<PAGE>   1

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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                      ------------------------------------
                                   Form 10-K
                 FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
          SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

<TABLE>
<S>         <C>                                                           <C>
(Mark One)

   [X]          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                          SECURITIES EXCHANGE ACT OF 1934
                      For the fiscal year ended March 31, 2001
                                         OR
   [ ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                          SECURITIES EXCHANGE ACT OF 1934
                      For the transition period from       to
</TABLE>

                        Commission File Number 33-99970

<TABLE>
<S>                                            <C>
              AIRPLANES LIMITED                            AIRPLANES U.S. TRUST
  (Exact Name of Registrants as specified in memorandum of association or trust agreement)
           JERSEY, CHANNEL ISLANDS                               DELAWARE
               (State or other jurisdiction of incorporation or organization)
                    7359                                        13-3521640
                 (SIC Code)                        (I.R.S. Employer Identification No.)
              AIRPLANES LIMITED                            AIRPLANES U.S. TRUST
       22 GRENVILLE STREET, ST. HELIER                   1100 NORTH MARKET STREET,
               JERSEY, JE4 8PX                              RODNEY SQUARE NORTH
               CHANNEL ISLANDS                        WILMINGTON, DELAWARE 19890-0001
            (011 44 1534 609 000)                            (1-302-651-1000)
</TABLE>

    (Addresses and telephone numbers, including area codes, of Registrants'
                          principal executive offices)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT

<TABLE>
<CAPTION>
                                                           NAME OF EACH EXCHANGE
            TITLE OF EACH CLASS                             ON WHICH REGISTERED
--------------------------------------------    --------------------------------------------
<S>                                             <C>
                    None                                            None
</TABLE>

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT
                                      None

                                (Title of class)

  Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
                        Yes [X]                      No [ ]

    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 or Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

    Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.

<TABLE>
<CAPTION>
                                                                                          OUTSTANDING AT
ISSUER                                                       CLASS                        JUNE 30, 2001
------                                                       -----                        --------------
<S>                                      <C>                                              <C>
Airplanes Limited....................          Ordinary Shares, $1.00 par value                 30
</TABLE>

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<PAGE>   2

                   AIRPLANES LIMITED AND AIRPLANES U.S. TRUST

                          2001 FORM 10-K ANNUAL REPORT

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                          PAGE
                                                                          ----
<S>         <C>                                                           <C>
PART I
  Item 1.   Business....................................................    3
  Item 2.   Properties..................................................   38
  Item 3.   Legal Proceedings...........................................   38
  Item 4.   Submission of Matters to a Vote of Security-Holders.........   39
PART II
  Item 5.   Market for Registrants' Common Equity and Related
            Stockholder Matters.........................................   40
  Item 6.   Selected Combined Financial Data............................   40
  Item 7.   Management's Discussion and Analysis of Financial Condition
            and Results of Operations...................................   42
  Item 7A.  Quantitative and Qualitative Disclosures about Market
            Risks.......................................................   71
  Item 8.   Financial Statements and Supplementary Data.................   75
  Item 9.   Changes in and Disagreements with Accountants on Accounting
            and Financial Disclosure....................................   75
PART III
  Item 10.  Directors and Executive Officers of the Registrants.........   76
  Item 11.  Executive Compensation......................................   85
  Item 12.  Security Ownership of Certain Beneficial Owners and
            Management..................................................   85
  Item 13.  Certain Relationships and Related Transactions..............   85
PART IV
  Item 14.  Exhibits, Financial Statement Schedules and Reports on Form
            8-K.........................................................   87
</TABLE>

                                        2
<PAGE>   3

                                     PART I

ITEM 1.  BUSINESS

INTRODUCTION

     Airplanes Limited ("AIRPLANES LIMITED") is a limited liability company
formed under the laws of Jersey, Channel Islands. Airplanes U.S. Trust
("AIRPLANES TRUST") is a Delaware business trust. "AIRPLANES GROUP" refers to
Airplanes Limited and Airplanes Trust, and in this report, we use "WE," "US" and
"OUR" to refer to Airplanes Group and its subsidiaries and Airplanes Pass
Through Trust. We are in the business of leasing aircraft to aircraft operators
around the world. At March 31, 2001, we owned 193 aircraft (the "AIRCRAFT"), 187
of which were on lease to 64 lessees in 34 countries.

     On March 28, 1996, we established eight separate pass through trusts to
issue and sell $4,048 million in aggregate principal amount of subclass A-1,
A-2, A-3, A-4 and A-5 and class B, C and D pass through certificates in an
underwritten offering. We used the proceeds from this offering, together with
the proceeds from the sale of the class E notes of Airplanes Limited and
Airplanes Trust to GPA Group plc (now known as debis AirFinance Ireland plc), to
acquire a portfolio of 229 aircraft from GPA Group and its subsidiaries. We use
the rental payments that we receive from leasing the aircraft to pay interest
and principal on this debt. On March 16, 1998, we established four additional
pass through trusts to issue and sell $2,437 million in aggregate principal
amount of subclass A-6, A-7 and A-8 and class B certificates in connection with
the refinancing of our subclass A-1, A-2 and A-3 and class B certificates. On
November 20, 1998, GE Capital acquired a majority of the class E notes from GPA
Group (then known as AerFi Group and now known as debis AirFinance Ireland) and
its subsidiaries. On that date, a subsidiary of AerFi Group also granted GE
Capital an option to acquire the residual interest in Airplanes Trust. See below
at "Airplanes Trust" for more information about the option. The subclass A-5
certificates were fully repaid as of May 15, 1998. We established a new pass
through trust on March 15, 2001 to issue and sell $750 million in aggregate
principal amount of subclass A-9 certificates which rank equally in right of
payment with our outstanding subclass A-6 and A-8 certificates. We used the
proceeds from this offering to refinance our existing subclass A-4 and A-7
certificates and the corresponding subclass A-4 and A-7 notes.

AIRPLANES PASS THROUGH TRUST

     "AIRPLANES PASS THROUGH TRUST" and the "TRUST" refer to all the pass
through trusts created under the Airplanes Pass Through Trust Agreement dated
March 28, 1996 (the "TRUST AGREEMENT") among Airplanes Limited, Airplanes Trust
and Bankers Trust Company, as trustee (the "TRUSTEE"), except where it is clear
that this term means only a particular pass through trust. The certificates
issued by each pass through trust each represent a fractional undivided
beneficial interest in two corresponding classes or subclasses of notes issued
and cross-guaranteed by Airplanes Limited and Airplanes Trust pursuant to
indentures dated as of March 28, 1996 (as amended or supplemented, the
"INDENTURES") they entered into with Bankers Trust Company, as trustee (the
"INDENTURE TRUSTEE"), and held by that trust. The two corresponding classes of
notes and guarantees held by each trust are the principal sources of payment for
the class or subclass of certificates issued by that trust.

AIRPLANES LIMITED

     Airplanes Limited is a special purpose limited liability company formed on
November 3, 1995 under the laws of Jersey, Channel Islands. Its sole purposes
are to (a) acquire, own, manage, maintain, lease, re-lease, modify and sell
(subject to restrictions under its indenture) the aircraft, (b) finance and
refinance these activities, including guaranteeing the obligations of its
subsidiaries and of Airplanes Trust, (c) manage its interest rate and currency
risks, and (d) engage in other activities related to the aircraft and their
financing.

     Airplanes Limited's principal assets are the intercompany loans it has
advanced to its subsidiaries and 95% of the capital stock of Airplanes Holdings
Limited. As of March 31, 2001, Airplanes Holdings owned a total of 177 aircraft
directly and through its aircraft-owning subsidiaries, and owned a number of
aircraft-leasing subsidiaries which lease aircraft from the aircraft-owning
subsidiaries and sublease them to lessees. The remaining 5% of the capital stock
of Airplanes Holdings is owned by GECAS. See below "Risk Factors -- Risks
                                        3
<PAGE>   4

Relating to Tax" for a discussion of the tax benefits of this 5% ownership by
GECAS and the risk of losing these benefits. Airplanes Limited has no ownership
or leasehold interests in any real property.

     For information on the capital stock of Airplanes Limited, including a
discussion of annual dividends, see "Item 5. Market for Registrants' Common
Equity and Related Shareholder Matters."

     Airplanes Limited is managed by a board of directors, which is currently
composed of five directors. See "Item 10. Directors And Executive Officers Of
The Registrants -- Directors and Controlling Trustees" for details on these
directors. Airplanes Limited does not have any employees or executive management
of its own and relies solely on service providers to service, lease and re-lease
aircraft and perform other executive and administrative responsibilities. For a
description of the services provided by the service providers, see "Item 10.
Directors And Executive Officers Of The Registrants -- The Servicer" and "-- The
Administrative Agent and Cash Manager."

     We have taken steps to structure Airplanes Limited and its acquisition of
the aircraft-owning and aircraft-leasing subsidiaries from GPA Group (now known
as debis AirFinance Ireland) in 1996 to ensure that its assets would not be
consolidated with the assets of debis AirFinance Ireland and would not otherwise
become available to its creditors in any bankruptcy or insolvency proceeding
involving debis AirFinance Ireland or any of its affiliates. For a description
of the risks if these steps are not effective, see below "Risk Factors -- Risks
Relating to Bankruptcy."

AIRPLANES TRUST

     Airplanes Trust is a Delaware statutory business trust formed in November
1995. Its sole purposes are to (a) acquire, own, manage, maintain, lease,
re-lease, modify and sell (subject to restrictions under its indenture) the
aircraft, (b) finance and refinance these activities, including guaranteeing the
obligations of its subsidiaries and of Airplanes Limited, (c) manage its
interest rate and currency risks and (d) engage in other activities related to
the aircraft and their financing.

     Airplanes Trust's principal assets are the intercompany loans it has
advanced to its subsidiaries and 100% of the capital stock of AeroUSA, which as
of March 31, 2001, owned 16 aircraft through its direct subsidiary, AeroUSA 3.
The shares of AeroUSA and AeroUSA 3 are held by separate voting trusts with
First Security Bank of Utah, acting as trustee, in order to satisfy the U.S.
Federal Aviation Administration regulations regarding the U.S. citizenship of
the owners of U.S.-registered aircraft. Airplanes Trust has no ownership or
leasehold interests in any real property.

     debis AirFinance, Inc., a wholly-owned subsidiary of debis AirFinance
Ireland, holds the residual ownership interest in all of the property of
Airplanes Trust. In connection with the sale of the class E notes to GE Capital
by GPA Group (now known as debis AirFinance Ireland) and its subsidiaries in
1998, GPA, Inc. (now known as debis AirFinance, Inc.) granted an option to GE
Capital for it to purchase this residual ownership interest in Airplanes Trust
for $1.00. If GE Capital does not exercise this option before its expiry date,
which is 30 days after notice of the dissolution of the trust, the option will
become void. Upon repayment in full of all of the indebtedness of Airplanes
Trust and the dissolution of Airplanes Trust, legal title to the AeroUSA shares
and other property of Airplanes Trust will revert to debis AirFinance, Inc. or
GE Capital, if GE Capital has exercised its option.

     Airplanes Trust has five controlling trustees, who are the same individuals
as those who currently serve as directors of Airplanes Limited, and a Delaware
trustee, Wilmington Trust Company. For information on its management, see "Item
10. Directors and Executive Officers of the Registrants." Airplanes Trust does
not have any employees or executive officers of its own and relies solely on
service providers to service, lease and re-lease the aircraft and perform other
executive and administrative responsibilities. For a description of these
services, see "Item 10. Directors And Executive Officers Of The Registrants --
The Servicer" and "-- The Administrative Agent and Cash Manager."

     We have taken steps to structure Airplanes Trust and its acquisition of the
aircraft-owning and aircraft-leasing subsidiaries from GPA Group (now known as
debis AirFinance Ireland) in 1996 to ensure that its assets would not be
consolidated with the assets of debis AirFinance Ireland and would not otherwise
become available to its creditors in any bankruptcy or insolvency proceeding
involving debis AirFinance Ireland or any of
                                        4
<PAGE>   5

its affiliates. For a description of the risks if these steps are not effective,
see below "Risk Factors -- Risks Relating to Bankruptcy."

RISK FACTORS

     The following summarizes various risks and uncertainties which may
materially affect the ability of Airplanes Limited and Airplanes Trust to pay
interest, principal or any premium on the notes and hence our ability to pay
interest, principal or any premium on our certificates in full at or before
their respective final maturity dates. These risks and uncertainties are not the
only ones relevant to the certificates, the notes and guarantees, the trust or
Airplanes Group.

     This Form 10-K contains forward-looking statements that involve risks and
uncertainties. In most cases, you can identify these forward-looking statements
by terms such as "may," "should," "expect," "plan," "anticipate," "believe,"
"estimate," "predict," "potential," "continue" or similar terms that relate to
the future or express uncertainty. Our actual results could differ materially
from those anticipated in these forward-looking statements. In evaluating these
statements, you should specifically consider various factors, including the
risks outlined below, that may impact our results of operations.

RISKS RELATING TO AIRPLANES GROUP AND THIRD PARTIES

WE HAVE A HISTORY OF INCURRING NET LOSSES IN OUR OPERATIONS.

     Airplanes Group has incurred net losses since its inception and expects to
continue to incur net losses. See "Item 7. Management's Discussion and Analysis
of Financial Condition and Results of Operations" for a further discussion of
these net losses.

WE HAVE NO MANAGEMENT RESOURCES AND DEPEND ON SERVICE PROVIDERS TO OPERATE OUR
BUSINESS AND COLLECT OUR REVENUES.

     We have no employees or executive management resources of our own and rely
solely on the servicer, administrative agent, cash manager and other service
providers for all aircraft servicing, leasing, re-leasing, sales and other
executive and administrative functions relating to our portfolio. If these
service providers do not perform their contractual obligations to us, our
operations and cash flow may suffer, thereby adversely affecting the timing of
payments on, and ultimate repayment of, the certificates. We may find it
difficult to recover damages for any of these third parties' poor performance
pursuant to their contracts and may not be able to terminate these contracts by
ourselves. In particular, our rights to terminate the servicing agreement are
very limited. We cannot guarantee that we will continue our arrangements with
the existing service providers or that they will continue their relationship
with us until the certificates are paid in full. If a service provider resigns
or if we terminate any service provider, we may be unable to find a suitable
replacement that we can engage on suitable terms, which would harm our
operations and impede our cash flow. The appointment of replacement service
providers may also cause the rating agencies to lower or withdraw the ratings on
the certificates. You should refer to "Item 10. Directors And Executive Officers
Of The Registrants" for more detailed information on the responsibilities we
have delegated to the service providers.

THE SERVICER WILL NOT BE LIABLE TO US FOR LOSSES WE INCUR IN CONNECTION WITH ITS
PERFORMANCE OF THE SERVICES.

     The servicer will not be liable to us for losses we incur in connection
with its performance of the services, except where a court has finally
adjudicated that the losses have been directly caused by the servicer's willful
misconduct or gross negligence. In addition, we have agreed to indemnify the
servicer on an after-tax basis for a broad range of losses in connection with
its performance of the services. Any such indemnification payments will rank
senior to payments on the notes and certificates, which may result in our not
having enough funds to make payments on the notes and certificates.

                                        5
<PAGE>   6

WE DEPEND ON SWAP COUNTERPARTIES IN MANAGING INTEREST RATE RISKS. IF OUR SWAP
COUNTERPARTIES DEFAULT, OR IF WE ARE UNABLE TO FIND SUITABLE SWAP
COUNTERPARTIES, THERE MAY BE A MISMATCH BETWEEN OUR FIXED AND FLOATING RATE
ASSETS AND LIABILITIES WHICH COULD REDUCE OUR CASH FLOW.

     We manage interest rate risks arising from any mismatch between fixed and
floating rate lease rental payments and fixed and floating rate interest
obligations through swaps and other derivative instruments. This strategy for
managing interest rate risks is dependent upon our ability to enter into
interest rate swaps, including, if applicable, as a result of exercising
swaptions, with eligible counterparties and on the counterparties fulfilling
their contractual obligations. If a counterparty defaults or if we are unable to
enter into interest rate swaps with eligible counterparties, a mismatch between
our fixed and floating rate interest obligations and fixed and floating rate
lease payments may arise, which could harm our cash flow and adversely affect
our ability to make payments on the notes and certificates.

GECAS, THE SERVICER, MAY HAVE CONFLICTS OF INTEREST IN MANAGING OUR PORTFOLIO AS
A RESULT OF ITS OTHER AIRCRAFT MANAGEMENT ACTIVITIES.

     In addition to acting as the servicer for Airplanes Group, GECAS manages a
large portfolio of aircraft owned by its affiliates, including the GE group of
companies, and third parties, including debis AirFinance Ireland and its
affiliates, and other securitization vehicles such as Aircraft Finance Trust.
GECAS also arranges aircraft or engine financings and other lease transactions
and GE Capital, an affiliate of GECAS, is the owner of the class E notes. GECAS
may therefore face conflicts of interest in managing and marketing our portfolio
for re-lease or sale. The aircraft it manages for itself or others may compete
with our aircraft when they are being marketed for re-lease or sale. These
conflicts will arise as decisions affecting some aircraft that GECAS is managing
or that GECAS or one of its affiliates owns may be adverse to other aircraft
also managed by GECAS. The servicing agreement provides that the standard of
care applicable in cases where such conflicts arise requires that GECAS not
discriminate between aircraft on an unreasonable basis. For a fuller description
of the standard of care, see "Item 10. Directors And Executive Officers Of The
Registrants -- The Servicer -- The Servicing Agreement." While GECAS has agreed
to perform the services for us with reasonable care and diligence at all times,
GECAS may give preference to its affiliates and other third parties under the
terms of its other marketing and servicing arrangements. In addition, GECAS is
not obliged to inform us of any conflicts of interest of which it is aware. If,
as a result of a conflict of interest, GECAS makes a decision potentially
adverse to us, it could have a material adverse effect on the servicing of our
aircraft, which may cause a reduction in our cash flow, thereby potentially
adversely affecting the timely or full repayment of the notes and certificates.
See "Item 10. Directors And Executive Officers Of The Registrants -- The
Servicer" for more information on the activities of the servicer.

THE ADMINISTRATIVE AGENT AND CASH MANAGER MAY HAVE CONFLICTS OF INTEREST BECAUSE
OF THEIR PARENT COMPANIES' OTHER AIRCRAFT MANAGEMENT ACTIVITIES AND OWNERSHIP
INTERESTS.

     debis AirFinance B.V. and debis AirFinance Ireland, parent companies of the
administrative agent and the cash manager, manage a large portfolio of aircraft
owned by themselves, their affiliates and third parties. debis AirFinance
Ireland also acts as the servicer for AerCo Limited, a securitization vehicle
similar to Airplanes Group, and currently holds the class D-2, E-1 and E-2 notes
issued by AerCo. Subsidiaries of debis AirFinance Ireland also act as
administrative agent and cash manager for AerCo. As a result, the administrative
agent and the cash manager of Airplanes Group may from time to time have
conflicts of interest in performing their obligations to Airplanes Group. While
the roles of the administrative agent and the cash manager are more limited than
those of the servicer, any conflicts of interest that they cannot resolve could
have an adverse impact on Airplanes Group and on our ability to make payments on
the notes and certificates.

                                        6
<PAGE>   7

OUR LEGAL COUNSEL MAY HAVE CONFLICTS OF INTEREST IN NEGOTIATING SOME OF OUR
AGREEMENTS BECAUSE THEY ALSO REPRESENT PARTIES WITH WHICH WE DEAL.

     Airplanes Group and debis AirFinance Ireland are represented by the same
Jersey, Irish and United States legal counsel, and we anticipate that this
multiple representation will continue. Our legal counsel may face conflicts of
interest when negotiating agreements between Airplanes Group and debis
AirFinance Ireland. If a significant dispute does arise in the future between
Airplanes Group and debis AirFinance Ireland or any of their respective
affiliates, we anticipate that we will retain separate counsel to represent us.

RISKS RELATING TO THE AIRCRAFT

THE COMMERCIAL AIRCRAFT MARKET IS CYCLICAL. DECREASED DEMAND FOR OR EXCESS
SUPPLY OF AIRCRAFT CAN DEPRESS AIRCRAFT VALUES AND LEASE RATES, WHICH MAY CAUSE
US TO BE UNABLE TO RE-LEASE OR SELL AIRCRAFT ON FAVORABLE TERMS AND CAN DECREASE
CASH AVAILABLE TO MAKE PAYMENTS ON THE NOTES AND CERTIFICATES.

     The market for commercial jet aircraft is cyclical and can produce sharp
increases or decreases in aircraft values and lease rates depending on the level
of supply and demand. The aircraft leasing industry is currently experiencing an
oversupply of turboprop aircraft, Stage 2 aircraft and various types of used
Stage 3 aircraft, especially older widebody aircraft and some older narrowbody
aircraft. As airlines increasingly prefer jet aircraft over turboprop aircraft
and new generation Stage 3 aircraft over older Stage 3 aircraft, the markets for
these types of aircraft, on which we partly depend, remain unfavorable for both
aircraft values and lease rates. The condition of the aircraft market will vary
at different points when our aircraft are being marketed for re-lease or sale,
depending on, among other things, the business cycle for the lessees and buyers
of aircraft. Unfavorable conditions in the aircraft market may affect our
ability to re-lease or, where applicable, sell our aircraft on satisfactory
terms, which could decrease the cash available to make payments on the notes and
certificates.

THE AIRCRAFT VALUES AND LEASE RATES FOR AIRCRAFT MAY FLUCTUATE SIGNIFICANTLY
BECAUSE OF FACTORS OUTSIDE OUR CONTROL AND AFFECT OUR CASH FLOW.

     Decreases in aircraft values or lease rates may cause a decrease in our
cash flows. Depending on market conditions, we may be unable to re-lease or sell
aircraft on terms that will allow us to make payments on the notes and
certificates. Aircraft values and lease rates depend on various factors that are
outside our control, including:

     -  general economic conditions affecting lessee operations, including
        passenger demand and the cost of fuel and other expenses;

     -  the supply of and demand for used aircraft;

     -  manufacturer production levels and prices for new aircraft;

     -  interest rates, currency exchange rates and credit availability;

     -  retirement and obsolescence of aircraft models;

     -  re-introduction into service of aircraft previously in storage;

     -  governmental regulations; and

     -  lack of capacity in the aircraft traffic control system.

     Additional factors outside our control that may lead to sharp increases or
decreases in aircraft values or lease rates for specific aircraft include:

     -  manufacturer production levels and competition between aircraft
        manufacturers, such as the current competition between The Boeing
        Company and Airbus Industrie, which has led to an increased supply of
        new aircraft at lower prices;

                                        7
<PAGE>   8

     -  manufacturers merging or leaving the aircraft industry, such as the
        merger between Boeing and McDonnell Douglas and the bankruptcy of Fokker
        N.V., which has led to the termination of production of MD and Fokker
        aircraft and a resulting decrease in the values and lease rates for our
        MD and Fokker aircraft;

     -  the maintenance and operating history of the aircraft;

     -  the number of operators using a particular type of aircraft and the
        supply of that type of aircraft;

     -  legal or regulatory requirements that prevent re-leasing or selling that
        type of aircraft;

     -  the discovery of manufacturing defects in an aircraft model; and

     -  new regulatory requirements relating to an aircraft model.

THE CONCENTRATION OF AIRCRAFT TYPES IN OUR PORTFOLIO COULD MAGNIFY THE IMPACT OF
DECLINES IN LEASE RATES OR AIRCRAFT VALUES AND ADVERSELY AFFECT OUR CASH FLOW.

     As of March 31, 2001, each of the B737-400, MD-83 and A320-200 models of
aircraft comprised more than 10% of our portfolio by appraised value as of
January 31, 2001 and, in addition, each of the B737-300, B737-500, B767-300ER,
DC8, MD-11 and F-100 models of aircraft comprised more than 5% of our portfolio
by appraised value as of January 31, 2001. Furthermore, at March 31, 2001
widebody and turboprop aircraft each comprised more than 5% of our portfolio by
appraised value as of January 31, 2001. This concentration on particular models
or types of aircraft could magnify the adverse impact to our cash flow if there
is a decline in lease rates or aircraft values for these models or types of
aircraft, or if significant costs are required to be incurred with respect to
these aircraft. The negative impact can be especially severe where (a) there is
a sharp decrease of lease rates or aircraft values or (b) if specific
governmental or technical regulations are imposed on particular aircraft types,
as we have seen with (x) the increasing unpopularity of the turboprop aircraft,
the discontinuation of production of MD-83s and MD-11s, the reduction in demand
for B767s including in particular B767s powered by Pratt & Whitney engines, and
the bankruptcy of Fokker, (y) noise regulations restricting the use of Stage 2
aircraft which, as of March 31, 2001, accounted for approximately 5% of our
portfolio by appraised value as of January 31, 2001, and (z) the Airworthiness
Directives ("ADS") with respect to the MD-80s, MD-11s and B737s, all as
described more fully below in "The Aircraft, Related Leases and Collateral."
These events have caused, and could continue to cause, our overall lease rates
or the aircraft values to significantly decrease and may cause us to incur
significant costs which would reduce our cash flow.

THE ACTUAL MARKET VALUE OF THE AIRCRAFT MAY BE LESS THAN THE APPRAISED VALUE AND
PROCEEDS FROM DISPOSITIONS OF THE AIRCRAFT MAY BE INADEQUATE TO MAKE PAYMENTS ON
THE NOTES AND CERTIFICATES.

     We have determined the scheduled principal payments and the expected final
payment dates for the notes and certificates based on the appraised values of
the aircraft, which are determined based on the assumption that there is an
"open, unrestricted stable market environment with a reasonable balance of
supply and demand." Appraised values for an aircraft, however, do not
necessarily reflect the market value for the aircraft at a specific time and you
should not rely on appraised values as an indication of the price that we could
obtain if we sold an aircraft. The aircraft market is cyclical and there may be
imbalances of supply and demand at any one time, especially for specific
aircraft types. At the high point in the industry cycle, the current market
value of some aircraft may be at or above their appraised values while the
current market value of others may be significantly less than their appraised
values. At a low point in the industry cycle, the current market value of most
aircraft types is likely to be less, or in many cases, much less, than appraised
values. If we sell an aircraft to repay the notes, the proceeds may be
significantly less than its appraised value. We may therefore have insufficient
cash to make payments on the notes to pass through to the certificate holders.
Market values may also be affected by market lease rates for aircraft.

                                        8
<PAGE>   9

SOME OF OUR LESSEES MAY EXERCISE PURCHASE OPTIONS AT PRICES THAT ARE LESS THAN
THE PROPORTIONATE SHARE OF THE UNPAID PRINCIPAL OF THE NOTES AND CERTIFICATES
ALLOCABLE TO THE RELEVANT AIRCRAFT AND, THEREFORE, WE MAY BE UNABLE TO MAKE
PAYMENTS ON THE NOTES AND CERTIFICATES.

     As of March 31, 2001, 11 lessees had options to purchase a total of 31
aircraft, representing 12.87% of our portfolio by appraised value as of January
31, 2001. There is a risk that the purchase prices may be less than the
proportionate share of the unpaid principal of the notes and certificates
allocable to the aircraft being purchased. If those options are exercised, there
could be a reduction in the amount, or a delay in the timing, of payments on the
notes and certificates.

WE MAY BE UNABLE TO REPOSSESS, RE-LEASE OR SELL THE AIRCRAFT IF THE LESSEES DO
NOT DISCHARGE LIENS ON THE AIRCRAFT, WHICH WOULD REDUCE CASH AVAILABLE TO US TO
MAKE PAYMENTS ON THE NOTES AND CERTIFICATES.

     Liens which secure the payment of airport taxes, customs duties, air
navigation charges, landing charges, crew wages, repairer's charges or salvage
may attach to the aircraft in the normal course of operations. The sums which
these liens secure may be substantial and could exceed the value of the
aircraft. In some jurisdictions, a holder of aircraft liens may have the right
to detain, sell or cause the forfeiture of the aircraft. While our lessees are
generally required to discharge all liens arising during the term of their
leases, their failure to discharge any liens may impair our ability to
repossess, re-lease or sell the aircraft if the lessee defaults, which could
have an adverse effect on our cash flow.

OUR LESSEES MAY FAIL TO MAINTAIN REGISTRATION OF OUR AIRCRAFT, WHICH MAY AFFECT
THEIR ABILITY TO MAKE PAYMENTS TO US AND OUR ABILITY TO MAKE PAYMENTS ON THE
NOTES AND CERTIFICATES.

     All aircraft in operation must be duly registered with an appropriate
aviation authority. If any lessee fails to maintain a valid registration of an
aircraft, the lessee operator or, in some cases, the owner or lessor may be
subject to penalties which may result in a lien being placed on the aircraft.
Loss of registration could also have other adverse effects, including grounding
of the aircraft and loss of insurance, which may prevent the aircraft from
generating cash flow and have an adverse effect on our ability to make payments
on the notes and certificates.

THE AVAILABILITY OF NEW, MORE TECHNOLOGICALLY ADVANCED AIRCRAFT MAY IMPAIR OUR
ABILITY TO RE-LEASE OR SELL AIRCRAFT AND REDUCE OUR CASH AVAILABLE TO MAKE
PAYMENTS ON THE NOTES AND CERTIFICATES.

     The availability of newer, more technologically advanced aircraft could
adversely affect our ability to re-lease or sell our aircraft because lessees
and buyers of used aircraft tend to favor these newer, more technologically
advanced models. In particular, within the last year, demand for some older
narrowbody Stage 3 aircraft, which make up a significant proportion of our
portfolio, has been adversely affected by the availability of new generation
narrowbody Stage 3 aircraft. Although this risk is common to all aircraft
lessors, it is particularly significant for us because we have a comparatively
older portfolio and will need to re-lease all of our aircraft at least once
before the expected final payment date of some of the certificates. We may also
need to sell aircraft that are close to the end of their useful economic lives
in order to meet our payment obligations on the notes and certificates. Our
ability to manage these technological risks through modifications to aircraft
and sales of aircraft is limited by the significant costs of modifications and
by the restrictions imposed on modifications to and sale of aircraft under the
indentures.

                                        9
<PAGE>   10

INCREASED REGULATION OF THE AIRCRAFT INDUSTRY MAY CAUSE US TO INCUR MORE
EXPENSES OR MAY IMPAIR OUR ABILITY TO RE-LEASE OR SELL AIRCRAFT AND REDUCE OUR
CASH AVAILABLE TO MAKE PAYMENTS ON THE NOTES AND CERTIFICATES.

     The aircraft industry is heavily regulated and aviation authorities may
adopt additional regulations in jurisdictions where our aircraft are registered
or operate. In particular, governmental regulations, especially in North America
and Europe, impose increasingly strict noise and emissions levels and enhanced
safety requirements for aircraft, such as fire safety insulation, traffic
collision avoidance systems and emergency locator transmitters. We may have to
incur significant costs in order to comply with additional regulations. In
addition, because our portfolio is composed of a significant number of older
aircraft and we have a heavy concentration of some types of aircraft,
increasingly stringent noise or emissions regulations that disproportionately
affect older aircraft or particular types of aircraft, such as the recent U.S.
Federal Aviation Administration ("FAA") fire safety regulations on MD-80 and
MD-11 aircraft, could have a significant adverse impact on our results. We will
incur significant costs in order to comply with these regulations. For example,
it will cost an estimated $18 million to comply with the MD-11 and MD-80 fire
safety regulations. In addition, aircraft that fail to comply with noise or
emissions regulations could be prohibited from flying into some jurisdictions,
which will adversely affect their values and lease rates.

RISKS RELATING TO THE LEASES AND CASH FLOWS FROM LEASE PAYMENTS

THE RENTAL PAYMENTS AND SALE PROCEEDS FROM THE AIRCRAFT MAY NOT BE ADEQUATE TO
SUPPORT THE REQUIRED PAYMENTS ON THE NOTES AND CERTIFICATES.

     Our primary sources of cash flow are payments under the leases and proceeds
from the sale of aircraft. This cash flow is affected by our ability to manage
maintenance and other costs, collect payments under the leases and maintain a
constant stream of cash flows by re-leasing aircraft upon lease expiration or
termination and by selling aircraft on favorable terms. It is also dependent on
factors outside our control, such as performance by the lessees and the service
providers, exercise by lessees of any purchase or early termination options, and
external economic factors. It is therefore possible that we may not have enough
funds from these rental payments and sale proceeds to make payments on the notes
and certificates.

     The appraised value of our portfolio has declined at a rate greater than
that originally expected in March 1996 (when Airplanes Group was formed) and our
overall cash performance has been less than expected. Continuation of these
factors over a prolonged period may increase the risk that one or more of the
rating agencies may decide to lower their ratings on one or more classes of the
certificates.

OUR OPERATIONAL AND FINANCIAL RESTRICTIONS MAY AFFECT OUR ABILITY TO COMPETE AND
MAINTAIN THE CASH FLOW TO REPAY THE NOTES AND CERTIFICATES.

     The indentures and constitutive documents of Airplanes Limited and
Airplanes Trust impose restrictions on how we operate our business. These
restrictions may limit our ability to compete against other lessors who are not
subject to similar restrictions or who have greater financial resources than we
do. For example, we are not permitted to grant concessionary rental rates to
airlines in return for equity investments in the airlines. Additionally, we
cannot sell aircraft at prices below a specified target price except in limited
circumstances and in limited aggregate amounts, which may restrict our ability
to sell aircraft to generate cash flow. For example, the current market value of
our MD-11s is below the specified target price, which prevents us from selling
these aircraft in compliance with the indenture requirements. See "The Aircraft,
Related Leases and Collateral -- The Lessees -- Commercial Opportunities for our
MD-11 Aircraft" below for more information on our MD-11 aircraft. There are also
restrictions on who we can lease our aircraft to and limits on leasing to
lessees in particular geographic regions. Many competing aircraft lessors do not
operate under similar restrictions or have a stronger financial position or
other strengths and therefore have a competitive advantage over us when
negotiating leases and sales. This could adversely affect the amount and timing
of payments on the notes and certificates.

                                        10
<PAGE>   11

WE MAY NOT BE ABLE TO GENERATE SUFFICIENT FUNDS TO REPAY THE NOTES AND
CERTIFICATES IF WE CANNOT RE-LEASE AIRCRAFT QUICKLY AND ON FAVORABLE TERMS.

     We may not be able to re-lease the aircraft upon expiration or termination
of the leases without incurring significant downtime. If we cannot quickly
re-lease the aircraft, or if we cannot obtain favorable rates and lease terms
for the aircraft, our cash flow could be negatively affected. Our ability to
re-lease aircraft at acceptable lease rates and terms may suffer because of a
number of factors, including:

     -  economic conditions affecting the airline industry;

     -  the supply of competing aircraft and demand for particular aircraft
        types;

     -  increased bargaining power of lessees as they join global alliances with
        other airlines;

     -  competition from other lessors; and

     -  restrictions on our flexibility imposed by the indentures.

     The following table shows the number and type of aircraft as of March 31,
2001 that we must re-lease during the next five years. The table assumes that
(1) no lease terminates early, (2) there are no sales of aircraft and (3)
existing letters of intent will result in leases. Additional aircraft may need
to be re-leased if they become available through early terminations, if letters
of intent do not result in leases or if new leases are for short terms.

   AIRPLANES GROUP EXPECTED LEASE PLACEMENT REQUIREMENT AS OF MARCH 31, 2001

<TABLE>
<CAPTION>
                                                                  YEAR ENDING DECEMBER 31,
                                                            ------------------------------------
AIRCRAFT TYPE                                               2001    2002    2003    2004    2005
-------------                                               ----    ----    ----    ----    ----
<S>                                                         <C>     <C>     <C>     <C>     <C>
A300-B4-200.............................................     --      --      --       1       1
A300-C4-200.............................................     --       1      --      --      --
A320-200................................................     --       1       7       4      --
ATR42-300...............................................      2       2      --      --      --
B727-200A...............................................      2      --      --      --      --
B737-200A...............................................      4       4       3       2       4
B737-300................................................      2      --       2       1      --
B737-400................................................      2       9       3       2       3
B737-500................................................      3       2       1       1       1
B757-200................................................     --       1      --      --       2
B767-300ER..............................................      1      --       2      --      --
DC8-71F.................................................      2       8       6       2      --
DC8-73F.................................................     --      --      --       1      --
DC9-32..................................................     --       6      --      --      --
DC9-51..................................................      4      --      --      --      --
DHC8-100................................................      1       1       2       1      --
DHC8-300................................................      2       7       3      --       1
DHC8-300C...............................................      2      --      --      --      --
F-100...................................................     --      --       8      --      --
MD-11...................................................      1       2      --      --      --
MD-82...................................................     --      --      --       2      --
MD-83...................................................      4       2       4       8       4
MD-87...................................................     --       1      --      --      --
METRO-III...............................................      3      --      --      --      --
                                                            ---     ---     ---     ---     ---
Total...................................................     35      47      41      25      16
                                                            ===     ===     ===     ===     ===
</TABLE>

     Our longest lease is scheduled to expire in September 2008. Therefore we
will be required to re-lease all of our aircraft at least once before the
expected final payment date for some of the certificates. We currently expect
that the turboprop aircraft, older widebody aircraft, Stage 2 aircraft and some
older Stage 3 narrowbody aircraft
                                        11
<PAGE>   12

may prove difficult to re-lease because of the factors noted above. If we cannot
on a timely basis re-lease the aircraft that are coming off lease or can only
re-lease them at lower lease rates than the current lease rates, we may not have
enough funds to make payments on the notes and certificates.

WE MAY NOT BE ABLE TO OBTAIN REQUIRED LICENSES, CONSENTS AND APPROVALS, AND
CONSEQUENTLY OUR CASH FLOW MAY BE REDUCED.

     A number of lessees require specific licenses, consents or approvals for
different aspects of the lease. These include consents from governmental or
regulatory authorities to make payments under the leases and to the import,
re-export or de-registration of the aircraft. If we cannot obtain the required
governmental licenses, consents and approvals, if these requirements are
increased by subsequent changes in applicable law or administrative practice, or
if the licenses, consents or approvals are withdrawn, we may be unable to
re-lease or sell our aircraft. In that case, our cash flow may be insufficient
to make payments on the notes and certificates.

LESSEES MAY NOT PERFORM REQUIRED AIRCRAFT MAINTENANCE, CAUSING THE AIRCRAFT
VALUES AND LEASE RATES TO DECLINE AND THEREBY REDUCING OUR CASH FLOW.

     The standard of maintenance observed by our lessees and the condition of
the aircraft at the time of lease or sale may affect the aircraft values and
lease rates on our aircraft. If a lessee fails to perform required or
recommended maintenance on an aircraft during the term of the lease or does not
comply with all applicable governmental requirements, the aircraft could be
grounded and we may incur substantial costs to restore the aircraft to an
acceptable maintenance condition before its re-lease or sale. Also, an
increasing number of lessees with better credit no longer provide any cash
maintenance reserves. If the lessees do not perform their maintenance
obligations in any month, or if the maintenance costs for any month exceed the
maintenance payments made by the lessees or are more than our maintenance
reserves, we will have to fund these maintenance costs out of cash flow from the
leases for that month. As a result, our cash flow may be volatile from month to
month and we may not have enough funds left to make payments on the notes and
certificates after paying significant maintenance costs, especially as the
aircraft age.

OUR AIRCRAFT INSURANCE MAY NOT BE ADEQUATE TO COVER THE LOSSES OR LIABILITIES WE
INCUR, REDUCING CASH OTHERWISE AVAILABLE TO MAKE PAYMENTS ON THE NOTES AND
CERTIFICATES.

     Our lessees are required under the leases to maintain property and
liability insurance covering their operation of the aircraft and to indemnify us
against any damages. Although we believe that this insurance will be adequate to
cover all likely claims, we cannot guarantee that losses and liabilities from
one or more aviation accidents and other catastrophic events will not exceed the
insurance coverage limits. If the proceeds of insurance held by the lessees or
contingent policies held by us do not cover the losses or liabilities we incur,
or if our lessees default in fulfilling their insurance or indemnification
obligations, we may not have enough funds remaining after covering these losses
or liabilities to make payments on the notes and certificates.

OUR HEDGING POLICY MAY NOT ADEQUATELY MANAGE OUR INTEREST RATE RISKS, INCLUDING
THE ASSOCIATED LESSEE CREDIT RISKS, AND WE MAY NOT BE ABLE TO PURCHASE AN
ADEQUATE PORTFOLIO OF SWAPTIONS TO MITIGATE OUR INTEREST RATE RISKS, INCLUDING
THE ASSOCIATED LESSEE CREDIT RISKS. IN THIS CASE, THERE COULD BE A MISMATCH
BETWEEN OUR FIXED AND FLOATING RATE ASSETS AND LIABILITIES WHICH COULD REDUCE
OUR CASH FLOW.

     We manage our interest rate risks, including the associated lessee credit
risks, through the use of swaps and swaptions which we enter into with third
parties. However, our hedging policy may not adequately manage these risks. We
may also have insufficient cash flow available to purchase the full requirement
of swaptions. If our hedging policy does not adequately manage our interest rate
risks, including the associated lessee credit risks, or we do not have
sufficient cash flow to purchase the full requirement of swaptions, a mismatch
between our fixed and floating rate interest obligations and fixed and floating
rate lease payments may arise, which could harm our cash flow and adversely
affect our ability to make payments on the notes and certificates.
                                        12
<PAGE>   13

WITHHOLDING TAXES MAY BE IMPOSED ON LEASE RENTALS, INCREASING OUR COSTS AND
REDUCING OUR CASH FLOW.

     We have tried to structure our leases so that either withholding taxes do
not apply to lease payments or, if withholding taxes do apply, the lessees are
obliged to pay corresponding additional amounts so that we always receive the
full lease payment. However, if withholding taxes must be paid and we cannot
recover additional amounts from the lessees, we may not have sufficient funds to
make payments on the notes and certificates.

RISK OF LESSEE DEFAULT

LESSEES IN WEAK FINANCIAL CONDITION COULD FAIL TO MAKE LEASE PAYMENTS, CAUSING
OUR REVENUES TO FALL BELOW THE LEVEL REQUIRED TO MAKE PAYMENTS ON THE NOTES AND
CERTIFICATES.

