$
4,881,558     (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.(c)
    
    Beginning in 2002, ILFCs
    Australian subsidiaries have owned aircraft and claimed tax
    depreciation deduction for Australian tax purposes. Australian
    deferred taxes have not been included in the parents U.S.
    financial statement due to accumulated operating loss carried
    forward recorded by the Australian subsidiaries. At
    December 31, 2010 and 2009, the Australian subsidiaries
    have aggregate operating loss carried forward of
    $308 million and $311 million, respectively, and
    deferred tax liabilities of $279 million and
    $279 million, respectively. Any potential Australian tax
    gains resulting from disposition of the aircraft will be fully
    absorbed by the carried forward losses. Because the company does
    not expect to generate additional revenue to utilize the excess
    operating loss, a valuation allowance is recorded against the
    excess carried forward loss. As a result, the ownership and
    depreciation of aircraft by the Australian subsidiaries has no
    impact to the companys net deferred tax liability. 81




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note K 
    Income
    Taxes (Continued)     2010


2009


2008(Dollars in thousands)Computed expected provision at 35%

$
(207,154
)

$
488,659


$
383,152State income tax, net of Federal


(14,081
)


5,774



3,179Foreign Taxes


133



10



97IRS audit adjustments(a)


8,656



2,185



2,863Other(b)


4,336



3,910



2,305Provision for income taxes

$
(208,110
)

$
500,538


$
391,596     (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.  Tax benefit sharing
    payable to AIG
   82




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note K 
    Income
    Taxes (Continued)    (Dollars in thousands)Balance at January 1, 2008

$
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


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)


165,824Additions based on tax positions related to 2010(a)


53,584Additions for tax positions of prior years(b)


5,944Reductions for tax positions of prior years


Balance at December 31, 2010(d)

$
225,352     (a)
    
    Consists principally of FSC and ETI
    benefits.(b)
    
    Items attributable to IRS
    adjustments.(c)
    
    Amounts paid to AIG related to the
    settlement of prior year audit adjustments for the years 1991 to
    1999. In addition, we paid $4.6 million in interest during
    the year ended December 31, 2009. We did not pay any
    interest in 2008 or 2010.(d)
    
    $53.6 million and
    $8.0 million is recorded in current taxes at December 2010
    and 2009, respectively, and $121.1 million and
    $107.1 million is recorded in deferred taxes at
    December 31, 2010 and 2009, respectively. In addition,
    $50.7 million is recorded in Accrued interest and other
    payables at December 31, 2009 and 2010, respectively.      (i) (ii) (iii)
 83




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note K 
    Income
    Taxes (Continued)  (i) (ii) (iii)
  Note L 
    Other
    Information  Concentration
    of Credit Risk
      Segment
    Information
    Geographical
    Concentration
    2010


2009


2008Amount


%


Amount


%


Amount


%(Dollars in thousands)Europe

$
2,103,058



44.5
%

$
2,195,516
(a)


44.6
%

$
2,110,239



45.1
%Asia and the Pacific


1,455,873



30.8



1,503,241



30.5



1,372,454



29.3The Middle East and Africa


375,496



7.9



412,687
(a)


8.4



414,493



8.9U.S. and Canada


206,396



4.4



228,126



4.6



254,603



5.4Central and South America and Mexico


585,679



12.4



588,683



11.9



527,067



11.3$
4,726,502
(b)


100.0
%

$
4,928,253
(b)


100.0
%

$
4,678,856
(b)


100.0
%     (a)
    
    Revenues from rentals of flight
    equipment attributable to two countries have been reclassified
    from the Middle East and Africa to Europe to reflect the new
    geographical boundaries of the European Union.(b)
    
    Revenues from rentals of flight
    equipment have been reduced by $478.6 million (2010),
    $347.0 million (2009) and $264.6 million (2008),
    which was previously recorded as Provision for overhauls in
    expenses.   84




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note L 
    Other
    Information (Continued)    2010

2009

2008Amount

%

Amount

%

Amount

%(Dollars in thousands)China

$
815,683



17.3
%

$
879,073



18.3
%

$
819,371



17.5
%France


516,899



10.9



526,283



10.9



504,370



10.8   Currency
    Risk
  Interest
    and other
  Note M 
    Employee
    Benefit Plans    Pension
    Plans
  Out of Period Adjustment
    Stock-Based
    and Other Compensation Plans
  (i) (ii) (iii) 2005-2006 (iv) (v) (vi) (vii)
   85