     There is a significant risk that lessees in weak financial condition may
default on their obligations under the leases. If lessees do not make rent and
maintenance payments or are significantly in arrears, we may not have enough
funds to make payments on the notes and certificates. The ability of each lessee
to perform its obligations under its lease will depend primarily on its
financial condition, which may be affected by many factors beyond its control,
including competition, fare levels, passenger demand, currency exchange rates,
operating costs (including fuel and labor costs), cost and availability of
financing, and environmental and other governmental regulation. Because a
substantial portion of business and, especially, leisure airline travel is
discretionary, the general economic conditions of the geographic regions where
our lessees operate will also affect their ability to meet their lease
obligations. Since the majority of our leases require lease payments in U.S.
dollars, any weakness in the local currency in which a lessee operates against
the U.S. dollar could also adversely affect its ability to pay us.

     Some of our current lessees are in a weak financial position and you should
expect this to continue to be the case with future lessees. In particular, many
of our lessees are based or operate in regions such as Asia or Latin America
that from time to time experience severe economic crises. As a result, a large
proportion of lessees may consistently be significantly in arrears in their
rental payments or maintenance payments. The current level of defaults and
lessee arrears may not be representative of future defaults and arrears, and
defaults and arrears may increase as the aircraft industry experiences
anticipated cyclical downturns, particularly in regions such as Asia or Latin
America. See "The Aircraft, Related Leases and Collateral -- The Lessees" and
"The Commercial Aircraft Industry" below for a more detailed discussion of the
regional concentrations of our lessees and the economic trends of the regions
that may impact their financial condition.

WE MAY NOT BE ABLE TO TERMINATE LEASES OR REPOSSESS AIRCRAFT WHEN A LESSEE
DEFAULTS, CAUSING US TO INCUR UNEXPECTED REPOSSESSION COSTS THAT REDUCE OUR CASH
FLOW.

     If there is an event of default under a lease, we have the right to
terminate the lease and repossess the aircraft. However, it may be difficult,
expensive and time-consuming for us to enforce our rights in some circumstances,
especially if the lessee contests the termination or is bankrupt or under court
protection. Delays resulting from proceedings to repossess an aircraft add to
the period when the aircraft is not generating cash flow for us. In addition, we
may incur significant costs in trying to repossess an aircraft and in performing
maintenance and other work necessary to make the aircraft available for re-lease
or sale, including retrieval or reconstruction of aircraft records. We may also
incur swap breakage costs. Our efforts to repossess an aircraft following a
lessee's default may also be limited by the laws of the local jurisdiction which
may delay or prevent repossession. All of this may adversely affect our cash
flow.

RISKS RELATING TO PAYMENTS ON THE CERTIFICATES

CERTIFICATEHOLDERS HAVE NO SECURITY INTEREST IN THE AIRCRAFT OR THE LEASES TO
SECURE OUR REPAYMENT OF THE CERTIFICATES.

     None of the certificateholders, the trustee or the security trustee has any
security interest, mortgage, charge or similar interest in any aircraft in our
portfolio or in the related leases. If the trust defaults on payments to
                                        13
<PAGE>   14

certificateholders on the certificates, neither certificateholders nor anybody
acting on their behalf can sell the aircraft or exercise other remedies with
respect to the aircraft or the leases to repay the principal and interest that
we owe them, which they would have been able to do if they had held a security
interest in the aircraft or the leases. Airplanes Limited and Airplanes Trust
have, however, pledged to the security trustee, as security for the notes and
their other obligations, one-third of the ordinary share capital of each of
AeroUSA, Airplanes Holdings and their subsidiaries, cash balances in the
accounts and investments made with our cash balances.

THE TRUST HAS LIMITED SOURCES OF INCOME FROM WHICH TO REPAY THE CERTIFICATES.

     The trust is a pass through trust. The principal assets of the trust will
be the notes and guarantees, and its only sources of payment on the certificates
will be payments by Airplanes Limited and Airplanes Trust on those notes and
guarantees, including proceeds from any disposition of them. If Airplanes
Limited and Airplanes Trust do not make payments on the notes and guarantees to
the trust, the trust will have limited or no funds to make payments to
certificateholders on the certificates. The certificates and notes are not
guaranteed by the trustee, the security trustee, the indenture trustee, the
servicer, the administrative agent, the cash manager or any of their affiliates,
and certificateholders cannot look to them or anyone else to repay them if we
default in payment on the certificates.

AIRPLANES LIMITED AND AIRPLANES TRUST HAVE LIMITED SOURCES OF INCOME FROM WHICH
TO REPAY THE NOTES AND GUARANTEES.

     The principal assets of Airplanes Limited and Airplanes Trust are shares of
their direct subsidiaries and intercompany loans to their direct and indirect
subsidiaries. Airplanes Limited and Airplanes Trust do not directly own any of
the aircraft and are dependent on payments and distributions from their
subsidiaries for their cash flow. If their subsidiaries do not make principal or
interest payments to Airplanes Limited and Airplanes Trust on the intercompany
loans, or if their subsidiaries do not make any distributions to them, Airplanes
Limited and Airplanes Trust may not have enough funds to make payments to the
trust on the notes or guarantees. Also, if withholding or other taxes are
imposed on payments or distributions to Airplanes Limited and Airplanes Trust,
or if other significant tax liabilities arise, Airplanes Limited and Airplanes
Trust may not have enough funds to make payments to the trust. In these
circumstances, the trust may not have enough funds to make payments to
certificateholders on the certificates.

AIRPLANES LIMITED AND AIRPLANES TRUST HAVE OTHER CLAIMS THAT RANK SENIOR OR
EQUAL TO THE NOTES AND GUARANTEES.

     Administrative and lease expenses and some other specified payments in the
ordinary course of business of Airplanes Limited and Airplanes Trust rank senior
in priority of payment to the notes and guarantees and will be paid out of our
available funds before payments are made on the notes and guarantees and passed
through to certificateholders. Airplanes Limited has also guaranteed a
significant number of its subsidiaries' obligations to lessees. Payments on
these guarantees will be treated as lease expenses and will rank ahead of other
payment obligations of Airplanes Limited.

CLAIMS ON OUR SUBSIDIARIES ARE EFFECTIVELY SENIOR TO THE CLAIMS OF
CERTIFICATEHOLDERS ON AIRPLANES LIMITED AND AIRPLANES TRUST, AND OUR
SUBSIDIARIES MAY HAVE MATERIAL CONTINGENT LIABILITIES UNKNOWN TO US.

     Any claims on the subsidiaries of Airplanes Limited and Airplanes Trust are
effectively senior to the notes and guarantees because the subsidiaries would
generally have to make payments on those claims before making payments or
distributions to Airplanes Limited and Airplanes Trust. These claims include any
payment obligations to lessees and other contingent liabilities, such as
liabilities to third parties from operating and leasing the aircraft. There may
also be liabilities of this type that arose before we acquired our subsidiaries
from GPA Group (now known as debis AirFinance Ireland) in 1996 of which we are
not aware. If the subsidiaries are called upon to pay any of these contingent
liabilities, we may not have enough funds to make payments to
certificateholders.

                                        14
<PAGE>   15

THE NOTES AND CERTIFICATES ARE SUBJECT TO EARLY REFINANCING OR REDEMPTION WHICH
MAY REDUCE THE YIELD ON CERTIFICATEHOLDERS' INVESTMENT IN THE CERTIFICATES.

     The notes, and the corresponding certificates, may be refinanced or
redeemed at the applicable redemption price at our option on any payment date.
They may also be redeemed at par upon the occurrence of specified adverse tax
events affecting Airplanes Group. Available funds from the sale of aircraft and
other available collections will also be used to repay the certificates under
the priority of payments provided in the indentures. If any refinancing or early
redemption of the certificates occurs, the yield on certificateholders'
investment in the certificates could be adversely affected.

THERE IS NO PUBLIC MARKET FOR THE CERTIFICATES.

     We expect the certificates to have a limited trading market which may harm
certificateholders' ability to sell them or depress the price at which
certificateholders sell them. The certificates will be listed only on the
Luxembourg Stock Exchange. No one has an obligation to make a market in the
certificates. We do not intend to seek approval for quotation through any
automated quotation system. Future trading prices for the certificates will
depend on many factors, including general economic conditions, our financial
condition, performance and prospects and the market's then current perception of
the commercial aircraft industry and the operating lease business generally.

RISKS RELATING TO TAX

OWNING THE CERTIFICATES MAY HAVE TAX CONSEQUENCES FOR CERTIFICATEHOLDERS AND MAY
REDUCE CERTIFICATEHOLDERS' INCOME.

     Ownership of the certificates may subject certificateholders to withholding
of income taxes in the United States, Jersey or other jurisdictions in which
Airplanes Group, its aircraft-owning and aircraft-leasing subsidiaries and the
lessees are organized, reside or operate. The tax consequences of the purchase
of the certificates depend to some extent upon certificateholders' individual
circumstances.

PRE-1998 AEROUSA LOSSES MAY NOT BE AVAILABLE TO OFFSET FUTURE TAXABLE INCOME OF
AEROUSA, AS A RESULT OF WHICH AEROUSA MAY HAVE TO PAY ADDITIONAL U.S. FEDERAL
INCOME TAX AND HAVE LESS CASH FLOW TO PAY AIRPLANES TRUST WHICH WILL HAVE LESS
CASH TO MAKE PAYMENTS ON THE NOTES AND CERTIFICATES.

     AeroUSA had net operating loss carryforwards for U.S. federal income tax
purposes when GE Capital acquired all of the class E notes on November 20, 1998.
As a result of that acquisition, AeroUSA's pre-1998 net operating loss
carryforwards may only be utilized to offset up to $452,000 of taxable income
per year and possibly to offset certain "built in" gains (which existed at the
time of the acquisition) on aircraft sold prior to November 20, 2003. To the
extent that the pre-1998 net operating loss carryforwards are not available to
offset taxable income of AeroUSA in future years, AeroUSA will be required to
pay additional U.S. federal income tax which will reduce the amount available to
pay to Airplanes Trust and which will have a negative impact on the cash flow of
Airplanes Trust available to make payments on the notes and certificates.

AEROUSA MAY INCUR ADDITIONAL TAX LIABILITIES AS A RESULT OF FILING CONSOLIDATED
TAX RETURNS WITH GENERAL ELECTRIC COMPANY ("GE") OR DEBIS AIRFINANCE, INC. THERE
WILL BE A NEGATIVE IMPACT ON THE CASH FLOW OF AIRPLANES GROUP IF AEROUSA INCURS
ANY SUCH LIABILITIES.

     AeroUSA and its wholly owned subsidiary, AeroUSA 3 Inc. (together, the
"AEROUSA GROUP"), filed U.S. federal consolidated tax returns and certain state
and local tax returns with GPA, Inc. (now known as debis AirFinance, Inc.) and
its subsidiaries (together, the "DEBIS AIRFINANCE U.S. TAX GROUP") through
November 20, 1998. Since November 20, 1998, the AeroUSA group has filed U.S.
federal consolidated tax returns and certain state and local tax returns with GE
and its subsidiaries (together, the "GE U.S. TAX GROUP"). As members of the
consolidated tax groups, the AeroUSA group is jointly and severally liable for
the
                                        15
<PAGE>   16

applicable U.S. federal or state and local tax liabilities of the debis
AirFinance U.S. tax group for the period through November 20, 1998 and of the GE
U.S. tax group for the period since November 20, 1998. There are ongoing U.S.
federal, state and local tax audits with respect to taxes previously reported by
the debis AirFinance U.S. tax group.

     GE, AeroUSA and Airplanes Trust have entered into a tax sharing agreement
pursuant to which GE has agreed to indemnify members of the AeroUSA group
against any U.S. federal, state or local tax liabilities of any member of the GE
U.S. tax group (other than an AeroUSA group member) which are imposed on the
AeroUSA group that are related to any tax period or portion of a tax period
beginning after November 20, 1998 and are tax liabilities that the AeroUSA group
would not have incurred if they were not members of the GE U.S. tax group.
Furthermore, under this tax sharing agreement, (1) AeroUSA has agreed to pay GE
(in cash if a payment is then due by the GE U.S. tax group to a tax authority,
otherwise in the form of subordinated non-interest bearing notes) its share of
tax liabilities based on the amount of tax liabilities that the AeroUSA group
would have incurred if it were not included in the GE U.S. tax group and (2) GE
has agreed to pay AeroUSA, at the time such tax savings are realized, an amount
equal to any tax savings by any member of the GE U.S. tax group (other than a
member of the AeroUSA group) for any tax period after November 20, 1998 as a
result of any tax asset generated by the AeroUSA group. Similar provisions
contained in a tax sharing agreement between GPA Group (now known as debis
AirFinance Ireland), GPA, Inc. (now known as debis AirFinance, Inc.), AeroUSA
and Airplanes Trust which terminated on November 20, 1998 remain applicable in
respect of tax periods ending on or before November 20, 1998.

     The receipt by Airplanes Trust or AeroUSA of any amounts from GE, debis
AirFinance Ireland or debis AirFinance, Inc., as applicable, pursuant to the tax
sharing agreements will depend upon the financial condition and liquidity of GE,
debis AirFinance Ireland or debis AirFinance, Inc., as applicable, at the time
any claim is made. To the extent any tax claims are successfully made against
the AeroUSA group and those amounts are not indemnified by GE, debis AirFinance
Ireland or debis AirFinance, Inc. under the relevant tax sharing agreements,
those claims will have a negative impact on the cash flow available to Airplanes
Group to make payments on the notes and certificates. In addition, because the
notes and certificates are not secured directly or indirectly by the aircraft or
the leases, substantially all of the assets of the AeroUSA group, including the
aircraft, would be available for attachment and satisfaction of any of those
claims.

AIRPLANES LIMITED, AIRPLANES HOLDINGS AND AIRPLANES HOLDINGS' NON-U.S.
SUBSIDIARIES MAY BE SUBJECT TO U.S. FEDERAL INCOME TAX AS A RESULT OF ACTIONS OF
THE SERVICER OR ADMINISTRATIVE AGENT OR, IN THE CASE OF AIRPLANES HOLDINGS AND
ITS IRISH TAX RESIDENT AIRCRAFT OWNING SUBSIDIARIES, BECAUSE THEY MAY NOT
BENEFIT FROM THE U.S.-IRISH TAX TREATY, WHICH WOULD NEGATIVELY AFFECT THEIR CASH
FLOW.

     Whether Airplanes Limited, Airplanes Holdings and Airplanes Holdings'
non-U.S. subsidiaries will be subject to U.S. federal income tax may depend on
the manner in which the activities of the servicer and administrative agent are
performed, and in the case of Airplanes Holdings and its Irish tax resident
aircraft owning subsidiaries, will depend on qualification for the benefits of
the income tax treaty between the United States and Ireland (the "TREATY").

     Prior to GE Capital's acquisition of the class E notes, Airplanes Holdings
and its Irish tax resident aircraft owning subsidiaries qualified for treaty
benefits by virtue of a ruling obtained by AerFi Group (now known as debis
AirFinance Ireland) from the U.S. competent authority, which applied to AerFi
Group and its qualified affiliates. Following the acquisition of the class E
notes by GE Capital, Airplanes Holdings and its Irish tax resident aircraft
owning subsidiaries are no longer affiliates of AerFi Group. Accordingly, the
AerFi Group ruling no longer applies to Airplanes Holdings and its Irish tax
resident aircraft owning subsidiaries. Airplanes Holdings has applied for its
own competent authority ruling on similar grounds to those on which the AerFi
Group ruling was based. However, there can be no assurance that such a ruling
will be granted to Airplanes Holdings and its Irish tax resident aircraft owning
subsidiaries, or even if the ruling is obtained, that the activities of the
servicer or the administrative agent will not subject Airplanes Limited,
Airplanes Holdings and Airplanes Holdings' non-U.S. subsidiaries to U.S. federal
income tax on some or all of their income.
                                        16
<PAGE>   17

     In the event that Airplanes Limited, Airplanes Holdings or Airplanes
Holdings' non-U.S. subsidiaries are subject to U.S. federal income tax on some
or all of their income, the cash flow available to make payments on the notes
and certificates would be reduced.

THE OPERATIONS OF AIRPLANES LIMITED, AIRPLANES TRUST AND AEROUSA MAY BECOME
SUBJECT TO IRISH CORPORATE TAXES WHICH WOULD REDUCE THEIR CASH FLOWS.

     Airplanes Limited, Airplanes Trust and AeroUSA do not intend to be treated
as doing business in Ireland and, therefore, do not expect to be subject to
Irish corporate tax. However, if their operations differ from those intended,
they could become subject to Irish taxes.

WE WILL NOT PAY ANY ADDITIONAL AMOUNTS TO MAKE UP FOR ANY WITHHOLDING TAX THAT
MAY APPLY AND REDUCE THE AMOUNTS CERTIFICATEHOLDERS RECEIVE.

     We will not make any additional payments to certificateholders for any
withholding or deduction required by applicable law on payments on either the
notes or the certificates. We will use reasonable efforts to avoid the
application of withholding taxes or other deductions. If withholding taxes
cannot be avoided, however, we may redeem the notes and certificates. If we do
not redeem them, we will reduce the net amount of interest that is passed
through to certificateholders by the amount of any withholding or deduction.

WE MAY LOSE IRISH CORPORATE TAX BENEFITS WHICH WOULD REDUCE OUR CASH FLOW AND
IMPAIR OUR ABILITY TO REPAY THE NOTES AND CERTIFICATES.

     Airplanes Limited owns 95% of the capital stock of Airplanes Holdings and
GECAS owns the remaining 5%. The 5% shareholding by GECAS is intended to entitle
Airplanes Holdings and some of its Irish tax-resident subsidiaries to continue
to be eligible for a reduced rate of corporate tax and other corporate tax
benefits for Shannon, Ireland certified companies, including a preferential 10%
corporate tax rate. If GECAS reduces or relocates its operations for any reason
so that it fails to maintain, among other things, specified employment levels in
Ireland, or if GECAS resigns or its appointment is terminated in accordance with
the terms of the servicing agreement, then Airplanes Holdings and those other
companies (a) may become subject to Irish corporate taxation at general Irish
statutory rates, which are currently 20% for trading income, and are expected to
fall to 16% for 2002 and 12.5% for 2003 and subsequent years, and (b) may lose
the ability to deduct interest payments to Airplanes Limited from their income
in calculating their liability to Irish tax. The loss of these tax benefits
would likely have a materially adverse effect on Airplanes Limited's ability to
make payments on its notes and guarantees.

     Upon the scheduled termination of the preferential 10% tax rate on December
31, 2005, Airplanes Holdings and its Irish tax resident subsidiaries will become
subject to Irish corporate tax on their net trading income, which would include
leasing income, at a 12.5% tax rate as provided for in the Irish Finance Act of
1999. There can be no assurance that this tax rate will not be changed in the
future.

RISKS RELATING TO BANKRUPTCY

OUR ASSETS MAY BE CONSOLIDATED WITH THOSE OF DEBIS AIRFINANCE IRELAND OR ITS
SUBSIDIARIES IF THEY BECOME BANKRUPT OR INSOLVENT, LEAVING FEWER ASSETS
AVAILABLE TO REPAY THE CERTIFICATES.

     We have taken steps to structure Airplanes Group and our transactions,
especially the 1996 transaction whereby we acquired our portfolio of aircraft
from GPA Group (now known as debis AirFinance Ireland), to ensure that our
assets would not be consolidated with the assets of debis AirFinance Ireland and
would not become available to debis AirFinance Ireland's creditors in any
bankruptcy or insolvency proceeding involving debis AirFinance Ireland or any of
its affiliates. If debis AirFinance Ireland or any of its subsidiaries becomes
bankrupt or insolvent, there is a legal risk that a court or other authority
could decide that these steps were not effective to insulate our assets from
debis AirFinance Ireland's assets or that debis AirFinance Ireland's transfer of
aircraft to us in 1996 was improper. As a result, the aircraft and our other
assets could become available to

                                        17
<PAGE>   18

repay debis AirFinance Ireland's creditors and we could lose all of our rights
in the aircraft and our other assets. If that happens, we may not have
sufficient funds left to repay the certificates.

THE AIRCRAFT, RELATED LEASES AND COLLATERAL

OVERVIEW

     As of March 31, 2001, our portfolio comprised a total of 193 aircraft, of
which 187 aircraft were on lease to 64 lessees in 34 countries and 6 aircraft
were off-lease. At March 31, 2001, one of these off-lease aircraft was subject
to a lease agreement and one was subject to a letter of intent for lease. This
letter of intent subsequently expired and the aircraft became subject to a
letter of intent for lease to a new lessee. As of the date of this Form 10-K,
two of the unplaced off-lease aircraft had became subject to letters of intent
for sale. The remaining four unplaced aircraft represented 1.34% of our
portfolio by appraised value as of January 31, 2001. As of March 31, 2001, the
weighted average remaining contracted lease term of our portfolio (by appraised
value as of January 31, 2001 and without giving effect to purchase options or
extension options) was 28 months. Our longest lease is scheduled to expire in
September 2008. Therefore we will be required to re-lease all of our aircraft at
least once before the expected final payment date for some of the certificates.
See "Risk Factors -- Risks Relating to the Leases and Cash Flows for Lease
Payments" for a description of the risks certificateholders could face if any
aircraft is not re-leased.

APPRAISALS

     Under the indentures, we are required, at least once each year and in any
case no later than March 1 of each year, to deliver to the indenture trustee
appraisals of the value of each of the aircraft in our portfolio from at least
three independent appraisers. This value (the "APPRAISED VALUE") for each
aircraft is the value for that aircraft at normal utilization rates in an open,
unrestricted and stable market, adjusted to take account of the reported
maintenance standard of that aircraft, except for the aircraft that are subject
to finance leases, which are valued at their lease receivable book values. The
appraisals are not based on physical inspection of the aircraft and do not take
into account the value of the leases, maintenance reserves or security deposits.

     For the appraisals as of January 31, 2001, we obtained independent
appraisals from three independent appraisers and calculated the appraised value
of each aircraft by taking the average of the three appraisals. On this basis,
the average appraised value for our portfolio of 193 aircraft was approximately
$3,135.4 million as of January 31, 2001, as compared to $3,310.1 million for the
same 193 aircraft based on appraisals as of February 18, 2000. The reduction in
value represents utilization for the period.

     The appraised value of each aircraft in our portfolio by each of the three
independent appraisers as of January 31, 2001 can be found in "Airplane Group
Portfolio Analysis" below. The aggregate appraised values calculated by each of
the three independent appraisers for our portfolio, calculated by adding up the
appraised value by that appraiser of each aircraft in our portfolio, are as
follows:

<TABLE>
<CAPTION>
                                                                      AGGREGATE
                                                                   APPRAISED VALUE
APPRAISER                                                       AS OF JANUARY 31, 2001
---------                                                       ----------------------
                                                                    (IN MILLIONS)
<S>                                                             <C>
Airclaims Limited...........................................           $2,933.5
Aircraft Information Services, Inc..........................            3,195.9
BK Associates, Inc..........................................            3,276.7
Average of three appraisers.................................           $3,135.4
</TABLE>

     You should not rely on the appraised value as a measure of the realizable
value of any aircraft. See "Risk Factors -- Risks Relating to the Aircraft" for
a discussion of the risks associated with the appraised value.

PORTFOLIO INFORMATION

     The tables set forth below summarize important information about our
portfolio. For a more detailed analysis of the aircraft, see "--Airplanes Group
Portfolio Analysis" below.
                                        18
<PAGE>   19

     As of March 31, 2001, 95.02% of the aircraft in our portfolio by appraised
value as of January 31, 2001 held or were capable of holding a noise certificate
issued under Chapter 3 of Volume 1, Part II of Annex 16 of the Chicago
Convention or have been shown to comply with the Stage 3 noise levels set out in
Section 36.5 of Appendix C of Part 36 of the United States Federal Aviation
Regulations (assuming for this purpose that turboprop aircraft are Stage 3
aircraft). We refer to this as being "STAGE 3" compliant and call these aircraft
"STAGE 3 AIRCRAFT."

     The remaining 4.98% of the aircraft by appraised value as of January 31,
2001 held or were capable of holding a noise certificate issued under Chapter 2
of the Chicago Convention or have been shown to comply with the Stage 2 noise
levels set out in Section 36.5 of Appendix C of Part 36 of the United States
Federal Aviation Regulations but do not comply with the requirements for a Stage
3 aircraft. We refer to this as being "STAGE 2" compliant and call these
aircraft "STAGE 2 AIRCRAFT." Most jurisdictions have adopted these U.S.
classifications, which consider Stage 2 aircraft that have been hushkitted to be
Stage 3 aircraft. For purposes of the table below, Stage 2 aircraft that have
been hushkitted are considered to be Stage 3 aircraft and referred to as "STAGE
3HK."

     The following table lists the aircraft by type and number as of March 31,
2001 and the percentage of our portfolio they represent by appraised value as of
January 31, 2001. For the purpose of this table, turboprop aircraft are
considered to be Stage 3 aircraft.

<TABLE>
<CAPTION>
                                                                                      % OF PORTFOLIO BY
                                                                                      APPRAISED VALUE AS
                                                     NUMBER OF                          OF JANUARY 31,
MANUFACTURER                      TYPE OF AIRCRAFT   AIRCRAFT    BODY TYPE    STAGE          2001
------------                      ----------------   ---------   ----------   -----   ------------------
<S>                               <C>                <C>         <C>          <C>     <C>
Boeing (46.68%).................  B727-200A               2      Narrowbody      2            0.23%
                                   B737-200A             16      Narrowbody      2            2.58
                                   B737-200A              6      Narrowbody    3hk            0.79
                                   B737-300               8      Narrowbody      3            5.07
                                   B737-300QC             2      Narrowbody      3            1.14
                                   B737-400              22      Narrowbody      3           16.82
                                   B737-500              11      Narrowbody      3            6.97
                                   B747-200SF             1      Freighter       3            0.96
                                   B757-200               3      Narrowbody      3            3.53
                                   B767-200ER             1      Widebody        3            1.37
                                   B767-300ER             4      Widebody        3            7.23
McDonnell Douglas (30.52%)......  DC8-71F                18      Freighter       3            7.64
                                   DC8-73CF               1      Freighter       3            0.54
                                   DC9-32                 6      Narrowbody      2            0.71
                                   DC9-51                 4      Narrowbody      2            0.43
                                   MD-11                  3      Widebody        3            5.94
                                   MD-82                  2      Narrowbody      3            1.06
                                   MD-83                 23      Narrowbody      3           13.82
                                   MD-87                  1      Narrowbody      3            0.39
Airbus (11.45%).................  A300-B4-200             2      Widebody        2            0.57
                                   A300-C4-200            1      Widebody        2            0.47
                                   A320-200              12      Narrowbody      3           10.41
Fokker (6.15%)..................  F-100                  16      Narrowbody      3            6.15
De Havilland of Canada            DHC8-100                6      Turboprop       3            0.98
  (4.43%).......................   DHC8-300              13      Turboprop       3            3.00
                                   DHC8-300C              2      Turboprop       3            0.45
ATR (0.68%).....................  ATR42-300               4      Turboprop       3            0.68
Fairchild (0.09%)...............  METRO-III               3      Turboprop       3            0.07
                                                        ---                                 ------
  Total.........................                        193                                100.00%
                                                        ===                                 ======
</TABLE>

                                        19
<PAGE>   20

     The following table sets forth the exposure of our portfolio by lessee as
of March 31, 2001 according to the number of aircraft and the appraised value as
of January 31, 2001.

<TABLE>
<CAPTION>
                                                                             % OF PORTFOLIO BY
                                                                             APPRAISED VALUE AS
                                                                NUMBER OF      OF JANUARY 31,
LESSEE(1)                                                       AIRCRAFT            2001
---------                                                       ---------    ------------------
<S>                                                             <C>          <C>
Air Canada Capital Limited..................................        11               8.95%
Viacao Aerea Rio-Grandense S.A. (VARIG).....................         3               5.94
Turk Hava Yollari A.O. (THY Turkish Airlines)...............         7               5.28
Aerovias Nacionales de Colombia S.A. (AVIANCA)..............         6               5.08
BAX Global Inc..............................................        10               4.24
Airtours International Airways Limited......................         4               3.54
Spanair S.A. ...............................................         6               3.50
Compania Mexicana de Aviacion, S.A. de C.V. (MEXICANA)......         9               3.23
Rio-Sul Servicos Aereos Regionais S.A. .....................         5               3.23
TAM Transportes Aereos Meridionais S.A. ....................         8               3.04
China Southern Airlines Company Limited.....................         4               2.47
Malev Hungarian Airlines plc................................         3               2.41
Trans World Airlines Inc. (TWA)(4)..........................         2               2.39
Lan Chile Airlines..........................................         4               2.34
Compania Hispano Irlandesa de Aviacion S.A. (FUTURA)........         3               2.26
Philippine Airlines Inc. (PAL)..............................         3               2.17
Aerovias de Mexico, S.A. de C.V. (AEROMEXICO)...............         9               2.15
Meridiana SpA...............................................         3               1.89
Compagnie Nationale Air France (AIR FRANCE).................         2               1.72
Schreiner Airways B.V. .....................................         7               1.58
Air Espana S.A. (AIR EUROPA)................................         2               1.54
Air One SpA.................................................         2               1.44
Pegasus Hava Tasimaciligi A.S. .............................         2               1.42
Asiana Airlines Inc. .......................................         2               1.40
Emery Worldwide Airlines, Inc. .............................         3               1.40
American Airlines Inc.(4)...................................         2               1.28
Aircraft International Leasing Limited (A.I.L.L.)(2)........         3               1.27
Transportes Aereos Mercantiles Pan Americanos S.A.
  (TAMPA)...................................................         3               1.27
China Xinjiang Airlines.....................................         1               1.20
America West Airlines Inc. .................................         2               1.14
Eurofly SpA.................................................         2               1.09
Other (33 lessees)..........................................        54              16.27
Off-lease(3)................................................         6               1.85
                                                                   ---             ------
  Total.....................................................       193             100.00%
                                                                   ===             ======
</TABLE>

---------------

(1)  Total number of lessees = 64

(2)  A.I.L.L. is an indirect 100% subsidiary of Lan Chile.

(3)  As of March 31, 2001, one of the six off-lease aircraft was subject to a
     lease agreement with a new lessee and one was subject to a letter of intent
     for lease to an existing lessee. This letter of intent subsequently expired
     and the aircraft became subject to a letter of intent for lease to a new
     lessee. As of the date of this Form 10-K, two of the unplaced off-lease
     aircraft had become subject to letters of intent for sale.

(4)  On April 9, 2001, American Airlines assumed the leases in respect of the
     two aircraft previously leased by TWA, subject to certain amendments. See "
     -- North America."

                                        20
<PAGE>   21

     The following table sets forth the exposure of our portfolio by country of
domicile of lessees as of March 31, 2001 according to the number of aircraft and
the appraised value of the portfolio as of January 31, 2001.

<TABLE>
<CAPTION>
                                                                             % OF PORTFOLIO BY
                                                                             APPRAISED VALUE AS
                                                                NUMBER OF      OF JANUARY 31,
COUNTRY(1)                                                      AIRCRAFT            2001
----------                                                      ---------    ------------------
<S>                                                             <C>          <C>
United States of America....................................        29              13.06%
Brazil......................................................        16              12.20
Canada......................................................        11               8.95
Spain.......................................................        11               7.29
Turkey......................................................        10               7.17
Colombia....................................................        10               6.55
Mexico......................................................        18               5.39
Italy.......................................................         7               4.43
United Kingdom..............................................         8               4.33
China.......................................................         5               3.66
Chile.......................................................         7               3.61
Indonesia...................................................         9               2.63
Hungary.....................................................         3               2.41
France......................................................         3               2.37
Netherlands.................................................         7               1.58
South Korea.................................................         2               1.40
Philippines.................................................         3               2.17
Tunisia.....................................................         2               1.26
Sweden......................................................         1               1.18
Other (15 countries)........................................        25               6.51
Off-lease...................................................         6               1.85
                                                                   ---             ------
  Total.....................................................       193             100.00%
                                                                   ===             ======
</TABLE>

---------------

(1)  Total number of countries = 34

(2)  As of March 31, 2001, one of the six off-lease aircraft was subject to a
     lease agreement with a lessee in the United Kingdom and one was subject to
     a letter of intent for lease to a lessee in the Netherlands. This letter of
     intent subsequently expired and the aircraft became subject to a letter of
     intent to lease to a new lessee in the Bahamas. As of the date of this Form
     10-K, two of the unplaced off-lease aircraft had become subject to letters
     of intent for sale.

                                        21
<PAGE>   22

     The following table sets forth the exposure of our portfolio by regions in
which lessees are domiciled as of March 31, 2001 according to the number of
aircraft and the appraised value of our portfolio as of January 31, 2001.

<TABLE>
<CAPTION>
                                                                             % OF PORTFOLIO BY
                                                                             APPRAISED VALUE AS
                                                                NUMBER OF      OF JANUARY 31,
REGION(1)                                                       AIRCRAFT            2001
---------                                                       ---------    ------------------
<S>                                                             <C>          <C>
Europe (excluding CIS Countries)............................        54              32.51%
Latin America...............................................        61              29.81
North America...............................................        40              22.01
Asia & Far East.............................................        23              11.73
Africa......................................................         2               1.26
Other (including CIS Countries).............................         3               0.54
Australia & New Zealand.....................................         4               0.29
Off-Lease(1)................................................         6               1.85
                                                                   ---             ------
  Total.....................................................       193             100.00%
                                                                   ===             ======
</TABLE>

---------------

(1)  As of March 31, 2001, one of the six off-lease aircraft was subject to a
     lease agreement with a lessee in Europe and one was subject to a letter of
     intent for lease to a lessee in Europe. This letter of intent subsequently
     expired and the aircraft became subject to a letter of intent to lease to a
     new lessee in Latin America. As of the date of this Form 10-K, two of the
     unplaced off-lease aircraft had become subject to letters of intent for
     sale.

     The following table sets forth the exposure of the portfolio by year of
aircraft manufacture or conversion to freighter as of March 31, 2001 according
to the number of aircraft and the appraised value of the aircraft as of January
31, 2001. See note 4 to "Airplanes Group Portfolio Analysis" below for the
original manufacture dates for the aircraft that were converted into freighters.

<TABLE>
<CAPTION>
                                                                             % OF PORTFOLIO BY
                                                                             APPRAISED VALUE AS
                                                                NUMBER OF      OF JANUARY 31,
YEAR OF MANUFACTURER/FREIGHTER CONVERSION                       AIRCRAFT            2001
-----------------------------------------                       ---------    ------------------
<S>                                                             <C>          <C>
1988........................................................        15               5.37%
1989........................................................         9               4.66
1990........................................................        19              10.08
1991........................................................        43              23.65
1992........................................................        53              41.10
1993........................................................         7               3.30
Other.......................................................        47              11.84
                                                                   ---             ------
  Total.....................................................       193             100.00%
                                                                   ===             ======
</TABLE>

                                        22
<PAGE>   23

     The following table sets forth the exposure of the portfolio by seat
category as of March 31, 2001 according to the number of aircraft and the
appraised value of the portfolio as of January 31, 2001.

<TABLE>
<CAPTION>
                                                                                 % OF PORTFOLIO BY
                                                                                 APPRAISED VALUE AS
                                                                    NUMBER OF      OF JANUARY 31,
SEAT CATEGORY    AIRCRAFT TYPES                                     AIRCRAFT            2001
-------------    -----------------------------------------------    ---------    ------------------
<S>              <C>                                                <C>          <C>
Less than 51     DHC8, METRO-III, ATR42.........................        28               5.21%
91-120           B737-200, B737-500, DC9-32/51, MD-87, F-100....        60              18.02
121-170          B727-200, B737-300/300QC/400, MD-82/83,
                 A320-200.......................................        71              48.54
171-240          B757-200, B767-200ER...........................         4               4.90
241-350          B767-300ER, MD-11, A300........................        10              14.20
Freighter        B747-200SF, DC8-71F/73CF.......................        20               9.13
                                                                       ---             ------
                                                                       193             100.00%
                                                                       ===             ======
</TABLE>

                                        23
<PAGE>   24

                       AIRPLANES GROUP PORTFOLIO ANALYSIS
<TABLE>
<CAPTION>

                                                                                                              DATE OF
                                                                                                            MANUFACTURE/
REGION        COUNTRY        LESSEE                          TYPE           ENGINE        MSN     NOTES      CONVERSION
------        -------        ------                       -----------   --------------   -----   --------   ------------
<S>           <C>            <C>                          <C>           <C>              <C>     <C>        <C>
AFRICA......  Tunisia        Nouvelair Tunisie            MD-83         JT8D-219         49672              1-Jul-88
              Tunisia        Societe des Lignes
                             Aeriennes Interieures
                             (Tuninter) S.A.              B737-300      CFM56-3C1        24905               1-Feb-91
ASIA & FAR
EAST........  Bangladesh     GMG Airlines Limited         DHC8-300      PW123              307              1-Dec-91
              China          China Southern               B737-500      CFM56-3C1        24897               26-Feb-91
              China          China Southern               B737-500      CFM56-3C1        25182               3-Feb-92
              China          China Southern               B737-500      CFM56-3C1        25183               14-Feb-92
              China          China Southern               B737-500      CFM56-3C1        25188               12-Mar-92
              China          China Xinjiang               B757-200      RB211-535E4-37   26156               25-Nov-92
              Indonesia      PT Garuda Indonesia          B737-400      CFM56-3C1        24683               7-Aug-90
              Indonesia      PT Garuda Indenosia          B737-400      CFM56-3C1        24691               9-Aug-90
              Indonesia      Merpati Nusantara Airlines   B737-200A     JT8D-15          22368        (1)    1-Sep-80
              Indonesia      Merpati Nusantara Airlines   B737-200A     JT8D-15          22369               1-Sep-80
              Indonesia      PT Mandala Airlines          B737-200A     JT8D-17          21685               1-Jan-79
              Indonesia      PT Mandala Airlines          B737-200A     JT8D-15          22278               19-Mar-80
              Indonesia      PT Mandala Airlines          B737-200A     JT8D-17A         22803               14-Feb-83
              Indonesia      PT Mandala Airlines          B737-200A     JT8D-17A         22804               1-Feb-83
              Indonesia      PT Mandala Airlines          B737-200A     JT8D-17A         23023               30-Mar-83
              Malaysia       Air Asia Sdn. Bhd            B737-300      CFM56-3C1        24907               1-Mar-91
              Pakistan       Pakistan International
                             Airlines Corporation         A300-B4-200   CF6-50C2           269               11-Aug-83
              Philippines    Philippine Airlines Inc.     B737-300      CFM56-3B1        24770               1-Oct-90
              Philippines    Philippine Airlines Inc.     B737-400      CFM56-3C1        24684               1-Apr-90
              Philippines    Philippine Airlines Inc.     B737-400      CFM56-3C1        26081               10-Mar-93
              South Korea    Asiana Airlines Inc.         B737-400      CFM56-3C1        24493               14-Jul-89
              South Korea    Asiana Airlines Inc.         B737-400      CFM56-3C1        24520               21-Dec-89
              Taiwan         Far Eastern Air Transport
                             Corporation                  MD-83         JT8D-219         49950               1-Nov-91
AUSTRALIA &
NEW
ZEALAND.....  Australia      National Jet Systems Pty.
                             Limited                      DHC8-100      PW121              229               1-Sep-90
              New Zealand    New Zealand International
                             Airlines Limited             METRO-III     TPE331-11          705               1-Aug-88
              New Zealand    New Zealand International
                             Airlines Limited             METRO-III     TPE331-11          711               1-Mar-88
              New Zealand    New Zealand International
                             Airlines Limited             METRO-III     TPE331-11          712               1-Jun-88
EUROPE......  Czech
              Republic       Travel Servis a.s.           B737-400      CFM56-3C1        24911              1-Apr-91
              France         Air France                   A320-200      CFM56-5A3          203               1-Sep-91
              France         Air France                   A320-200      CFM56-5A3          220               1-Sep-91
              France         Air Liberte S.A.             MD-83         JT8D-219         49943               1-Jul-91
              Hungary        Malev                        B737-400      CFM56-3C1        25190               7-Apr-92

<CAPTION>
                   APPRAISED VALUE AS OF JANUARY 31, 2001
              -------------------------------------------------
                               (IN THOUSANDS)                     % OF PORTFOLIO
                                                                   BY APPRAISED
                                                                   VALUES AS OF
REGION        AIRCLAIMS       AISI      BK ASSOC.     AVERAGE       31-JAN-01
------        ----------   ----------   ----------   ----------   --------------
<S>           <C>          <C>          <C>          <C>          <C>
AFRICA......  $   15,260   $   18,560   $   19,100   $   17,640         0.56%

                  20,460       22,690       22,850       22,000         0.70
ASIA & FAR
EAST........       7,080        6,740        7,600        7,140         0.23
                  20,190       19,260       18,700       19,383         0.62
                  18,410       18,990       18,150       18,517         0.59
                  20,910       20,220       20,500       20,543         0.66
                  19,300       18,820       18,500       18,873         0.60
                  33,940       39,560       39,050       37,517         1.20
                  20,980       23,730       24,350       23,020         0.73
                  21,040       24,130       24,500       23,223         0.74
                   4,200        4,240        6,200        4,880         0.16
                   4,240        4,110        6,200        4,850         0.15
                   3,950        4,740        5,000        4,563         0.15
                   4,690        5,130        6,950        5,590         0.18
                   3,260        5,460        6,000        4,907         0.16
                   4,910        6,320        7,000        6,077         0.19
                   3,610        5,120        7,100        5,277         0.17
                  21,030       21,910       22,850       21,930         0.70

                   6,390        8,140       12,350        8,960         0.29
                  18,930       20,880       19,000       19,603         0.63
                  21,320       23,660       23,500       22,827         0.73
                  23,560       25,910       27,200       25,557         0.82
                  20,800       22,740       22,150       21,897         0.70
                  21,170       22,630       22,350       22,050         0.70

                  18,110       20,640       23,250       20,667         0.66
AUSTRALIA &
NEW
ZEALAND.....
                   5,260        5,110        7,750        6,040         0.19

                     420          950        1,550          973         0.03

                     500          940        1,550          997         0.03

                     460          940        1,550          983         0.03
EUROPE......
                  22,570       25,080       24,000       23,883         0.76
                  26,320       26,920       28,200       27,147         0.87
                  26,820       26,300       27,100       26,740         0.85
                  18,600       20,650       22,300       20,517         0.65
                  21,850       24,910       25,100       23,953         0.76
</TABLE>

                                        24
<PAGE>   25
<TABLE>
<CAPTION>
AIRPLANES GROUP PORTFOLIO ANALYSIS -- (CONTINUED)