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
  Note N 
    Commitments
    and Contingencies  Aircraft
    Orders
      737-800
    Guarantees
  Asset Value Guarantees:
  Aircraft Loan Guarantees:
    Leases
   86




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note N 
    Commitments
    and Contingencies (Continued)    (Dollars in thousands)2011

$
11,9732012


12,4532013


12,9512014


13,3622015


9,063Thereafter


Total(a)

$
59,802     (a)
    
    Minimum rentals have not been
    reduced by minimum sublease rentals of $6.5 million in the
    future under non-cancelable subleases.  Contingencies
  Legal
    Contingencies
  
    Flash Airlines, Yemen Airways-Yemenia and Airblue
    Limited:  We are named in lawsuits in connection
    with the 2004 crash of our Boeing
    737-300
    aircraft on lease to Flash Airlines, an Egyptian carrier; the
    2009 crash of our Airbus A310-300 aircraft on lease to Yemen
    Airways-Yemenia, a Yemeni carrier; and the 2010 crash of our
    Airbus A320-200 aircraft on lease to Airblue Limited, a
    Pakistani carrier. These lawsuits were filed by the families of
    victims on the flights and seek unspecified damages for wrongful
    death, costs, and fees. The Flash Airlines litigation originally
    commenced in May 2004 in California, but all
    U.S. proceedings were dismissed in favor of proceedings in
    France where claims are pending before the Tribunal de Grande
    Instance civil courts in Bobigny and Paris. As of March 4,
    2011, the parties are engaged in settlement negotiations. We
    believe that we have substantial defenses to this action and
    available liability insurance is adequate to cover our defense
    costs and any potential liability. The Yemen Airways litigation
    was filed in January 2011 in California Superior Court in Los
    Angeles County. We have been served with the complaint and the
    litigation is in its incipient stages. While plaintiffs have not
    specified any amount of damages, we believe that we are
    adequately covered by available liability insurance and that we
    have substantial defenses to this action. The Airblue Limited
    litigation commenced in Cook County, Illinois in September 2010.
    The case was removed to the U.S. district court for the
    Northern District of Illinois and plaintiffs voluntarily
    dismissed their claims without prejudice. We do not believe that
    the outcome of any of these lawsuits will have a material effect
    on our consolidated financial condition, results of operations
    or cash flows.
    Estate of Volare Airlines:  In November 2004,
    Volare, an Italian airline, filed for bankruptcy in Italy. Prior
    to Volares bankruptcy, we leased to Volare, through
    wholly-owned subsidiaries, two A320-200 aircraft and four
    A330-200 aircraft. In addition, we managed the lease to Volare
    by an entity that is a related party to us of one A330-200
    aircraft. In October 2009, the Volare bankruptcy receiver filed
    a claim in an Italian court in the amount of
    29.6 million against us and our related party for the
    return to the Volare estate of all payments made by it to us and
    our related party in the year prior to Volares bankruptcy
    filing. We are currently engaged in settlement negotiations and
    at December 31, 2010, we had accrued the proposed
    settlement amount in our consolidated financial statements. We
    do not expect any settlement payment to be material to our
    consolidated financial position, results of operations or cash
    flows.
    Krasnoyarsk Airlines:  We leased a
    757-200ER
    aircraft to a Russian airline, KrasAir, which became the subject
    of a Russian bankruptcy-like proceeding. The aircraft was
    detained by the Russian customs authorities on the basis of
    certain alleged violations of the Russian customs code by
    KrasAir. While we 87




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note N 
    Commitments
    and Contingencies (Continued)      Note O 
    Variable
    Interest Entities  Debt Financings
  Investment
    Activities
    (i) (ii)
   88




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note O 
    Variable
    Interest Entities (Continued)    Non-Recourse
    Financing Structures
      Wholly-Owned
    ECA Financing Vehicles
    Other
    Secured Financings
  Debt
    Financing
  Wholly-Owned
    Leasing Entities
   89