                                                                                                              DATE OF
                                                                                                            MANUFACTURE/
REGION        COUNTRY        LESSEE                          TYPE           ENGINE        MSN     NOTES      CONVERSION
------        -------        ------                       -----------   --------------   -----   --------   ------------
<S>           <C>            <C>                          <C>           <C>              <C>     <C>        <C>
EUROPE......  Hungary        Malev                        B737-400      CFM56-3C1        26069              2-Nov-92
(CONTINUED)   Hungary        Malev                        B737-400      CFM56-3C1        26071               13-Nov-92
              Italy          Air One SpA                  B737-300      CFM56-3C1        25179               12-Feb-92
              Italy          Air One SpA                  B737-300      CFM56-3C1        25187               14-Mar-92
              Italy          Eurofly SpA                  MD-83         JT8D-219         49390               1-Apr-86
              Italy          Eurofly SpA                  MD-83         JT8D-219         49631               14-Jun-89
              Italy          Meridiana SpA                MD-83         JT8D-219         49792               1-Nov-89
              Italy          Meridiana SpA                MD-83         JT8D-219         49935               26-Sep-90
              Italy          Meridiana SpA                MD-83         JT8D-219         49951               25-Aug-91
              Macedonia      Interimpex-Avioimpex A.D.    MD-83         JT8D-219         49442               29-Apr-87
              Netherlands    Schreiner Airways            DHC8-300      PW123              232               20-Oct-90
              Netherlands    Schreiner Airways            DHC8-300      PW123              244               1-Dec-90
              Netherlands    Schreiner Airways            DHC8-300      PW123              266               20-Mar-91
              Netherlands    Schreiner Airways            DHC8-300      PW123              276               13-May-91
              Netherlands    Schreiner Airways            DHC8-300      PW123              283               1-Sep-91
              Netherlands    Schreiner Airways            DHC8-300      PW123              298               1-Apr-92
              Netherlands    Schreiner Airways            DHC8-300      PW123              300               1-Apr-92
              Norway         Wideroe's Flyveselskap a/s   DHC8-300      PW123              293               1-Oct-91
              Norway         Wideroe's Flyveselskap a/s   DHC8-300      PW123              342               1-Dec-92
              Spain          Air Europa                   B737-400      CFM56-3C1        24906               24-Feb-91
              Spain          Air Europa                   B737-400      CFM56-3C1        24912               14-Jun-91
              Spain          Futura                       B737-400      CFM56-3C1        24689               3-Jul-90
              Spain          Futura                       B737-400      CFM56-3C1        24690               1-Jul-90
              Spain          Futura                       B737-400      CFM56-3C1        25180               21-Jan-92
              Spain          Spanair                      MD-83         JT8D-219         49620               1-Jul-88
              Spain          Spanair                      MD-83         JT8D-219         49624               1-Aug-88
              Spain          Spanair                      MD-83         JT8D-219         49626               22-Oct-88
              Spain          Spanair                      MD-83         JT8D-219         49709               1-Dec-88
              Spain          Spanair                      MD-83         JT8D-219         49936               6-Oct-90
              Spain          Spanair                      MD-83         JT8D-219         49938               1-Dec-90
              Sweden         Transwede Leisure AB         B757-200      RB211-535E4-37   26151               23-Jul-92
              Turkey         MNG Havayollari
                             Ve Tasimaciligi A.S.
                             (MNG Airlines Cargo)         A300C4-200    CF6-50C2            83               1-May-79
              Turkey         Pegasus                      B737-400      CFM56-3C1        24345               1-Jun-89
              Turkey         Pegasus                      B737-400      CFM56-3C1        24687               25-May-90
              Turkey         Turk Hava Yollari            B737-400      CFM56-3C1        24917               24-Jun-91
              Turkey         Turk Hava Yollari            B737-400      CFM56-3C1        25181               3-Feb-92
              Turkey         Turk Hava Yollari            B737-400      CFM56-3C1        25184               2-Mar-92
              Turkey         Turk Hava Yollari            B737-400      CFM56-3C1        25261               9-Apr-92
              Turkey         Turk Hava Yollari            B737-400      CFM56-3C1        26065               1-May-92

<CAPTION>
AIRPLANES GR  AIRPLANES GROUP PORTFOLIO ANALYSIS -- (CONTINUED)
                   APPRAISED VALUE AS OF JANUARY 31, 2001
              -------------------------------------------------
                               (IN THOUSANDS)                     % OF PORTFOLIO
                                                                   BY APPRAISED
                                                                   VALUES AS OF
REGION        AIRCLAIMS       AISI      BK ASSOC.     AVERAGE       31-JAN-01
------        ----------   ----------   ----------   ----------   --------------
<S>           <C>          <C>          <C>          <C>          <C>
EUROPE......  $   23,240   $   26,300   $   27,750   $   25,763         0.82%
(CONTINUED)       23,640       26,300       27,750       25,897         0.83
                  21,430       22,560       23,700       22,563         0.72
                  21,800       22,560       23,800       22,720         0.72
                  14,410       16,830       16,000       15,747         0.50
                  15,810       19,590       19,700       18,367         0.59
                  16,410       18,490       19,000       17,967         0.57
                  17,910       20,550       22,500       20,320         0.65
                  18,540       21,580       23,100       21,073         0.67
                  13,390       17,450       17,050       15,963         0.51
                   6,330        6,010        7,100        6,480         0.21
                   6,570        6,060        7,700        6,777         0.22
                   6,990        6,700        7,650        7,113         0.23
                   7,130        6,700        7,700        7,177         0.23
                   6,790        6,780        7,800        7,123         0.23
                   7,060        7,320        8,000        7,460         0.24
                   6,840        7,330        8,200        7,457         0.24
                   6,800        6,700        7,850        7,117         0.23
                   7,680        7,370        8,750        7,933         0.25
                  23,010       24,450       24,300       23,920         0.76
                  23,600       24,270       25,000       24,290         0.77
                  21,030       23,920       23,700       22,883         0.73
                  21,480       23,990       23,750       23,073         0.74
                  22,650       25,920       26,000       24,857         0.79
                  15,960       18,890       19,450       18,100         0.58
                  14,950       18,800       18,450       17,400         0.55
                  15,190       18,930       19,100       17,740         0.57
                  14,920       18,690       19,000       17,537         0.56
                  18,120       19,930       21,750       19,933         0.64
                  16,300       19,360       21,050       18,903         0.60
                  32,430       39,470       38,900       36,933         1.18

                  15,410       12,880       15,750       14,680         0.47
                  20,430       22,090       22,800       21,773         0.69
                  21,440       23,220       23,500       22,720         0.72
                  23,720       24,800       25,300       24,607         0.78
                  23,040       26,220       26,200       25,153         0.80
                  23,020       26,230       27,100       25,450         0.81
                  23,010       26,100       26,550       25,220         0.80
                  23,030       25,920       26,850       25,267         0.81
</TABLE>

                                        25
<PAGE>   26
<TABLE>
<CAPTION>
AIRPLANES GROUP PORTFOLIO ANALYSIS -- (CONTINUED)

                                                                                                              DATE OF
                                                                                                            MANUFACTURE/
REGION        COUNTRY        LESSEE                          TYPE           ENGINE        MSN     NOTES      CONVERSION
------        -------        ------                       -----------   --------------   -----   --------   ------------
<S>           <C>            <C>                          <C>           <C>              <C>     <C>        <C>
EUROPE......  Turkey         Turk Hava Yollari            B737-500      CFM56-3C1        25288              16-Jun-92
(CONTINUED)   Turkey         Turk Hava Yollari            B737-500      CFM56-3C1        25289               12-Jun-92
              United
              Kingdom        Airtours International       A320-200      CFM56-5A3          294               2-Apr-92
              United
              Kingdom        Airtours International       A320-200      CFM56-5A3          301               22-Apr-92
              United
              Kingdom        Airtours International       A320-200      CFM56-5A3          348               17-Jun-92
              United
              Kingdom        Airtours International       A320-200      CFM56-5A3          349               30-Oct-92
              United
              Kingdom        Brymon Airways Limited       DHC8-300      PW123              296               1-Oct-91
              United
              Kingdom        Brymon Airways Limited       DHC8-300      PW123              334               8-Oct-92
              United
              Kingdom        Titan Airways Limited        ATR42-300     PW120              109               14-Oct-88
              United
              Kingdom        Titan Airways Limited        ATR42-300     PW120              113               18-Nov-88
LATIN
 AMERICA....  Antigua        Liat 1974 Limited            DHC8-100      PW120-A            113              1-Sep-88
              Antigua        Liat 1974 Limited            DHC8-100      PW120-A            140               1-Mar-89
              Antigua        Liat 1974 Limited            DHC8-100      PW120-A            144               1-Mar-89
              Antigua        Liat 1974 Limited            DHC8-100      PW120-A            270               1-May-91
              Argentina      Aerolineas Argentinas S.A.   B737-200A     JT8D-17          21192               1-Mar-76
              Argentina      Lineas Aereas Privadas
                             Argentinas (L.A.P.A.) S.A.   B737-200A     JT8D-17          21193               1-Jul-76
              Argentina      Lineas Aereas Privadas
                             Argentinas (L.A.P.A.) S.A.   B737-200A     JT8D-15          22633               1-Mar-81
              Brazil         Rio-Sul                      B737-500      CFM56-3C1        25185               18-Feb-92
              Brazil         Rio-Sul                      B737-500      CFM56-3C1        25186               11-Mar-92
              Brazil         Rio-Sul                      B737-500      CFM56-3C1        25191               10-Apr-92
              Brazil         Rio-Sul                      B737-500      CFM56-3C1        25192               14-Apr-92
              Brazil         Rio-Sul                      B737-500      CFM56-3C1        26075               23-Oct-92
              Brazil         TAM                          F-100         TAY650-15        11284               31-Jul-90
              Brazil         TAM                          F-100         TAY650-15        11285               1-Aug-90
              Brazil         TAM                          F-100         TAY650-15        11304               27-Feb-91
              Brazil         TAM                          F-100         TAY650-15        11305               19-Apr-91
              Brazil         TAM                          F-100         TAY650-15        11336               5-Jun-91
              Brazil         TAM                          F-100         TAY650-15        11347               1-Oct-91
              Brazil         TAM                          F-100         TAY650-15        11348               6-Aug-91
              Brazil         TAM Express S.A.             F-100         TAY650-15        11371               19-Dec-91
              Brazil         VARIG                        MD-11         CF6-80C2-D1F     48499               31-Dec-91
              Brazil         VARIG                        MD-11         CF6-80C2-D1F     48500               1-Mar-92
              Brazil         VARIG                        MD-11         CF6-80C2-D1F     48501               1-Sep-92
              Chile          A.I.L.L.                     DC8-71F       CFM56-2C1        45810     (2)(3)    9-Apr-92
              Chile          A.I.L.L.                     DC8-71F       CFM56-2C1        45970     (2)(3)    15-Oct-92
              Chile          A.I.L.L.                     DC8-71F       CFM56-2C1        45976     (2)(3)    10-Aug-91
              Chile          Lan Chile                    B737-200A     JT8D-15          22397               1-Feb-81
              Chile          Lan Chile                    B737-200A     JT8D-17A         22407               1-Sep-80
              Chile          Lan Chile                    B737-200A     JT8D-17A         23024               1-May-83
              Chile          Lan Chile                    B767-300ER    PW4060           26204               1-Oct-92

<CAPTION>
AIRPLANES GR  AIRPLANES GROUP PORTFOLIO ANALYSIS -- (CONTINUED)
                   APPRAISED VALUE AS OF JANUARY 31, 2001
              -------------------------------------------------
                               (IN THOUSANDS)                     % OF PORTFOLIO
                                                                   BY APPRAISED
                                                                   VALUES AS OF
REGION        AIRCLAIMS       AISI      BK ASSOC.     AVERAGE       31-JAN-01
------        ----------   ----------   ----------   ----------   --------------
<S>           <C>          <C>          <C>          <C>          <C>
EUROPE......  $   19,750   $   19,710   $   20,500   $   19,987         0.64%
(CONTINUED)       20,000       19,700       20,250       19,983         0.64

                  26,460       27,490       27,950       27,300         0.87

                  26,720       27,470       29,450       27,880         0.89

                  27,330       27,280       28,400       27,670         0.88

                  27,240       27,380       30,000       28,207         0.90

                   7,780        6,700        7,950        7,477         0.24

                   7,400        7,340        8,500        7,747         0.25

                   4,450        4,490        5,000        4,647         0.15

                   4,720        4,490        4,950        4,720         0.15
LATIN
 AMERICA....       4,020        4,330        4,950        4,433         0.14
                   4,220        4,730        4,550        4,500         0.14
                   4,410        4,600        5,400        4,803         0.15
                   4,960        5,550        5,750        5,420         0.17
                   4,250        3,950        4,400        4,200         0.13

                   3,110        3,300        4,350        3,587         0.11

                   4,680        5,140        6,550        5,457         0.17
                  21,360       20,020       19,650       20,343         0.65
                  20,240       20,070       19,550       19,953         0.64
                  18,860       20,190       19,850       19,633         0.63
                  21,200       19,940       19,600       20,247         0.65
                  21,800       19,990       21,250       21,013         0.67
                  11,610       10,630       11,450       11,230         0.36
                  11,590       10,730       11,400       11,240         0.36
                  11,780       10,850       12,150       11,593         0.37
                  12,790       11,420       12,150       12,120         0.39
                  12,110       11,020       12,750       11,960         0.38
                  12,000       11,100       13,250       12,117         0.39
                  12,060       10,820       14,100       12,327         0.39
                  13,320       11,390       13,450       12,720         0.41
                  49,220       61,040       70,300       60,187         1.92
                  52,330       64,870       71,450       62,883         2.01
                  51,030       64,710       73,500       63,080         2.01
                  13,080       13,210       12,450       12,913         0.41
                  14,500       13,950       12,450       13,633         0.43
                  13,270       14,090       12,450       13,270         0.42
                   3,770        4,690        6,150        4,870         0.16
                   4,040        4,890        6,200        5,043         0.16
                   4,850        5,870        7,800        6,173         0.20
                  55,340       60,350       56,500       57,397         1.83
</TABLE>

                                        26
<PAGE>   27
<TABLE>
<CAPTION>
AIRPLANES GROUP PORTFOLIO ANALYSIS -- (CONTINUED)

                                                                                                              DATE OF
                                                                                                            MANUFACTURE/
REGION        COUNTRY        LESSEE                          TYPE           ENGINE        MSN     NOTES      CONVERSION
------        -------        ------                       -----------   --------------   -----   --------   ------------
<S>           <C>            <C>                          <C>           <C>              <C>     <C>        <C>
LATIN
 AMERICA....  Colombia       AeroLineas Centrales de
                             Colombia S.A.                ATR42-300     PW121-5A1          284               1-Jan-92
(CONTINUED)
              Colombia       Avianca                      B757-200      RB211-535E4-37   26154               22-Sep-92
              Colombia       Avianca                      B767-200ER    PW4060           25421               14-Jan-92
              Colombia       Avianca                      MD-83         JT8D-219         49939               26-Oct-90
              Colombia       Avianca                      MD-83         JT8D-219         49946               18-Jul-91
              Colombia       Avianca                      MD-83         JT8D-219         53120               29-Jul-92
              Colombia       Avianca                      MD-83         JT8D-219         53125               2-Apr-92
              Colombia       Tampa                        DC8-71F       CFM56-2C1        45849        (3)    9-Mar-91
              Colombia       Tampa                        DC8-71F       CFM56-2C1        45945        (3)    19-May-92
              Colombia       Tampa                        DC8-71F       CFM56-2C1        46066        (3)    24-Apr-91
              Mexico         Aeromexico                   DC9-32        JT8D-17          48125               1-Apr-80
              Mexico         Aeromexico                   DC9-32        JT8D-17          48126               1-Apr-80
              Mexico         Aeromexico                   DC9-32        JT8D-17          48127               1-Jul-80
              Mexico         Aeromexico                   DC9-32        JT8D-17          48128               1-Aug-80
              Mexico         Aeromexico                   DC9-32        JT8D-17          48129               1-Nov-80
              Mexico         Aeromexico                   DC9-32        JT8D-17          48130               1-Dec-80
              Mexico         Aeromexico                   MD-82         JT8D-217         49660               1-Mar-88
              Mexico         Aeromexico                   MD-82         JT8D-217A        49667               21-Jan-88
              Mexico         Aeromexico                   MD-87         JT8D-219         49673               1-Dec-88
              Mexico         Mexicana                     B727-200A     JT8D-17R         21346               1-Oct-80
              Mexico         Mexicana                     B727-200A     JT8D-17R         21600               1-Nov-80
              Mexico         Mexicana                     F-100         TAY650-15        11266               17-Aug-90
              Mexico         Mexicana                     F-100         TAY650-15        11309               16-May-91
              Mexico         Mexicana                     F-100         TAY650-15        11319               5-Apr-91
              Mexico         Mexicana                     F-100         TAY650-15        11339               1-Jul-91
              Mexico         Mexicana                     F-100         TAY650-15        11374               20-Jan-92
              Mexico         Mexicana                     F-100         TAY650-15        11375               1-Dec-92
              Mexico         Mexicana                     F-100         TAY650-15        11382               1-Jan-93
              Mexico         Mexicana                     F-100         TAY650-15        11384               1-Jan-93
              Netherlands
              Antilles       ALM 1997 Airline N.V.        DHC8-300C     PW123              230               1-Feb-91
              Netherlands
              Antilles       ALM 1997 Airline N.V.        DHC8-300C     PW123              242               1-Nov-90
              Trinidad &
              Tobago         Trinidad & Tobago
                             (BWIA International)
                             Airways Corporation          MD-83         JT8D-219         49789               23-Sep-89
NORTH
 AMERICA....  Canada         Air Canada                   A320-200      CFM56-5A1          174              1-Apr-91
              Canada         Air Canada                   A320-200      CFM56-5A1          175               1-Apr-91
              Canada         Air Canada                   A320-200      CFM56-5A1          232               1-Oct-91
              Canada         Air Canada                   A320-200      CFM56-5A1          284               9-Mar-92

<CAPTION>
AIRPLANES GR  AIRPLANES GROUP PORTFOLIO ANALYSIS -- (CONTINUED)
                   APPRAISED VALUE AS OF JANUARY 31, 2001
              -------------------------------------------------
                               (IN THOUSANDS)                     % OF PORTFOLIO
                                                                   BY APPRAISED
                                                                   VALUES AS OF
REGION        AIRCLAIMS       AISI      BK ASSOC.     AVERAGE       31-JAN-01
------        ----------   ----------   ----------   ----------   --------------
<S>           <C>          <C>          <C>          <C>          <C>
LATIN
 AMERICA....
              $    5,670   $    6,430   $    6,350   $    6,150         0.20%
(CONTINUED)
                  33,070       38,280       37,300       36,217         1.16
                  35,800       48,460       44,750       43,003         1.37
                  17,290       19,960       20,500       19,250         0.61
                  16,980       20,730       20,950       19,553         0.62
                  18,330       21,920       22,100       20,783         0.66
                  18,150       21,640       21,850       20,547         0.66
                  12,740       13,590       12,450       12,927         0.41
                  14,250       14,130       12,350       13,577         0.43
                  13,710       13,660       12,450       13,273         0.42
                   2,370        4,390        3,300        3,353         0.11
                   3,310        5,340        4,250        4,300         0.14
                   2,260        4,620        3,100        3,327         0.11
                   2,930        4,540        4,050        3,840         0.12
                   2,460        4,580        3,700        3,580         0.11
                   2,710        4,700        3,750        3,720         0.12
                  15,390       17,640       17,000       16,677         0.53
                  15,980       17,720       15,950       16,550         0.53
                   9,330       12,820       14,300       12,150         0.39
                   3,550        4,260        3,700        3,837         0.12
                   2,730        3,970        3,050        3,250         0.10
                  12,180       10,600       11,800       11,527         0.37
                  12,640       10,910       12,000       11,850         0.38
                  12,100       10,990       12,000       11,697         0.37
                  12,800       11,310       13,150       12,420         0.40
                  11,800       11,590       13,200       12,197         0.39
                  12,600       11,640       13,850       12,697         0.40
                  12,630       11,540       13,900       12,690         0.40
                  11,900       11,650       13,950       12,500         0.40

                   6,540        7,060        7,650        7,083         0.23

                   6,420        7,040        7,700        7,053         0.22

                  15,180       18,620       19,950       17,917         0.57
NORTH
 AMERICA....      25,140       25,450       25,150       25,247         0.81
                  25,030       25,500       24,250       24,927         0.80
                  27,030       25,630       25,550       26,070         0.83
                  27,420       26,730       28,350       27,500         0.88
</TABLE>

                                        27
<PAGE>   28
<TABLE>
<CAPTION>
AIRPLANES GROUP PORTFOLIO ANALYSIS -- (CONTINUED)

                                                                                                              DATE OF
                                                                                                            MANUFACTURE/
REGION        COUNTRY        LESSEE                          TYPE           ENGINE        MSN     NOTES      CONVERSION
------        -------        ------                       -----------   --------------   -----   --------   ------------
<S>           <C>            <C>                          <C>           <C>              <C>     <C>        <C>
NORTH
 AMERICA....  Canada         Air Canada                   A320-200      CFM56-5A1          309              13-May-92
(CONTINUED)   Canada         Air Canada                   A320-200      CFM56-5A1          404               1-Jan-94
              Canada         Air Canada                   B737-200A     JT8D-9A          21639     (1)(4)    1-Nov-78
              Canada         Air Canada                   B737-200A     JT8D-9A          21712     (1)(4)    1-Feb-79
              Canada         Air Canada                   B737-200A     JT8D-9A          22873     (1)(4)    1-Jul-82
              Canada         Air Canada                   B767-300ER    PW4060           24948               19-Jul-91
              Canada         Air Canada                   B767-300ER    PW4060           26200               1-Sep-92
              U.S.A.         Allegheny Airlines Inc.      DHC8-100      PW121              258               1-Jan-91
              U.S.A.         America West                 B737-300QC    CFM56-3B1        23499               1-Jun-86
              U.S.A.         America West                 B737-300QC    CFM56-3B1        23500               1-Jun-86
              U.S.A.         American Airlines            MD-83         JT8D-219         49941               1-Dec-90
              U.S.A.         American Airlines            MD-83         JT8D-219         49949               5-Aug-91
              U.S.A.         BAX Global                   DC8-71F       CFM56-2C1        45811        (3)    30-May-91
              U.S.A.         BAX Global                   DC8-71F       CFM56-2C1        45813        (3)    28-Apr-92
              U.S.A.         BAX Global                   DC8-71F       CFM56-2C1        45946        (3)    23-Apr-92
              U.S.A.         BAX Global                   DC8-71F       CFM56-2C1        45971        (3)    13-Feb-92
              U.S.A.         BAX Global                   DC8-71F       CFM56-2C1        45973        (3)    27-Feb-92
              U.S.A.         BAX Global                   DC8-71F       CFM56-2C1        45978        (3)    23-Apr-93
              U.S.A.         BAX Global                   DC8-71F       CFM56-2C1        45993        (3)    23-Jun-93
              U.S.A.         BAX Global                   DC8-71F       CFM56-2C1        45994        (3)    1-Sep-94
              U.S.A.         BAX Global                   DC8-71F       CFM56-2C1        45998        (3)    21-May-93
              U.S.A.         BAX Global                   DC8-71F       CFM56-2C1        46065        (3)    12-Jan-92
              U.S.A.         Emery Worldwide              DC8-71F       CFM56-2C1        45996        (3)    29-Oct-92
              U.S.A.         Emery Worldwide              DC8-71F       CFM56-2C1        45997        (3)    7-Dec-93
              U.S.A.         Emery Worldwide              DC8-73CF      CFM56-2C1        46091        (3)    1-Dec-89
              U.S.A.         Frontier Airlines, Inc.      B737-300      CFM56-3B1        23177               1-Apr-86
              U.S.A.         Hawaiian Airlines, Inc.      DC9-51        JT8D-17          47742               1-Jun-77
              U.S.A.         Hawaiian Airlines, Inc.      DC9-51        JT8D-17          47784               1-May-79
              U.S.A.         Hawaiian Airlines, Inc.      DC9-51        JT8D-17          47796               1-Apr-79
              U.S.A.         Hawaiian Airlines, Inc.      DC9-51        JT8D-17          48122               26-Jan-81
              U.S.A.         Idefix Leasing Corporation   ATR42-300     PW120              249               1-Jun-91
              U.S.A.         Polar Air Cargo, Inc.        B747-200SF    JT9D-7Q          21730        (3)    27-Mar-98
              U.S.A.         TWA                          B767-300ER    PW4060           25411        (6)    15-Jan-92
              U.S.A.         TWA                          MD-83         JT8D-219         49575        (6)    1-Oct-87
              U.S.A.         Vanguard Airlines            B737-200A     JT8D-15          21735        (1)    1-Jun-79
              U.S.A.         Vanguard Airlines            B737-200A     JT8D-15          22979        (1)    1-Mar-83
OTHER.......  Kazakstan      Air Kazakstan                B737-200A     JT8D-15          22090              1-May-80
              Kazakstan      Air Kazakstan                B737-200A     JT8D-15          22453               1-Mar-81
              Ukraine        Ukraine International
                             Airlines                     B737-200A     JT8D-17A         22802               1-Feb-83

<CAPTION>
AIRPLANES GR  AIRPLANES GROUP PORTFOLIO ANALYSIS -- (CONTINUED)
                   APPRAISED VALUE AS OF JANUARY 31, 2001
              -------------------------------------------------
                               (IN THOUSANDS)                     % OF PORTFOLIO
                                                                   BY APPRAISED
                                                                   VALUES AS OF
REGION        AIRCLAIMS       AISI      BK ASSOC.     AVERAGE       31-JAN-01
------        ----------   ----------   ----------   ----------   --------------
<S>           <C>          <C>          <C>          <C>          <C>
NORTH
 AMERICA....  $   27,990   $   26,840   $   28,050   $   27,627         0.88%
(CONTINUED)       28,670       30,490       31,450       30,203         0.96
                   1,279        1,279        1,279        1,279         0.04
                   1,397        1,397        1,397        1,397         0.04
                   4,848        4,848        4,848        4,848         0.15
                  50,780       57,210       50,500       52,830         1.68
                  55,190       60,700       59,850       58,580         1.87
                   4,920        5,460        6,100        5,493         0.18
                  18,310       19,060       15,950       17,773         0.57
                  18,480       18,890       16,150       17,840         0.57
                  17,500       20,070       22,050       19,873         0.63
                  17,250       21,190       22,650       20,363         0.65
                  15,140       14,090       12,050       13,760         0.44
                  14,380       13,880       11,800       13,353         0.43
                  12,540       14,320       12,600       13,153         0.42
                  13,080       13,150       12,450       12,893         0.41
                  12,770       14,160       12,450       13,127         0.42
                  13,600       13,490       12,450       13,180         0.42
                  13,910       13,380       12,450       13,247         0.42
                  13,840       13,540       12,450       13,277         0.42
                  12,730       14,230       12,450       13,137         0.42
                  14,600       13,940       12,450       13,663         0.44
                  14,740       13,790       13,100       13,877         0.44
                  13,370       13,960       12,450       13,260         0.42
                  16,690       16,100       17,600       16,797         0.54
                  13,700       16,860       13,450       14,670         0.47
                   2,700        3,880        3,200        3,260         0.10
                   1,910        4,000        3,700        3,203         0.10
                   2,240        4,490        3,250        3,327         0.11
                   2,870        4,640        3,900        3,803         0.12
                   5,280        6,000        6,250        5,843         0.19
                  27,070       30,550       33,050       30,223         0.96
                  53,700       61,300       58,200       57,733         1.84
                  14,800       17,820       18,650       17,090         0.55
                   4,950        5,860        6,150        5,653         0.18
                   5,880        7,040        7,350        6,757         0.22
OTHER.......       3,910        4,620        6,450        4,993         0.16
                   4,610        5,200        6,600        5,470         0.17

                   5,540        6,220        7,800        6,520         0.21
</TABLE>

                                        28
<PAGE>   29
<TABLE>
<CAPTION>
AIRPLANES GROUP PORTFOLIO ANALYSIS -- (CONTINUED)

                                                                                                              DATE OF
                                                                                                            MANUFACTURE/
REGION        COUNTRY        LESSEE                          TYPE           ENGINE        MSN     NOTES      CONVERSION
------        -------        ------                       -----------   --------------   -----   --------   ------------
<S>           <C>            <C>                          <C>           <C>              <C>     <C>        <C>
OFF-LEASE...  Off-lease      Off-lease                    A300-B4-200   CF6-50C2           131        (5)   7-Feb-81
              Off-lease      Off-lease                    B737-200A     JT8D-17          21196        (5)    1-Jul-76
              Off-lease      Off-lease                    B727-200A     JT8D-17A         21600               1-Nov-80
              Off-lease      Off-lease                    B737-300      CFM56-382        23749               1-May-87
              Off-lease      Off-lease                    B737-300      CFM56-382        23923               1-Apr-88
              Off-lease      Off-lease                    DHC8-300      PW123              267        (5)    4-Apr-91

<CAPTION>
AIRPLANES GR  AIRPLANES GROUP PORTFOLIO ANALYSIS -- (CONTINUED)
                   APPRAISED VALUE AS OF JANUARY 31, 2001
              -------------------------------------------------
                               (IN THOUSANDS)                     % OF PORTFOLIO
                                                                   BY APPRAISED
                                                                   VALUES AS OF
REGION        AIRCLAIMS       AISI      BK ASSOC.     AVERAGE       31-JAN-01
------        ----------   ----------   ----------   ----------   --------------
<S>           <C>          <C>          <C>          <C>          <C>
OFF-LEASE...  $    7,430   $    7,510   $   11,450   $    8,797         0.28%
                   2,730        3,400        3,850        3,327         0.11
                   2,730        3,970        3,050        3,250         0.10
                  16,550       19,110       17,600       17,753         0.57
                  16,590       18,760       17,650       17,667         0.56
                   6,930        6,670        7,600        7,067         0.23
              ----------   ----------   ----------   ----------       ------
              $2,933,514   $3,195,914   $3,276,674   $3,135,367       100.00%
              ==========   ==========   ==========   ==========       ======
</TABLE>

---------------

(1) These aircraft are Stage 3 hushkitted aircraft.

(2) A.I.L.L. is an indirect 100% subsidiary of Lan Chile.

(3) The following table sets forth the date of original manufacture for the
    aircraft that were converted to freighter aircraft:

<TABLE>
<CAPTION>
                                DATE OF
SERIAL NUMBER                 MANUFACTURE
-------------                 -----------
<S>                           <C>
45810.......................    May-67
45811.......................    Aug-67
45813.......................    Jan-67
45849.......................    Apr-67
45945.......................    Mar-68
45946.......................    Mar-68
45970.......................    Mar-68
45971.......................    May-68
45973.......................    May-68
45976.......................    Jul-68
</TABLE>

<TABLE>
<CAPTION>
                                DATE OF
SERIAL NUMBER                 MANUFACTURE
-------------                 -----------
<S>                           <C>
45978.......................    Jul-68
45993.......................    Aug-68
45994.......................    Aug-68
45996.......................    Oct-68
45997.......................    Oct-68
45998.......................    Oct-68
46065.......................    Jun-69
46066.......................    Jun-69
46091.......................    Apr-70
21730.......................    Jun-79
</TABLE>

(4) Aircraft lease receivable book values are used for the aircraft subject to
    finance leases rather than appraised values.

(5) Of the six off-lease aircraft at March 31, 2001, one was subject to a lease
    agreement to a lessee in the United Kingdom (MSN 131) and, one was subject
    to a letter of intent for lease to a lessee in The Netherlands (MSN 267) and
    four aircraft were available for marketing. As of the date of this Form
    10-K, two of the unplaced off-lease aircraft had became subject to letters
    of intent for sale, the letter of intent to lease expired and the aircraft
    subsequently became subject to a letter of intent to lease to a lessee in
    the Bahamas.

(6) On April 9, 2001, American Airlines assumed the leases in respect of the two
    aircraft previously leased by TWA, subject to certain amendments. See " --
    North America".

                                        29
<PAGE>   30

THE LEASES

     Most of the leases are operating leases under which we generally retain the
benefit, and bear the risk, of the residual value of the aircraft at the end of
the lease. As of March 31, 2001, we had 187 leases in effect, covering our whole
portfolio except for six aircraft which were off-lease. As of March 31, 2001,
one of these off-lease aircraft was subject to a lease agreement and one was
subject to a letter of intent for lease. The remaining four unplaced aircraft
represented 1.34% of our portfolio by appraised value as of January 31, 2001. As
of the date of this Form 10-K, two of the unplaced off-lease aircraft had became
subject to letters of intent for sale. All leases are managed by the servicer
according to the servicing agreement.

     Although the lease documentation is fairly standardized in many respects,
significant variations do exist as a result of negotiation with each lessee.

     Under a majority of our leases, the lessee is responsible, either directly
or through indemnification of the lessor, for all operating expenses, including
maintenance, operating, overhaul, fuel, crews, airport and navigation charges,
taxes, licenses, consents and approvals, aircraft registration and hull and
liability insurance. In addition, the lessees must remove all liens on the
aircraft except liens that are permitted by the lease.

     Each of our current leases requires the lessee to make periodic rental
payments during the term of the lease. Some of the leases also require the
lessee to pay periodic amounts as maintenance reserves or to deliver letters of
credit or guarantees for this purpose. Almost all the leases require the lessees
to make payments to us without set-off or counterclaim, and most of them include
an obligation for the lessee to gross-up payments under the lease if the lease
payments are subject to withholding or other taxes. The leases also generally
contain indemnification of the lessor for tax liabilities such as value added
tax and stamp duty tax, but not income tax.

     Each lease also contains provisions which specify our rights and remedies
if the lessee defaults in making payments or performing its other obligations
under the lease. These remedies include terminating the lease and repossessing
the aircraft. However, any default by a lessee may lead to reduction of payments
under the leases and cause us to incur significant repossession and other costs,
including breakage costs under swaps. If there is an event of default due to a
lessee's bankruptcy, we may also face delays in asserting our rights if the
relevant jurisdiction imposes a mandatory waiting period between default and
repossession.

     The following is a summary of the principal terms of the leases as of March
31, 2001, with reference to appraised values as of January 31, 2001.

LEASE TERM.................  As of March 31, 2001, the weighted average
                             remaining contracted lease term of the aircraft
                             (weighted by appraised value as of January 31, 2001
                             and without giving effect to purchase options,
                             early terminations or extensions) was 28 months.
                             The longest lease was scheduled to expire in
                             September 2008.

RENTALS....................  As of March 31, 2001, rent under 180 of the leases,
                             representing 92.57% by appraised value of our
                             portfolio as of January 31, 2001, was payable
                             monthly in advance, and rent under 7 of the leases,
                             representing 5.58% by appraised value of our
                             portfolio as of January 31, 2001, was payable
                             monthly in arrears.

                             These rental payments are calculated based on a
                             floating rate or a fixed rate or may change from
                             one to the other over the course of the lease. The
                             rent under all of the leases is currently payable
                             in U.S. dollars, although in the future, some rent
                             may be payable in euros. Some rental payments are
                             based on the number of flight hours an aircraft is
                             operated or may vary depending on the time of year
                             during which the aircraft is operating.

EXTENSION OPTIONS..........  Some of the leases contain an extension option
                             pursuant to which, depending on the negotiations
                             with the lessee at the time of signing of the
                             lease, either we or the lessee could extend the
                             term of the lease at either the existing lease rate
                             or at the future market rate. As of March 31, 2001,
                             44 of
                                        30
<PAGE>   31

                             the leases representing 26.03% of our portfolio by
                             appraised value as of January 31, 2001 included an
                             extension option.

EARLY TERMINATION
OPTIONS....................  Some of the leases contain an early termination
                             option pursuant to which the lessee may terminate
                             the lease before the scheduled expiration date if
                             specified conditions are met. As of March 31, 2001,
                             26 of the leases representing 9.14% of our
                             portfolio by appraised value as of January 31, 2001
                             include an early termination option. Assuming that
                             all these options are exercised for the earliest
                             possible termination, the weighted average
                             remaining lease term of our portfolio would be 27
                             months.

PURCHASE OPTIONS...........  As of March 31, 2001, 11 lessees had outstanding
                             options to purchase a total of 31 aircraft,
                             representing 12.87% of our portfolio by appraised
                             value as of January 31, 2001. The latest date on
                             which a purchase option could be exercised is
                             November 4, 2006 for a purchase of a B767-200ER.

SECURITY DEPOSITS..........  As of March 31, 2001, lessees under 158 of the
                             leases representing 82.31% of our portfolio by
                             appraised value as of January 31, 2001 have
                             provided security for their obligations. As of
                             March 31, 2001, we had $34.5 million in cash
                             security deposits in respect of 98 aircraft
                             representing 52.11% of our portfolio by appraised
                             value as of January 31, 2001, and $282 million in
                             letters of credit in respect of 84 aircraft
                             representing 44.04% of our portfolio by appraised
                             value as of January 31, 2001.

GUARANTEES.................  In twelve of the leases, we have received
                             guarantees of the lessee's performance obligations
                             under the lease. These guarantees were issued by
                             the lessee's parent company or shareholders.

MAINTENANCE................  The leases contain detailed provisions specifying
                             maintenance standards and aircraft redelivery
                             conditions generally to be met at the lessees'
                             expense. During the term of each lease, we require
                             the lessee to maintain the aircraft in accordance
                             with an agreed maintenance program designed to
                             ensure that the aircraft meets applicable
                             airworthiness and other regulatory requirements.
                             Lessees must provide monthly maintenance reserves
                             under approximately 110 of the leases. Under the
                             balance of the leases, the lessee or the lessor may
                             be required to make certain adjustment payments to
                             one another if at redelivery the aircraft or
                             specified items do not meet the required standards
                             under the lease. Heavy maintenance on significant
                             components of an aircraft, such as the airframe and
                             the engines, is generally required to be performed
                             on a cycle of several years and the cost of this
                             maintenance may be material in relation to the
                             value of the aircraft, with the overhaul of a
                             single component often exceeding $1 million.
                             Pursuant to the leases, if and when an aircraft is
                             transferred from one lessee to another between
                             maintenance overhauls, the transferring lessee is
                             generally required to pay for that portion of the
                             succeeding overhaul that can be attributed to its
                             use of the aircraft under its lease.

                             Depending on the credit of the lessee and other
                             factors, we may require that the lessee pay cash
                             maintenance reserves (61 leases as of March 31,
                             2001, representing 34.51% of our portfolio by
                             appraised value as of January 31, 2001) or provide
                             a combination of maintenance reserves and letters
                             of credit or guarantees (51 leases as of March 31,
                             2001, representing 25.22% of our portfolio by
                             appraised value as of January 31, 2001). If the
                             lessee pays maintenance reserves, we will have to
                             reimburse it for maintenance it actually performs
                             on the aircraft. Our obligation to reim-

                                        31
<PAGE>   32

                             burse maintenance is classified as an expense and
                             therefore ranks senior to any payments on the
                             certificates.

                             If the lessee is not required to pay maintenance
                             reserves or provide letters of credit or
                             guarantees, we have to rely on the lessee's credit
                             and its ability to maintain the aircraft during the
                             lease term and return it in good condition or make
                             any maintenance payments required at the end of the
                             lease. If maintenance is required on the aircraft
                             but not performed, or the lessee fails to pay, we
                             have to fund this maintenance ourselves. As of
                             March 31, 2001, we recorded approximately $246
                             million of maintenance reserves liability.

                             Maintenance payments by lessees will depend upon
                             numerous factors including the financial condition
                             of the lessee and the ability of Airplanes Group to
                             obtain satisfactory maintenance terms in leases. An
                             increasing number of leases do not provide for any
                             maintenance payments to be made by lessees as
                             security for their maintenance obligations. Any
                             significant variations in these factors may
                             materially adversely affect the ability of
                             Airplanes Group to make payments of interest,
                             principal and premium, if any, on the notes and
                             certificates.

REDELIVERY CONDITIONS......  At least 90% of the leases provide for the aircraft
                             to be redelivered in a specified condition upon
                             expiration of the lease and/or stipulate the
                             payments to be made by the lessee to us or, in some
                             cases, by us to the lessee, to reflect the extent
                             to which the actual redelivery condition of the
                             aircraft falls below or exceeds the redelivery
                             condition specified in the lease.

INSURANCE..................  The lessees bear responsibility through an
                             operational indemnity to carry insurance for any
                             liabilities arising out of the operation of the
                             aircraft. The indemnity includes liabilities for
                             death or injury to persons and damage to property
                             that ordinarily would attach to the operator of the
                             aircraft. The lessees are also required to carry
                             comprehensive liability insurance and hull
                             insurance, and any further insurance that is
                             customary in the commercial aircraft industry, and
                             to indemnify us against all liabilities, including
                             where the liability to us as owner and lessor
                             attaches by law. We are required under the leases
                             to be named as an additional insured on hull and
                             liability policies. Most of the leases also require
                             the lessee to maintain the liability insurance for
                             a specified period between one and three years
                             after termination of that lease. Under the
                             servicing agreement, the servicer is required to
                             monitor the lessees' performance of obligations
                             with respect to the insurance provisions of the
                             applicable leases. We also carry contingent hull
                             and liability insurance to cover any insurable loss
                             in excess of the lessee's coverage. The amount of
                             the contingent liability policies may not be the
                             same as the insurance required under the lease. The
                             amount of third party contingent insurance is
                             subject to a number of limitations imposed by the
                             air transportation insurance industry.

                             Most insurance certificates contain a breach of
                             warranty endorsement so that an additional insured
                             party remains protected even if the lessee violates
                             any of the terms, conditions or warranties of the
                             insurance policies, provided that the additional
                             insured party has not caused, contributed to or
                             knowingly condoned the breach.

                                        32
<PAGE>   33

THIRD PARTY LIABILITY
  INSURANCE................  The minimum third party liability limits under the
                             leases range from $250 million in respect of
                             turboprop aircraft to $750 million in respect of
                             widebody aircraft. In some cases, the lessee
                             carries significantly more insurance than the
                             minimum specified in the lease. We also have in
                             place our own contingent liability coverage to
                             cover any liability in excess of the lessee's
                             coverage or any liability resulting from a lapse
                             for any reason of a lessee's coverage.

AIRCRAFT PROPERTY
INSURANCE..................  In all cases, the sum of the stipulated loss value
                             and our own additional coverage in place is at
                             least equal to the appraised value of the aircraft.
                             Permitted deductibles, which generally apply only
                             in the case of a partial loss, range from $50,000
                             for turboprop aircraft to $1 million for widebody
                             aircraft.