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
  Note P 
    Fair
    Value Measurements  Fair
    Value Measurements on a Recurring Basis
    other-than-active
  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
   90




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note P 
    Fair
    Value Measurements (Continued)  Fair
    Value Measurements on a Non-Recurring Basis
    
    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 where appropriate, 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.
    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 marketable securities 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, net investment in finance and sales-type leases and
    AVGs. 91




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note P 
    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, 2010:Derivative assets

$



$
116,394
(b)

$



$
(56,244
)

$
60,150Derivative liabilities






(56,244
)






56,244



Total derivative assets, net

$



$
60,150


$



$



$
60,150December 31, 2009:Derivative assets

$



$
258,347
(b)

$



$
(67,490
)

$
190,857Derivative liabilities






(67,490
)






67,490



Total derivative assets, net

$



$
190,857


$



$



$
190,857     (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 $0.8 million and $24.2 million as of
    December 31, 2010 and 2009, respectively.  Assets
    and Liabilities Measured at Fair Value on a Non-recurring
    Basis
      
    Impairment charges and fair value adjustments aggregating
    $550.0 million related to 77 aircraft as a result of
    aircraft sales, potential sales, or other disposal plans. Of
    these 77 aircraft, 60 were transferred to Flight equipment held
    for sale, eight were sold (two of which were accounted for as
    sales-type leases), two were designated for part-out, and seven
    remain in our fleet held for use.
    On December 1, 2010, Airbus announced new fuel efficient
    engine options for its narrow body neo aircraft with expected
    deliveries starting in 2016. At December 31, 2010, we had
    identified 78 narrow body aircraft with first generation engines
    in our fleet that we expect may be negatively impacted by the
    introduction of the neo and, as part of our on-going fleet
    assessment, we performed a recoverability analysis on those
    aircraft, using revised cash flow assumptions. Based on this
    recoverability analysis, 61 of these 78 aircraft were deemed
    impaired and we recorded impairment charges of
    $557.4 million for the three months ended December 31,
    2010.
    As a result of our ongoing recoverability assessments of our
    entire fleet, we determined that the value of certain aircraft
    within our fleet were not recoverable and recorded impairment
    charges of $391.3 million to reduce the carrying value of
    17 aircraft to fair market value. 92




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note P 
    Fair
    Value Measurements (Continued)   Aircraft Impairment
  Book


Impairment











BookValue at


Charges and








Depreciation


Value atDecember 31,


Fair Value








and Other


December 31,2009


Adjustments


Reclassifications


Sales


Adjustments


2010(Dollars in millions)Flight equipment under operating lease

$
4,940.1


$
(1,498.7
)

$
(2,275.5
)

$
(74.6
)

$
(218.0
)

$
873.3Flight equipment held for sale










2,236.1



(1,979.5
)


(1.4
)


255.2Net investment in finance and sales-type leases










30.2







(0.1
)


30.1Lease receivables and other assets










9.2



(0.3
)






8.9Total

$
4,940.1


$
(1,498.7
)

$
0.0


$
(2,054.4
)

$
(219.5
)

$
1,167.5     Note Q 
    Derivative
    Financial Instruments     93




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##### Table of Contents



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


Liability DerivativesNotional Value


USD Fair Value


Notional Value


USD Fair Value(In thousands)December 31, 2010:Derivatives designated as hedging instruments:Interest rate swap agreements(a)

$



$



$
625,717


$
(56,244
)Foreign exchange swap agreements


1,000,000



114,431


$



$
Total derivatives designated as hedging instruments





$
114,431






$
(56,244
)Derivatives not designated as hedging instruments:Interest rate cap agreements

$
89,520


$
1,963


$



$
Total derivatives





$
116,394






$
(56,244
)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
)     (a)
    
    Converts floating interest rate
    debt into fixed rate debt. 94




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

2010


2009


2008(Dollars in thousands)Effective portion of change in fair market value of
    derivatives(a)(b)

$
(107,524
)

$
160,617


$
(601,008
)Amortization of balances of de-designated hedges and other
    adjustments


3,372



(485
)


(742
)Foreign exchange component of cross currency swaps credited
    (charged) to income


225,700



(114,620
)


507,050Income tax effect


(42,542
)


(15,929
)


33,145Net changes in cash flow hedges, net of taxes

$
79,006


$
29,583


$
(61,555
)     (a)
    