POLITICAL RISK INSURANCE...  With respect to some leases, we may arrange
                             separate political risk repossession insurance for
                             our own benefit, covering (a) confiscation,
                             nationalization and requisition of title of the
                             relevant aircraft by the government of the country
                             of registration and denegation and deprivation of
                             legal title and rights, and (b) the failure of the
                             authorities in that country to allow
                             de-registration and export of the aircraft, subject
                             to the conditions of the policies.

SUBLEASES AND WET LEASES...  Under most of our current leases, the lessee may
                             sublease the aircraft without our consent if
                             specified conditions are met. Under most of our
                             current leases, the lessee may also "WET LEASE" the
                             aircraft (leasing the aircraft to another airline
                             with a crew and services provided by the lessee)
                             without our consent so long as the lessee does not
                             part with operational control of the aircraft.
                             Where there is a sublease or a wet lease, the
                             lessee remains fully liable to us for all its
                             payment and performance obligations under the lease
                             and we have no contractual relationship with the
                             sublessee or the wet lessee. The following lessees
                             sublease their aircraft: A.I.L.L. subleases three
                             aircraft to Aerotransportes MAS de Carga, S.A. de
                             C.V. (MAS Air Cargo); Schreiner Airways subleases
                             two aircraft to Aero Contractors Co. of Nigeria
                             Ltd; and National Jet Systems Pty. Limited
                             subleases one aircraft to Eastern Australia
                             Airlines. In addition, we currently lease one ATR
                             42-300 to Idefix, a subsidiary of ATR, and Idefix
                             subleases the aircraft to American Eagle. Leases
                             with new lessees will be based on a pro forma lease
                             that will include restrictions on subleases and wet
                             leases into specified prohibited countries.

COMPLIANCE WITH GOVERNMENTAL AND TECHNICAL REGULATION

     In addition to the general requirements regarding maintenance of the
aircraft, aviation authorities from time to time issue ADs requiring the
operators of aircraft to take particular maintenance actions or make particular
modifications with respect to all aircraft of a particular type. Manufacturer
recommendations may also be issued. To the extent that a lessee fails to perform
ADs that are required to maintain its certificate of airworthiness or other
manufacturer requirements in respect of an aircraft (or if the aircraft is not
currently subject to a lease), Airplanes Group may have to bear or share (if the
lease requires it) the cost of compliance. Other governmental regulations
relating to noise and emissions levels may be imposed not only by the
jurisdictions in which the aircraft are registered, including as part of the
airworthiness requirements, but also in other jurisdictions where the aircraft
operate. A number of jurisdictions including the United States have adopted, or
are in the process of adopting, noise regulations which ultimately will require
all aircraft to comply with the most restrictive currently applicable standards.
Some of the jurisdictions that impose these regulations restrict the future
operation of aircraft that do not meet Stage 3 noise requirements and prohibit
the operation of those aircraft in those
                                        33
<PAGE>   34

jurisdictions. As 4.98% of our portfolio by appraised value as of January 31,
2001 did not meet the Stage 3 requirements as of March 31, 2001, these
regulations may adversely affect Airplanes Group because our non-compliant
aircraft will not be able to operate in those jurisdictions and we may incur
substantial costs to comply with the Stage 3 requirements.

     Moreover new ADs or noise or emissions reduction requirements may be
adopted in the future and these could result in significant costs to Airplanes
Group or adversely affect the value of, or our ability to re-lease, Stage 2 or
Stage 3 aircraft. In particular, certain organizations and jurisdictions are
currently considering "STAGE 4" requirements which would tighten noise and
emissions certification requirements for newly manufactured aircraft. If these
more restrictive requirements are adopted or applied to existing aircraft types,
it could result in significant costs to Airplanes Group or adversely affect the
value of, or our ability to re-lease, aircraft in our portfolio.

     Volume 2 of Annex 16 of the Chicago Convention also contains standards and
recommendations regarding limitations on vented fuel and smoke and gaseous
emissions for aircraft. While a number of countries have adopted regulations
implementing these recommendations, these regulations generally have been
prospective in nature, requiring only that newly manufactured engines meet
particular standards after a particular date. To the extent that these
regulations require modifications to the engines owned by Airplanes Group, they
would be treated similarly to ADs under the leases.

     Aviation authorities in Europe and North America have recently adopted
regulations requiring the installation of traffic collision avoidance systems,
automatic emergency locator transmitters and various other systems. Depending on
whether the costs of complying with these regulations are borne by us or the
lessees, installation of these systems could result in significant cash capital
expenditures by Airplanes Group in the future.

     The FAA recently issued an AD concerning insulation for the purpose of
increasing fire safety on MD-80 and MD-11 aircraft. As of March 31, 2001, we had
3 MD-11 and 26 MD-80 aircraft, representing a total of 21.2% of our portfolio by
appraised value as of January 31, 2001. We will incur significant costs in
ensuring these aircraft comply with these standards. We expect to complete the
modification of 17 of the 29 aircraft by December 2001 at an estimated cost of
approximately $11 million and to modify the remaining 12 aircraft by December
2005 at an estimated cost of approximately $7 million.

     The FAA is expected to issue an AD by the end of 2001 mandating the
modification of affected lapjoints on Boeing 737 aircraft when the aircraft has
completed 50,000 cycles. The estimated cost to implement this modification for
each aircraft is approximately $230,000 per aircraft. Based on the current
cycles completed to date by our 65 Boeing 737 aircraft, representing 33.36% of
our portfolio by appraised value as of January 31, 2001, our Boeing 737 aircraft
are not likely to require these modifications prior to 2007. However, we could
incur significant costs in the future in ensuring our Boeing 737 aircraft comply
with these standards, which could impact adversely our results of operations.

     The FAA is also expected to issue an AD within 12 months mandating a
re-design of the rudder systems of Boeing 737 aircraft. The average cost per
aircraft of these modifications is expected to be approximately $50,000.
Depending on the time period within which the modifications are required to be
made, the costs may be the responsibility of existing lessees. However, if the
costs are not the responsibility of some or all existing lessees, we could incur
significant costs in ensuring that our Boeing 737 aircraft comply with these
modifications, which could impact adversely our results of operations.

THE LESSEES

     As of March 31, 2001, our aircraft were on lease to 64 lessees in 34
countries throughout the world. See "-- Portfolio Information" for the countries
and regions where our lessees reside.

     A number of our lessees are in a relatively weak financial position. As of
March 31, 2001, amounts outstanding for a period greater than 30 days in respect
of rental payments, maintenance reserves and other miscellaneous amounts due
under the leases (net of amounts in respect of default interest and cash in
transit) amounted to $13.4 million in respect of 17 lessees (who leased a
combined total of 46 aircraft representing 23.68% of our portfolio by appraised
value as of that date) and $11.3 million in respect of five former lessees. Of
                                        34
<PAGE>   35

the total $24.7 million, $3.1 million was in arrears for a period between 30 and
60 days, $1.8 million was in arrears for a period between 60 and 90 days and
$19.8 million was in arrears for a period greater than 90 days. Some of these
lessees, as well as other lessees, have consistently been significantly in
arrears in their respective rental payments and some are known to be currently
experiencing financial difficulties.

     As of March 31, 2001, in addition to the $24.7 million in respect of
payments past due more than 30 days, we had agreed to allow seven lessees to
defer rent, maintenance and miscellaneous payments totaling $9.4 million for
periods ranging from six months for one lessee in respect of $0.3 million and up
to 84 months for one lessees in respect of $2.3 million. In the past,
restructurings have typically involved delaying rental payments for periods of
up to 12 months. In addition, some restructurings have involved voluntary
terminations of leases prior to lease expiration, the replacement of aircraft
with less expensive aircraft and the arrangement of sub-leases from the lessee
to another aircraft operator. In other cases, it has been necessary to repossess
aircraft from lessees which have defaulted and re-lease the aircraft to other
lessees.

     In addition to difficulties which have affected lessees in a given region,
individual lessees have experienced periodic difficulties in meeting their
maintenance obligations under the related leases. The difficulties have arisen
from, among other things, the failure of the lessee to have in place a
sufficiently well established maintenance program, adverse climate and other
environmental conditions in the locations where the related aircraft is operated
or financial and labor difficulties experienced by the relevant lessee. A
continuous failure by a lessee to meet its maintenance obligations under the
relevant lease could result in a grounding of the aircraft, cause us to incur
substantial costs in restoring the aircraft to an acceptable maintenance
condition before we can re-lease or sell it and adversely affect the value of
the aircraft.

     The following is a discussion of the lessees experiencing difficulty by
region in which they are located.

LATIN AMERICA

     At March 31, 2001, lessees with respect to 29.81% of the aircraft by
appraised value as of January 31, 2001 operated in Latin America, principally
Brazil, Mexico, Colombia and Chile. The prospects for lessee operations in these
countries depend in part on the general level of political stability and
economic activity and policies in those countries. Future developments in the
political systems or economies of these countries or the implementation of
future governmental policies in these countries may materially affect lessee
operations in those countries.

     Brazil.  During 1999, Brazil experienced significant downturns in its
economy and financial markets, including large decreases in financial asset
prices and dramatic decreases in the value of its currency. While there has been
some stabilization in the Brazilian economy within the last fifteen months, any
future general deterioration in the Brazilian economy will mean that lessees may
be unable to generate sufficient revenues in Brazilian currency to pay rental
payments in U.S. dollars under the leases. Future developments in the political
systems or economies of Brazil and other Latin American countries may have a
material adverse effect on lessee operations in those countries. At March 31,
2001, Airplanes Group leased 16 aircraft representing 12.20% of our portfolio by
appraised value as of January 31, 2001 to operators in Brazil. Accordingly, any
future deterioration in the Latin American economies, especially Brazil, could
lead to a material decrease in Airplanes Group's leasing revenues and an
increase in default related costs.

     At March 31, 2001, we had 8 Fokker 100 aircraft, representing 3.04% of our
portfolio by appraised value as of January 31, 2001, on lease to a Brazilian
lessee that was party to a restructuring agreement with us which was signed in
2000 in respect of the leases for 6 Fokker 100 aircraft. Under the 2000
restructuring agreement, all arrears are to be paid with interest by December
31, 2003. At March 31, 2001, this lessee was current on all payments.

     In addition, in 1999, we entered into a restructuring agreement with
Transbrasil, a former lessee, under which it repaid a restructured amount of
approximately $1.9 million over 12 months. At March 31, 2001, Transbrasil had
arrears of $2 million, and the servicer is currently in negotiations with
Transbrasil regarding repayment. An accounting provision has been made against
our receivables for the excess of the arrears over the cash security held.

     See "Item 3. Legal Proceedings" for details of legal proceedings involving
a Brazilian airline.
                                        35
<PAGE>   36

     Argentina.  On May 17, 2001, a lessee of two B737-200A aircraft
representing 0.29% of our portfolio by appraised value as of January 31, 2001
filed for protection from its creditors. The lessee continues to pay certain of
the rentals while under the protection of the bankruptcy courts and the security
in the form of a surety bond has been drawn and payment has been received.

     Colombia.  Colombia has recently suffered economically as a result of the
deterioration in the value of the Colombian peso and the resulting negative
impact on the Colombian economy. As of March 31, 2001, we leased 10 aircraft,
representing 6.55% of our portfolio by appraised value as of January 31, 2001,
to three Colombian lessees. Because of the continued weakness in the value of
the Colombian peso, as well as general deterioration in the Colombian economy,
these lessees may be unable to generate sufficient revenues in Colombian pesos
to pay the U.S. dollar denominated rental payments under the leases.

     In particular, as of March 31, 2001, we leased 6 aircraft, representing
5.08% of our portfolio by appraised value as of January 31, 2001, to one of our
three Colombian lessees. At May 31, 2001, this lessee was $13.8 million in
arrears, including deferrals. The servicer agreed not to exercise its remedies
in respect of events of default existing under the leases in order to permit the
Colombian lessee to have a stable business environment in which to develop,
negotiate and commence implementing a long-term business plan. During the period
to the date of filing of this report we have received approximately 77.0% of
amounts due under the leases in cash, with the remainder provided by way of
secured and unsecured notes issued by the lessee. The Colombian lessee's other
aircraft lessors and major creditors agreed similar forbearance arrangements. On
June 27, 2001, the servicer signed a restructuring agreement with the lessee
which agreement is conditional on the fulfillment of certain conditions
precedent. The unsecured notes have been paid in full as at the date of this
filing. Under the terms of the restructuring agreement, assuming satisfaction of
all conditions precedent, payments of the secured notes are to be made over a
seven year period. In addition, the lessee has agreed to extend the lease terms
by 36 months in respect of one B757 aircraft and 30 months in respect of four
MD-83 aircraft. However, the monthly lease rentals in respect of these aircraft
will be reduced by 23% and 34%, respectively. The monthly lease rental in
respect of a B767 aircraft will be reduced by 20%. In the event that the
conditions precedent to the restructuring agreement are not fulfilled the
servicer will consider all relevant options, which may include the return of
some or all of the aircraft.

NORTH AMERICA

     As of March 31, 2001, we had 29 aircraft, representing 13.06% of our
portfolio by appraised value as of January 31, 2001, on lease to 11 U.S. lessees
and 11 aircraft, representing 8.95% of our portfolio by appraised value as of
January 31, 2001, on lease to one Canadian lessee. The commercial aircraft
industry in North America is highly sensitive to general economic conditions.
Since air travel is largely discretionary, the industry has suffered severe
financial difficulties during economic downturns. Over the last several years,
nearly half of the major North American passenger airlines have entered into
plans of reorganization or sought protection through bankruptcy, insolvency or
other similar proceedings and several major U.S. airlines have ceased
operations.

     On January 10, 2001, TWA, one of our former lessees, filed for Chapter 11
bankruptcy protection in the U.S. TWA had leased two aircraft from Airplanes
Group, which represented 2.39% of our aircraft by appraised value as of January
31, 2001. On April 9, 2001, American Airlines assumed the leases in respect of
these aircraft subject to certain amendments, including an extension of the
lease term by 11 years in respect of the MD-83 aircraft and a reduction of the
lease term by 4.5 years in respect of the B767-300ER aircraft and a reduction in
monthly rentals by 26.5% in respect of the MD-83 aircraft and by 6% in respect
of the B767-300ER aircraft.

     In March 1998, we reached an agreement with Tower Air, then the lessee of
our only B747-200SF, representing 0.96% of our portfolio by appraised value as
of January 31, 2001, which allowed Tower Air to defer payment of a security
deposit and of two months rent. In March 2000, owing to its deteriorating
financial condition, Tower Air agreed to return the aircraft and subsequently
filed for protection from its creditors under Chapter 11 of the U.S. bankruptcy
laws. The aircraft was subsequently re-leased to another U.S. lessee.

     As of the date of this Form 10-K, the servicer has signed a restructuring
agreement in relation to lease payments with a North American lessee of two
B737-200A aircraft, representing 0.4% of our portfolio by appraised value as of
January 31, 2001.
                                        36
<PAGE>   37

ASIA & FAR EAST

     As of March 31, 2001, 23 aircraft representing 11.73% of our portfolio by
appraised value as of January 31, 2001 were on lease to 11 lessees in this
region. The commercial aircraft industry in Asia was adversely affected by the
severe economic and financial difficulties experienced in the region during 1998
and 1999. Since 1999, there has been some stabilization and recovery in the
economies of this region. Prior to 1998, the market in this region for aircraft
on operating lease demonstrated significant growth rates. If the recessionary
conditions that prevailed in large parts of the region were to recur it would
have an adverse impact on global aircraft demand.

     During the year to March 31, 2000, a rescheduling agreement was signed with
a Philippine lessee which committed to pay its balance of $2.7 million over the
36 months to September 2002. As of the date of this Form 10-K, the lessee has
paid in accordance with the rescheduling agreement.

EUROPE (EXCLUDING CIS)

     As of March 31, 2001, 54 aircraft representing 32.51% of our portfolio by
appraised value as of January 31, 2001 were on lease to 20 lessees in this
region. The commercial aircraft industry in European countries, as in the rest
of the world generally, is highly sensitive to general economic conditions.
Because a substantial portion of airline travel (business and especially
leisure) is discretionary, the industry has tended to suffer severe financial
difficulties during economic downturns. Accordingly, the financial prospects for
European lessees can be expected to depend largely on the level of economic
activity in Europe generally and in the specific countries in which these
lessees operate. A recession or other worsening of economic conditions in one or
more of these countries, particularly if combined with high fuel prices and/or a
weak euro, may have a material adverse effect on the ability of European lessees
to meet their financial and other obligations under the leases. In addition,
commercial airlines in Europe face, and can be expected to continue to face,
increased competitive pressures, in part as a result of the continuing
deregulation of the airline industry by the EU. There can be no assurance that
competitive pressures resulting from such deregulation will not have a material
adverse impact on the operations of our European lessees.

     Bulgaria. On February 15, 2001, the servicer terminated the leases with a
Bulgarian lessee in respect of two B737-300 aircraft representing 1.13% of our
portfolio by appraised value as of January 31, 2001. The aircraft were returned
by the lessee on February 27, 2001. The lessee balance was repaid in full
through the drawdown of a letter of credit as of March 31, 2001. The costs of
repossession and the technical costs required to ensure that the aircraft are in
a suitable condition for re-leasing may be significant.

     Turkey. As of March 31, 2001, 10 aircraft, representing 7.17% of our
portfolio by appraised value as of January 31, 2001, were leased to three
lessees in Turkey. The recent fall in the value of the deutsche mark, the
principal currency in which the Turkish airlines receive their revenues, and of
the Turkish lira may affect the ability of these airlines to meet the U.S.
dollar denominated rental and other payments due under the leases.

     Spain.  As of March 31, 2001, one Spanish lessee, representing 3.5% of our
portfolio by appraised value as of January 31, 2001, was in negotiations with
the servicer on a restructuring of its payment obligations under its leases with
Airplanes Group, which would also include an extension of certain of the leases
to compensate for any proposed reduction in lease rentals.

     Ireland.  As of March 31, 2001, an Irish airline which formerly leased one
A300-B4-200 aircraft, representing 0.28% of our portfolio by appraised value as
of January 31, 2001, was $3.4 million in arrears (including previously
rescheduled amounts). A liquidator has been appointed to the airline to wind up
its business. As of March 31, 2001, this aircraft was subject to a lease to a
new lessee.

PURCHASE OPTIONS

     As of March 31, 2001, 11 lessees with respect to 31 aircraft, representing
12.87% of our portfolio by appraised value as of January 31, 2001, held options
to purchase aircraft at various dates between 2001 and 2006 at prices generally
at or above their estimated appraised value at the exercise date. Since March
31, 1998, one lessee has exercised its option to purchase five B737-200A
aircraft, one of which was delivered on January 15, 2000, three of which were
delivered on January 5, 2001 and one of which was delivered on April 30, 2001.
This
                                        37
<PAGE>   38

lessee had options to purchase a further two aircraft, both of which have been
exercised as of the date of this Form 10-K. At March 31, 2001, three lessees
with respect to three aircraft, representing 2.05% of our portfolio by appraised
value as of January 31, 2001, had options to purchase aircraft at prices below
estimated appraised value at the exercise date. For the purposes of this
paragraph, the estimated appraised value has been arrived at by deducting the
estimated depreciation (as calculated by Airplanes Group's existing depreciation
policy) from March 31, 2001 to the option exercise date from the appraised value
of each aircraft.

COMMERCIAL OPPORTUNITIES FOR OUR MD-11 AIRCRAFT

     As of March 31, 2001, we leased three MD-11 aircraft, representing 5.94% of
our portfolio by appraised value as of January 31, 2001, to a Latin American
lessee. These leases are expected to expire between December 2001 and September
2002. Because the market for re-leasing these aircraft in their current
passenger configuration is currently, and is expected to remain, very weak, we
are examining all possibilities in respect of these aircraft, including, subject
to the restrictions in our indentures, selling them or converting them to
freighter aircraft. The current market value of these aircraft is such that we
would not be able to sell the aircraft at prices that would meet the indenture
requirements. Although there is currently demand for converted MD-11 aircraft,
conversion into freighter aircraft would involve substantial cash expenditures
by us.

AIRCRAFT SALES

     Based on the recommendations of the servicer and the administrative agent,
the board of directors of Airplanes Limited and the controlling trustees of
Airplanes Trust have identified a number of aircraft types for potential sale so
long as the terms of a proposed sale for a particular aircraft are commercially
advantageous to Airplanes Group and the sale complies with the requirements of
the indentures. The aircraft types which have been identified for potential sale
are B737-200, B727-200, DC-9, A300 and turboprop aircraft. At March 31, 2001,
there was a total of 65 aircraft of these aircraft types in our portfolio
representing 10.97% of our portfolio by appraised value as of January 31, 2001.
Since June 1999, Airplanes Group has sold five aircraft of these aircraft types
for an aggregate of $22 million, which has been applied in accordance with the
priority of payments provided under the indentures. Since March 31, 2001, a
non-binding letter of intent for the sale of two B737-200 aircraft and one
B727-200 aircraft has been signed.

ITEM 2.  PROPERTIES

     Airplanes Group has no ownership or leasehold interest in any real
property.

     Airplanes Limited's registered and principal office is located at 22
Grenville Street, St. Helier, Jersey, JE4 8PX, Channel Islands and its telephone
number is 011-44-1534-609000.

     Airplanes Trust's principal office is located at 1100 North Market Street,
Rodney Square North, Wilmington, Delaware 19890-0001, care of Wilmington Trust
Company and its telephone number is 1-302-651-1000.

     For a description of Airplanes Group's interest in other property, see
"Item 1. Business -- The Aircraft, Related Leases and Collateral".

ITEM 3.  LEGAL PROCEEDINGS

     Following the default by the Brazilian airline VASP under its leases, GPA
Group (now known as debis AirFinance Ireland) sought and obtained in November
1992 a preliminary injunction for repossession of 13 aircraft and three engines,
and subsequently repossessed these aircraft and engines. Airplanes Group
acquired seven of these aircraft from GPA Group in March 1996, four of which
remain in our portfolio and represented 1.8% of our portfolio by appraised value
as of January 31, 2001. In December 1996, the High Court in Sao Paolo, Brazil,
found in favor of VASP on appeal and granted it the right to the return of the
aircraft and engines or the right to seek damages against debis AirFinance
Ireland. debis AirFinance Ireland has challenged this decision and in January
2000, the High Court granted a stay of the 1996 judgment while it considers
debis AirFinance Ireland's rescission action. The risk of repossession only
arises where VASP is successful in seeking repossession of the aircraft and
where the aircraft are located in Brazil. Although none of our lessees which
lease any of the
                                        38
<PAGE>   39

relevant aircraft is based in Brazil, some of them may operate those aircraft
into Brazil from time to time. debis AirFinance Ireland has informed Airplanes
Group that it has been advised by its Brazilian counsel that the December 1996
High Court decision was incorrect as a matter of Brazilian law and that it is
actively pursuing all available courses of action, including appeals to superior
courts to overturn the High Court decision.

     AeroUSA and AeroUSA 3 have in the past filed U.S. federal consolidated tax
returns and certain state and local tax returns with debis AirFinance, Inc.
(then known as AerFi, Inc.) and its subsidiaries. There are ongoing tax audits
by certain state and local tax authorities with respect to tax returns
previously reported by debis AirFinance, Inc. and its subsidiaries. debis
AirFinance believes that none of these audits will have a material adverse
impact upon the liquidity, results of operations or the financial condition of
AeroUSA.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS

     None.

                                        39
<PAGE>   40

                                    PART II

ITEM 5.  MARKET FOR REGISTRANTS' COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Airplanes Limited has an authorized share capital of 10,000 ordinary
shares, with $1 par value per share. 30 ordinary shares of Airplanes Limited
have been issued and are outstanding. The ordinary shares of Airplanes Limited
are not listed on any national exchange or traded in any established market.
These shares are held by Juris Limited and Lively Limited, each a Jersey limited
liability company, as bare nominees for the benefit of the following three
"CHARITABLE TRUSTS":

<TABLE>
<CAPTION>
TITLE OF CLASS                              NAME AND ADDRESS            NUMBER OF SHARES   PERCENT OF CLASS
--------------                              ----------------            ----------------   ----------------
<S>                                 <C>                                 <C>                <C>
Common stock......................  Mourant & Co. Trustees Limited as      10 Shares          33 1/3%
                                    trustee of Holdings Trust I,
                                    22 Grenville Street,
                                    St. Helier, Jersey,
                                    Channel Islands
Common stock......................  Mourant & Co. Trustees Limited as      10 Shares          33 1/3%
                                    trustee of Holdings Trust II,
                                    22 Grenville Street,
                                    St. Helier, Jersey,
                                    Channel Islands
Common stock......................  Mourant & Co. Trustees Limited as      10 Shares          33 1/3%
                                    trustee of Holdings Trust III,
                                    22 Grenville Street,
                                    St. Helier, Jersey,
                                    Channel Islands
</TABLE>

     Under its articles of association, Airplanes Limited pays an annual fixed
cumulative preferential dividend of $4,500 (the "ANNUAL DIVIDEND AMOUNT") to the
holders of its capital stock, but only when it has distributable profits which
may lawfully be paid as dividends and provided that no event of default has
occurred and is continuing.

     Mourant & Co. Trustees Limited, as trustee of each of the three charitable
trusts, has agreed pursuant to a shareholders' agreement with Airplanes Limited
and the indenture trustee not to transfer any part of the capital stock of
Airplanes Limited without the prior written approval of the indenture trustee
and all the directors of Airplanes Limited, unless the transferee is a trustee
of a substantially identical charitable trust and enters into a substantially
identical shareholders' agreement.

ITEM 6.  SELECTED COMBINED FINANCIAL DATA

     The selected combined financial data set out below for each of the years in
the five year period ended March 31, 2001 have been extracted or derived from
the audited financial statements of Airplanes Group included elsewhere in this
report, which have been audited by KPMG, independent chartered accountants.
These financial statements have been prepared in accordance with generally
accepted accounting principles in the United States.

     The selected combined financial data set forth below combine the operating
results, assets, liabilities and cash flows of Airplanes Limited and Airplanes
Trust. The separate balance sheets, statements of operations, statements of
changes in shareholders' deficit/net liabilities and statements of cash flows of
Airplanes Limited and Airplanes Trust are contained in the financial statements
included in "Item 14 -- Exhibits, Financial Statement Schedules and Reports on
Form 8-K." The directors of Airplanes Limited and the controlling trustees of
Airplanes Trust believe that a combined presentation is most appropriate
because:

     -  the assets of Airplanes Limited and Airplanes Trust are managed on the
        basis of one combined aircraft fleet, and
                                        40
<PAGE>   41

     -  each of Airplanes Limited and Airplanes Trust has fully and
        unconditionally guaranteed the performance of the other under their
        respective notes.

You should note that the notes and the guarantees comprise obligations of two
different legal entities owning different assets. However, the notes and
guarantees have been structured in the indentures to ensure that no payments are
made on a junior class of notes or guarantees of Airplanes Trust before all
amounts due and payable on a more senior class of notes or guarantees of
Airplanes Limited have been paid, and no payments are made on a junior class of
notes or guarantees of Airplanes Limited before all amounts due and payable on a
more senior class of notes or guarantees of Airplanes Trust have been paid.

     Aircraft assets are stated on the "predecessor cost basis," that is,
reflecting debis AirFinance Ireland's historical cost less accumulated
depreciation. The difference between the predecessor cost basis and the amount
of Airplanes Group's indebtedness is a significant component of total
shareholders' deficit in the combined balance sheet data.

COMBINED STATEMENT OF OPERATIONS DATA(1)

<TABLE>
<CAPTION>
                                                           FISCAL YEAR ENDED MARCH 31,
                                                    -----------------------------------------
                                                    1997     1998     1999     2000     2001
                                                    -----    -----    -----    -----    -----
                                                                  (IN MILLIONS)
<S>                                                 <C>      <C>      <C>      <C>      <C>
REVENUES(2)
Aircraft leasing..................................  $ 604    $ 585    $ 526    $ 501    $ 471
Aircraft sales....................................     --       94      132        3       21
Other income......................................     --       --       --        1       --
EXPENSES
Cost of aircraft sold.............................     --      (90)    (118)      (1)     (14)
Depreciation and amortization.....................   (223)    (192)    (176)    (174)    (170)
Net interest expense(3)...........................   (383)    (411)    (428)    (468)    (536)
Bad and doubtful debts............................     --       --      (11)      (4)      (7)
Provision for loss making leases(4)...............     12       17       12        4      (17)
Other lease costs.................................   (112)    (118)     (83)     (74)     (83)
Selling general and administrative expenses.......    (38)     (38)     (35)     (34)     (35)
Tax benefit/(charge)..............................     10        3        3       (7)      20
                                                    -----    -----    -----    -----    -----
Net loss..........................................  $(130)   $(150)   $(178)   $(253)   $(350)
                                                    =====    =====    =====    =====    =====
</TABLE>

COMBINED BALANCE SHEET DATA(1)

<TABLE>
<CAPTION>
                                                               AS OF MARCH 31,
                                             ---------------------------------------------------
                                              1997       1998       1999       2000       2001
                                             -------    -------    -------    -------    -------
                                                                (IN MILLIONS)
<S>                                          <C>        <C>        <C>        <C>        <C>
Aircraft, net, and net investment in
  capital and sales type leases............  $ 3,731    $ 3,436    $ 3,128    $ 2,947    $ 2,759
  Total assets.............................    4,048      3,743      3,453      3,206      3,023
Indebtedness(3)............................   (4,397)    (4,078)    (3,842)    (3,636)    (3,495)
Provision for maintenance..................     (313)      (315)      (283)      (274)      (246)
  Total liabilities........................   (5,194)    (5,039)    (4,927)    (4,933)     5,100
Net liabilities............................   (1,146)    (1,296)    (1,474)    (1,727)    (2,077)
</TABLE>

                                        41
<PAGE>   42

COMBINED STATEMENT OF CASH FLOWS(1)

<TABLE>
<CAPTION>
                                                           FISCAL YEAR ENDED MARCH 31,
                                                    -----------------------------------------
                                                    1997     1998     1999     2000     2001
                                                    -----    -----    -----    -----    -----
                                                                  (IN MILLIONS)
<S>                                                 <C>      <C>      <C>      <C>      <C>
Cash paid in respect of interest(3)...............  $ 265    $ 267    $ 223    $ 214    $ 210
Net cash provided by operating activities (after
  payment of interest)............................  $ 224    $ 214    $ 111    $ 181    $ 105
Net cash (used in)/provided by investing
  activities......................................     19      101      135        8       26
Net cash (used in)/provided by financing
  activities......................................   (238)    (322)    (240)    (210)    (137)
                                                    -----    -----    -----    -----    -----
Net increase/(decrease) in cash...................  $   5    $  (7)   $   6    $ (21)   $  (6)
                                                    =====    =====    =====    =====    =====
</TABLE>

OTHER DATA(1)

<TABLE>
<CAPTION>
                                                           FISCAL YEAR ENDED MARCH 31,
                                                    -----------------------------------------
                                                    1997     1998     1999     2000     2001
                                                    -----    -----    -----    -----    -----
                                                                  (IN MILLIONS)
<S>                                                 <C>      <C>      <C>      <C>      <C>
Deficiency of combined earnings after combined
  fixed charges(5)................................  $(140)   $(153)   $(181)   $(246)   $(370)
</TABLE>

---------------

(1)  The financial statements of Airplanes Group are stated in U.S. dollars
     which is the principal operating currency of Airplanes Group and the
     aviation industry.

(2)  Revenues include maintenance reserve receipts. See Note 14 to the financial
     statements.

(3)  Net interest expense is significantly higher than cash paid in respect of
     interest in all periods reflecting the high interest rate accruing on the
     class E notes (20% adjusted for inflation) relative to the lower amount of
     cash interest payable on the class E notes for so long as the other classes
     of notes remain outstanding. Net interest expense is stated after crediting
     interest income of $17 million in 1997, $16 million in 1998, $14 million in
     1999, $13 million in 2000 and $14 million in 2001.

(4)  A lease agreement is deemed to be "loss making" in circumstances where the
     contracted rental payments are insufficient to cover the depreciation and
     interest attributable to the aircraft plus various direct costs
     attributable to the lease over its term.

(5)  Deficiency of combined earnings after combined fixed charges represents the
     amount by which Airplanes Group's loss before income taxes and fixed
     charges exceeded fixed charges. Fixed charges consists of interest expense.
     Because our fixed charges exceeded earnings for all periods presented, a
     ratio of earnings to fixed charges is not presented.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

INTRODUCTION

     The following discussion and analysis is based primarily on the combined
operating results of Airplanes Limited and Airplanes Trust and not on their
results reported as individual entities. You should note that the notes and the
guarantees comprise obligations of two different legal entities owning different
assets. The directors and the controlling trustees believe that a combined
discussion is the most appropriate basis of presentation because:

     -  Airplanes Limited and Airplanes Trust are not intended to be regarded as
        separate businesses but rather on the basis of one combined aircraft
        fleet, and

     -  each of Airplanes Limited and Airplanes Trust has fully and
        unconditionally guaranteed the performance of the other under their
        respective notes.

The notes and guarantees have been structured in the indentures to ensure that
no payments are made on a junior class of notes of Airplanes Trust or Airplanes
Limited, as the case may be, before all amounts due and payable on

                                        42
<PAGE>   43

a more senior class of notes of Airplanes Limited or Airplanes Trust,
respectively, have been paid pursuant to the terms of the more senior classes of
notes or the guarantees of these notes.

     Substantially all of Airplanes Group's future business is expected to
consist of aircraft operating lease activities. Airplanes Group may also engage
in aircraft sales subject to specified limitations and guidelines. Airplanes
Group's revenues and operating cash flows are determined by a number of
significant factors, including:

     -  trading conditions in the civil aviation industry and, in particular,
        the market for aircraft on operating leases,

     -  the mix, relative age and popularity of the various aircraft types in
        our portfolio, and

     -  Airplanes Group's financial resources and liquidity position relative to
        its competitors who may possess substantially greater financial
        resources.

     Except to the extent that the strength of the U.S. dollar against some
local currencies may adversely affect the ability of some of our lessees who
operate in those currencies to pay us, the effect of changes in currency rates
on Airplanes Group is minimal because Airplanes Group conducts its business
almost entirely in U.S. dollars.

RESULTS OF OPERATIONS -- YEAR ENDED MARCH 31, 2001 COMPARED WITH YEAR ENDED
MARCH 31, 2000

     Airplanes Group's results for the year ended March 31, 2001 reflected a
continuation of difficult trading conditions for some of its lessees, along with
an unfavorable market for some of its aircraft, in particular widebody aircraft,
and increased levels of aircraft downtime. Overall, Airplanes Group generated
$105 million in cash from operations in the year ended March 31, 2001, compared
to $181 million in the year ended March 31, 2000. The decrease in cash generated
from operations in the year ended March 31, 2001 is primarily attributable to a
reduction in lease revenues due to a greater number of off-lease aircraft during
the year ended March 31, 2001 and a smaller portfolio of aircraft due to prior
aircraft sales. In addition, there was a net outflow of maintenance payments and
a net increase in the level of receivables before write offs, as compared with
the year ended March 31, 2000. This was partially offset by a cash receipt from
GE Capital under the terms of the tax sharing agreement. There was a net loss
after taxation for the year ended March 31, 2001 of $350 million (Airplanes
Limited: $333 million; Airplanes Trust: $17 million) compared to a net loss
after taxation for the year ended March 31, 2000 of $253 million (Airplanes
Limited: $235 million; Airplanes Trust: $18 million). The increase in the net
loss for the year ended March 31, 2001 was primarily attributable to additional
interest being charged on accrued but unpaid class E note interest, a reduction
in revenue due to aircraft downtime and provisions for loss making leases and
bad debts.

LEASING REVENUES

     Leasing revenues (which include maintenance reserve receipts which
Airplanes Group receives from some of its lessees) for the year ended March 31,
2001 were $471 million (Airplanes Limited: $432 million; Airplanes Trust: $39
million) compared with $501 million (Airplanes Limited: $460 million; Airplanes
Trust: $41 million) for the year ended March 31, 2000. The decrease in 2001 was
primarily attributable to the reduction in the number of aircraft on lease in
the year ended March 31, 2001, increased levels of aircraft downtime (in
particular, in respect of B767 aircraft), and, to a lesser extent, a smaller
portfolio of aircraft due to prior aircraft sales. At March 31, 2001, Airplanes
Group had 187 of its 193 aircraft on lease (Airplanes Limited: 171 aircraft;
Airplanes Trust: 16 aircraft) compared to 193 of its 199 aircraft on lease
(Airplanes Limited: 175 aircraft; Airplanes Trust: 18 aircraft) at March 31,
2000.

AIRCRAFT SALES

     Sales revenues of $21 million (Airplanes Limited: $8 million, Airplanes
Trust: $13 million) in respect of the sale of an airframe of one A300 aircraft,
the sale of four engines from two A300 aircraft, the airframes of which had been
sold separately, and the sale of two B737-200A aircraft were received in the
year ended March 31,
                                        43
<PAGE>   44

2001. Sales revenues of $3 million (Airplanes Limited $3 million; Airplanes
Trust: $Nil) in respect of the sale of three aircraft, were received in the year
ended March 31, 2000. The net book values of the aircraft sold were $14 million
(Airplanes Limited: $4 million, Airplanes Trust: $10 million) in the year ended
March 31, 2001 and $1 million (Airplanes Limited: $1 million; Airplanes Trust:
$Nil) in the year ended March 31, 2000.

DEPRECIATION AND AMORTIZATION

     The charge for depreciation and amortization in the year ended March 31,
2001 amounted to $170 million (Airplanes Limited: $154 million; Airplanes Trust:
$16 million) which is comparable with $174 million (Airplanes Limited: $157
million; Airplanes Trust: $17 million) for the year ended March 31, 2000.

OTHER INCOME

     During the year ended March 31, 2000, Airplanes Group exercised an option
to purchase shares in an airline. The option was granted under a lease which
Airplanes Group acquired when it acquired its portfolio in 1996. The shares were
subsequently sold, yielding a profit of $1 million.

NET INTEREST EXPENSE

     Net interest expense was $536 million (Airplanes Limited: $487 million;
Airplanes Trust: $49 million) in the year ended March 31, 2001 compared to $468
million (Airplanes Limited: $425 million; Airplanes Trust: $43 million) in the
year ended March 31, 2000. The increase in net interest expense was primarily
due to a combination of offsetting factors: additional interest charged on
accrued but unpaid class E note interest of $70 million and a higher interest
rate on the notes, being offset by lower average debt in the year ended March
31, 2001.

     The weighted average interest rate on the class A, B, C and D notes (taking
into account the interest rate swaps entered into by Airplanes Group) during the
year ended March 31, 2001 was 7.6695% and the average debt in respect of the
class A, B, C and D notes outstanding during the year was $2,984 million. The
class E notes accrue interest at a rate of 20% per annum, as adjusted to take
account of changes to the U.S. consumer price index since March 28, 1996. The
weighted average interest rate on the class A, B, C and D notes (also taking
into account the interest rate swaps entered into by Airplanes Group) during the
year ended March 31, 2000 was 6.73% and the average debt in respect of the class
A, B, C and D notes outstanding during the year was $3,160 million. The weighted
average interest rate is effected by the continued paydown of the Class A and B
notes with the Class C and D notes carrying a higher coupon.

     The difference between Airplanes Group's net interest expense of $536
million (Airplanes Limited: $487 million; Airplanes Trust: $49 million) and cash
paid in respect of interest of $210 million (Airplanes Limited: $190 million;
Airplanes Trust: $20 million) for the year ended March 31, 2001 is substantially
accounted for by the fact that Airplanes Group accrued interest on the class E
notes at a rate substantially higher than amounts paid in cash.

     Net interest expense is stated after deducting interest income earned
during the relevant period. In the year ended March 31, 2001, Airplanes Group
earned interest income (including lessee default interest) of $14 million
(Airplanes Limited: $14 million; Airplanes Trust: $Nil) compared with $13
million in the year ended March 31, 2000 (Airplanes Limited: $13 million;
Airplanes Trust: $Nil).

     At March 31, 2001, Airplanes Group had options to enter into interest rate
swaps ("SWAPTIONS") with a notional principal balance of $378 million.

BAD DEBT AND LOSS-MAKING LEASE PROVISIONS

     Airplanes Group's practice is to provide specifically for any amounts due
but unpaid by lessees based primarily on the amount due in excess of security
held and also taking into account the financial strength and condition of a
lessee and the economic conditions existing in the lessee's operating
environment. While a number of Airplanes Group's lessees failed to meet their
contractual obligations in the year ended March 31, 2001, resulting in the
requirement for additional provisions in respect of bad and doubtful debts in
respect of these
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<PAGE>   45

lessees, the credit exposure with regard to other carriers improved in the year.
Overall, there was a net charge of $7 million in respect of bad and doubtful
debts (Airplanes Limited: $5 million; Airplanes Trust: $2 million) in the year
ended March 31, 2001, compared with an overall net charge of $4 million for the
year ended March 31, 2000 (Airplanes Limited: $2 million; Airplanes Trust: $2
million). The net charge in the year ended March 31, 2001 was primarily as a
result of provisions in respect of one Turkish lessee and one Colombian lessee.

     A lease agreement is deemed to be "loss making" in circumstances where the
contracted rental payments are insufficient to cover the depreciation and
allocated interest attributable to the aircraft plus certain direct costs, such
as legal fees and registration costs, attributable to the lease over its term.
For these purposes, interest is allocated to individual aircraft based on the
weighted average interest cost of the principal balance of the notes, excluding,
in the case of the class E notes, the element of interest (9% per annum) which
is payable only in the event that the principal amount of all the other classes
of notes is repaid. This results in a significant number of leases being loss
making while still being cash positive. In the year ended March 31, 2001, the
significant loss making leases signed related to two B767 aircraft leased to a
North American lessee, three B737-400 aircraft leased to two European lessees
and on B737-400 aircraft leased to an Asian lessee. Consequently, there was an
overall net charge of $17 million (Airplanes Limited: $17 million; Airplanes
Trust: $Nil) in respect of loss making leases in the year ended March 31, 2001,
compared with the year ended March 31, 2000, where there was an overall net
release of $4 million (Airplanes Limited: $3 million; Airplanes Trust: $1
million).

OTHER LEASE COSTS

     Other lease costs in the year ended March 31, 2001, comprising mainly
amounts transferred to maintenance provisions and aircraft related technical
expenditure, amounted to $83 million (Airplanes Limited: $81 million; Airplanes
Trust: $2 million) compared to other lease costs of $74 million (Airplanes
Limited: $71 million; Airplanes Trust: $3 million) in the year ended March 31,
2000. The increase in the year ended March 31, 2001 is attributable to an
increased number of aircraft being remarketed, partially offset by a release of
$10 million in relation to a continuing review of the adequacy of maintenance
reserves when aircraft are re-leased.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses for the year ended March 31,
2001 amounted to $35 million (Airplanes Limited: $33 million; Airplanes Trust:
$2 million). This is a comparable expense to that incurred in the year ended
March 31, 2000 of $34 million (Airplanes Limited: $31 million; Airplanes Trust:
$3 million).

     The most significant element of selling, general and administrative
expenses are the aircraft servicing fees paid to GECAS. Substantially all of
these amounts represent asset based fees calculated as an annual percentage of
agreed values of aircraft under management pursuant to the servicing agreement.
Selling, general and administrative expenses in the year ended March 31, 2001
include $23 million (Airplanes Limited: $21 million; Airplanes Trust: $2
million) relating to GECAS servicing fees, similar to the charge of $22 million
for the year ended March 31, 2000.

     A further significant element of Airplanes Group's actual selling, general
and administrative expenses reported in the year ended March 31, 2001 was $9
million (Airplanes Limited: $8 million; Airplanes Trust: $1 million) in respect
of administrative agency and cash management fees payable to the administrative
agent and the cash manager, similar to the charge of $9 million for the year
ended March 31, 2000.

OPERATING LOSS

     The operating loss for the year ended March 31, 2001 was $370 million
(Airplanes Limited: $341 million; Airplanes Trust: $29 million) compared with an
operating loss of $246 million for the year ended March 31, 2000 (Airplanes
Limited: $220 million; Airplanes Trust: $26 million). Airplanes Limited and
Airplanes Trust are expected to continue to report substantial losses in the
future.

                                        45
<PAGE>   46

TAXES

     There was a tax credit of $20 million (Airplanes Limited: $8 million;
Airplanes Trust: $12 million) in the year ended March 31, 2001, as compared with
a net charge of $7 million (Airplanes Limited: charge $15 million; Airplanes
Trust: credit of $8 million) for the year ended March 31, 2000. The release
arises primarily in relation to a reduction in valuation allowances against the
realizability of net operating losses.

NET LOSS

     The net loss after taxation for the year ended March 31, 2001 was $350
million (Airplanes Limited: $333 million; Airplanes Trust: $17 million) compared
with a net loss after taxation for the year ended March 31, 2000 of $253 million
(Airplanes Limited: $235 million; Airplanes Trust: $18 million).

RESULTS OF OPERATIONS -- YEAR ENDED MARCH 31, 2000 COMPARED WITH YEAR ENDED
MARCH 31, 1999

     Airplanes Group's results for the year ended March 31, 2000 reflected a
continuation of difficult trading conditions for some of its lessees, along with
an unfavorable market for some of its aircraft, in particular, widebody
aircraft. The net loss for the year ended March 31, 2000 was $253 million,
compared to $178 million for the year ended March 31, 1999. The increase of $75
million was primarily attributable to a reduction in lease rentals of $25
million and an increase of $40 million in net interest expense due to additional
interest being charged on accrued but unpaid class E note interest, partially
offset by lower average debt outstanding. Profit on sales also reduced by $12
million. There was a decrease in the provision for bad debts of $7 million; a
net decrease in the utilization of loss-making lease provisions of $8 million
and there was a decrease in other lease costs of $9 million. Finally, there was
an increase in the deferred tax charge of $10 million.

     Airplanes Group generated $181 million in cash from operations in the year
ended March 31, 2000, compared to $111 million in the year ended March 31, 1999.
The increase in cash generated from operations in the year to March 31, 1999 is
primarily attributable to a reduction in the level of receivables of $11 million
compared to an increase of $20 million in the year ended March 31, 1999. In
addition, there was a reduction in the net outflow of maintenance revenues of
$20 million, due largely to the acceleration of maintenance events in the year
ended March 31, 1999 (including as a result of aircraft repossessions) in the
amount of $15 million and the return of $7 million in maintenance reserves due
to a Latin American lessee as a result of the restructuring of its leases. There
was a reduction in the amount of cash paid as interest during the year ended
March 31, 2000 of $27 million, as a result of lower average debt and due to the
generation of $11 million in cash from the re-couponing or unwinding of
Airplanes Group's swap portfolio. See "-- Interest Rate Sensitivity -- Interest
Rate Risk and Management" below for a further description of this re-couponing
and unwinding of our swap portfolio. These factors were somewhat offset by a
reduction of $25 million in leasing revenues, which arose due to aircraft sales
and an increased level of aircraft downtime, particularly in respect of some
B767 aircraft.

LEASING REVENUES

     Leasing revenues (which include maintenance reserve receipts which
Airplanes Group receives from some of its lessees) for the year ended March 31,
2000 were $501 million (Airplanes Limited: $460 million; Airplanes Trust: $41
million) compared with $526 million (Airplanes Limited: $484 million; Airplanes
Trust: $42 million) for the year ended March 31, 1999. The decrease of $25
million consists of $20 million in lease rentals and $5 million in maintenance
billings. The decrease of $20 million in lease rentals arises primarily from $4
million foregone as a result of aircraft sales and $14 million resulting from a
higher level of downtime. At March 31, 2000, Airplanes Group had 193 of its 199
aircraft on lease (Airplanes Limited: 175 aircraft; Airplanes Trust: 18
aircraft) compared to 201 of its 202 aircraft on lease (Airplanes Limited: 184
aircraft; Airplanes Trust: 18 aircraft) at March 31, 1999.

AIRCRAFT SALES

     Sales revenues of $3 million (Airplanes Limited: $3 million; Airplanes
Trust: $Nil) in respect of the sale of three aircraft were received in the year
ended March 31, 2000. The net book value of these three aircraft at the
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<PAGE>   47

date of sale was $1 million (Airplanes Limited: $1 million; Airplanes Trust:
$Nil). In the year ended March 31, 1999, Airplanes Group received sales revenues
of $132 million (Airplanes Limited: $37 million, Airplanes Trust: $95 million)
in respect of the sale of nineteen aircraft. The net book value of these
nineteen aircraft at the date of disposal was $118 million (Airplanes Limited:
$32 million; Airplanes Trust: $86 million).

OTHER INCOME

     During the year to March 31, 2000, Airplanes Group exercised an option to
purchase shares in an airline. The option was granted under a lease which
Airplanes Group acquired when it acquired its portfolio in 1996. The shares were
subsequently sold, yielding a profit of $1 million.

DEPRECIATION AND AMORTIZATION

     The charge for depreciation and amortization in the year ended March 31,
2000 amounted to $174 million (Airplanes Limited: $157 million; Airplanes Trust:
$17 million) compared with $176 million (Airplanes Limited: $159 million;
Airplanes Trust: $17 million) in the year ended March 31, 1999. The decrease
arose as a result of the reduction in the number of aircraft owned by Airplanes
Group.

NET INTEREST EXPENSE

     Net interest expense was $468 million (Airplanes Limited: $425 million;
Airplanes Trust: $43 million) in the year ended March 31, 2000 compared to $428
million (Airplanes Limited: $388 million; Airplanes Trust: $40 million) in the
year ended March 31, 1999. The increase of $40 million in net interest expense
was primarily due to additional interest charged on accrued but unpaid class E
note interest of $57 million, offset by reduced interest on the class A, B, C
and D notes due to a lower average level of debt.

     The weighted average interest rate on the class A, B, C and D notes during
the year to March 31, 2000 was 6.73% and the average debt in respect of the
class A, B, C and D notes outstanding during that year was $2,395 million. The
class E notes accrue interest at a rate of 20% per annum as adjusted to take
account of changes to the U.S. consumer price index, since March 28, 1996. The
weighted average interest rate on the class A, B, C, and D notes during the year
ended March 31, 1999 was 6.73% and the average debt in respect of the class A,
B, C, and D notes outstanding during that year was $3,346 million. LIBOR in the
year ended March 31, 2000 was comparable to the year ended March 31, 1999 and
the weighted average interest rate on the class A, B, C and D notes remained
constant during the year ended March 31, 2000 as compared to the year ended
March 31, 1999.

     For the year ended March 31, 2000, the difference in Airplanes Group's net
interest expense of $468 million (Airplanes Limited: $425 million; Airplanes
Trust: $43 million) and cash paid in respect of interest of $214 million
(Airplanes Limited: $193 million; Airplanes Trust: $21 million) is substantially
accounted for by the fact that Airplanes Group accrued interest on the class E
notes at a rate substantially higher than amounts paid in cash in the year ended
March 31, 2000.

     Net interest expense is stated after deducting interest income earned
during the relevant year. In the year ended March 31, 2000, Airplanes Group
earned interest income (including lessee default interest) of $13 million
(Airplanes Limited: $13 million; Airplanes Trust: $Nil) compared with $14
million in the year ended March 31, 1999 (Airplanes Limited: $14 million;
Airplanes Trust: $Nil). The decrease is primarily as a result of lower average
cash balances in the year to March 31, 1999.

     At March 31, 2000, Airplanes Group had swaptions with a notional principal
balance of $289 million. During the year ended March 31, 2000, the value of the
swaptions decreased by approximately $1 million as swap rates increased. As
swaptions do not qualify for hedge accounting under U.S. GAAP, the decrease in
fair value of $1 million has been included in net interest expense in the
statement of operations.

BAD DEBT AND LOSS-MAKING LEASE PROVISIONS

     There was a net charge of $4 million in respect of bad and doubtful debts
(Airplanes Limited: $2 million; Airplanes Trust: $2 million) in the year ended
March 31, 2000, compared with a net charge for the year ended
                                        47
<PAGE>   48

March 31, 1999 of $11 million (Airplanes Limited: $9 million; Airplanes Trust:
$2 million). Airplanes Group's practice is to provide specifically for any
amounts due but unpaid by lessees based primarily on the amount due in excess of
security held and also taking into account the financial strength and condition
of a lessee and the economic conditions existing in the lessee's operating
environment. A number of Airplanes Group's lessees failed to meet their
contractual obligations in the year ended March 31, 2000, resulting in the
requirement for additional provisions in respect of bad and doubtful debts in
respect of these lessees, while the arrears with regard to certain other
carriers reduced in the year. The overall net charge in 2000 was primarily as a
result of provisions required in respect of one Colombian lessee, one Israeli
lessee, one Philippine lessee and one Irish lessee, which were partially offset
by a reduction in the provisions required in respect of two Brazilian lessees.

     The only significant loss making leases signed in the year to March 31,
2000 were in respect of two Fokker 100 aircraft leased to a Brazilian lessee,
one B737-200A aircraft leased to an Asian lessee and one B737-200A aircraft
leased to a European lessee. Consequently, there was an overall net utilization
of $4 million (Airplanes Limited: $3 million; Airplanes Trust: $1 million) in
respect of loss making lease provisions in the year ended March 31, 2000,
compared with the year to March 31, 1999, where there was an overall net
utilization of $12 million (Airplanes Limited: $10 million; Airplanes Trust: $2
million). The provision required in the year ended March 31, 1999 was primarily
required in respect of one B767 aircraft on lease to a Latin American lessee and
one A320 aircraft on lease to a Canadian lessee.

OTHER LEASE COSTS

     Other lease costs in the year ended March 31, 2000 amounted to $10 million
(Airplanes Limited: $9 million; Airplanes Trust: $1 million) compared to other
lease costs of $14 million (Airplanes Limited: $13 million; Airplanes Trust: $1
million) in the year ended March 31, 1999. The decrease in other lease costs of
$9 million relate primarily to a release of $11 million of maintenance reserves
following a continuing review of the adequacy of maintenance reserves, when
aircraft are re-leased. There was a release of $9 million withholding tax
provisions in the year ended March 31, 1999, following updated advice that they
were no longer required for certain jurisdictions.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses for the year ended March 31,
2000 amounted to $34 million (Airplanes Limited: $31 million; Airplanes Trust:
$3 million). This is a comparable expense to that incurred in the year to March
31, 1999 of $35 million (Airplanes Limited: $32 million; Airplanes Trust: $3
million).

     The most significant element of selling, general and administrative
expenses are the aircraft servicing fees paid to GECAS. Substantially all of
these amounts represent asset based fees calculated as an annual percentage of
agreed values of aircraft under management pursuant to the servicing agreement.
Selling, general and administrative expenses of $34 million in the year to March
31, 2000 includes $22 million (Airplanes Limited: $20 million; Airplanes Trust:
$2 million) relating to GECAS servicing fees, comparable with the $24 million
incurred in the year to March 31, 1999 (Airplanes Limited: $22 million;
Airplanes Trust: $2 million).

     A further significant element of Airplanes Group's actual selling, general
and administrative expenses reported in the year ended March 31, 2000 was $9
million (Airplanes Limited: $8 million; Airplanes Trust: $1 million) in respect
of administrative agency and cash management fees payable to the administrative
agent and cash manager, in line with the charge of $9 million for the year to
March 31, 1999.

OPERATING LOSS

     The operating loss for the year ended March 31, 2000 was $246 million
(Airplanes Limited: $220 million; Airplanes Trust: $26 million) compared with an
operating loss of $181 million for the year ended March 31, 1999 (Airplanes
Limited: $168 million; Airplanes Trust: $13 million). Airplanes Limited and
Airplanes Trust are expected to continue to report substantial losses in the
future.

                                        48
<PAGE>   49

TAXES

     There was an overall tax charge of $7 million (Airplanes Limited: $15
million; Airplanes Trust: tax benefit of $8 million) in the year ended March 31,
2000, as compared with an overall tax benefit of $3 million in the year ended
March 31, 1999 (Airplanes Limited: $3 million; Airplanes Trust: $Nil). The
increase in deferred tax arises as a result of the enactment of a 12.5%
corporation tax rate in Ireland applicable to Airplanes Limited's Irish
subsidiaries after December 31, 2005. This has been partially offset by a tax
benefit of $8 million resulting from the utilization by GE of the current year
losses of AeroUSA and AeroUSA 3 for which GE has compensated Airplanes Trust
pursuant to the tax sharing agreement.

NET LOSS

     The net loss after taxation for the year ended March 31, 2000 was $253
million (Airplanes Limited: $235 million; Airplanes Trust: $18 million) compared
with a net loss after taxation for the year ended March 31, 1999 of $178 million
(Airplanes Limited: $165 million; Airplanes Trust: $13 million).

FINANCIAL RESOURCES AND LIQUIDITY

     Our primary source of liquidity is rental payments made by lessees under
the leases. Our principal uses of cash rental payments are expenses related to
the aircraft and their servicing, corporate expenses and the payment of
interest, principal and any premium on indebtedness. See "-- Indebtedness" for
more information regarding our outstanding debt.

     Airplanes Group's cash balances at March 31, 2001 amounted to $197 million
(Airplanes Limited: $191 million; Airplanes Trust: $6 million) compared to cash
balances at March 31, 2000 of $203 million (Airplanes Limited: $197 million;
Airplanes Trust: $6 million). This represented a decrease of $6 million in the
cash balances for the year ended March 31, 2001, compared with a net decrease in
the cash balances of $21 million for the year ended March 31, 2000.

     Under the terms of Airplanes Group's indebtedness, we are required to
maintain cash balances, which we refer to as the "LIQUIDITY RESERVE AMOUNT,"
equal to (1) the amount of security deposits ($37 million at March 31, 2001),
(2) a maintenance reserve and (3) a miscellaneous reserve amount. See "-- The
Accounts -- Liquidity Reserve Amount" for circumstances under which these
amounts may be increased or decreased. The terms of Airplanes Group's
indebtedness restrict the use of this cash so that it is generally not available
to service debt. The liquidity reserve amount has been determined largely based
on an analysis of historical experience, assumptions regarding Airplanes Group's
future performance and the frequency and cost of certain contingencies in
respect of the aircraft. It is intended to provide liquidity for meeting the
cost of maintenance obligations and non-maintenance, aircraft-related
contingencies such as removing liens, complying with ADs and repossessing and
re-leasing aircraft.

     In analyzing the future impact of costs, assumptions have been made
regarding their frequency and amount based on historical experience. There can
be no assurance, however, that historical experience will prove to be relevant
or that actual cash received by Airplanes Group will not be significantly less
than that assumed. Any significant variation may materially adversely affect our
ability to make payments of interest and principal on the notes.

     During future years, we may have to incur unusually high cash expenditures
for the purpose of airframe and engine overhauls and complying with new
regulatory requirements for aircraft operating in Europe and North America.
Depending on their level and timing, these payments could adversely affect our
ability to make certain principal payments on the notes since aircraft expenses
rank ahead of payments on the notes.

OPERATING ACTIVITIES

     Operating cash flows depend on many factors including the performance of
lessees and Airplanes Group's ability to re-lease aircraft, the average cost of
the notes, the efficacy of Airplanes Group's interest rate hedging policies, the
ability of Airplanes Group's swap providers to perform under the terms of their
swap and similar

                                        49
<PAGE>   50

obligations and whether Airplanes Group will be able to refinance certain
subclasses of notes that have not been repaid with lease cash flows.

     Net cash provided by operating activities in the year ended March 31, 2001
amounted to $105 million (Airplanes Limited: $105 million; Airplanes Trust:
$Nil) compared with $181 million in the year ended March 31, 2000 (Airplanes
Limited: $163 million; Airplanes Trust: $18 million). This includes cash paid in
respect of interest of $210 million in the year ended March 31, 2001 (Airplanes
Limited: $190 million; Airplanes Trust: $20 million) compared with the $214
million in the year ended March 31, 2000 (Airplanes Limited: $193 million;
Airplanes Trust: $21 million). The decrease in cash provided by operating
activities in the year ended March 31, 2001 is primarily attributable to the
number and type of off-lease aircraft during the year ended March 31, 2001 and a
reduction in lease revenues due to previous aircraft sales. In addition, in the
year ended March 31, 2001 there was a net increase in the level of receivables
balances before write offs, as compared to the year ended March 31, 2000 when
there was a reduction in receivables.

     There was a reduction in the amount of cash paid as interest during the
year ended March 31, 2001 of $4 million, as a result of lower average debt but
partially offset by a higher average interest rate. These factors were somewhat
offset by a reduction of $30 million in leasing revenues, which arose due to
aircraft sales and an increased level of aircraft downtime.

INVESTING AND FINANCING ACTIVITIES

     Cash flows from investing activities in the year ended March 31, 2001,
reflect the cash provided by capital and sales type leases which was $7 million
(Airplanes Limited: $7 million; Airplanes Trust: $Nil) comparable to the year
ended March 31, 2000. In the year ended March 31, 2001, Airplanes Group also
received net sales proceeds of $19 million (Airplanes Limited: $6 million;
Airplanes Trust: $13 million).

     Cash flows from financing activities in the year ended March 31, 2001,
primarily reflect the repayment of $137 million of principal on the subclass A-6
notes and class B notes by Airplanes Group (Airplanes Limited: $124 million;
Airplanes Trust: $13 million) compared with $210 million of principal repaid on
the subclass A-6, class B and C notes by Airplanes Group (Airplanes Limited:
$192 million; Airplanes Trust: $18 million) in the year ended March 31, 2000.
The decrease in principal repayments in the year ended March 31, 2001 as
compared to the year ended March 31, 2000, is due to a decrease in cash provided
by operating activities as discussed above.

INDEBTEDNESS

     Airplanes Group's outstanding indebtedness consisted of class A, B, C, D
and E notes in the amount of $3,509 million (Airplanes Limited: $3,194 million;
Airplanes Trust: $315 million) at March 31, 2001 and $3,647 million (Airplanes
Limited: $3,323 million; Airplanes Trust: $324 million) at March 31, 2000.
Airplanes Group had $591 million of class E notes outstanding at March 31, 2001
and 2000. The terms of each subclass of notes, including the outstanding
principal amount as of March 15, 2001, and estimated fair market value as of
March 31, 2001, are as follows:

<TABLE>
<CAPTION>
                               OUTSTANDING                                                 ESTIMATED
                                PRINCIPAL            ANNUAL                               FAIR MARKET
CLASS OR SUBCLASS OF           AMOUNT AS OF       INTEREST RATE          FINAL            VALUE AS OF
CERTIFICATES AND NOTES        MARCH 15, 2001    (PAYABLE MONTHLY)    MATURITY DATE     MARCH 31, 2001(1)
----------------------        --------------    -----------------    --------------    -----------------
                               ($ MILLIONS)                                              ($ MILLIONS)
<S>                           <C>               <C>                  <C>               <C>
Subclass A-6................      445.4         LIBOR+0.340%         March 15, 2019          445.2
Subclass A-8................      700.0         LIBOR+0.375%         March 15, 2019          698.3
Subclass A-9(2).............      750.0         LIBOR+0.550%         March 15, 2019          748.8
Class B.....................      278.3         LIBOR+0.750%         March 15, 2019          270.8
Class C.....................      349.8         8.150%               March 15, 2019          335.6
Class D.....................      395.1         10.875%              March 15, 2019          268.7
Class E (notes only)(3).....      591.2         20.000%              March 15, 2019             --
</TABLE>

---------------

                                        50
<PAGE>   51

(1)  Based on the outstanding principal amounts as of March 31, 2001, which, in
     the case of the subclass A-6 notes, was $445.4 million and, in the case of
     the class B notes, was $278.3 million.

(2)  The subclass A-9 certificates were issued on March 15, 2001.

(3)  The annual interest rate on the class E notes is adjusted by reference to
     changes in the U.S. Consumer Price Index since March 28, 1996. As of March
     15, 2001, the annual interest rate on the class E notes was 22.0%. Except
     for the class E minimum interest amount and supplemental interest amount,
     payable at 1% and 10% per annum respectively, no principal or interest is
     payable on the class E notes until the more senior classes of notes have
     all been paid in full. As of March 15, 2001, the accrued and unpaid class E
     minimum interest amount and supplemental interest amount was $1,054
     million.

     In order to repay principal on the subclass A-8 notes on their expected
final payment date (March 15, 2003) and avoid step-up interest, Airplanes Group
expects that it will have to refinance the subclass A-8 certificates in the
capital markets.

                       AIRPLANES GROUP CASH FLOW ANALYSIS

     The financial information set forth in this Airplanes Group Cash Flow
Analysis, which was not prepared in accordance with U.S. GAAP, shows the cash
receipts and payments of Airplanes Group for the two month period from March 10,
2001 to May 15, 2001 (the "TWO MONTH PERIOD") and the thirty-six month period
from March 11, 1998 to March 15, 2001 (the "THIRTY-SIX MONTH PERIOD").

COMPARISON OF ACTUAL CASH FLOWS VERSUS THE 2001 BASE CASE FOR THE TWO MONTH
PERIOD FROM MARCH 10, 2001 TO MAY 15, 2001.

     The March 8, 2001 Offering Memorandum (the "OFFERING MEMORANDUM") for the
2001 refinancing certificates contains assumptions in respect of Airplanes
Group's future cash flows and expenses (the "2001 BASE CASE").

     The following is a discussion of the Total Cash Collections, Total Cash
Expenses, Interest Payments and Principal Payments of Airplanes Group for the
Two Month Period. You should read this discussion in conjunction with the
analysis under "-- Airplanes Cash Flow Performance for the Period from March 10,
2001 to May 15, 2001 (2 Months) Comparison of Actual Cash Flows versus 2001 Base
Case Cash Flows."

CASH COLLECTIONS

     "TOTAL CASH COLLECTIONS" include Net Lease Rentals, Interest Earned,
Aircraft Sales, Net Maintenance and Other Receipts (each as defined below). In
the Two Month Period, Airplanes Group generated approximately $72.6 million in
Total Cash Collections, $3.8 million more than the Total Cash Collections
contemplated by the 2001 Base Case. This difference is due to a combination of
the factors set out below. The numbers in square brackets below refer to the
line item number in the analysis under "-- Airplanes Cash Flow Performance for
the Period from March 10, 2001 to May 15, 2001 (2 Months) Comparison of Actual
Cash Flows versus 2001 Base Case Cash Flows."

[2]  RENEGOTIATED LEASES

     "RENEGOTIATED LEASES" refers to the loss in rental revenue caused by a
lessee negotiating a reduction in the lease rental. Typically, this can be a
permanent reduction over the remaining lease term in exchange for other
contractual concessions from the lessee. In the Two Month Period, the amount of
revenue loss attributed to Renegotiated Leases was $Nil, as compared to $Nil
assumed in the 2001 Base Case.

[3]  RENTAL RESETS, INCLUDING INTEREST RATE ADJUSTMENTS FOR FLOATING RATE LEASES

     "RENTAL RESETS" is a measure of the loss in rental revenue when new lease
rates are different than those assumed in the 2001 Base Case, including lease
rate adjustments for changes in interest rates on floating rate

                                        51
<PAGE>   52

leases. Rental Resets amounted to $2.4 million in the Two Month Period, as
compared to $Nil assumed in the 2001 Base Case.

[5]  CONTRACTED LEASE RENTALS

     "CONTRACTED LEASE RENTALS" represents the current contracted lease rental
rollout, which is equal to the 2001 Base Case Lease Rentals less adjustments for
Renegotiated Leases and Rental Resets. For the Two Month Period, Contracted
Lease Rentals were $68.8 million, which was $2.4 million less than that assumed
in the 2001 Base Case. The difference is due to losses from Renegotiated Leases
and Rental Resets as discussed above.

[6]  MOVEMENT IN CURRENT ARREARS BALANCE

     "CURRENT ARREARS" is the total Contracted Lease Rentals outstanding from
current lessees at a given date but excluding any amounts classified as Bad
Debts. There was a net reduction of $2.6 million in the Current Arrears balance
over the Two Month Period, compared to $Nil assumed in the 2001 Base Case.

[7]  NET STRESS-RELATED COSTS

     "NET STRESS-RELATED COSTS" is a combination of all the factors which can
cause actual lease rentals to vary from the Contracted Lease Rentals. The 2001
Base Case assumed gross stress-related costs equal to 6.0% of the 2001 Base Case
Lease Rentals. However, the 2001 Base Case also assumed the recovery of certain
deferred arrears equal to 0.8% of the 2001 Base Case Lease Rentals in the Two
Month Period, resulting in an overall Net Stress-Related Costs assumption of
5.2% of the 2001 Base Case Lease Rentals. For the Two Month Period, Net
Stress-Related Costs incurred amounted to a net cash outflow of $5.0 million
(7.0% of Lease Rentals) compared to the $3.7 million outflow assumed in the 2001
Base Case, a variance of $1.3 million that is due to the following five factors
described in items [8] to [12] below.

[8]  BAD DEBTS

     "BAD DEBTS" are arrears owed by lessees who have defaulted and which are
deemed irrecoverable. They amounted to $2.7 million (3.8% of Lease Rentals) for
the Two Month Period, $2.0 million more than the 2001 Base Case assumption of
$0.7 million (1.0% of Lease Rentals). Actual Bad Debts related to two lessees.

[9]  DEFERRED ARREARS BALANCE

     "DEFERRED ARREARS BALANCE" refers to current arrears that have been
capitalized and restructured into a deferred balance. In the Two Month Period,
Airplanes Group received payments totalling $0.9 million in accordance with
these restructurings. Payments totalling $0.6 million were assumed to be
received in accordance with restructurings included in the 2001 Base Case.

[10]  AIRCRAFT ON GROUND ("AOG")

     AOG is defined as the 2001 Base Case Lease Rentals lost when an aircraft is
off-lease and non-revenue earning. In the Two Month Period, the amount of
revenue lost attributed to AOG was $1.5 million (2.1% of Lease Rentals), as
compared to $3.0 million under the 2001 Base Case, and relates to 6 aircraft
which were off-lease at different times during this period. At March 31, 2001,
six aircraft were AOG.

[11]  OTHER LEASING INCOME

     "OTHER LEASING INCOME" consists of miscellaneous income received in
connection with a lease other than contracted rentals, maintenance receipts and
security deposits, such as early termination payments or default interest. In
the Two Month Period, Other Leasing Income amounted to $0.2 million, as compared
to $Nil assumed under the 2001 Base Case.

                                        52
<PAGE>   53

[12]  REPOSSESSION COSTS

     "REPOSSESSION COSTS" cover legal and aircraft technical costs incurred as a
result of repossessing an aircraft. In the Two Month Period, Airplanes Group
incurred Repossession Costs totalling $1.8 million (2.6% of Lease Rentals),
relating to 5 aircraft, as compared to $0.6 million under the 2001 Base Case.

[14]  NET LEASE RENTALS

     "NET LEASE RENTALS" is Contracted Lease Rentals less any movement in
Current Arrears Balance and Net Stress-Related Costs. In the Two Month Period,
Net Lease Rentals amounted to $66.4 million, $1.1 million less than that assumed
in the 2001 Base Case. The variance was attributable to the combined effect of
the factors outlined in items [2] and [3] and in items [6] to [12] above.

[15]  INTEREST EARNED

     "INTEREST EARNED" relates to interest received on cash balances held in the
Collection and Expense Accounts, which are described in greater detail in
"Description of Securities -- The Accounts." In the Two Month Period, interest
earned amounted to $1.6 million, $0.3 million more than that assumed in the 2001
Base Case. The difference is due to a combination of two offsetting factors: (1)
the intra-month cash balances in the Collection Account and Expense Account were
higher than contemplated in the 2001 Base Case and (2) the average actual
reinvestment rate for the Two Month Period was 5.0% (excluding a $5 million
guaranteed investment contract) as compared to the 5.2% assumed in the 2001 Base
Case.

[16]  AIRCRAFT SALES

     Since March 9, 2001, Airplanes Group has received net sales proceeds of
$5.2 million in respect of the sale of one B737-200A aircraft (final bullet
payment on finance lease), which was not anticipated in the 2001 Base Case until
a subsequent period, and the sale of one engine relating to one A300B4-100
aircraft (airframe and other engine were previously sold), which was not
anticipated in the 2001 Base Case.

[17]  NET MAINTENANCE

     "NET MAINTENANCE" refers to maintenance reserve revenue received less any
maintenance reimbursements paid to lessees. In the Two Month Period, Net
Maintenance costs of $0.7 million were incurred. The 2001 Base Case makes no
assumptions for Net Maintenance as it assumes that, over time, maintenance
revenue will equal maintenance expenditure. The negative maintenance cashflow
performance is primarily due to the acceleration of maintenance events due to
aircraft repossessions and a greater than expected incidence of maintenance
events in the Two Month Period.

CASH EXPENSES

     "TOTAL CASH EXPENSES" include Aircraft Operating Expenses and Selling,
General and Administrative ("SG&A") Expenses. In the Two Month Period, Total
Cash Expenses were $8.4 million compared to $9.2 million assumed in the 2001
Base Case, a positive variance of $0.8 million. A number of offsetting factors
discussed below have given rise to this.

     "AIRCRAFT OPERATING EXPENSES" includes all operational costs related to the
leasing of aircraft including costs of insurance, re-leasing and other overhead
costs.

[20]  RE-LEASING AND OTHER OVERHEAD COSTS

     "RE-LEASING AND OTHER OVERHEAD COSTS" consist of miscellaneous re-delivery
and leasing costs associated with re-leasing events, costs of insurance and
other lessee-related overhead costs. In the Two Month Period, these costs
amounted to $2.1 million (or 2.9% of Lease Rentals) compared to $3.6 million (or
5.0% of Lease Rentals) assumed in the 2001 Base Case.

     SG&A Expenses relate to fees paid to the servicer and to other service
providers.

                                        53
<PAGE>   54

[21]  AIRCRAFT SERVICER FEES

     The "AIRCRAFT SERVICER FEES" are defined as amounts paid to the servicer in
accordance with the terms of the servicing agreement. In the Two Month Period,
the total Aircraft Servicer Fees paid were $5.2 million, $1.1 million more than
assumed in the 2001 Base Case, principally as a result of the timing of payment
of the minimum incentive fee.

     Aircraft Servicer Fees consist of:

<TABLE>
<CAPTION>
                                                                $ MILLIONS
                                                                ----------
<S>                                                             <C>
Retainer Fee................................................       3.5
Minimum Incentive Fee.......................................       1.5
Core Cash Flow/Sales Incentive Fee..........................       0.2
                                                                   ---
Total Aircraft Servicer Fees................................       5.2
                                                                   ===
</TABLE>

     The Retainer Fee is a fixed amount per month per aircraft and changes only
as aircraft are sold.

[23]  OTHER SERVICER FEES AND OTHER OVERHEADS

     "OTHER SERVICER FEES AND OTHER OVERHEADS" relate to fees and expenses paid
to other service providers including the administrative agent, the cash manager,
financial advisors, legal advisors and accountants, and to the directors. In the
Two Month Period, Other Servicer Fees and Other Overheads amounted to $1.1
million, $0.4 million less than an assumed expense of $1.6 million in the 2001
Base Case.

NET CASH COLLECTIONS

     "NET CASH COLLECTIONS" is defined as Total Cash Collections less Total Cash
Expenses, Interest Payments and Swap Payments, each as defined below.

[29]  REDUCTION IN LIQUIDITY RESERVE

     On February 20, 2001, the board of directors of Airplanes Limited and the
controlling trustees of Airplanes Trust approved a reduction of the
miscellaneous reserve amount from $40 million to $Nil as of March 15, 2001. The
$40 million made available from this reduction of the miscellaneous reserve
amount was applied to reduce the outstanding class A principal adjustment amount
in the Two Month Period.

[30]  INTEREST PAYMENTS

     In the Two Month Period, interest payments to the holders of the class A,
B, C and D notes amounted to $32.2 million, which is $0.4 million lower than the
2001 Base Case as a result of a slightly lower than expected level of average
interest rates. The 2001 Base Case assumed LIBOR to be 5.2% whereas the average
monthly LIBOR rate was 5.1%.

     In the Two Month Period, there was a suspension of payments of the class E
minimum interest amount of 1% (refer to item 33 below). No payments of class E
minimum interest were anticipated in the 2001 Base Case.

[31]  SWAP PAYMENTS

     Airplanes Group had net swap payments of $3.7 million during the Two Month
Period compared with $3.0 million assumed in the 2001 Base Case. Included in the
net swap payments of $3.7 million for the Two Month Period are net payments of
$0.5 million in respect of the minimum hedge payments in the Two Month Period.

[33]  PRINCIPAL PAYMENTS

     In the Two Month Period, total principal payments amounted to $65.9 million
(comprising $63.5 million on the class A notes and $2.4 million on the class B
notes), $1.9 million more than assumed in the 2001 Base Case.

                                        54
<PAGE>   55

     Applying the declining value assumptions to the original March 1996
appraisals and adjusting for aircraft sales, the total appraised value of the
aircraft was assumed to be $3,389.4 million at May 15, 2001. Our portfolio is
appraised annually and the most recent appraisal dated January 31, 2001, which
was effective from the February 2001 payment date, valued our portfolio at
$3,130.5 million. Applying the declining value assumptions to this appraisal,
the total appraised value was $3,073.7 million at May 15, 2001.

     As a consequence of the cumulative excess decline in appraised values
experienced in the period from March 1996 to May 2001, combined with overall
cash performance during that period, Airplanes Group's available cash flows
after payment of expenses, interest and class A and B minimum principal amounts,
have been redirected in accordance with the priority of payments to pay class A
principal adjustment amounts in April 1998 and May 1998 and from February 1999
to May 2001. Since the principal adjustment amounts on the class A notes rank
ahead of the scheduled principal payments on the class C and D notes, and since
available cash flows were not sufficient to pay all of the class A principal
adjustment amounts, some of the scheduled principal payments on the class C and
D notes have been deferred on some payment dates during these periods. In
particular, an adverse movement in cashflow performance in the thirteen month
period from the April 2000 payment date to the May 2001 payment date which arose
due to the factors described above and in "Management's Discussion and Analysis
of Financial Condition and Results of Operations," together with the cumulative
decline in appraised values to date, resulted in available cashflows not being
sufficient to pay all of the class A principal adjustment amounts in the
thirteen month period. As a result, no payments of the class C and D scheduled
principal amounts were made in that thirteen month period. Consequently, total
deferrals of class C and class D scheduled principal amounts amounted to $17.3
million and $8.3 million, respectively, as of May 15, 2001. The class E minimum
interest amount was also suspended during the Two Month Period (refer to Item 30
above). The principal adjustment amount outstanding was $11.4 million on the
class A notes as of May 15, 2001.

     The continued payment of class A principal adjustment amount will result in
the continued reallocation of cashflows in favour of the class A notes until
such time as the class A Target Loan to Value Ratio has been restored.
Accordingly, payments of the class C and D scheduled principal amounts will
continue to be deferred and the current suspension of payments of the class E
minimum interest amount will also continue. There can be no assurance that cash
collections will be sufficient to restore this ratio in the foreseeable future.