    Includes gains(losses) realized on
    swaps that matured during 2010, 2009, and 2008 that were
    de-designated as hedges and then subsequently redesignated, did
    not have hedge accounting treatment, or were not perfectly
    effective, for the entire term of the contracts. The amounts
    included are $(15.4) million, $9.7 million and
    ($22.1) million in 2010, 2009, and 2008, respectively.(b)
    
    2010 and 2009 include
    $23.3 million and $(12.7) million 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

2010


2009


2008(Dollars in thousands)Interest rate swap agreements

$
(27,733
)

$
7,260


$
(79,575
)Foreign exchange swap agreements(a)


(172,003
)


66,037



(503,765
)Total

$
(199,736
)

$
73,297


$
(583,340
)     (a)
    
    2010 and 2009 include
    $23.3 million and $(12.7) million of combined CVA and
    MVA, respectively.    Amount of Gain or(Loss) Reclassifiedfrom AOCI IntoIncome(Effective Portion)Location of Gain or (Loss) Reclassified from AOCI

December 31,into Income (Effective Portion)

2010


2009


2008(Dollars in thousands)Interest rate swap agreements  interest expense

$
(31,682
)

$
(36,916
)

$
(14,613
)Foreign exchange swap agreements  interest expense


(60,306
)


(49,681
)


38,999Foreign exchange swap agreements  lease revenue


(224
)


(723
)


(6,718
)Total

$
(92,212
)

$
(87,320
)

$
17,668  95




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##### Table of Contents



INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note Q 
    Derivative
    Financial Instruments (Continued)      Amount of Gain or (Loss)Recognized in Income onDerivatives (IneffectivePortion)(a)December 31,2010


2009


2008(Dollars in thousands)Derivatives Designated as Cash Flow Hedges:Interest rate swap agreements

$
(156
)

$
(868
)

$
(1,768
)Foreign exchange swap agreements


(26,788
)


12,791



(16,750
)Total


(26,944
)


11,923



(18,518
)Derivatives Not Designated as a Hedge:Interest rate cap agreements(b)


(2,062
)


(647
)


Reconciliation to Consolidated Statements of Operations:Income effect of maturing derivative contracts


(15,409
)


9,689



(22,110
)Reclassification of amounts de-designated as hedges recorded in
    AOCI


(3,372
)


485



702Effect from derivatives, net of change in hedged items due to
    changes in foreign exchange rates

$
(47,787
)

$
21,450


$
(39,926
)     (a)
    
    All components of each
    derivatives gain or loss were included in the assessment
    of effectiveness.(b)
    
    An additional $(0.1) million
    and $(0.8) million of amortization of premium paid to the
    derivative counterparty was recognized in Interest expense
    during the years ended December 31, 2010 and 2009,
    respectively.  Note R 
    Fair
    Value Disclosures of Financial Instruments    Cash:
  Notes receivable:
  Debt Financing:
  Derivatives:
  AVGs:
 96




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note R 
    Fair
    Value Disclosures of Financial
    Instruments (Continued)    2010

2009Carrying



CarryingAmount

Fair Value

Amount

Fair Valueof Asset

of Asset

of Asset

of Asset(Liability)

(Liability)

(Liability)

(Liability)(Dollars in thousands)Cash

$
3,524,750
(a)

$
3,524,750


$
652,067
(a)

$
652,067Notes receivable


65,065



64,622



102,213



97,600Debt financing (including foreign currency adjustment and
    subordinated debt and excluding debt discount)


(27,789,786
)


(28,267,765
)


(30,112,395
)


(26,762,955
)Derivative assets, net(b)


60,150



60,150



190,857



190,857AVGs


(10,013
)


(11,654
)


(10,860
)


(12,886
)     (a)
    
    Includes restricted cash of
    $457.1 million (2010) and $315.2 million (2009).(b)
    
    Includes combined CVA and MVA of
    $23.3 million (2010) and $(12.7) million (2009).  Note S 
    Flight
    Equipment Rent    Note T 
    Out of
    Period Adjustments  (i) (ii)
  Note U 
    Subsequent
    Events  Revolving
    Credit Facility
    AIG
    Recapitalization
   97