<TABLE>
<CAPTION>
NOTE                                REPORT LINE NAME                                   DESCRIPTION
----                     ---------------------------------------    -------------------------------------------------
<S>                      <C>                                        <C>
[1]                      CASH COLLECTIONS
                         Lease Rentals                              Assumptions as per the 2001 Base Case
[2]                      Renegotiated Leases                        Change in contracted rental cash flow caused by a
                                                                    renegotiated lease
[3]                      Rental Resets                              Re-leasing events where new lease rate deviated
                                                                    from the 2001 Base Case
[4]                      Other
[5] (SIGMA)[1]...[4]     CONTRACTED LEASE RENTALS                   Current Contracted Lease Rentals due as at the
                                                                    latest Calculation Date
[6]                      Movement in Current Arrears Balance        Current Contracted Lease Rentals not received as
                                                                    at the latest Calculation Date, excluding Bad
                                                                    Debts
[7]                      Less Net Stress related Costs
[8]                      Bad Debts                                  Arrears owed by former lessees and deemed
                                                                    irrecoverable
[9]                      Deferred Arrears Balance                   Current arrears that have been capitalised and
                                                                    restructured as a Note Payable
[10]                     AOG                                        Loss of rental due to an aircraft being off-lease
                                                                    and non-revenue earning
[11]                     Other Leasing Income                       Includes lease termination payments, rental
                                                                    guarantees and late payments charges
[12]                     Repossession                               Legal and technical costs incurred in
                                                                    repossessing aircraft
[13] (SIGMA)[8]...[12]   Sub-total
[14] [5]+[6]+[13]        NET LEASE RENTALS                          Contracted Lease Rentals less Movement in Current
                                                                    Arrears Balance and Net Stress-related costs
[15]                     Interest Earned                            Interest earned on monthly cash balances
[16]                     Aircraft Sales                             Proceeds, net of fees and expenses, from the sale
                                                                    of aircraft
[17]                     Net Maintenance                            Maintenance Revenue Reserve received less
                                                                    reimbursements to lessees
[18]                     Other Receipts
</TABLE>

                                        55
<PAGE>   56

<TABLE>
<CAPTION>
NOTE                                REPORT LINE NAME                                   DESCRIPTION
----                     ---------------------------------------    -------------------------------------------------
<S>                      <C>                                        <C>
[19] (SIGMA)[14]...[18]
[18]                     Total Cash Collections                     Net Lease Rentals + Interest Earned + Aircraft
                                                                    Sales + Net Maintenance + Other Receipts
                         CASH EXPENSES
                         Aircraft Operating Expenses                All operational costs related to the leasing of
                                                                    aircraft
[20]                     Releasing and Other Overheads SG&A         Costs associated with transferring an aircraft
                         Expenses                                   from one lessee to another, costs of insurance
                                                                    and other lessee-related overheads
[21]                     Aircraft Servicer Fees                     Monthly and annual fees paid to the servicer
                         Retainer Fee                               Fixed amount per month per aircraft
                         Minimum Incentive Fee                      Minimum annual fee paid to Servicer for
                                                                    performance above an annually agreed target
                         Core Cash Flow/Sales Incentive Fee         Fees (in excess of Minimum Incentive Fee above)
                                                                    paid to the Servicer for performance above an
                                                                    annually agreed target/on sale of an aircraft
[22] [21]                Sub-total
[23]                     Other Servicer Fees and Other Overheads    Administrative agent, trustee and professional
                                                                    fees paid to other service providers and other
                                                                    overheads
[24] [22]+[23]           Sub-total
[25] [20]+[24]           Total Cash Expenses                        Aircraft Operating Expenses + SG&A Expenses
                         NET CASH COLLECTIONS
[26] [19]                Total Cash Collections                     Line 19 above
[27] [25]                Total Cash Expenses                        Line 25 above
[28]                     Movement in Expense Account                Relates to reduction in accrued expense amounts
[29]                     Reduction in Liquidity Reserve             Reduction of the miscellaneous reserve amount
                                                                    from $40m to $Nil
[30]                     Interest Payments                          Interest paid on all outstanding debt
[31]                     Swap payments                              Net swap payments (paid)/received
[32] (SIGMA)[26]...[31]  Total
[33]                     PRINCIPAL PAYMENTS                         Principal payments on debt
</TABLE>

                                        56
<PAGE>   57

     AIRPLANES CASH FLOW PERFORMANCE FOR THE PERIOD FROM MARCH 10, 2001 TO
            MAY 15, 2001 (2 MONTHS) COMPARISON OF ACTUAL CASH FLOWS
                        VERSUS 2001 BASE CASE CASH FLOWS

<TABLE>
<CAPTION>
                                                                                            % OF LEASE RENTALS UNDER
                                                                                               THE 2001 BASE CASE
                                                                                          -----------------------------
                                                                     2001                            2001
                                                         ACTUAL    BASE CASE   VARIANCE   ACTUAL   BASE CASE   VARIANCE
                                                         -------   ---------   --------   ------   ---------   --------
<S>  <C>     <C>                                         <C>       <C>         <C>        <C>      <C>         <C>
             CASH COLLECTIONS
1            Lease Rentals.............................     71.2       71.2         0.0   100.0%     100.0%       0.0%
2            -- Renegotiated Leases....................      0.0        0.0         0.0     0.0%       0.0%       0.0%
3            -- Rental Resets..........................     (2.4)       0.0        (2.4)   (3.4%)      0.0%      (3.4%)
4            -- Other..................................      0.0        0.0         0.0     0.0%       0.0%       0.0%
                                                         -------    -------    --------   -----      -----     ------
5    1-4     CONTRACTED LEASE RENTALS..................     68.8       71.2        (2.4)   96.6%     100.0%      (3.4%)
6            Movement in Current Arrears...............      2.6        0.0         2.6     3.7%       0.0%       3.7%
             Balance
7            less Net Stress Related Costs
8            -- Bad Debts..............................     (2.7)      (0.7)       (2.0)   (3.8%)     (1.0%)     (2.8%)
9            -- Deferred Arrears Balance...............      0.9        0.6         0.3     1.2%       0.8%       0.4%
10           -- AOG....................................     (1.5)      (3.0)        1.6    (2.1%)     (4.2%)      2.2%
11           -- Other Leasing Income...................      0.2        0.0         0.2     0.2%       0.0%       0.2%
12           -- Repossession...........................     (1.8)      (0.6)       (1.3)   (2.6%)     (0.8%)     (1.8%)
                                                         -------    -------    --------   -----      -----     ------
13   8-12    Sub-total.................................     (5.0)      (3.7)       (1.3)   (7.0%)     (5.2%)     (1.8%)
14   5+6+13  NET LEASE RENTAL..........................     66.4       67.5        (1.1)   93.3%      94.8%      (1.5%)
15           Interest Earned...........................      1.6        1.3         0.3     2.3%       1.9%       0.4%
16           Aircraft Sales............................      5.2        0.0         5.2     7.3%       0.0%       7.3%
17           Net Maintenance...........................     (0.7)       0.0        (0.7)   (0.9%)      0.0%      (0.9%)
18           Other Receipts............................      0.0        0.0         0.0     0.0%       0.0%       0.0%
                                                         -------    -------    --------   -----      -----     ------
19   14-18   TOTAL CASH COLLECTIONS....................     72.6       68.8         3.8   102.0%      96.6%       5.3%
                                                         =======    =======    ========   =====      =====     ======
             CASH EXPENSES
             Aircraft Operating Expenses
20           -- Re-leasing and other overheads.........     (2.1)      (3.6)       (1.5)   (2.9%)     (5.0%)      2.1%
             SG&A Expenses
21           Aircraft Servicer Fees
             -- Retainer Fee...........................     (3.5)      (3.8)        0.3    (4.9%)     (5.3%)      0.4%
             -- Minimum Incentive Fee..................     (1.5)      (0.3)       (1.3)   (2.1%)     (0.4%)     (1.8%)
             -- Core Cashflow/Sales Incentive Fee......     (0.2)       0.0        (0.2)   (0.2%)      0.0%      (0.2%)
                                                         -------    -------    --------   -----      -----     ------
22   21      Sub-total.................................     (5.1)      (4.0)       (1.1)   (7.2%)     (5.6%)     (1.6%)
23           Other Servicer Fees.......................     (1.1)      (1.6)        0.4    (1.6%)     (2.2%)      0.6%
                                                         -------    -------    --------   -----      -----     ------
24   22+23   Sub-total.................................     (6.3)      (5.6)       (0.7)   (8.8%)     (7.8%)     (1.0%)
                                                         =======    =======    ========   =====      =====     ======
25   24+20   TOTAL CASH EXPENSES.......................     (8.4)      (9.2)        0.8   (11.7%)    (12.9%)      1.1%
                                                         =======    =======    ========   =====      =====     ======
             NET CASH COLLECTIONS
26   19      Total Cash Collections....................     72.6       68.8         3.8   102.0%      96.6%       5.3%
27   25      Total Cash Expenses.......................     (8.4)      (9.2)        0.8   (11.7%)    (12.9%)      1.1%
28           Movement in Expense Account...............     (2.4)       0.0        (2.4)   (3.4%)      0.0%      (3.4%)
29           Reduction in Liquidity Reserve............     40.0       40.0         0.0    56.2%      56.2%      (0.0%)
30           Interest Payments.........................    (32.2)     (32.6)        0.3   (45.3%)    (45.7%)      0.5%
31           Swap Payments.............................     (3.7)      (3.0)       (0.7)   (5.2%)     (4.2%)     (1.0%)
                                                         -------    -------    --------   -----      -----     ------
32   26-31   TOTAL.....................................     65.9       64.1         1.9    92.5%      90.0%       2.5%
                                                         =======    =======    ========   =====      =====     ======
33           Principal Payments
             Subclass A-6..............................     63.5       62.1         1.3    89.1%      87.3%       1.8%
             Subclass B................................      2.4        1.9         0.5     3.4%       2.7%       0.7%
                                                         -------    -------    --------   -----      -----     ------
             Total.....................................     65.9       64.1         1.9    92.5%      90.0%       2.5%
                                                         =======    =======    ========   =====      =====     ======
             Debt Balances at May 15, 2001
             Subclass A-6..............................    382.0      383.3        (1.3)
             Subclass A-8..............................    700.0      700.0         0.0
             Subclass A-9..............................    750.0      750.0         0.0
             Subclass B................................    275.9      276.4        (0.5)
             Subclass C................................    349.8      349.8         0.0
             Subclass D................................    395.1      395.1         0.0
                                                         -------    -------    --------
                                                         2,852.8    2,854.6        (1.9)
                                                         =======    =======    ========
</TABLE>

                                        57
<PAGE>   58

<TABLE>
<CAPTION>
                                                  MAR-01                                 2001
                                                 CLOSING              ACTUAL           BASE CASE
                                                 -------              ------           ---------
                                                    $M                  $M                $M
<S>  <C>                                     <C>                 <C>                   <C>       <C>
     NET CASH COLLECTIONS................                               65.9               64.1
     Add Back Interest and Swap                                         35.9               35.6
     Payments............................
                                                                     -------            -------
a    Net Cash Collections (excl. interest                              101.8               99.6
     and swap payments)..................
                                                                     =======            =======
b    Swaps...............................                                3.7                3.0
c    Class A Interest....................                               17.6               17.9
d    Class A Minimum.....................                                0.0                0.0
e    Class B Interest....................                                2.8                2.8
f    Class B Minimum.....................                                2.4                1.9
g    Class C Interest....................                                4.8                4.8
h    Class D Interest....................                                7.2                7.2
i    Class A Principal Adjustment........                               63.5               62.1
j    Class C Scheduled...................                                0.0                0.0
k    Class D Scheduled...................                                0.0                0.0
l    Permitted Aircraft Modifications....                                0.0                0.0
m    Step-up Interest....................                                0.0                0.0
n    Class E Minimum Interest............                                0.0                0.0
o    Class B Supplemental................                                0.0                0.0
p    Class A Supplemental................                                0.0                0.0
                                                                     -------            -------
     Total...............................                              101.8               99.6
                                                                     =======            =======
(1)  INTEREST COVERAGE RATIO
     Class A.............................                                4.8                4.8  = a/(b+c)
     Class B.............................                                4.2                4.2  = a/(b+c+d+e)
     Class C.............................                                3.3                3.3  = a/(b+c+d+e+f+g)
     Class D.............................                                2.7                2.7  = a/(b+c+d+e+f+g+h)
(2)  DEBT COVERAGE RATIO
     Class A.............................                                4.8                4.8  = a/(b+c+d)
     Class B.............................                                3.9                3.9  = a/(b+c+d+e+f)
     Class C.............................                                1.0                1.0  = a/(b+c+d+e+f+g+h+i+j)
     Class D.............................                                1.0                1.0  = a/(b+c+d+e+f+g+h+i+j+k)
     LOAN TO VALUE RATIOS (IN US DOLLARS)
(3)  Expected Portfolio Value............
(4)  Adjusted Portfolio Value............        3,108.6             3,073.7            3,077.6
     Liquidity Reserve Amount of which
     -- Cash.............................          156.9               117.3              116.0
     -- Accrued Expenses.................           12.6                10.0                0.0
                                                 -------             -------            -------
     Subtotal............................          169.5               127.3              116.0
     Less Lessee Security Deposits.......           36.9                37.3               36.0
                                                 -------             -------            -------
     Subtotal............................          132.6                90.0               80.0
                                                 -------             -------            -------
(5)  TOTAL ASSET VALUE...................        3,241.2             3,163.7            3,157.6
                                                 =======             =======            =======
</TABLE>

<TABLE>
<CAPTION>
NOTE BALANCES AS AT:                           MARCH 15, 2001        MAY 15, 2001           MAY 15, 2001
--------------------                           ---------------      ---------------        ---------------
<S>                                            <C>       <C>        <C>       <C>          <C>       <C>
Class A................................        1,895.4   58.5%      1,832.0   57.9%        1,833.3   58.1%
Class B................................          278.3   67.1%        275.9   66.6%          276.4   66.8%
Class C................................          349.8   77.9%        349.8   77.7%          349.8   77.9%
Class D................................          395.1   90.0%        395.1   90.2%          395.1   90.4%
                                               -------              -------                -------
                                               2,918.6              2,852.8                2,854.6
                                               =======              =======                =======
</TABLE>

---------------

(1) "INTEREST COVERAGE RATIO" is equal to Net Cash Collections (excluding
    interest and swap payments) expressed as a ratio of the interest payable on
    each subclass of notes plus the interest and minimum principal payments
    payable on each subclass of notes that rank senior in priority of payment to
    the relevant subclass of notes.

(2) "DEBT SERVICE RATIO" is equal to Net Cash Collections (excluding interest
    and swap payments) expressed as a ratio of the interest and
    Minimum/Scheduled Principal Payments payable on each subclass of notes plus
    the interest and Minimum/Scheduled Principal Payments payable on each
    subclass of notes that ranks equally with or senior to the relevant subclass
    of notes in the priority of payments. In respect of the class A notes,
    Principal Adjustment Amount payments have been excluded as they are a
    function of aircraft values.
                                        58
<PAGE>   59

(3) "EXPECTED PORTFOLIO VALUE" represents the Initial Appraised Value of each
    aircraft in our portfolio multiplied by the Depreciation Factor at payment
    date divided by the Depreciation Factor at the March 1996 closing date.

(4) "ADJUSTED PORTFOLIO VALUE" represents the appraised value of each aircraft
    in our portfolio as determined by the most recent appraisal multiplied by
    the Depreciation Factor at payment date divided by the Depreciation Factor
    as of the relevant appraisal date.

(5) "TOTAL ASSET VALUE" is equal to Total Expected/Adjusted Portfolio Value plus
    Liquidity Reserve Amount minus lessee security deposits.

COMPARISON OF ACTUAL CASH FLOWS VERSUS THE ADJUSTED 1998 BASE CASE FOR THE
THIRTY-SIX MONTH PERIOD FROM MARCH 11, 1998 TO MARCH 15, 2001.

     The Adjusted 1998 Base Case referred to below represents the assumptions
with respect to Airplanes Group's cash performance contained in our March 9,
1998 prospectus (the "1998 BASE CASE") adjusted to take account of the 21
aircraft sales which have occurred since March 1998 (three DC8-71Fs, one
B737-300, four B737-200As, two B737-200QCs, three A300-B4-100s and eight DC9s),
which sales were not anticipated in the 1998 Base Case.

     The following is a discussion of the Total Cash Collections, Total Cash
Expenses, Interest Payments and Principal Payments of Airplanes Group for the
Thirty-Six Month Period. You should read this discussion in conjunction with the
analysis under "-- Airplanes Cash Flow Performance for the Period from March 11,
1998 to March 15, 2001 (36 Months) Comparison of Actual Cash Flows versus
Adjusted 1998 Base Case Cash Flows."

CASH COLLECTIONS

     "TOTAL CASH COLLECTIONS" include Net Lease Rentals, Interest Earned,
Aircraft Sales, Net Maintenance and Other Receipts (each as defined below). In
the Thirty-Six Month Period, Airplanes Group generated approximately $1,456.2
million in Total Cash Collections, $63.9 million less than the Total Cash
Collections contemplated by the Adjusted 1998 Base Case. This difference is due
to a combination of the factors set out below. The numbers in square brackets
below refer to the line item number in the analysis under "-- Airplanes Cash
Flow Performance for the Period from March 11, 1998 to March 15, 2001 (36
Months) Comparison of Actual Cash Flows versus Adjusted 1998 Base Case Cash
Flows."

[2]  RENEGOTIATED LEASES

     "RENEGOTIATED LEASES" refers to the loss in rental revenue caused by a
lessee negotiating a reduction in the lease rental. Typically, this can be a
permanent reduction over the remaining lease term in exchange for other
contractual concessions from the lessee. In the Thirty-Six Month Period, the
amount of revenue loss attributed to Renegotiated Leases was $2.6 million, as
compared to $Nil assumed in the Adjusted 1998 Base Case, and related to leases
renegotiated with two lessees. The renegotiated rentals were set at the then
prevailing market rate for these aircraft types.

[3]  RENTAL RESETS, INCLUDING INTEREST RATE ADJUSTMENTS FOR FLOATING RATE LEASES

     "RENTAL RESETS" is a measure of the loss in rental revenue when new lease
rates are different than those assumed in the Adjusted 1998 Base Case, including
lease rate adjustments for changes in interest rates on floating rate leases.
Rental Resets amounted to $26.9 million in the Thirty-Six Month Period, as
compared to $Nil assumed in the Adjusted 1998 Base Case.

[5]  CONTRACTED LEASE RENTALS

     "CONTRACTED LEASE RENTALS" represents the current contracted lease rental
rollout, which is equal to the Adjusted 1998 Base Case Lease Rentals less
adjustments for Renegotiated Leases and Rental Resets. For the Thirty-Six Month
Period, Contracted Lease Rentals were $1,370.0 million, which was $29.5 million
less than that assumed in the Adjusted 1998 Base Case. The difference is due to
losses from Renegotiated Leases and Rental Resets as discussed above.

                                        59
<PAGE>   60

[6]  MOVEMENT IN CURRENT ARREARS BALANCE

     "CURRENT ARREARS" is the total Contracted Lease Rentals outstanding from
current lessees at a given date but excluding any amounts classified as Bad
Debts. There was a net negative movement of $24.1 million in the Current Arrears
balance over the Thirty-Six Month Period, compared to $Nil assumed in the
Adjusted 1998 Base Case.

[7]  NET STRESS-RELATED COSTS

     "NET STRESS-RELATED COSTS" is a combination of all the factors which can
cause actual lease rentals to vary from the Contracted Lease Rentals. The
Adjusted 1998 Base Case assumed gross stress-related costs equal to 6.0% of the
Adjusted 1998 Base Case Lease Rentals. However, the Adjusted 1998 Base Case also
assumed the recovery of certain deferred arrears equal to 1.1% of the Adjusted
1998 Base Case Lease Rentals in the Thirty-Six Month Period, resulting in an
overall Net Stress-Related Costs assumption of 4.9% of the Adjusted 1998 Base
Case Lease Rentals. For the Thirty-Six Month Period, Net Stress-Related Costs
incurred amounted to a net cash outflow of $50.5 million (3.6% of Lease Rentals)
compared to the $69.5 million outflow assumed in the Adjusted 1998 Base Case, a
variance of $19.0 million that is due to the following five factors described in
items [8] to [12] below.

[8]  BAD DEBTS

     "BAD DEBTS" are arrears owed by lessees who have defaulted and which are
deemed irrecoverable. They amounted to $5.2 million (0.4% of Lease Rentals) for
the Thirty-Six Month Period, $8.9 million less than the Adjusted 1998 Base Case
assumption of $14.1 million (1.0% of Lease Rentals). Actual Bad Debts related to
four lessees.

[9]  DEFERRED ARREARS BALANCE

     "DEFERRED ARREARS BALANCE" refers to current arrears that have been
capitalized and restructured into a deferred balance. In the Thirty-Six Month
Period, Airplanes Group received payments totalling $16.7 million in accordance
with these restructurings. Payments totalling $15.3 million were assumed to be
received in accordance with restructurings included in the Adjusted 1998 Base
Case.

[10]  AIRCRAFT ON GROUND ("AOG")

     AOG is defined as the Adjusted 1998 Base Case Lease Rentals lost when an
aircraft is off-lease and non-revenue earning. In the Thirty-Six Month Period,
the amount of revenue lost attributed to AOG was $48.6 million (3.5% of Lease
Rentals), as compared to $59.4 million under the Adjusted 1998 Base Case, and
relates to 39 aircraft which were off-lease at different times during this
period. At March 15, 2001, six aircraft were AOG.

[11]  OTHER LEASING INCOME

     "OTHER LEASING INCOME" consists of miscellaneous income received in
connection with a lease other than contracted rentals, maintenance receipts and
security deposits, such as early termination payments or default interest. In
the Thirty-Six Month Period, Other Leasing Income amounted to $5.0 million, as
compared to $Nil assumed under the Adjusted 1998 Base Case.

[12]  REPOSSESSION COSTS

     "REPOSSESSION COSTS" cover legal and aircraft technical costs incurred as a
result of repossessing an aircraft. In the Thirty-Six Month Period, Airplanes
Group repossessed 15 aircraft from nine lessees, resulting in Repossession Costs
totalling $18.4 million (1.3% of Lease Rentals), as compared to $11.3 million
under the Adjusted 1998 Base Case.

                                        60
<PAGE>   61

[14]  NET LEASE RENTALS

     "NET LEASE RENTALS" is Contracted Lease Rentals less any movement in
Current Arrears Balance and Net Stress-Related Costs. In the Thirty-Six Month
Period, Net Lease Rentals amounted to $1,295.4 million, $34.6 million less than
that assumed in the Adjusted 1998 Base Case. The variance was attributable to
the combined effect of the factors outlined in items [2] and [3] and in items
[6] to [12] above.

[15]  INTEREST EARNED

     "INTEREST EARNED" relates to interest received on cash balances held in the
Collection and Expense Accounts, which are described in greater detail in
"Description of Securities -- The Accounts." In the Thirty-Six Month Period,
interest earned amounted to $35.5 million, $5.4 million more than that assumed
in the Adjusted 1998 Base Case. The difference is due to a combination of two
offsetting factors: (1) the Adjusted 1998 Base Case made no assumption as to the
interest earned on the intra-month cash balances in the Collection Account and
Expense Account and (2) the average actual reinvestment rate for the Thirty-Six
Month Period was 5.62% (excluding a $5 million guaranteed investment contract)
as compared to the 5.75% assumed in the Adjusted 1998 Base Case.

[16]  AIRCRAFT SALES

     Since March 1998, Airplanes Group has received net sales proceeds of $160.0
million in respect of the sale of 28 aircraft (including final bullet payments
on four finance leases), 21 of which were not anticipated in the 1998 Base Case.

     The net sales proceeds on the 28 aircraft of $160.0 million compares with
the relevant Note Target Price at the date of the respective sale of $146.6
million and a depreciated (using the depreciation curve assumed in the
indentures) Initial Appraised Value (appraised as of October 1995) at the date
of the respective sale of $157.0 million.

[17]  NET MAINTENANCE

     "NET MAINTENANCE" refers to maintenance reserve revenue received less any
maintenance reimbursements paid to lessees. In the Thirty-Six Month Period, Net
Maintenance costs of $44.1 million were incurred. The Adjusted 1998 Base Case
makes no assumptions for Net Maintenance as it assumes that, over time,
maintenance revenue will equal maintenance expenditure. The negative maintenance
cashflow performance is primarily due to the acceleration of maintenance events
due to aircraft repossessions, the return of approximately $7 million in
maintenance reserves to a Latin American lessee as a result of the restructuring
of its leases and a greater than expected incidence of maintenance events in the
Thirty-Six Month Period.

[18]  OTHER RECEIPTS

     "OTHER RECEIPTS" totalling $9.4 million during the Thirty-Six Month Period
comprise the following two receipts: a payment of $8.4 million from GE under the
tax sharing agreement for the period ended December 31, 1999 and net proceeds of
$1.0 million resulting from the exercise by Airplanes Group of an option to
purchase shares in a lessee which Airplanes Group had been granted under the
terms of a lease to that lessee and the subsequent sale of those shares. No
Other Receipts were anticipated in the Adjusted 1998 Base Case.

CASH EXPENSES

     "TOTAL CASH EXPENSES" include Aircraft Operating Expenses and Selling,
General and Administrative ("SG&A") Expenses. In the Thirty-Six Month Period,
Total Cash Expenses were $199.1 million compared to $133.3 million assumed in
the Adjusted 1998 Base Case, a negative variance of $65.8 million. A number of
offsetting factors discussed below have given rise to this.

     "AIRCRAFT OPERATING EXPENSES" includes all operational costs related to the
leasing of aircraft including costs of insurance, re-leasing and other overhead
costs.

                                        61
<PAGE>   62

[20]  RE-LEASING AND OTHER OVERHEAD COSTS

     "RE-LEASING AND OTHER OVERHEAD COSTS" consist of miscellaneous re-delivery
and leasing costs associated with re-leasing events, costs of insurance and
other lessee-related overhead costs. In the Thirty-Six Month Period, these costs
amounted to $87.1 million (or 6.2% of Lease Rentals) compared to $28.3 million
(or 2.0% of Lease Rentals) assumed in the Adjusted 1998 Base Case. Actual
Re-leasing and Other Overhead Costs exceeded the Adjusted 1998 Base Case
assumption primarily due to higher than assumed transition costs on aircraft
delivery to new lessees and payments made in the form of lessor contributions to
defray certain technical costs during the term of certain leases.

     SG&A Expenses relate to fees paid to the servicer and to other service
providers.

[21]  AIRCRAFT SERVICER FEES

     The "AIRCRAFT SERVICER FEES" are defined as amounts paid to the servicer in
accordance with the terms of the servicing agreement. In the Thirty-Six Month
Period, the total Aircraft Servicer Fees paid were $72.6 million, $4.3 million
more than assumed in the Adjusted 1998 Base Case, principally as a result of
higher incentive fees than assumed in the Adjusted 1998 Base Case.

     Aircraft Servicer Fees consist of:

<TABLE>
<CAPTION>
                                                                $ MILLIONS
                                                                ----------
<S>                                                             <C>
Retainer Fee................................................       64.6
Minimum Incentive Fee.......................................        4.5
Core Cash Flow/Sales Incentive..............................
Incentive Fee...............................................        3.5
                                                                   ----
Total Aircraft Servicer Fees................................       72.6
                                                                   ====
</TABLE>

     The Retainer Fee is a fixed amount per month per aircraft and changes only
as aircraft are sold.

[23]  OTHER SERVICER FEES AND OTHER OVERHEADS

     "OTHER SERVICER FEES AND OTHER OVERHEADS" relate to fees and expenses paid
to other service providers including the administrative agent, the cash manager,
financial advisors, legal advisors and accountants, and to the directors. In the
Thirty-Six Month Period, Other Servicer Fees and Other Overheads amounted to
$39.4 million, $2.7 million more than an assumed expense of $36.7 million in the
Adjusted 1998 Base Case.

NET CASH COLLECTIONS

     "NET CASH COLLECTIONS" is defined as Total Cash Collections less Total Cash
Expenses, Interest Payments and Swap Payments, each as defined below.

[30]  INTEREST PAYMENTS

     In the Thirty-Six Month Period, interest payments to investors amounted to
$674.7 million, which is $3.2 million lower than the Adjusted 1998 Base Case. As
a result of a greater decline in aircraft appraisals over the Thirty-Six Month
Period than that implied by the depreciation curve contemplated by the
indentures, which resulted in a reallocation of cash flows in favour of the
class A notes, there was a suspension of payments of the class E minimum
interest amount of 1% from February 1999 to January 2000 and from May 2000 to
March 2001. Total class E minimum interest payments suspended during these
periods amounted to $11.3 million (also see Item [33] below). Higher actual
amounts outstanding on each class of notes than those assumed under the Adjusted
1998 Base Case, the impact of which has been partly offset by a slightly lower
than expected level of average interest rates, resulted in interest payments to
the holders of the class A, B, C and D notes which were $8.1 million higher than
that assumed by the Adjusted 1998 Base Case. The Adjusted 1998 Base Case assumed
LIBOR to be 5.75% whereas the average monthly LIBOR rate was 5.72%.

                                        62
<PAGE>   63

[31]  SWAP PAYMENTS

     Airplanes Group had net swap payments of $2.6 million during the Thirty-Six
Month Period compared with $1.9 million assumed in the Adjusted 1998 Base Case.
Included in the net swap payments of $2.6 million for the Thirty-Six Month
Period is a net cash inflow of approximately $11 million on the re-couponing and
unwinding of 30 of Airplanes Group's portfolio of 44 swaps in November 1999.
Also included in net swap payments are net payments of $4.3 million in respect
of the minimum and supplemental hedge payments in the Thirty-Six Month Period.

[33]  PRINCIPAL PAYMENTS

     In the period from March 11, 1998 to March 15, 2001, total principal
payments amounted to $587.1 million (comprising $498.2 million on the class A
notes, $58.7 million on the class B notes, $25.3 million on the class C notes
and $4.9 million on the class D notes), $119.9 million less than assumed in the
Adjusted 1998 Base Case.

     Applying the declining value assumptions to the original March 1996
appraisals and adjusting for aircraft sales, the total appraised value of the
aircraft was assumed to be $4,073.0 million at March 15, 1998 and $3,410.7
million at March 15, 2001. Our portfolio is appraised annually and the most
recent appraisal dated January 31, 2001, which was effective from the February
2001 payment date, valued our portfolio at $3,135.4 million. Applying the
declining value assumptions to this appraisal, the total appraised value was
$3,108.7 million at March 15, 2001.

     As a consequence of the cumulative excess decline in appraised values
experienced in the period from March 1996 to March 2001, combined with overall
cash performance during that period, Airplanes Group's available cash flows
after payment of expenses, interest and class A and B minimum principal amounts,
have been redirected in accordance with the priority of payments to pay class A
principal adjustment amounts in April 1998 and May 1998 and from February 1999
to March 2001. Since the principal adjustment amounts on the class A notes rank
ahead of the scheduled principal payments on the class C and D notes, and since
available cash flows were not sufficient to pay all of the class A principal
adjustment amounts, some of the scheduled principal payments on the class C and
D notes have been deferred on some payment dates during these periods. In
particular, an adverse movement in cashflow performance in the eleven month
period from the April 2000 payment date to the March 2001 payment date which
arose due to the factors described above and in "Management's Discussion and
Analysis of Financial Condition and Results of Operations," together with the
cumulative decline in appraised values to date, resulted in available cashflows
not being sufficient to pay all of the class A principal adjustment amounts in
the eleven month period. As a result, no payments of the class C and D scheduled
principal amounts were made in that eleven month period. Consequently, total
deferrals of class C and class D scheduled principal amounts amounted to $14.4
million and $6.9 million, respectively, as of March 15, 2001. The class E
minimum interest amount was also suspended during the Thirty-Six Month Period
(refer to Item 30 above).

     Based on the most recent appraisal as of January 31, 2001, the decline in
aircraft valuations in the period from February 2000 to February 2001 was
approximately $10 million more than the decrease implied by the aircraft
depreciation schedules that form part of the terms of the notes. Details of the
appraised values are contained in "The Aircraft, Related Leases and Collateral
-- Appraisals." The decline in appraised values in this period resulted in an
increase of $6.2 million in the principal adjustment amount outstanding from
$32.4 million to $38.6 million on the class A notes as of February 15, 2001. The
principal adjustment amount outstanding increased to $47.0 million on the class
A notes as of March 15, 2001.

                                        63
<PAGE>   64

     The continued payment of class A principal adjustment amount will result in
the continued reallocation of cashflows in favour of the class A notes until
such time as the class A Target Loan to Value Ratio has been restored.
Accordingly, payments of the class C and D scheduled principal amounts will
continue to be deferred and the current suspension of payments of the class E
minimum interest amount will also continue. There can be no assurance that cash
collections will be sufficient to restore this ratio in the foreseeable future.

<TABLE>
<CAPTION>
NOTE                     REPORT LINE NAME                        DESCRIPTION
----                     ----------------                        -----------
<S>                      <C>                                     <C>
                         CASH COLLECTIONS
[1]                      Lease Rentals                           Assumptions as per the Adjusted 1998 Base Case
[2]                      Renegotiated Leases                     Change in contracted rental cash flow caused by a
                                                                 renegotiated lease
[3]                      Rental Resets                           Re-leasing events where new lease rate deviated from
                                                                 the Adjusted 1998 Base Case
[4]                      Other
[5](SIGMA)[1]...[4]      CONTRACTED LEASE RENTALS                Current Contracted Lease Rentals due as at the latest
                                                                 Calculation Date
[6]                      Movement in Current Arrears Balance     Current Contracted Lease Rentals not received as at
                                                                 the latest Calculation Date, excluding Bad Debts
[7]                      Less Net Stress related Costs
[8]                      Bad Debts                               Arrears owed by former lessees and deemed
                                                                 irrecoverable
[9]                      Deferred Arrears Balance                Current arrears that have been capitalised and
                                                                 restructured as a Note Payable
[10]                     AOG                                     Loss of rental due to an aircraft being off-lease and
                                                                 non-revenue earning
[11]                     Other Leasing Income                    Includes lease termination payments, rental
                                                                 guarantees and late payments charges
[12]                     Repossession                            Legal and technical costs incurred in repossessing
                                                                 aircraft.
[13](SIGMA)[8]...[12]    Sub-total
[14][5]+[6]+[13]         NET LEASE RENTALS                       Contracted Lease Rentals less Movement in Current
                                                                 Arrears Balance and Net Stress-related costs
[15]                     Interest Earned                         Interest earned on monthly cash balances
[16]                     Aircraft Sales                          Proceeds, net of fees and expenses, from the sale of
                                                                 aircraft.
[17]                     Net Maintenance                         Maintenance Revenue Reserve received less
                                                                 reimbursements to lessees
[18]                     Other Receipts                          Net proceeds received from the sale of shares held in
                                                                 an airline and amounts received under the Tax Sharing
                                                                 Agreement for the utilisation by GE Capital of tax
                                                                 losses of Airplanes Group companies.
[19]                     Total Cash Collections                  Net Lease Rentals + Interest Earned + Aircraft Sales
  (SIGMA)[14]...[18]                                             + Net Maintenance + Other Receipts
                         CASH EXPENSES
                         Aircraft Operating Expenses             All operational costs related to the leasing of
                                                                 aircraft.
[20]                     Releasing and Other Overheads           Costs associated with transferring an aircraft from
                                                                 one lessee to another, costs of insurance and other
                                                                 lessee-related overheads
                         SG&A EXPENSES
[21]                     Aircraft Servicer Fees                  Monthly and annual fees paid to the servicer
                         Retainer Fee                            Fixed amount per month per aircraft
                         Minimum Incentive Fee                   Minimum annual fee paid to Servicer for performance
                                                                 above an annually agreed target.
                         Core Cash Flow/Sales Incentive Fee      Fees (in excess of Minimum Incentive Fee above) paid
                                                                 to the Servicer for performance above an annually
                                                                 agreed target/on sale of an aircraft.
[22] [21]                Sub-total
[23]                     Other Servicer Fees and Other           Administrative agent, trustee and professional fees
                         Overheads                               paid to other service providers and other overheads
[24] [22]+[23]           Sub-total
[25] [20]+[24]           Total Cash Expenses                     Aircraft Operating Expenses + SG&A Expenses
</TABLE>

                                        64
<PAGE>   65

<TABLE>
<CAPTION>
NOTE                     REPORT LINE NAME                        DESCRIPTION
----                     ----------------                        -----------
<S>                      <C>                                     <C>
                         NET CASH COLLECTIONS
[26] [19]                Total Cash Collections                  Line 19 above
[27] [25]                Total Cash Expenses                     Line 25 above
[28]                     Movement in Expense Account             Relates to reduction in accrued expense amounts
[29]                     Refinancing Expenses (accrued March     Costs relating to the March 98 refinancing accrued on
                         98)                                     closing and paid post March 98
[30]                     Interest Payments                       Interest paid on all outstanding debt
[31]                     Swap payments                           Net swap payments (paid)/received
[32](SIGMA)[26]...[31]   Total
[33]                     PRINCIPAL PAYMENTS                      Principal payments on debt
</TABLE>

                                        65
<PAGE>   66

       AIRPLANES CASH FLOW PERFORMANCE FOR THE PERIOD FROM MARCH 11, 1998
         TO MARCH 15, 2001 (36 MONTHS) COMPARISON OF ACTUAL CASH FLOWS
                   VERSUS ADJUSTED 1998 BASE CASE CASH FLOWS

<TABLE>
<CAPTION>
                                                                                           % OF LEASE RENTALS UNDER
                                                                                         THE ADJUSTED 1998 BASE CASE*
                                                                                        -------------------------------
                                                               ADJUSTED                           ADJUSTED
                                                               1998 BASE                          1998 BASE
                                                    ACTUAL       CASE*      VARIANCE    ACTUAL      CASE*      VARIANCE
                                                    -------    ---------    --------    ------    ---------    --------
                                                      $ M         $ M         $ M
<S>             <C>                                 <C>        <C>          <C>         <C>       <C>          <C>
                CASH COLLECTIONS
[1]             Lease Rentals....................   1,399.5     1,399.5         0.0     100.0%      100.0%        0.0%
[2]             Renegotiated Leases..............      (2.6)        0.0        (2.6)     (0.2%)       0.0%       (0.2%)
[3]             Rental Resets....................     (26.9)        0.0       (26.9)     (1.9%)       0.0%       (1.9%)
[4]             Other............................       0.0         0.0         0.0       0.0%        0.0%        0.0%
                                                    -------     -------      ------     -----       -----        ----
[5] [1-4]       CONTRACTED LEASE RENTALS,........   1,370.0     1,399.5       (29.5)     97.9%      100.0%       (2.1%)
[6]             Movement in Current Arrears           (24.1)        0.0       (24.1)     (1.7%)       0.0%       (1.7%)
                Balance..........................
[7]             less Net Stress Related Costs.
[8]             Bad Debts........................      (5.2)      (14.1)        8.9      (0.4%)      (1.0%)       0.6%
[9]             Deferred Arrears Balance.........      16.7        15.3         1.4       1.2%        1.1%        0.1%
[10]            AOG..............................     (48.6)      (59.4)       10.8      (3.5%)      (4.2%)       0.7%
[11]            Other Leasing Income.............       5.0         0.0         5.0       0.4%        0.0%        0.4%
[12]            Repossession.....................     (18.4)      (11.3)       (7.1)     (1.3%)      (0.8%)      (0.5%)
                                                    -------     -------      ------     -----       -----        ----
[13] [8-12]     Sub-total........................     (50.5)      (69.5)       19.0      (3.6%)      (4.9%)       1.3%
[14] [5+6+13]   NET LEASE RENTAL.................   1,295.4     1,330.0       (34.6)     92.6%       95.1%       (2.5%)
[15]            Interest Earned..................      35.5        30.1         5.4       2.5%        2.1%        0.4%
[16]            Aircraft Sales...................     160.0       160.0         0.0      11.4%       11.4%        0.0%
[17]            Net Maintenance..................     (44.1)        0.0       (44.1)     (3.2%)       0.0%       (3.2%)
[18]            Other Receipts...................       9.4         0.0         9.4       0.7%        0.0%        0.7%
                                                    -------     -------      ------     -----       -----        ====
[19] [14-18]    Total Cash Consideration.........   1,456.2     1,520.1       (63.9)    104.0%      108.6%       (4.6%)
                                                    =======     =======      ======     =====       =====        ====
                CASH EXPENSES
                Aircraft Operating Expenses......
[20]            Re-leasing and other overheads...     (87.1)      (28.3)      (58.8)     (6.2%)      (2.0%)      (4.2%)
                SG&A Expenses....................
[21]            Aircraft Servicer Fees...........
                Retainer Fee.....................     (64.6)      (63.7)       (0.9)     (4.6%)      (4.6%)       0.0%
                Minimum Incentive Fee............      (4.5)       (4.6)        0.1      (0.3%)      (0.3%)       0.0%
                Core Cashflow/Sales Incentive Fee      (3.5)        0.0        (3.5)     (0.3%)       0.0%       (0.3%)
                                                    -------     -------      ------     -----       -----        ----
[22] [21]       Sub-total........................     (72.6)      (68.3)       (4.3)     (5.2%)      (4.9%)      (0.3%)
[23]            Other Servicer Fees and Other....     (39.4)      (36.7)       (2.7)     (2.8%)      (2.6%)      (0.2%)
                Overheads........................
                                                    -------     -------      ------     -----       -----        ----
[24] [22+23]    Sub-total........................    (112.0)     (105.0)       (7.0)     (8.0%)      (7.5%)      (0.5%)
                                                    -------     -------      ------     -----       -----        ----
[25] [24+20]    Total Cash Expenses..............    (199.1)     (133.3)      (65.8)    (14.2%)      (9.5%)      (4.7%)
                                                    =======     =======      ======     =====       =====        ====
                NET CASH COLLECTIONS
[26] [19]       Total Cash Collections...........   1,456.2     1,520.1       (63.9)    104.0%      108.6%       (4.6%)
[27] [25]       Total Cash Expenses..............    (199.1)     (133.3)      (65.8)    (14.2%)      (9.5%)      (4.7%)
[28]            Movement in Expense Account......      24.1         0.0        24.1       1.7%        0.0%        1.7%
[29]            Refinancing Expenses (accrued Mar)    (16.8)        0.0       (16.8)     (1.2%)       0.0%       (1.2%)
                98
[30]            Interest Payments................    (674.7)     (677.9)        3.2     (48.2%)     (48.5%)       0.3%
[31]            Swap Payments....................      (2.6)       (1.9)       (0.7)     (0.2%)      (0.1%)      (0.1%)
                                                    -------     -------      ------     -----       -----        ----
[32] [26-31]    TOTAL............................     587.1       707.0      (119.9)     41.9%       50.5%       (8.6%)
                                                    =======     =======      ======     =====       =====        ====
[33]            PRINCIPAL PAYMENTS
                Subclass A-5.....................      93.6        93.6         0.0       6.7%        6.7%        0.0%
                Subclass A-6.....................     404.6       488.0       (83.4)     28.9%       34.9%       (6.0%)
                Subclass B.......................      58.7        73.9       (15.2)      4.2%        5.3%       (1.1%)
                Subclass C.......................      25.3        39.7       (14.4)      1.8%        2.8%       (1.0%)
                Subclass D                              4.9        11.8        (6.9)      0.3%        0.8%       (0.5%)
                                                    -------     -------      ------     -----       -----        ----
                Total............................     587.1       707.0      (119.9)     41.9%       50.5%       (8.6%)
                                                    =======     =======      ======     =====       =====        ====
                DEBT BALANCES AT MARCH 15, 2001
                Subclass A-4 / A-9+..............     200.0       200.0         0.0
                Subclass A-6.....................     445.4       362.0        83.4
                Subclass A-7 / A-9+..............     550.0       550.0         0.0
                Subclass A-8.....................     700.0       700.0         0.0
                Subclass B.......................     278.3       263.1        15.2
                Subclass C.......................     349.8       335.4        14.4
                Subclass D.......................     395.1       388.2         6.9
                                                    -------     -------      ------
                                                    2,918.6     2,798.7       119.9
                                                    =======     =======      ======
</TABLE>

---------------

                                        66
<PAGE>   67

* Adjusted 1998 Base Case equals the 1998 Base Case as adjusted for aircraft
  sales which have occurred and which were not anticipated in the 1998 Base
  Case.

+ The subclass A-4 and A-7 certificates were refinanced on March 15, 2001 by the
  issuance of $750.0 million subclass A-9 certificates.

<TABLE>
<CAPTION>
                                                                                       ADJUSTED
                                                  MAR-98                                 1998
                                                 CLOSING              ACTUAL           BASE CASE
                                                 -------              ------           ---------
                                                    $M                  $M                $M
<S>  <C>                                     <C>                 <C>                   <C>       <C>
     NET CASH COLLECTIONS................                              587.1              707.0
     Add Back Interest and Swap..........                              677.3              679.8
                                                                     -------            -------
     Payments
a    Net Cash Collections (excl. interest                            1,264.4
     and swap payments)..................                                               1,386.8
                                                                     =======            =======
b    Swaps...............................                                2.6                1.9
c    Class A Interest....................                              389.9              384.5
d    Class A Minimum.....................                                0.0                0.0
e    Class B Interest....................                               60.1               58.9
f    Class B Minimum.....................                               53.5               31.7
g    Class C Interest....................                               88.4               87.4
h    Class D Interest....................                              129.9              129.4
i    Class A Principal Adjustment........                              373.5                0.0
j    Class C Scheduled...................                               25.3               39.7
k    Class D Scheduled...................                                4.9               11.8
l    Permitted Aircraft Modifications....                                0.0                0.0
m    Step-up Interest....................                                0.0                0.0
n    Class E Minimum Interest............                                6.4               17.7
o    Class B Supplemental................                                5.2               42.2
p    Class A Supplemental................                              124.7              581.6
                                                                     -------            -------
     Total...............................                            1,264.4            1,386.8
                                                                     =======            =======
[1] INTEREST COVERAGE RATIO
     Class A.............................                                3.2                3.6  = a/(b+c)
     Class B.............................                                2.8                3.1  = a/(b+c+d+e)
     Class C.............................                                2.1                2.5  = a/(b+c+d+e+f+g)
     Class D.............................                                1.7                2.0  = a/(b+c+d+e+f+g+h)
[2] DEBT COVERAGE RATIO
     Class A.............................                                3.2                3.6  = a/(b+c+d)
     Class B.............................                                2.5                2.9  = a/(b+c+d+e+f)
     Class C.............................                                1.1                1.9  = a/(b+c+d+e+f+g+h+i+j)
     Class D.............................                                1.1                1.9  = a/(b+c+d+e+f+g+h+i+j+k)
     LOAN TO VALUE RATIOS (IN US DOLLARS)
[3] Expected Portfolio Value.............        4,073.0                                3,410.7
[4] Adjusted Portfolio Value.............                            3,108.7
     Liquidity Reserve Amount                      174.4               156.9
     Of which -- Cash....................                                                 174.4
     -- Accrued Expenses.................            0.0                12.0
                                                 -------             -------
                                                                                            0.0
                                                                                        -------
     Subtotal............................          174.4               169.5              174.4
     Less Lessee Security Deposits.......           54.4                36.9               54.4
                                                 -------             -------            -------
     Subtotal............................          120.0               132.6              120.0
                                                 -------             -------            -------
[5] Total Asset Value....................        4,193.0             3,241.3            3,530.7
                                                 =======             =======            =======
</TABLE>

<TABLE>
<CAPTION>
                                               MARCH 15, 1998       MARCH 15, 2001         MARCH 15, 2001
                                               ---------------      ---------------        ---------------
<S>                                            <C>       <C>        <C>       <C>          <C>       <C>
NOTE BALANCES AS AT:
Class A................................        2,393.6   57.1%      1,895.4   58.5%        1,812.0   51.3%
Class B................................          337.0   65.1%        278.3   67.1%          263.1   58.8%
Class C................................          375.0   74.1%        349.8   77.9%          335.4   68.3%
Class D................................          400.0   83.6%        395.1   90.0%          388.2   79.3%
                                               -------              -------                -------
                                               3,505.6              2,918.6                2,798.7
                                               =======              =======                =======
</TABLE>

                                        67
<PAGE>   68

---------------

(1) "INTEREST COVERAGE RATIO" is equal to Net Cash Collections (excluding
    interest and swap payments) expressed as a ratio of the interest payable on
    each subclass of notes plus the interest and minimum principal payments
    payable on each subclass of notes that rank senior in priority of payment to
    the relevant subclass of notes.

(2) "DEBT SERVICE RATIO" is equal to Net Cash Collections (excluding interest
    and swap payments) expressed as a ratio of the interest and
    Minimum/Scheduled Principal Payments payable on each subclass of notes plus
    the interest and Minimum/Scheduled Principal Payments payable on each
    subclass of notes that ranks equally with or senior to the relevant subclass
    of notes in the priority of payments. In respect of the class A notes,
    Principal Adjustment Amount payments have been excluded as they are a
    function of aircraft values.

(3) "EXPECTED PORTFOLIO VALUE" represents the Initial Appraised Value of each
    aircraft in our portfolio multiplied by the Depreciation Factor at payment
    date divided by the Depreciation Factor at the March 1996 closing date.

(4) "ADJUSTED PORTFOLIO VALUE" represents the appraised value of each aircraft
    in our portfolio as determined by the most recent appraisal multiplied by
    the Depreciation Factor at payment date divided by the Depreciation Factor
    as of the relevant appraisal date.

(5) "TOTAL ASSET VALUE" is equal to Total Expected/Adjusted Portfolio Value plus
    Liquidity Reserve Amount minus lessee security deposits.

THE ACCOUNTS

     The indentures and the security trust agreement provide that substantially
all of Airplanes Group's cash inflows and outflows occur through the rental
accounts, collection account, lessee funded account and expense account which
the cash manager, acting on behalf of the security trustee, has established and
maintains at a bank having:

     -  a long-term unsecured debt rating of not less than AA, or the
        equivalent, by the rating agencies, or

     -  a certificate of deposit rating of A-1+ by Standard & Poor's, P-1 by
        Moody's and F1 by Fitch,

except that, where required by the terms of the relevant leases, some rental
accounts may be established at banks having ratings of less than AA, or the
equivalent, by the rating agencies or a certificate of deposit rating of less
than A-1+ by Standard & Poor's, P-1 by Moody's and F1 by Fitch.

     Except where local legal or regulatory reasons do not permit, all of these
accounts are held in the names of the security trustee, who has sole dominion
and control over the accounts, including the sole power to direct withdrawals
from or transfers among the accounts. Subject to conditions set forth in the
cash management agreement, the security trustee has delegated its authority over
the accounts to the cash manager but the security trustee is not responsible for
the acts or omissions of the cash manager.

     For so long as any notes remain outstanding, funds on deposit in the
accounts will be invested and reinvested at Airplanes Group's written direction
(which direction has been delegated to the cash manager pursuant to the cash
management agreement) in one or more permitted account investments, maturing, in
the case of the collection account and expense account, such that sufficient
funds shall be available to make required payments on the first succeeding
scheduled interest payment date on the notes after those investments are made.
Investment and reinvestment of funds in the lessee funded account must be made
in a manner and with maturities that conform to the requirements of the related
leases. Investment earnings on funds deposited in any account, net of losses and
investment expenses, will (to the extent permitted by the terms of the related
leases in the case of funds in the lessee funded account) be deposited in the
collection account and treated as collections.

RENTAL ACCOUNTS

     The lessees make all payments under the leases directly into the applicable
rental accounts. Pursuant to the cash management agreement, the cash manager
transfers, or causes to be transferred, all funds deposited into the rental
accounts into the collection account as collections within one business day of
receipt thereof (other than certain limited amounts, if any, required to be left
on deposit for local legal or regulatory reasons).

                                        68
<PAGE>   69

THE COLLECTION ACCOUNT

     All of the following "COLLECTIONS" received by Airplanes Group have to be
deposited in the collection account:

     -  rental payments,

     -  payments under any letter of credit, letter of comfort, letter of
        guarantee or other assurance in respect of a lessee's obligations under
        a lease,

     -  the liquidity reserve amount,

     -  amounts received in respect of claims for damages or in respect of any
        breach of contract for any nonpayment (including any amounts received
        from any Airplanes Group subsidiary, whether by way of distribution,
        dividend, repayment of a loan or otherwise and any proceeds received in
        connection with a lessee's restructuring),

     -  net proceeds of any aircraft sale or amounts received under purchase
        options and other agreements,

     -  proceeds of any insurance payments in respect of any aircraft or any
        indemnification proceeds,

     -  amounts transferred from the lessee funded account to the collection
        account,

     -  net payments to Airplanes Group under any swap agreement,

     -  investment income on all amounts on deposit in the accounts (in each
        case to the extent consistent with the terms of applicable related
        leases), and

     -  any other amounts received by any member of Airplanes Group, except
        specified funds required to be segregated from Airplanes Group's other
        funds, applied in connection with a redemption, received in connection
        with a refinancing issue of notes and required to be paid over to any
        third party.

     Collections on deposit in the collection account are calculated by the cash
manager on the fourth business day immediately preceding each interest payment
date. On each payment date, the cash manager will transfer from the collection
account to the expense account the portion of Airplanes Group expenses that are
due and payable or are anticipated to become due and payable over the next
interest accrual period on the notes (the "REQUIRED EXPENSE AMOUNT") and that
have not been paid directly by the cash manager to expense payees. The cash
manager may also transfer other amounts into the expense account for
unanticipated expenses falling due and payable within that interest accrual
period. If there are available funds in accordance with "--The Notes and
Guarantees -- Priority of Payments" on any payment date, the cash manager will
also transfer amounts in respect of expenses and costs that are not regular,
monthly recurring expenses but are anticipated to become due and payable in any
future interest accrual period ("PERMITTED ACCRUALS") to the expense account.
Amounts received in respect of segregated security deposits and maintenance
reserves are transferred directly into the lessee funded account.

LIQUIDITY RESERVE AMOUNT

     Airplanes Group is required to maintain a cash balance in the collection
account under the indentures in an amount equal to the sum of:

     -  the maintenance reserve amount ($60 million for purposes of the "First
        Collection Account Top-up" plus an additional $20 million for purposes
        of the "Second Collection Account Top-up" as of March 15, 2001, as
        further described below),

     -  a security deposit reserve amount (equal to approximately $36.9 million
        as of March 15, 2001), and

     -  a miscellaneous reserve amount ($Nil as of March 15, 2001, as further
        described below).

     The required maintenance reserve amount and miscellaneous reserve amount
may be increased or decreased from time to time by an action of the board of
directors of Airplanes Limited or the controlling trustees of Airplanes Trust in
light of significant changes in, among other things, the condition of the
aircraft, the terms and

                                        69
<PAGE>   70

conditions of future leases, the financial condition of the lessees or
prevailing industry conditions. Any reduction is subject to confirmation in
advance in writing from the rating agencies that the proposed reduction in the
liquidity reserve amount will not result in a lowering or withdrawal of their
ratings of any class of certificates.

     On February 20, 2001, the board of directors of Airplanes Limited and the
controlling trustees of Airplanes Trust approved a reduction of the
miscellaneous reserve amount required to be retained by Airplanes Group in the
collection account from $40 million to $Nil as of March 15, 2001. On March 8,
2001, the board of directors of Airplanes Limited and the controlling trustees
of Airplanes Trust further approved a reduction of the maintenance reserve
amount required to be retained by Airplanes Group in the collection account from
$80 million to $60 million as of March 15, 2001 for purposes of the "First
Collection Account Top-up" (but not for the "Second Collection Account Top-up")
according to the priority of payments provided in the indentures.

     The $40 million made available from the reduction of the miscellaneous
reserve amount was applied to reduce the outstanding class A principal
adjustment amount on the April 17, 2001 payment date. The reduction of the
maintenance reserve amount for purposes of the "First Collection Account Top-up"
will allow an additional amount of up to $20 million to be applied, if required,
to pay the minimum hedge payments, class A minimum principal, class B interest,
class B minimum principal, class C interest and class D interest on any payment
date after March 15, 2001. This additional $20 million amount, however, is still
required to be retained by Airplanes Group in the collection account for
purposes of the "Second Collection Account Top-up." The rating agencies have
confirmed that this reduction of the miscellaneous reserve amount and the
maintenance reserve amount will not result in a lowering or withdrawal of the
ratings of any class or subclass of certificates.

     If the balance of funds on deposit in the collection account falls below
the liquidity reserve amount at any time (including as a result of Airplanes
Group's determination that the liquidity reserve amount should be increased, as
required by the applicable rating agencies or otherwise), Airplanes Group may
continue to make all payments, including required payments on the notes and the
guarantees, which rank prior to or equally with payments of accrued but unpaid
interest on the class D notes and any permitted accruals so long as the balance
of funds in the collection account does not fall below the sum of the
maintenance reserve amount and the miscellaneous reserve amount at their then
current levels. Even if the balance of funds in the collection account falls
below the sum of the maintenance reserve amount and the miscellaneous reserve
amount, Airplanes Group may continue to make all payments, including required
payments on the notes and the guarantees, of (a) all accrued but unpaid interest
and, on the final maturity date, principal of the class or subclass of the most
senior class of notes then outstanding to avoid a note event of default and (b)
payments under Airplanes Group's swap agreements.

     If the aggregate outstanding principal balance of the notes is less than or
equal to the liquidity reserve amount, the balance of funds in the collection
account will be distributed in accordance with the priority of payments
established for the notes.

THE LESSEE FUNDED ACCOUNT

     Some leases require that certain lessee security deposits and supplemental
rent payments to provide for maintenance reserves be segregated from other
Airplanes Group funds. These security deposits and maintenance reserves are held
in the "LESSEE FUNDED ACCOUNT" and are accounted for (and, if required by any
lease, segregated) on a per lease basis.

     Funds on deposit in the lessee funded account are used to make specified
maintenance payments, security deposit repayments and other specified or
permitted payments and will not be used to make payments in respect of the notes
or the certificates at any time, including after a note event of default. In
some circumstances where lessees relinquish their rights to receive certain
maintenance and security deposit payments upon the expiration of a lease,
surplus funds may be transferred from the lessee funded account to the
collection account.

THE EXPENSE ACCOUNT

     On each payment date, the cash manager withdraws the required expense
amount from the collection account to pay the expenses. To the extent that the
required expense amount has not been paid directly to expense

                                        70
<PAGE>   71

payees, it is deposited into the expense account. Further withdrawals of cash
from the collection account by the cash manager to satisfy expenses due and
payable prior to the next payment date that were not previously anticipated are
also deposited in the expense account. If funds on deposit in the collection
account are less than the required expense amount on any payment date, Airplanes
Group will be unable to pay the required expense amount in full, which may lead
to a default under Airplanes Group's various service agreements or other
contracts under which the expenses arise.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

INTEREST RATE SENSITIVITY

     Airplanes Group's principal market risk exposure is to changes in interest
rates. This exposure arises from the notes (as illustrated in the table above at
"Item 7. Management's Discussion And Analysis Of Financial Condition And Results
Of Operations -- Indebtedness") and the derivative instruments used by Airplanes
Group to manage interest rate risk.

INTEREST RATE RISK AND MANAGEMENT

     The leasing revenues of Airplanes Group are generated primarily from lease
rental payments which are based on either a fixed or floating rate, or a
combination of the two. In the case of floating rate leases, an element of the
rental varies in line with changes in LIBOR, generally six-month LIBOR. See
"Item 1. Business -- The Aircraft, Related Leases and Collateral -- The Leases"
for more information regarding the terms of our leases. As of March 31, 2001,
leases representing approximately 75% of our portfolio by appraised value as of
January 31, 2001 provided for fixed rate rental payments and approximately 25%
provided for floating rate payments.

     In general, an interest rate exposure arises to the extent that Airplanes
Group's fixed and floating interest obligations in respect of the class A, B, C
and D notes do not correlate to the mix of fixed and floating rental payments
for different rental periods. This interest rate exposure can be managed through
the use of interest rate swaps and other derivative instruments. The class A and
class B notes bear floating rates of interest and the class C and class D notes
bear fixed rates of interest. The mix of fixed and floating rental payments
contains a higher percentage of fixed rate payments than the percentage of fixed
rate interest payments on the notes, including as a result of the fact that the
reset periods on floating rental payments are generally longer than the monthly
reset periods on the floating rate notes. In order to correlate the contracted
fixed and floating rental payments to the fixed and floating interest payments
on the notes, Airplanes Group enters into interest rate swaps.

     Under the swaps, Airplanes Group pays fixed amounts and receives floating
amounts on a monthly basis. The swaps amortize having regard to the expected pay
down schedule of the class A and B notes, the expiry dates of the leases under
which lessees are contracted to make fixed rate rental payments and the LIBOR
reset dates under the floating rate leases. At least every three months, and in
practice more frequently, the administrative agent seeks to enter into
additional swaps or sell at market value or unwind part or all of the swaps and
any future swaps in order to rebalance the fixed and floating mix of interest
obligations and the fixed and floating mix of rental payments.

     As of March 31, 2001, Airplanes Group had unamortized swaps with an
aggregate notional principal balance of $1,955 million. The aggregate notional
principal balance of these swaps reduce by their terms to $1,070 million by
March 31, 2002, to an aggregate notional principal balance of $490 million by
March 31, 2003 and to an aggregate notional principal balance of $105 million by
March 31, 2004. None of the swaps have maturity dates extending beyond December
15, 2004. The aggregate fair market value of the portfolio of 46 swaps as of
March 31, 2001 was estimated at $(38) million (that is, the swaps were
"out-of-the-money," that is if sold, would result in a loss, as detailed below:

                                        71
<PAGE>   72

                  AIRPLANES GROUP SWAP BOOK AT MARCH 31, 2001

<TABLE>
<CAPTION>
                                                                                                 ESTIMATED FAIR
                                                               FINAL MATURITY    FIXED RATE    MARKET VALUE AS OF
SWAP NUMBER            NOTIONAL AMOUNT(1)    EFFECTIVE DATE         DATE         PAYABLE(2)    MARCH 31, 2001(3)
-----------            ------------------    --------------    --------------    ----------    ------------------
                         (IN MILLIONS)                                                           (IN THOUSANDS)
<S>                    <C>                   <C>               <C>               <C>           <C>
1....................        $   15            28-Mar-96         15-Apr-01       6.09250%           $     (9)
2....................            20            17-Nov-99         15-Apr-01        5.85500                (13)
3....................            20            15-Aug-00         15-May-01        6.77500                (57)
4....................            20            28-Oct-97         15-Jun-01        5.96000                (52)
5....................            40            15-Dec-00         15-Jun-01        6.54000               (137)
6....................            55            22-Dec-00         15-Jun-01        6.22500               (178)
7....................           160            26-Jan-01         15-Jul-01        5.39500               (304)
8....................            15            15-Dec-99         15-Aug-01        6.20000                (41)
9....................           135            15-Mar-01         15-Sep-01        4.89000               (137)
10...................            45            16-Aug-99         15-Apr-02        6.22500               (645)
11...................            20            27-May-98         15-Apr-02        6.28000               (384)
12...................            15            15-Dec-99         15-Apr-02        6.31000               (229)
13...................            10            27-Oct-98         15-May-02        6.29000               (208)
14...................            15            17-Apr-00         15-May-02        6.71500               (309)
15...................           335            15-Nov-99         15-Jun-02        6.12000             (2,723)
16...................            15            16-Feb-99         15-Jul-02        6.27000               (316)
17...................            10            15-Sep-98         15-Aug-02        6.17000               (156)
18...................           120            15-Jul-98         15-Dec-02        6.24000             (2,864)
19...................            15            15-Jun-00         15-Dec-02        7.11250             (2,929)
20...................            30            25-Aug-98         15-Feb-03        6.39000             (1,056)
21...................            25            15-Oct-98         15-Feb-03        6.38000               (733)
22...................            10            16-Nov-98         15-Feb-03        6.39000               (380)
23...................            50            15-Dec-98         15-Feb-03        6.28400             (1,259)
24...................            40             1-Jun-99         15-Mar-03        6.22000               (857)
25...................            10            15-Feb-00         15-Mar-03        6.39650               (490)
26...................            15            18-Jan-00         15-Mar-03        6.38500               (563)
27...................            45            21-Dec-99         15-Mar-03        6.58750             (1,157)
28...................             0(4)         15-Apr-01         15-Apr-03        7.18500               (918)
29...................            35            21-Jun-99         15-Jun-03        6.31000             (1,649)
30...................            55            15-Jul-99         15-Aug-03        6.29000             (1,812)
31...................            15            18-Jan-00         15-Oct-03        6.46500               (561)
32...................            30            17-Aug-99         15-Nov-03        6.33000             (1,089)
33...................            35            15-Dec-00         15-Nov-03        7.36250             (1,948)
34...................            25            26-Apr-00         15-Nov-03        6.68750               (617)
35...................            40            20-Sep-00         15-Nov-03        6.56250             (1,685)
36...................           125            15-Nov-00         15-Nov-03        6.57750               (723)
37...................            35            15-Feb-01         15-Nov-03        5.27500               (335)
38...................            25            24-Mar-00         15-Dec-03        6.84500             (1,002)
39...................            85            15-May-00         15-Jan-04        7.29950             (1,952)
40...................            25            26-Jun-00         15-Feb-04        6.97750               (932)
41...................            45            15-Aug-00         15-Feb-04        6.77000             (2,241)
42...................            15            18-Aug-00         15-Apr-04        6.77000               (724)
43...................             0(4)         17-Apr-01         15-May-04        6.82900             (1,428)
44...................            60            16-Oct-00         15-Jul-04        6.58500               (765)
45...................             0(4)         17-Sep-01         15-Sep-04        5.71250               (643)
46...................             0(4)         15-Apr-02         15-Dec-04        5.39750               (121)
                             ------                                                                 --------
Total................        $1,955                                                                 $(38,045)
                             ======                                                                 ========
</TABLE>

                                        72
<PAGE>   73

---------------

(1)  While some of the above swaps have a fixed notional amount, many amortize
     over the period to the final maturity date.

(2)  Airplanes Group makes fixed rate payments on a monthly actual/360 adjusted
     basis under all swaps, with the exception of swap number 4 under which
     Airplanes Group makes fixed rate payments calculated on a monthly 30/360
     unadjusted basis.

(3)  Under all swaps, Airplanes Group receives floating rate payments at one
     month LIBOR, reset monthly.

(4)  The initial amounts for swaps number 28, 43, 45 and 46 are $20 million, $25
     million, $25 million and $40 million respectively.

     Pursuant to a decision of the directors of Airplanes Limited and the
controlling trustees of Airplanes Trust on November 8, 1999, Airplanes Group
either re-couponed or unwound and replaced 30 of its then portfolio of 44 swaps.
20 of these swaps were adjusted so that Airplanes Group's fixed payment rate
more closely reflected current market rates. Airplanes Group received a net cash
payment of $9.33 million with respect to these 20 swaps. In addition, ten of the
30 swaps were terminated, in return for a net payment to Airplanes Group of
$1.92 million. In aggregate, Airplanes Group received a net cash inflow of
$11.25 million as a result of this recouponing or unwinding and replacement, but
became subject to higher ongoing swap costs due to the re-calibrating of the
swaps to then current market rates. Simultaneously with these terminations,
Airplanes Group put in place a replacement swap to maintain a hedged position.
These adjustments and terminations released the positive value in Airplanes
Group's swaps and resulted in additional principal payments to the certificate
holders. These transactions were conducted in accordance with Airplanes Group's
interest rate risk management policies. The realized gain on the termination of
these swaps has been deferred and is being recognized over the life of the
hedged transaction in accordance with the guidance provided in ET Issue No.
84-7, "Termination of Interest Rate Swaps."

     Additional interest rate exposure will arise to the extent that lessees
owing fixed rate rental payments default and interest rates have declined
between the contract date of the lease and the date of default. This exposure is
managed through the purchase of swaptions. Airplanes Group purchases swaptions
which, if exercised, will allow Airplanes Group to enter into interest rate swap
transactions under which it will pay floating amounts and receive fixed amounts.

     Because not all lessees making fixed rate rental payments are expected to
default and not all lessee defaults are expected to occur following a decline in
interest rates, Airplanes Group purchases swaptions in a notional amount less
than the full extent of the exposure associated with the lessees making fixed
rate rental payments. This notional amount (the "TARGET HEDGE") will be varied
from time to time to reflect, among other things, changes in the mix of payments
bases under future leases and in the prevailing level of interest rates.

     The payment of the premium for any of these swaptions may be made at two
points in the priority of payments under the indentures. Fifty percent of any
swaption premium in any month is a "MINIMUM HEDGE PAYMENT" and is paid fourth in
Airplanes Group's order of priority of payments. The other 50% of the premium is
expended as a "SUPPLEMENTAL HEDGE PAYMENT" and is paid seventeenth in Airplanes
Group's order of priority of payments.

     If there are not sufficient amounts available for distribution and a
supplemental hedge payment would not be made in any month, then Airplanes Group
will reduce the aggregate notional amount of the swaptions bought in that month
to reflect the amount that can be bought for the premium payable as a minimum
hedge payment. As a result of the outstanding class A principal adjustment
amount, no supplemental hedge payments can be made until there are sufficient
cash flows in any given month to satisfy all obligations ranking senior to the
supplemental hedge payment under the terms of the notes. From time to time the
administrative agent may also sell at market value or unwind part or all of the
swaption portfolio, for example, to reflect any decreases in the target hedge.

     In the period from March 28, 1996 to March 31, 2001, Airplanes Group
purchased swaptions with an aggregate notional principal balance of $618 million
and sold swaptions with an aggregate notional principal balance of $194 million
and swaptions with an aggregate notional principal balance of $46 million have
matured.

                                        73
<PAGE>   74

The net aggregate notional principal balance of swaptions at March 31, 2001
therefore amounted to $378 million. The estimated fair market value of the
swaptions at March 31, 2001 was $3.5 million (March 31, 2000: $0.1 million).
Because the swaptions do not qualify for hedge accounting under U.S. GAAP, the
increase in value of $3.4 million between March 31, 2000 and March 31, 2001 has
been included in net interest expense for the year ended March 31, 2001.
Airplanes Group was a party to 16 swaptions as of March 31, 2001, which are
listed below:

               AIRPLANES GROUP SWAPTION BOOK AS OF MARCH 31, 2001

<TABLE>
<CAPTION>
                                                                                                   ESTIMATED FAIR
                                             EXERCISE DATE    FINAL MATURITY     FIXED RATE      MARKET VALUE AS OF
SWAPTION NUMBER        NOTIONAL AMOUNT(1)    (ON OR AFTER)         DATE         RECEIVABLE(2)      MARCH 31, 2001
---------------        ------------------    -------------    --------------    -------------    ------------------
                         (IN MILLIONS)                                                             (IN THOUSANDS)
<S>                    <C>                   <C>              <C>               <C>              <C>
1....................         $ 24             15-Jan-98        15-May-01          5.00%               $    6
2....................           50             15-Sep-98        15-Dec-01           5.30                  262
3....................           30             15-Jan-98        15-Apr-02           5.00                  236
4....................           20             17-Feb-98        15-Sep-02           5.10                  157
5....................           14             15-Apr-98        15-Sep-02           5.10                  110
6....................           12             15-Jan-01        15-Nov-02           5.25                   20
7....................           19             15-Feb-01        15-Nov-02           5.20                  157
8....................           15             16-Mar-98        15-Mar-03           5.10                  133
9....................           50             15-Jul-98        15-Mar-03           5.10                  433
10...................           20             15-Apr-98        15-Jun-03           5.10                  180
11...................           10             15-Sep-98        15-Sep-03           5.30                  114
12...................           15             15-Jan-01        15-Nov-03           5.30                  102
13...................           10             16-Feb-99        15-Feb-04           5.40                  139
14...................           46             15-Jan-01        15-Jan-05           5.40                  656
15...................           20             15-Feb-01        15-Feb-06           5.55                  368
16...................           23             15-Mar-01        15-Feb-06           5.45                  445
                              ----                                                                     ------
                              $378                                                                     $3,519
                              ====                                                                     ======
</TABLE>

---------------

(1)  Under each swaption, if exercised, Airplanes Group would receive fixed rate
     payments at the rate indicated above on a monthly fixed 30/360 unadjusted
     basis.

(2)  Under each swaption, if exercised, Airplanes Group would pay floating rate
     payments at one month LIBOR, reset monthly.

     Through the use of swaps, swaptions and other interest rate hedging
products, Airplanes Group seeks to manage its exposure to adverse changes in
interest rates based on regular reviews of its interest rate risk. There can be
no assurance, however, that Airplanes Group's interest rate risk management
strategies will be effective in this regard.

     The directors of Airplanes Limited and the controlling trustees of
Airplanes Trust are responsible for reviewing and approving the overall interest
rate management policies and transaction authority limits. Specific hedging
contracts are approved by officers of the administrative agent acting within the
overall policies and limits. Counterparty risk is monitored on an ongoing basis.
Counterparties are subject to the prior approval of the directors of Airplanes
Limited and the controlling trustees of Airplanes Trust. Airplanes Group's
counterparties consist of the affiliates of major U.S. and European financial
institutions who have credit ratings, or provide collateralization arrangements,
which are consistent with maintaining the ratings of the class A certificates.

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

     In June 1998 the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Certain Hedging Activities." In June 2000 the FASB
issued SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain
Hedging

                                        74
<PAGE>   75

Activity, an Amendment of SFAS 133." SFAS No. 133 and SFAS No. 138 require that
all derivative instruments be recorded on the balance sheet at their respective
fair values. SFAS No. 133 and SFAS No. 138 are effective for all fiscal quarters
of all fiscal years beginning after June 30, 2000. We adopted SFAS No. 133 and
SFAS No. 138 on April 1, 2001.

     Upon adoption of the standards all derivatives will be recognized on the
balance sheet at their fair value. All derivatives will be designated as either
a hedge of the fair value of a recognized asset or liability or of an
unrecognized firm commitment ("fair value" hedge), a hedge of a forecasted
transaction or of the variability of cash flows to be received or paid related
to a recognized asset or liability ("cash flow" hedge), a foreign-currency
fair-value or cash-flow hedge ("foreign currency" hedge) or a "held for trading"
("trading" instrument). We expect that all of our interest rate swaps will be
designed as cash flow hedges while our swaptions will be designated as trading
instruments.

     Airplanes Group is in the process of formally documenting all relationships
between hedging instruments and hedged items, as well as its risk-management
objective and strategy for undertaking various hedge transactions. This process
includes linking all derivatives that are designated as cash-flow hedges to
specific liabilities on the balance sheet. Airplanes Group will formally assess,
both at the hedge's inception and on an ongoing basis, whether the derivatives
that are used in hedging transactions are highly effective in offsetting changes
in cash flows of hedged items.

     Changes in the fair value of a derivative that is highly effective and that
is designated and qualifies as a cash-flow hedge will be recorded in other
comprehensive income until earnings are affected by the variability in cash
flows of the designated hedged item.

     We will discontinue hedge accounting prospectively when it is determined
that the derivative is no longer highly effective in offsetting changes in the
cash flows of the hedged item, the derivative expires or is sold, terminated, or
exercised, or management determines that designation of the derivative as a
hedging instrument is no longer appropriate.

     In all situations in which hedge accounting is discontinued, we will
continue to carry the derivative at its fair value on the balance sheet, and
recognize any changes in its fair value in earnings.

     In all situations where derivatives are designated as trading instruments,
they will be carried at fair value on the balance sheet and any changes in fair
value will be recognized in earnings.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The response to this item is submitted as a separate section of this
report. See "Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K".

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

     None.

                                        75
<PAGE>   76

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS

DIRECTORS AND CONTROLLING TRUSTEES

     The Directors and the Controlling Trustees of Airplanes Limited and
Airplanes Trust, respectively, their respective ages and principal activities
are as follows:

<TABLE>
<CAPTION>
                                                               OFFICES HELD
                                      --------------------------------------------------------------
NAME                             AGE        AIRPLANES LIMITED                AIRPLANES TRUST
----                             ---  ------------------------------  ------------------------------
<S>                              <C>  <C>                             <C>

Richard E. Cavanagh............  54   Independent director            Independent controlling
                                                                      trustee

Roy M. Dantzic.................  55   Independent director            Independent controlling
                                                                      trustee

Hugh R. Jenkins................  67   Independent director            Independent controlling
                                                                      trustee

William M. McCann..............  57   Chairman and independent        Chairman and independent
                                      director                        controlling trustee

Brian T. Hayden................  54   Class E note director           Class E note controlling
                                                                      trustee
</TABLE>

     Richard Cavanagh is the President and Chief Executive Officer of The
Conference Board, Inc., a global business research and membership enterprise
based in New York City. Before taking up his current position in 1995, he served
for eight years as Executive Dean of the Kennedy School of Government at Harvard
University. Before that, he was a partner at McKinsey & Company, Inc., an
international management consulting firm. During his 17 years with McKinsey, he
took a two-year public service leave and held senior positions in The White
House Office of Management & Budget. He co-authored the management book The
Winning Performance. Mr. Cavanagh also serves as a director of Aircraft Finance
Trust (another aircraft securitization vehicle), the BlackRock Mutual Fund
family, Arch Chemicals (formerly Olin), The Fremont Group (formerly Bechtel
Investments) and The Guardian Life Insurance Company.

     Roy Dantzic qualified as a chartered accountant in 1968 and started his
career with Coopers & Lybrand. Between 1970 and 1980, he engaged in corporate
advisory work, principally as a director of Samuel Montagu. In 1980, Mr. Dantzic
was appointed by the British Government as the finance director of British
National Oil Corporation and he served in this capacity until 1984. Between 1985
and 1989, he was a director of the corporate broking division of Wood McKenzie.
In 1989 he joined the board of directors of Stanhope Properties and served as
its finance director from 1992 until the company was acquired in 1995. In August
1995, Mr. Dantzic became a director of the corporate broking division of Merrill
Lynch International Ltd. In addition, he has served as a non-executive director
on the boards of Central Electricity Generating Board, British Nuclear Fuels
Limited, Saxon Oil Limited and Total Oil Holdings Ltd. Mr. Dantzic is currently
the managing director of Lattice Property Holdings Ltd.

     Hugh Jenkins has spent over 20 years in senior investment management
positions. He served as Director-General of Investments for the pension plans of
the National Coal Board from 1973-1985, a director of Heron International, N.V.
from 1985-1986, Group Investment director of Allied Dunbar Insurance Plc from
1986-1989, and an executive director of the Prudential Corporation plc and
Chairman/Chief Executive of its investment management subsidiary from 1989 to
December 1995. He is currently the Chairman of Development Securities plc and a
non-executive director of EMI Group plc, Johnson Matthey plc, Gartmore European
Investment Trust plc and Development Securities (Investments) plc. Mr. Jenkins
is also an Advisory Director of London Economics Ltd.

     William McCann, a chartered accountant, was the Managing Partner of Craig
Gardner/Price Waterhouse in the Republic of Ireland from 1987 to 1995. From 1991
to 1995 he was a member of the Price Waterhouse World Board. He was a director
of the Central Bank of Ireland from 1993 to 1998. Mr. McCann was a member of the
Electricity Supply Board, Ireland from 1986 to 2001 and Chairman from 1996 to
2001. Mr. McCann is currently Deputy Chairperson of the Irish Takeover Panel. He
is also a director of Anglo Irish Bank Corporation plc,

                                        76
<PAGE>   77

Canada Life Assurance (Ireland) Limited and Readymix plc and is Chairman or a
director of a number of other companies. He is a member of the Irish National
Competitiveness Council and is a Board Member of the University College Dublin
Graduate School of Business.

     Brian Hayden qualified as a mechanical engineer in 1970 and started his
career with Aer Lingus. He worked in various management positions within Aer
Lingus during the next 19 years. In 1989, he moved to GPA Group (now known as
debis AirFinance Ireland) to head the technical division as Senior Vice
President -- Technical. In 1993, he joined GECAS and is presently an Executive
Vice President with responsibility for technical management of the GECAS-owned
and managed fleet. He is a director of GECAS and a former director of Irish
Helicopters.

     Neither Airplanes Limited nor Airplanes Trust has any employees or
executive management. The board of directors of Airplanes Limited and the
controlling trustees of Airplanes Trust rely on the servicer, the administrative
agent, the cash manager and the other service providers for all servicing,
executive and administrative functions. See "Item 1. Business -- Risk Factors --
Risks Relating to Airplanes Group and Third Parties" for a description of the
risks involved in relying on service providers to operate our business. The
directors and controlling trustees of Airplanes Limited and Airplanes Trust, as
well as other individuals, serve as directors of various of our subsidiaries.

     AUDIT COMMITTEES

     The audit committees of Airplanes Limited and Airplanes Trust, each
established in August 2000, consist of their four independent directors or
controlling trustees, respectively. The duties of each audit committee include:

     (a)   consideration of the independence and appointment of external
           auditors and audit fees;

     (b)   discussion of the nature and scope of the audit with the external
           auditor before any audit commences;

     (c)   review of the annual financial statements before submission to the
           board of Airplanes Limited or controlling trustees of Airplanes
           Trust;

     (d)   discussion of any issues and reservations arising from the audit and
           any matters the auditor may wish to discuss, if necessary, in the
           absence of the administrative agent, cash manager and servicer;

     (e)   review of Airplanes Group's internal control systems; and

     (f)   consideration of other topics as defined by the board of Airplanes
           Limited or controlling trustees of Airplanes Trust.

THE SERVICER

     GECAS provides various aircraft-related services to us as servicer under
the servicing agreement. On November 20, 1998, GECAS' affiliate, GE Capital,
acquired the class E notes previously held by GPA Group (now known as debis
AirFinance Ireland) and its subsidiaries. As the holder of the majority of the
class E notes, GE Capital has the right to appoint one director to the board of
Airplanes Limited and one controlling trustee of Airplanes Trust. GECAS also
holds 5% of the ordinary share capital of Airplanes Holdings, and its affiliate,
GE Capital, has an option to acquire the residual interest in Airplanes Trust
from debis AirFinance, Inc.

     GECAS is a global commercial aviation financial services company that
offers a broad range of aircraft financial products and provides management,
marketing and technical support services to airlines, aircraft owners, lenders
and investors and various of its affiliates, including the GE Group, and other
third parties, including Aircraft Finance Trust, debis AirFinance Ireland and
Airplanes Group. As of March 31, 2001, GECAS and its affiliates managed a
portfolio consisting of 1,086 aircraft on lease to more than 162 lessees in 61
countries throughout the world. As of March 31, 2001, GECAS has also committed
to purchase a total of 409 new aircraft from manufacturers, deliverable through
December 2007.

     GECAS and its affiliates offer such financial products as finance leases
(including both direct financing and leveraged leases), operating leases and
other structured finance products (including aircraft securitization vehicles).
Its management services include collecting rental payments, arranging and
monitoring aircraft
                                        77
<PAGE>   78

maintenance performed by others, limited technical inspection of aircraft,
arranging and monitoring insurance, arranging for aircraft valuations,
registration and de-registration, monitoring compliance with leases, enforcement
of lease provisions against lessees, confirming compliance with applicable ADs
and facilitating delivery and redelivery of aircraft. GECAS also arrange sales
of aircraft to third parties. GECAS, its affiliate, GE Capital, or any of its
other affiliates may acquire debt or beneficial interests in other
securitization vehicles that own a portfolio of aircraft assets.

     GECAS is headquartered in Shannon, Ireland where it had 97 employees as of
March 31, 2001. GE Capital Aviation Services, Inc., of which GECAS is a
subsidiary, has a further 130 employees worldwide and has operations in
Stamford, Connecticut; Shannon, Ireland; Miami, Florida and a number of other
locations.

     The table below sets forth the different aircraft comprising the GECAS
managed portfolio as of March 31, 2001 by manufacturer and by whether the
aircraft are owned and managed by affiliates of GE Capital or managed for third
parties or Airplanes Group.

<TABLE>
<CAPTION>
                                                 GE CAPITAL     OTHER MANAGED      AIRPLANES
AIRCRAFT TYPE AND CLASS                            FLEET       THIRD PARTIES(1)      GROUP      TOTAL
-----------------------                          ----------    ----------------    ---------    -----
<S>                                              <C>           <C>                 <C>          <C>
Airbus
  A300.........................................      16               --                3          19
  A310.........................................       7                1               --           8
  A319.........................................      58               --               --          58
  A320.........................................      49               13               12          74
  A321.........................................       5               --               --           5
  A330.........................................       7               --               --           7
Boeing
  B727.........................................       8               --                2          10
  B737-200.....................................      42                3               22          67
  B737-300/400/500.............................     201(2)            18               43         262
  B737-600/700/800.............................      90               --               --          90
  B747.........................................      31               --                1          32
  B757-200.....................................      27               --                3          30
  B767-200ER...................................       5                2                1           8
  B767-300ER...................................      34               10                4          48
  B777-200.....................................       6               --               --           6
McDonnell Douglas
  DC8..........................................       2               --               19          21
  DC9..........................................      --               24               10          34
  DC10.........................................       9                3               --          12
  MD-11........................................       6                2                3          11
  MD-81........................................      --               10               --          10
  MD-82........................................      30               21                2          53
  MD-83........................................      16                8               23          47
  MD-87........................................      --                5                1           6
  MD-88........................................      12               --               --          12
Fokker
  F-100........................................      10                3               16          29
Other Jets.....................................      88                1               --          89
Turboprops.....................................       3                7               28          38
                                                    ---              ---              ---       -----
  Total........................................     762              131              193       1,086
                                                    ===              ===              ===       =====
Body Type:
  Widebody.....................................     122               18               12         152
  Narrowbody...................................     640              113              181         934
Stage Compliance(3):
  Stage 2......................................      22                3               31          59
  Stage 3......................................     740              128              162       1,027
</TABLE>

                                        78
<PAGE>   79

---------------

(1)  The third parties include debis AirFinance Ireland and Aircraft Finance
     Trust. Certain aircraft included in the Other Managed Third Parties fleet
     are owned by joint ventures or pursuant to other arrangements in which
     unaffiliated parties have interests.

(2)  For purposes of this table, seven B737 aircraft which GE Capital leases to
     debis AirFinance Ireland and which are subleased to the operating lessee,
     have been included in the GE Capital fleet.

(3)  Turboprop and Stage 3 hushkitted aircraft have been classified as Stage 3
     compliant.

THE SERVICING AGREEMENT

     GECAS provides services with respect to all of the aircraft in our
portfolio pursuant to the servicing agreement. The servicing agreement provides
that the servicer will act in accordance with applicable law and with our
directions in performing the aircraft services described below. In addition, the
servicer has agreed to perform its services in accordance with the following
"GECAS SERVICES STANDARD" and "GECAS CONFLICTS STANDARD":

     -  GECAS must use reasonable care and diligence at all times in the
        performance of the services.

     -  If a conflict of interest arises regarding GECAS's management, servicing
        or marketing of (a) any two aircraft in our portfolio or (b) any
        aircraft in our portfolio and any other aircraft managed by GECAS, GECAS
        will perform its services in good faith. If the two aircraft or the
        aircraft in our portfolio and the other aircraft managed by GECAS are
        substantially similar in terms of objectively identifiable
        characteristics that are relevant for the particular services to be
        performed, GECAS will not discriminate among the aircraft or between any
        of the aircraft in our portfolio and any other aircraft managed by GECAS
        on an unreasonable basis. GECAS is not obliged to inform us of any
        conflicts of interest.

     The servicer does not have any fiduciary duty or other implied duties to us
or any other person, including any certificate holders, and its obligations will
be limited to the express terms of the servicing agreement. GECAS will not be
liable to us for any of our losses arising out of, in connection with or related
to, GECAS's management of our portfolio, except where those losses are finally
adjudicated to have resulted directly from GECAS's gross negligence or wilful
misconduct. The servicer is not obliged to take any action that it believes is
reasonably likely to violate any applicable law with respect to GECAS or its
affiliates, violate any established written policies of GE related to legal,
ethical and social matters in business practices, or lead to an investigation by
any governmental authority. In addition, the servicer does not assume any
liability or accountability for (a) the terms and conditions of the notes, (b)
the ability of Airplanes Limited or Airplanes Trust to comply with the terms and
conditions of the notes or the guarantees and (c) the structuring or
implementation of any aspect of the various transactions contemplated by this
report.

     Airplanes Limited, Airplanes Trust, Airplanes Holdings and AeroUSA have
agreed to indemnify the servicer and its affiliates on an after-tax basis for
any of its losses arising out of, in connection with or related to its
performance of the services, except where those losses are finally adjudicated
to have resulted directly from GECAS's gross negligence or wilful misconduct in
respect of its obligation to apply the GECAS services standard or GECAS
conflicts standard in respect of its performance of the services.

AIRCRAFT SERVICES

     The main categories of the services that are provided by the servicer are:

     -  lease marketing, including re-marketing, lease negotiation and
        execution;

     -  aircraft management, including lease rent collection, ensuring aircraft
        maintenance, insurance monitoring and procurement, contract compliance
        by, and enforcement against, lessees, and accepting delivery and
        re-delivery of aircraft;

     -  aircraft sales as we direct;

     -  monitoring of maintenance reporting, and provision of records and
        information about the aircraft;

     -  arranging valuations and monitoring regulatory developments;

                                        79
<PAGE>   80

     -  commercially reasonable assistance in complying with covenants relating
        to the aircraft under the indentures;

     -  assistance in connection with public or private offerings of
        certificates;

     -  legal and other professional services in the ordinary course of the
        operating lease business; and

     -  periodic reporting of operational information relating to the aircraft.

     The servicer has also agreed to give us and our agents access to
information and its personnel for monitoring purposes, and to separate its own
funds from our funds.

OPERATING GUIDELINES

     Under the servicing agreement, GECAS is entitled to exercise the authority
necessary to give it a practicable and working autonomy in performing the
services. Airplanes Holdings, acting on behalf of Airplanes Group through the
administrative agent, has established monitoring and control procedures to
enable the servicer to properly manage our business and assets.

     All transactions the servicer enters into on our behalf must be at arm's
length and on fair market value terms unless we agree otherwise. Some
transactions or matters involving the aircraft require the prior written
approval of Airplanes Holdings. These include:

     -  sales of aircraft unless required by a lease;

     -  entering into any leases, renewals or extensions on terms that do not
        comply with the operating covenants under the indentures;

     -  terminating any lease or leases to any single lessee with respect to
        aircraft having an aggregate depreciated net book value in excess of
        $200 million;

     -  entering into any contract for the modification or maintenance of
        aircraft where the costs to be incurred (a) exceed the greater of (1)
        the estimated aggregate cost of a heavy maintenance check for a similar
        aircraft and (2) available maintenance reserves or other collateral
        under the related lease, or (b) are outside the ordinary course of our
        business;

     -  issuing any guarantee for us, or otherwise pledging our credit, other
        than with respect to trade payables in the ordinary course of business;
        and

     -  any transaction with GE Capital or any of its affiliates not
        contemplated in the servicing agreement.