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note U 
    Subsequent
    Events (Continued)    737-800
  Note V 
    Quarterly
    Financial Information  (Unaudited)  Basis of Preparation
  As previously reported
  QuarterFirst

Second

Third

Fourth

Total(Dollars in thousands)Year Ended December 31, 2010Total Revenues

$
901,588


$
1,244,095


$
1,287,296



N/A



N/APre-tax (Loss) Income(a)


(98,612
)


174,358



(157,185
)(b)


N/A



N/ANet (Loss) Income(a)


(62,926
)


110,753



(105,535
)


N/A



N/AYear 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
(c)


1,396,167Net Income


202,957



236,925



245,813



209,934



895,629     (a)
    During 2010, we recorded impairment charges and fair value
    adjustments of $353.4 million, $61.2 million,
    $407.4 million and $676.7 million during the first,
    second, third and fourth quarter, respectively, related to 155
    aircraft.(b)
    In the third quarter of 2010, we recorded an out of period
    adjustment which decreased pretax income by $20.2 million
    related to prior quarters and years and relating to certain
    pension costs under a non qualified plan covering certain ILFC
    employees for the service period of
    1996-2010.(c)
    In the fourth quarter of 2009, we recorded impairment charges
    aggregating $52.9 million related to three aircraft.  Revised:
  QuarterFirst

Second

Third

Fourth

Total(Dollars in thousands)Year Ended December 31, 2010Total Revenues

$
1,244,132


$
1,174,338


$
1,211,534


$
1,168,876


$
4,798,880Pre-tax (Loss) Income(a)


(98,612
)


174,358



(157,185
)


(510,429
)(c)


(591,868
)Net (Loss) Income(a)


(62,926
)


110,753



(105,535
)


(326,050
)


(383,758
)Year Ended December 31, 2009Total Revenues

$
1,201,629


$
1,256,070


$
1,278,728


$
1,265,571


$
5,001,998Pre-tax Income


314,902



364,397



380,887



335,981
(b)


1,396,167Net Income


202,957



236,925



245,813



209,934



895,629  98




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INTERNATIONAL
    LEASE FINANCE CORPORATION AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Continued)
   Note V 
    Quarterly
    Financial Information (Unaudited) (Continued)     (a)
    During 2010, we recorded impairment charges and fair value
    adjustments of $353.4 million, $61.2 million,
    $407.4 million and $676.7 million during the first,
    second, third and fourth quarter, respectively, related to 155
    aircraft.(b)
    In the fourth quarter of 2009, we recorded impairment charges
    aggregating $52.9 million related to three aircraft.(c)
    In the fourth quarter of 2010, we recorded an out of period
    adjustment which decreased pretax income by $20.7 million
    related to prior quarters and years and relating to the
    depreciable lives of overhaul costs that were incurred by ILFC
    directly over the period of 2003 to 2010. 99




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##### Table of Contents



SIGNATURES
      INTERNATIONAL LEASE FINANCE
    CORPORATION
  By
    /s/  FREDERICK
    S. CROMER  Frederick S. Cromer
 Senior Vice President
 and Chief Financial Officer
    Signature

Title

Date/s/  HENRI
    COURPRONHenri
    Courpron

Chief Executive Officer and Director (Principal Executive
    Officer)

March 9, 2011/s/  ALAN
    H. LUNDAlan
    H. Lund

President, Director and Vice Chairman of the Board

March 9, 2011/s/  DOUGLAS
    M. STEENLANDDouglas
    M. Steenland

Director and Chairman of the Board

March 9, 2011/s/  ROBERT
    H. BENMOSCHERobert
    H. Benmosche

Director

March 9, 2011/s/  WILLIAM
    N. DOOLEYWilliam
    N. Dooley

Director

March 9, 2011/s/  LESLIE
    L. GONDALeslie
    L. Gonda

Director

March 9, 2011/s/  DAVID
    L. HERZOGDavid
    L. Herzog

Director

March 9, 2011/s/  FREDERICK
    S. CROMERFrederick
    S. Cromer

Senior Vice President and Chief Financial Officer (Principal
    Financial Officer)

March 9, 2011/s/  KURT
    H. SCHWARZKurt
    H. Schwarz

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

March 9, 2011  100




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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.
   101