BUDGET

     Airplanes Holdings adopts an annual budget each year with respect to the
aircraft. The servicer has agreed to use reasonable commercial efforts to
attempt to achieve the budget each year.

SERVICING FEES

     Airplanes Limited, Airplanes Holdings and AeroUSA pay an annual
index-linked fee to the servicer, payable monthly in arrears for the period each
aircraft is under management. For the year to March 31, 2001, this fee is 0.53%
of the agreed book value of each aircraft, payable monthly in arrears for the
period of time that aircraft is under GECAS's management. The servicer is
entitled to additional incentive fees based on annual cash flow generated by
leases in excess of targets and sales of aircraft, with a minimum fee of $1.5
million annually. The servicer is also entitled to additional fees in connection
with the services required to be provided by GECAS in respect of any offerings
and sales by us of certificates. Airplanes Limited, Airplanes Holdings and
AeroUSA also pay expenses incurred or approved by the servicer on our behalf,
including aircraft maintenance costs and insurance, outside professional
advisory fees and other out of pocket expenses, which may be a significant
component of our overhead costs. In the year ended March 31, 2001, aircraft
maintenance reserve expenses were $56.8 million. Other expenses, including
servicer fees, outside professional advisory fees, insurance and other out of
pocket expenses amounted to $26.4 million for the same period.
                                        80
<PAGE>   81

TERM AND TERMINATION

     The initial term of the servicing agreement expires on the earlier of March
28, 2014 and the payment in full of all amounts outstanding under the notes.
Each party has the right to terminate under specified circumstances. The
servicer has the right to terminate the servicing agreement if any of the
following occur:

     -  Airplanes Limited, Airplanes Trust, Airplanes Holdings and/or AeroUSA
        fail to pay when due any servicing fees or other amounts owed to the
        servicer after appropriate notice;

     -  Airplanes Limited, Airplanes Trust, Airplanes Holdings and/or AeroUSA
        fail to perform or observe or violate in any material respect any
        material term, covenant, condition or agreement under the servicing
        agreement;

     -  any of Airplanes Limited, Airplanes Trust, Airplanes Holdings, AeroUSA
        or their respective subsidiaries or affiliates has made a false or
        misleading representation or warranty in the servicing agreement or any
        related document that is reasonably likely to have a material adverse
        effect on the servicer or on its rights and obligations under the
        servicing agreement;

     -  an involuntary proceeding under applicable bankruptcy, insolvency,
        receivership or similar law against Airplanes Limited, Airplanes Trust,
        Airplanes Holdings, AeroUSA or any of their significant subsidiaries
        continues for 75 days or if any of these entities goes into liquidation
        or suffers a receiver or mortgagee to take possession of all or
        substantially all of our or its assets, or if any of these entities
        commences a voluntary proceeding under bankruptcy, insolvency,
        receivership or similar law or makes a general assignment for the
        benefit of their creditors;

     -  Airplanes Limited, Airplanes Trust, AeroUSA, Airplanes Holdings and
        their respective subsidiaries and affiliates no longer own any aircraft;

     -  the indentures cease to be in full force and effect; or

     -  any guarantee in favor of the servicer by any of Airplanes Limited,
        Airplanes Trust, AeroUSA, Airplanes Holdings and their respective
        subsidiaries and affiliates ceases to be legal, valid and binding.

     Airplanes Holdings, on behalf of itself, AeroUSA and Airplanes Limited, has
the right to terminate the servicing agreement if any of the follow occur:

     -  the servicer ceases to be at least 75% owned, directly or indirectly, by
        GE or GE Capital;

     -  the servicer fails in any material respect to perform any material
        services required by the servicing agreement in accordance with the
        GECAS services standard or the GECAS conflicts standard, and this
        failure has a material adverse effect on Airplanes Group as a whole; or

     -  an involuntary proceeding under bankruptcy, insolvency, receivership or
        similar law against GE, GE Capital or the servicer continues undismissed
        for 75 days or any of those entities goes into liquidation or suffers a
        receiver or mortgagee to take possession of all or substantially all of
        its assets, or if GE, GE Capital or the servicer commences a voluntary
        proceeding under bankruptcy, insolvency, receivership or similar law or
        makes a general assignment for the benefit of its creditors.

     Airplanes Limited, AeroUSA and Airplanes Holdings also have the right to
terminate the servicing agreement upon six months' written notice to the
servicer if:

     -  the servicer fails to perform any of its specified tax related
        undertakings to preserve the Shannon tax benefits as described below;
        and

     -  as a result, we experience a material adverse tax event as defined in
        the servicing agreement.

     The servicer may resign if it determines that directions given, or services
required, would, if carried out:

     -  be unlawful under applicable law;

     -  violate GE policy as written and in effect for GE and its controlled
        subsidiaries at that time;

                                        81
<PAGE>   82

     -  be likely to lead to an investigation by any governmental authority;

     -  expose the servicer to liabilities for which, in the servicer's good
        faith opinion, it is not adequately indemnified; or

     -  place the servicer in a conflict of interest so that, in the servicer's
        good faith opinion, it could not continue to perform its obligations
        under the servicing agreement according to its terms.

     Generally, the servicer may only resign, and the parties may only terminate
the servicing agreement, if a replacement servicer has been appointed and the
rating agencies have confirmed that the current ratings of any certificates will
not be lowered or withdrawn.

TAX STATUS

     Because GECAS owns 5% of the outstanding issued ordinary share capital of
Airplanes Holdings and it maintains particular employment levels in Shannon,
Ireland, Airplanes Holdings and its Irish tax-resident subsidiaries enjoy
reduced rates of corporation tax, and improved entitlements to capital
allowances. In addition, these Shannon tax benefits include the right to pay
interest in various circumstances without paying Irish withholding tax, and to
deduct payments of interest in calculating corporate tax liability. While we
expect Airplanes Holdings and our Irish tax resident subsidiaries to continue to
benefit from their status as Shannon certified companies until the scheduled
termination of the preferential tax regime on December 31, 2005, we cannot
guarantee that the management of the aircraft by the servicer will not expose
Airplanes Holdings or the Irish tax resident companies to tax liabilities
outside Ireland. The servicing agreement sets out various tax-related
undertakings of the servicer to maintain a favorable tax treatment in Ireland
for Airplanes Holdings and its Irish tax resident subsidiaries. These include:

     -  maintaining minimum levels of employment in Ireland if required for
        Airplanes Holdings or its Irish tax resident subsidiaries to maintain
        their Shannon licences and tax certification;

     -  holding meetings of the board of directors of the servicer in Shannon at
        least quarterly, and only occasionally outside Shannon;

     -  holding meetings of the servicer's transaction approval committee in
        Shannon at least monthly and only occasionally outside Ireland;

     -  a majority of the committee members must be employees of the servicer;

     -  generally signing aircraft-related contracts in Ireland or outside of
        Ireland pursuant to a limited power of attorney;

     -  compensating any of the servicer's affiliates for services provided
        outside Ireland in respect of the aircraft only to the extent those
        services are provided by express agreement;

     -  ensuring the managing director of the servicer is an officer and
        employee based in Shannon; and

     -  maintaining no offices outside Shannon.

     If the servicer breaches a tax-related undertaking as a result of its gross
negligence or wilful misconduct and we experience a material tax event, our sole
remedy is to terminate the servicing agreement after notice. The servicer has
the right for any good faith commercial reason to modify the tax-related
undertakings, which could lead to a loss of favorable tax treatment for
Airplanes Holdings and its Irish tax resident subsidiaries.

ASSIGNMENT OF SERVICING AGREEMENT

     None of the servicer, Airplanes Limited, Airplanes Holdings or AeroUSA can
assign their rights and obligations under the servicing agreement without the
other parties' consent. However, the servicer may delegate a portion, but not
all, of its duties to GE Capital or GE or any 75% or more owned subsidiary of GE
Capital or GE.

                                        82
<PAGE>   83

PRIORITY OF PAYMENT OF SERVICING FEES AND REIMBURSABLE EXPENSES

     The fees and expenses of the servicer rank senior in priority of payment to
all payments of interest, principal and any premium on the notes.

     The obligations of Airplanes Limited, Airplanes Holdings and AeroUSA under
the servicing agreement have been guaranteed by each other, Airplanes Trust and
their respective subsidiaries and affiliates.

     GECAS's address is GE Capital Aviation Services Limited, Aviation House,
Shannon, Ireland and its telephone number is +353-61-706500.

THE ADMINISTRATIVE AGENT AND CASH MANAGER

DEBIS AIRFINANCE IRELAND

     Subsidiaries of debis AirFinance Ireland serve as our administrative agent
and cash manager. debis AirFinance Ireland is a wholly-owned indirect subsidiary
of debis AirFinance B.V., a major participant in the global commercial aviation
industry. debis AirFinance B.V., directly and through debis AirFinance Ireland
and other subsidiaries, also owns and manages aircraft, both for its own account
and for third parties, including AerCo, another aircraft securitization vehicle.
At March 31, 2001, debis AirFinance B.V. directly had 194 aircraft in its
portfolio which were on lease to 75 lessees in 34 countries and, through debis
AirFinance Ireland, had 103 aircraft in its portfolio which were on lease to 52
lessees in 25 countries. debis AirFinance Ireland is also the holder of all of
the subclass D-2, E-1 and E-2 notes of AerCo and acts as servicer for AerCo's
portfolio of aircraft. Subsidiaries of debis AirFinance Ireland also act as
administrative agent and cash manager to AerCo. Other subsidiaries of debis
AirFinance Ireland act as administrative agent and cash manager to GPA-ATR
Limited, a turboprop aircraft joint venture company in which debis AirFinance
Jetprop Limited holds 50% of the share capital.

     GPA Group (now known as debis AirFinance Ireland), directly or indirectly
owned all of the aircraft, the aircraft-owning and aircraft-leasing subsidiaries
that we acquired in March 1996. We have taken steps to structure Airplanes Group
and the acquisition from debis AirFinance Ireland in 1996 to ensure that our
assets would not be consolidated with the assets of debis AirFinance Ireland and
would not otherwise become available to their creditors in any bankruptcy or
insolvency proceeding involving debis AirFinance Ireland or any of its
affiliates. See "Item 1. Business -- Risk Factors -- Risks Relating to
Bankruptcy."

     At March 31, 2001, debis AirFinance B.V. employed 105 people worldwide,
with 32 employees in Shannon, Ireland, where debis AirFinance Ireland is
located. debis AirFinance B.V. has its headquarters in Amsterdam, the
Netherlands and has subsidiaries with offices in Malmo, Sweden and Fort
Lauderdale, Florida.

ADMINISTRATIVE AGENT

     debis AirFinance Financial Services (Ireland) Limited, as administrative
agent, is responsible for providing administrative and accounting services to
the directors and controlling trustees. Its duties include:

     -  monitoring the performance of the servicer;

     -  liaising with rating agencies;

     -  maintaining accounting ledgers (although we retain responsibility for
        all discretionary decisions and judgments relating to the preparation
        and maintenance of ledgers and accounts, and we retain responsibility
        for, and prepare, our financial statements);

     -  preparing and presenting annual budgets to us for approval;

     -  authorizing payment of various expenses;

     -  coordinating any amendments to the transaction documents other than the
        leases;

     -  supervising outside counsel and coordinating legal advice;

                                        83
<PAGE>   84

     -  preparing and coordinating reports to investors and the SEC and managing
        investor relations with the assistance of outside counsel and auditors,
        if appropriate;

     -  preparing, or coordinating the preparation of, all required tax returns
        for our approval and filing;

     -  maintaining, or monitoring the maintenance of, our books and records
        that are not maintained by our company secretary or the Delaware
        trustee;

     -  preparing agendas and any required papers for meetings of the governing
        bodies of Airplanes Group entities;

     -  assisting us in (i) developing and implementing our interest rate
        management policy and developing financial models, cash flow projections
        and forecasts, and (ii) making aircraft lease, sale and capital
        investment decisions;

     -  advising us as to the appropriate levels of the liquidity reserve
        amount; and

     -  assisting us in the refinancing of all or a portion of the notes and
        certificates.

     We may also ask the administrative agent to provide additional services. We
pay an annual index-linked fee of $6 million to the administrative agent,
payable monthly in arrears, and an additional annual fee of approximately $2
million, which varies according to the number of aircraft owned. We reimburse
the administrative agent for expenses incurred on our behalf and indemnify the
administrative agent for any liability it incurs, other than through its own
deceit, fraud, wilful default or gross negligence.

     The administrative agent may resign upon 60 days' written notice in defined
circumstances. We may remove the administrative agent upon 120 days' written
notice with or without cause. However, the resignation or removal of the
administrative agent will not become effective until a successor administrative
agent has been appointed with the consent of the servicer and has accepted
appointment as the successor administrative agent under the administrative
agency agreement.

CASH MANAGER

     debis AirFinance Cash Manager Limited, as cash manager, provides cash
management and related services to us, including establishing and administering
our accounts, providing information about our accounts and investing the funds
held by us in the collection account and the lessee funded account in prescribed
investments ("PERMITTED ACCOUNT INVESTMENTS") on permitted terms. These accounts
(but not the rental accounts) are maintained in the name of the security
trustee. See "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations -- The Accounts" for a more detailed
description of our accounts.

     The cash manager calculates monthly payments and makes other calculations
required under the cash management agreement based on data it receives from the
servicer. The cash manager also provides the trustee with the information
required for the monthly reports to the certificate holders. It is the
responsibility of the cash manager to ensure that the proceeds from the lease or
sale of our assets are deposited in the collection account. Upon the occurrence
of a note event of default, the cash manager will distribute funds in the manner
set forth in the indentures.

     We pay the cash manager an annual fee of $1 million and indemnify the cash
manager against any loss or liability it incurs, other than through its own
deceit, fraud, willful default or gross negligence, or simple negligence in the
handling of funds.

     The cash manager may resign upon 30 days' written notice so long as a
replacement cash manager has been appointed. We may remove the cash manager at
any time with or without cause.

COMPANY SECRETARY

     Mourant & Co. Secretaries Limited, as company secretary for Airplanes
Limited, provides secretarial services for, and maintains the books and records,
including minute books and stock transfer records, of Airplanes Limited.

                                        84
<PAGE>   85

DELAWARE TRUSTEE

     Wilmington Trust Company, as the Delaware Trustee for Airplanes Trust,
maintains the books and records, including minute books and trust certificate
records, of Airplanes Trust.

ITEM 11.  EXECUTIVE COMPENSATION

     All directors of Airplanes Limited and controlling trustees of Airplanes
Trust are compensated for travel and other expenses incurred in the performance
of their duties. Each independent director and independent controlling trustee
is paid an index-linked annual fee, currently $79,479.75, for their services in
both capacities. The chairman of Airplanes Limited and Airplanes Trust also
receives an additional index-linked annual fee, currently $52,986.50, for his
services in that capacity. In addition, Mr. Dantzic, Mr. Jenkins and Mr. McCann
each receive annual amounts, currently $7,500, $2,500 and $7,500, respectively,
for their services as directors of Airplanes Holdings and some of its
subsidiaries. Mr. Dantzic, Mr. Jenkins and Mr. McCann are also entitled to
receive an additional $1,000 in respect of each board meeting of these companies
which they attend, subject to a maximum payment of $5,000 annually for each of
them. Mr. Cavanagh and Mr. Dantzic are also each entitled to receive an
aggregate of $2,500 annually from AeroUSA and AeroUSA 3 for their services as
directors of these companies and are also entitled to receive an additional
$1,000 in respect of each board meeting of these companies which they attend,
subject to a maximum payment of $5,000 annually. On July 1, 2000, the
independent directors and independent controlling trustees were paid a one-off
amount by Airplanes Limited and Airplanes Trust equal to the amount they would
have received had their fees been index-linked from April 1, 1996, taking
account of inflation from April 1, 1996 to April 1, 1999. The aggregate fees
paid to the independent directors and independent controlling trustees by
Airplanes Trust and Airplanes Limited may not exceed $550,000 in any year. The
directors and controlling trustees are reimbursed for travel and other expenses,
and premiums for directors' and officers' insurance are paid on their behalf.
Neither the director nor the controlling trustee appointed by the holder of a
majority in aggregate principal amount of the class E notes receives
remuneration from Airplanes Limited or Airplanes Trust for his services, except
reimbursement of travel and other expenses and payment of premiums for
directors' and officers' insurance.

     The directors and the controlling trustees do not receive any additional
cash or non-cash compensation from Airplanes Limited or Airplanes Trust (either
in the form of stock options, stock appreciation rights or pursuant to any
long-term incentive plan, benefit or actuarial plan or any other similar
arrangements of any kind) as salary or bonus for their services as directors or
controlling trustees. None of the directors or controlling trustees currently
has an employment contract with either Airplanes Limited or Airplanes Trust or
serves as a member of a compensation committee of either Airplanes Limited or
Airplanes Trust. The compensation of the directors of Airplanes Limited is set
forth in the Articles of Association of Airplanes Limited and that of the
controlling trustees is set forth in the Airplanes Trust Agreement. None of the
directors or controlling trustees has any beneficial ownership in any of the
equity securities of Airplanes Limited, Airplanes Trust or any of their
subsidiaries.

     None of the directors, controlling trustees or any member of their
families, or any person owning five percent or more of Airplanes Limited's
capital stock, has been party to any transaction, or is party to any currently
proposed transaction, with Airplanes Limited, Airplanes Trust or any of their
subsidiaries. No director or controlling trustee or any member of his family, or
any corporation, organization or trust in which that director or controlling
trustee is an executive officer, partner, trustee or has a beneficial interest,
has been indebted in any amount to Airplanes Limited or Airplanes Trust.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Not applicable.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Airplanes Group has had and currently maintains various relationships with
GE Capital and GECAS. First, GECAS acts as servicer for Airplanes Group.
Secondly, GECAS is a holder of 5% of the ordinary share capital of Airplanes
Holdings. Thirdly, Mr Hayden, an employee of GECAS, is a director of Airplanes
Limited and a
                                        85
<PAGE>   86

controlling trustee of Airplanes Trust. Fourthly, GE Capital holds the majority
of the Airplanes Group class E notes and has an option over the residual
interest in Airplanes Trust.

     Airplanes Group has had and currently maintains various relationships with
debis AirFinance Ireland plc, formerly known as AerFi Group plc which was
previously known as GPA Group plc. First, debis AirFinance Ireland acted as
promoter in establishing the entities that comprise Airplanes Group. Secondly,
Airplanes Group purchased substantially all of its assets from debis AirFinance
Ireland . See "Item 1. Business -- Introduction". Third, debis AirFinance
Ireland was a holder of 5% of the ordinary share capital of Airplanes Holdings
until November 20, 1998. Fourth, subsidiaries of debis AirFinance Ireland act as
the Administrative Agent and Cash Manager for Airplanes Group. See "Item 10.
Directors and Executive Officers of the Registrants -- Corporate Management". In
addition, on November 20, 1998, GE Capital acquired the Airplanes Group class E
notes previously held by debis AirFinance Ireland.

                                        86
<PAGE>   87

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)(1) and (2). Financial Statements: the response to this portion of Item
14 is submitted as a separate section of this report beginning on page F-1.
Schedules: Schedule II is submitted as a separate section of this report
beginning on page S-1.

<TABLE>
<CAPTION>
  (a)(3) AND
(c). EXHIBITS:
--------------
<C>              <S>

     3.1         Certificate of Incorporation of Atlanta Holdings Limited
                 dated November 3, 1995 and Certificate of Incorporation on
                 change of name to Airplanes Limited dated November 29, 1995*

     3.2         Memorandum and Articles of Association of Airplanes Limited
                 dated March 11, 1996**

     3.3         Memorandum and Articles of Association of Airplanes Limited
                 reprinted with amendments to June 29, 2000****

     3.4         Airplanes U.S. Trust Amended and Restated Trust Agreement
                 among GPA, Inc., as Settlor, Wilmington Trust Company, as
                 the Delaware Trustee, and the Controlling Trustees referred
                 to therein dated March 11, 1996**

     3.5         Amendment to Airplanes U.S. Trust Amended and Restated Trust
                 Agreement dated June 29, 2000****

     4.1         Pass Through Trust Agreement dated as of March 28, 1996
                 among Airplanes Limited, Airplanes U.S. Trust and Bankers
                 Trust Company, as Trustee**

     4.2         Trust Supplement No. 7 dated as of March 28, 1996 to the
                 Pass Through Trust Agreement**

     4.3         Trust Supplement No. 8 dated as of March 28, 1996 to the
                 Pass Through Trust Agreement**

     4.4         Trust Supplement No. 9 dated as of March 16, 1998 to the
                 Pass Through Trust Agreement***

     4.5         Trust Supplement No. 11 dated as of March 16, 1998 to the
                 Pass Through Trust Agreement***

     4.6         Trust Supplement No. 12 dated as of March 16, 1998 to the
                 Pass Through Trust Agreement***

     4.7         Trust Supplement No. 13 dated as of March 15, 2001 to the
                 Pass Through Trust Agreement*****

     4.8         Trust Supplement A dated as of March 16, 1998 to the Pass
                 Through Trust Agreement***

     4.9         Form of Subclass A-6 Pass Through Certificate***

     4.10        Form of Subclass A-8 Pass Through Certificate***

     4.11        Form of Subclass A-9 Pass Through Certificate*****
                 (included in Exhibit 4.7)

     4.12        Form of Class B Pass Through Certificate***

     4.13        Form of Class C Pass Through Certificate**

     4.14        Form of Class D Pass Through Certificate**

     4.15        Airplanes Limited Indenture dated as of March 28, 1996 among
                 Airplanes Limited, Airplanes U.S. Trust and Bankers Trust
                 Company, as Trustee**

     4.16        Supplement No. 1 to the Airplanes Limited Indenture***

     4.17        Supplement No. 2 to the Airplanes Limited Indenture*****

     4.18        Airplanes U.S. Trust Indenture dated as of March 28, 1996
                 among Airplanes U.S. Trust, Airplanes Limited and Bankers
                 Trust Company, as Trustee**

     4.19        Supplement No. 1 to the Airplanes Trust Indenture***

     4.20        Supplement No. 2 to the Airplanes Trust Indenture*****

     4.21        Form of Floating Rate Subclass A-6 Note***

     4.22        Form of Floating Rate Subclass A-8 Note***

     4.23        Form of Floating Rate Subclass A-9 Note*****
</TABLE>

                                        87
<PAGE>   88

<TABLE>
<CAPTION>
  (a)(3) AND
(c). EXHIBITS:
--------------
<C>              <S>

     4.24        Form of Floating Rate Class B Note***

     4.25        Form of 8.15% Class C Note**

     4.26        Form of 10.875% Class D Note**

     4.27        Form of 20.00% (inflation adjusted) Class E Note**

    10.1         Stock Purchase Agreement dated as of March 28, 1996 among
                 AerFi, Inc., AerFi Group plc and Airplanes U.S. Trust**

    10.2         Stock Purchase Agreement dated as of March 28, 1996 among
                 AerFi Group plc, Skyscape Limited and Airplanes Limited**

    10.3         Administrative Agency Agreement dated as of March 28, 1996
                 among AerFi Financial Services (Ireland) Limited, AerFi
                 Group plc, Airplanes Limited, AerFi II Limited, Airplanes
                 U.S. Trust and AeroUSA, Inc.**

    10.4         Servicing Agreement dated as of March 28, 1996 among GE
                 Capital Aviation Services, Limited, Airplanes Limited,
                 AeroUSA, Inc., AerFi II Limited, Airplanes U.S. Trust and
                 AerFi Cash Manager Limited**

    10.5         Reference Agency Agreement dated as of March 28, 1996 among
                 Airplanes Limited, Airplanes U.S. Trust Bankers Trust
                 Company, as Airplanes Limited Indenture Trustee and
                 Airplanes U.S. Trust Indenture Trustee, Bankers Trust
                 Company, as Reference Agent and AerFi Cash Manager Limited,
                 as Cash Manager**

    10.6         Secretarial Services Agreement dated as of March 28, 1996
                 between Airplanes Limited and Mourant & Co. Secretaries
                 Limited, as Company Secretary**

    10.7         Cash Management Agreement dated as of March 28, 1996 between
                 AerFi Cash Manager Limited, as Cash Manager, AerFi Group
                 plc, Airplanes Limited, Airplanes U.S. Trust and Bankers
                 Trust Company, as Trustee under each of the Airplanes
                 Limited Indenture, the Airplanes U.S. Trust Indenture and
                 the Security Trust Agreement**

    10.8         Form of Swap Agreement**

    10.9         Security Trust Agreement dated as of March 28, 1996 among
                 Airplanes Limited, Airplanes U.S. Trust, Mourant & Co.
                 Secretaries Limited, the Issuer Subsidiaries listed therein,
                 AerFi Financial Services (Ireland) Limited, AerFi Cash
                 Manager Limited, AerFi Group plc, GE Capital Aviation
                 Services, Limited, Bankers Trust Company, as Airplanes U.S.
                 Trust Indenture Trustee and Airplanes Limited Indenture
                 Trustee, Bankers Trust Company, as Reference Agent, and
                 Bankers Trust Company, as Security Trustee**

    12           Statement re Computation of Ratios*****

    21           Subsidiaries of the Registrants*****
</TABLE>

     * Incorporated by reference to the Registration Statement on Form S-1 (File
       No. 33-99978), previously filed with the Commission on December 1, 1995,
       and Amendments No. 1 through 5 thereto.

   ** Incorporated by reference to the Report on Form 10-Q for the quarterly
      period ended December 31, 1996, previously filed with the Commission.

  *** Incorporated by reference to the Registration Statement on Form S-1 (File
      No. 33-99978), previously filed with the Commission on December 30, 1997,
      and Amendments No. 1 through 3, thereto.

 **** Incorporated by reference to the Report on Form 10-Q for the quarterly
      period ended June 30, 2000, previously filed with the Commission.

***** Incorporated by reference to the Registration Statement on Form S-4 (File
      No. 33-58608), previously filed with the Commission on April 10 2001 and
      Amendment No. 1 thereto.

     (b) Reports on Form 8-K: filed for event dates February 15, 2001, March 15,
2001, April 17, 2001, May 15, 2001 and June 15, 2001 (relating to the monthly
report to holders of the Certificates);

     (d) Not applicable.

                                        88
<PAGE>   89

                                AIRPLANES GROUP

                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                PAGE
                                                                ----
<S>                                                             <C>
Independent Auditors' Report................................    F-2
Balance Sheets..............................................    F-3
Statements of Operations....................................    F-4
Statements of Changes in Shareholders' Deficit/Net
  Liabilities...............................................    F-5
Statements of Cash Flows....................................    F-6
Notes to the Financial Statements...........................    F-7
</TABLE>

                                       F-1
<PAGE>   90

                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors of Airplanes Limited
  and the Controlling Trustees of Airplanes U.S. Trust

     We have audited the accompanying balance sheets of Airplanes Limited and
Airplanes U.S. Trust as of March 31, 2001 and 2000, and the related statements
of operations, changes in shareholders' deficit/net liabilities and cashflows
for each of the years in the three year period ended March 31, 2001. These
financial statements are the responsibility of management. Our responsibility is
to express an opinion on these financial statements based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards in the United States. These standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

     In our opinion the financial statements referred to above present fairly,
in all material respects, the financial position of Airplanes Limited and
Airplanes U.S. Trust as at March 31, 2001 and 2000, and the results of their
operations and cash flows for each of the years in the three year period ended
March 31, 2001, in conformity with generally accepted accounting principles in
the United States.

                                          KPMG
                                          Chartered Accountants
Dublin, Ireland
June 11, 2001

                                       F-2
<PAGE>   91

                                AIRPLANES GROUP

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                  MARCH 31,
                                     -------------------------------------------------------------------
                                                   2000                               2001
                                     --------------------------------   --------------------------------
                                     AIRPLANES   AIRPLANES              AIRPLANES   AIRPLANES
                             NOTES    LIMITED      TRUST     COMBINED    LIMITED      TRUST     COMBINED
                             -----   ---------   ---------   --------   ---------   ---------   --------
                                               ($ MILLIONS)                       ($ MILLIONS)
<S>                          <C>     <C>         <C>         <C>        <C>         <C>         <C>
ASSETS
Cash.......................    5         197          6          203        191          6          197
Accounts receivable........    6
  Trade receivables........               24          8           32         19         11           30
  Allowance for doubtful
     debts.................              (10)        (5)         (15)       (12)        (7)         (19)
Amounts due from Airplanes
  Limited..................    7          --         28           28         --         46           46
Net investment in capital
  and sales type leases....    8          15         --           15          7         --            7
Aircraft, net..............    9       2,697        235        2,932      2,543        209        2,752
Other assets...............                3          8           11          6          4           10
                                      ------       ----       ------     ------       ----       ------
Total assets...............            2,926        280        3,206      2,754        269        3,023
                                      ======       ====       ======     ======       ====       ======
LIABILITIES
Accrued expenses and other
  liabilities..............   10         807         74          881      1,111        104        1,215
Amounts due to Airplanes
  Trust....................    7          28         --           28         46         --           46
Indebtedness...............   11       3,313        323        3,636      3,185        310        3,495
Provision for
  maintenance..............   12         258         16          274        233         13          246
Deferred income taxes......   19          66         48          114         58         40           98
                                      ------       ----       ------     ------       ----       ------
Total liabilities..........            4,472        461        4,933      4,633        467        5,100
                                      ------       ----       ------     ------       ----       ------
Net liabilities............           (1,546)      (181)      (1,727)    (1,879)      (198)      (2,077)
                                      ------       ----       ------     ------       ----       ------
                                       2,926        280        3,206      2,754        269        3,023
                                      ======       ====       ======     ======       ====       ======
</TABLE>

     Commitments and Contingent Liabilities (Notes 20 and 21)

    The accompanying notes are an integral part of the financial statements.
                                       F-3
<PAGE>   92

                                AIRPLANES GROUP

                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                        YEARS ENDED MARCH 31,
                                 -------------------------------------------------------------------
                                               1999                               2000
                                 --------------------------------   --------------------------------
                                 AIRPLANES   AIRPLANES              AIRPLANES   AIRPLANES
                         NOTES    LIMITED      TRUST     COMBINED    LIMITED      TRUST     COMBINED
                         -----   ---------   ---------   --------   ---------   ---------   --------
                                           ($ MILLIONS)                       ($ MILLIONS)
<S>                      <C>     <C>         <C>         <C>        <C>         <C>         <C>
REVENUES
Aircraft leasing.......   14        484          42         526        460          41         501
Aircraft sales.........   14         37          95         132          3          --           3
Other income...........              --          --          --          1          --           1
EXPENSES
Cost of aircraft
 sold..................             (32)        (86)       (118)        (1)         --          (1)
Depreciation and
 amortisation..........            (159)        (17)       (176)      (157)        (17)       (174)
Net interest expense...   15       (388)        (40)       (428)      (425)        (43)       (468)
Bad and doubtful
 debts.................              (9)         (2)        (11)        (2)         (2)         (4)
Provision for loss
 making leases, net....   16         11           1          12          3           1           4
Other lease costs......   17        (80)         (3)        (83)       (71)         (3)        (74)
Selling, general and
 administrative
 expenses..............   18        (32)         (3)        (35)       (31)         (3)        (34)
                                   ----        ----        ----       ----        ----        ----
OPERATING LOSS BEFORE
 INCOME TAXES..........            (168)        (13)       (181)      (220)        (26)       (246)
Income tax benefit.....   19          3          --           3        (15)          8          (7)
                                   ----        ----        ----       ----        ----        ----
NET LOSS...............            (165)        (13)       (178)      (235)        (18)       (253)
                                   ====        ====        ====       ====        ====        ====

<CAPTION>
                              YEARS ENDED MARCH 31,
                         --------------------------------
                                       2001
                         --------------------------------
                         AIRPLANES   AIRPLANES
                          LIMITED      TRUST     COMBINED
                         ---------   ---------   --------
                                   ($ MILLIONS)
<S>                      <C>         <C>         <C>
REVENUES
Aircraft leasing.......     432          39         471
Aircraft sales.........       8          13          21
Other income...........      --          --          --
EXPENSES
Cost of aircraft
 sold..................      (4)        (10)        (14)
Depreciation and
 amortisation..........    (154)        (16)       (170)
Net interest expense...    (487)        (49)       (536)
Bad and doubtful
 debts.................      (5)         (2)         (7)
Provision for loss
 making leases, net....     (17)         --         (17)
Other lease costs......     (81)         (2)        (83)
Selling, general and
 administrative
 expenses..............     (33)         (2)        (35)
                           ----        ----        ----
OPERATING LOSS BEFORE
 INCOME TAXES..........    (341)        (29)       (370)
Income tax benefit.....       8          12          20
                           ----        ----        ----
NET LOSS...............    (333)        (17)       (350)
                           ====        ====        ====
</TABLE>

    The accompanying notes are an integral part of the financial statements.
                                       F-4
<PAGE>   93

                                AIRPLANES GROUP

         STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT/NET LIABILITIES

                   YEARS ENDED MARCH 31, 1999, 2000 AND 2001

<TABLE>
<CAPTION>
                                                AIRPLANES LIMITED
                                    ------------------------------------------     AIRPLANES       COMBINED
                                       SHARE                                         TRUST       SHAREHOLDERS
                                      CAPITAL          NET        SHAREHOLDERS        NET        DEFICIT/NET
                                     (NOTE 15)     LIABILITIES      DEFICIT       LIABILITIES    LIABILITIES
                                    -----------    -----------    ------------    -----------    ------------
                                      ($              ($          ($ MILLIONS)      ($
                                    MILLIONS)       MILLIONS)                      MILLIONS)     ($ MILLIONS)
<S>                                 <C>            <C>            <C>             <C>            <C>
BALANCE AT MARCH 31, 1999.........       --           1,311          1,311            163           1,474
                                        ---           -----          -----            ---           -----
Net loss for the fiscal year......       --             235            235             18             253
                                        ---           -----          -----            ---           -----
Balance at March 31, 2000.........       --           1,546          1,546            181           1,727
                                        ---           -----          -----            ---           -----
Net loss for the fiscal year......       --             333            333             17             350
                                        ---           -----          -----            ---           -----
BALANCE AT MARCH 31, 2001.........       --           1,879          1,879            198           2,077
                                        ===           =====          =====            ===           =====
</TABLE>

    The accompanying notes are an integral part of the financial statements.
                                       F-5
<PAGE>   94

                                AIRPLANES GROUP

                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                       YEARS ENDED MARCH 31,
                                -------------------------------------------------------------------
                                              1999                               2000
                                --------------------------------   --------------------------------
                                AIRPLANES   AIRPLANES              AIRPLANES   AIRPLANES
                                 LIMITED      TRUST     COMBINED    LIMITED      TRUST     COMBINED
                                ---------   ---------   --------   ---------   ---------   --------
                                          ($ MILLIONS)                       ($ MILLIONS)
<S>                             <C>         <C>         <C>        <C>         <C>         <C>
CASH FLOWS FROM OPERATING
 ACTIVITIES
Net loss......................    (165)        (13)       (178)      (235)        (18)       (253)
Adjustments to reconcile net
 loss to net cash provided by
 operating activities:
Depreciation and
 amortisation.................     159          17         176        157          17         174
Aircraft maintenance, net.....     (21)         (1)        (22)        (6)         (1)         (7)
Profit on disposal of
 aircraft.....................      (5)         (9)        (14)        (2)         --          (2)
Deferred income taxes.........      (3)         --          (3)        15          (8)          7
Provision for loss making
 leases.......................     (11)         (1)        (12)        (3)         (1)         (4)
Accrued and deferred interest
 expense......................     187          18         205        249          23         272
Changes in operating assets
 and liabilities:
Accounts receivable, net......     (12)         (1)        (13)         4           5           9
Other accruals and
 liabilities..................     (39)         11         (28)       (16)          1         (15)
Other assets..................      --          --          --         --          --          --
                                  ----        ----        ----       ----        ----        ----
NET CASH PROVIDED BY OPERATING
 ACTIVITIES...................      90          21         111        163          18         181
                                  ====        ====        ====       ====        ====        ====
Cash Flows from Investing
 Activities
Sale of /(Additions to)
 aircraft.....................      48          79         127         --          --          --
Intercompany account
 movements....................      79         (79)         --         --          --          --
Capital and sales type
 leases.......................       8          --           8          8          --           8
                                  ----        ----        ----       ----        ----        ----
NET CASH PROVIDED BY/INVESTING
 ACTIVITIES...................     135          --         135          8          --           8
                                  ====        ====        ====       ====        ====        ====
CASH FLOWS FROM FINANCING
 ACTIVITIES
Repayment of notes............    (219)        (21)       (240)      (192)        (18)       (210)
Issue of refinanced notes.....      --          --          --         --          --          --
                                  ----        ----        ----       ----        ----        ----
NET CASH (USED IN) FINANCING
 ACTIVITIES...................    (219)        (21)       (240)      (192)        (18)       (210)
                                  ====        ====        ====       ====        ====        ====
NET INCREASE/(DECREASE) IN
 CASH.........................       6          --           6        (21)         --         (21)
Cash at beginning of year.....     212           6         218        218           6         224
                                  ----        ----        ----       ----        ----        ----
Cash at end of year...........     218           6         224        197           6         203
                                  ====        ====        ====       ====        ====        ====
CASH PAID IN RESPECT OF:
Interest......................     219          23         241        193          21         214
                                  ====        ====        ====       ====        ====        ====

<CAPTION>
                                     YEARS ENDED MARCH 31,
                                --------------------------------
                                              2001
                                --------------------------------
                                AIRPLANES   AIRPLANES
                                 LIMITED      TRUST     COMBINED
                                ---------   ---------   --------
                                          ($ MILLIONS)
<S>                             <C>         <C>         <C>
CASH FLOWS FROM OPERATING
 ACTIVITIES
Net loss......................    (333)        (17)       (350)
Adjustments to reconcile net
 loss to net cash provided by
 operating activities:
Depreciation and
 amortisation.................     154          16         170
Aircraft maintenance, net.....     (25)         (2)        (27)
Profit on disposal of
 aircraft.....................      (4)         (3)         (7)
Deferred income taxes.........      (8)        (12)        (20)
Provision for loss making
 leases.......................      17          --          17
Accrued and deferred interest
 expense......................     300          29         329
Changes in operating assets
 and liabilities:
Accounts receivable, net......       7         (19)        (12)
Other accruals and
 liabilities..................       1          --           1
Other assets..................      (4)          8           4
                                  ----        ----        ----
NET CASH PROVIDED BY OPERATING
 ACTIVITIES...................     105          --         105
                                  ====        ====        ====
Cash Flows from Investing
 Activities
Sale of /(Additions to)
 aircraft.....................       6          13          19
Intercompany account
 movements....................      --          --          --
Capital and sales type
 leases.......................       7          --           7
                                  ----        ----        ----
NET CASH PROVIDED BY/INVESTING
 ACTIVITIES...................      13          13          26
                                  ====        ====        ====
CASH FLOWS FROM FINANCING
 ACTIVITIES
Repayment of notes............    (806)        (81)       (887)
Issue of refinanced notes.....     682          68         750
                                  ----        ----        ----
NET CASH (USED IN) FINANCING
 ACTIVITIES...................    (124)        (13)       (137)
                                  ====        ====        ====
NET INCREASE/(DECREASE) IN
 CASH.........................      (6)         --          (6)
Cash at beginning of year.....     197           6         203
                                  ----        ----        ----
Cash at end of year...........     191           6         197
                                  ====        ====        ====
CASH PAID IN RESPECT OF:
Interest......................     190          20         210
                                  ====        ====        ====
</TABLE>

    The accompanying notes are an integral part of the financial statements.
                                       F-6
<PAGE>   95

                                AIRPLANES GROUP

                       NOTES TO THE FINANCIAL STATEMENTS

1.   SECURITIZATION TRANSACTION

     On March 28, 1996 ("THE CLOSING DATE") debis AirFinance Ireland plc (then
known as GPA Group plc) and its subsidiary undertakings ("DEBIS") re-financed on
a long term basis certain indebtedness due to commercial banks and other senior
secured debt. The re-financing was effected through a major aircraft
securitization transaction ("THE TRANSACTION").

     Under the terms of the Transaction, a combination ("AIRPLANES GROUP")
comprising Airplanes Limited, a special purpose company formed under the laws of
Jersey, Channel Islands ("AIRPLANES LIMITED") and Airplanes U.S. Trust, a trust
formed under the laws of Delaware ("AIRPLANES TRUST") together acquired directly
or indirectly from debis a portfolio of 229 commercial aircraft (collectively
the "AIRCRAFT") and related leases (the "LEASES"). The Transaction was effected
by transferring existing subsidiaries of debis that owned the Aircraft to
Airplanes Limited and Airplanes Trust, respectively. References to Airplanes
Group in these notes to the financial statements may relate to Airplanes Limited
and Airplanes Trust on a combined or individual basis as applicable.

     Simultaneously with such transfers, Airplanes Group issued notes of $4,048
million in aggregate principal amount in four classes: Class A, Class B, Class C
and Class D ("NOTES") with approximately 91% of the principal amount of notes in
each class being issued by Airplanes Limited and 9% approximately by Airplanes
Trust. Airplanes Group also issued Class E Notes ranking after the Notes and
these were taken up by debis as part consideration for the transfer of the
Aircraft and certain related lease receivables. Airplanes Limited and Airplanes
Trust have each fully and unconditionally guaranteed each others' obligations
under the relevant notes.

     On March 16, 1998 Airplanes Group successfully completed a refinancing of
$2,437 million related to Class A and Class B Notes.

     On November 20, 1998 debis (then known as AerFi Group plc) transferred its
holding of E Notes to GE Capital Corporation ("GE CAPITAL").

     On March 15, 2001 Airplanes Group successfully completed a refinancing of
$750 million related to Class A Notes.

2.   BASIS OF PREPARATION

     The accompanying financial statements of Airplanes Limited, Airplanes Trust
and the combined balance sheets, statements of operations, statements of changes
in shareholders' deficit/net liabilities and cash flows of Airplanes Group
(together the "FINANCIAL STATEMENTS") have been prepared on a going concern
basis in accordance with the accounting policies set out in Note 4 and in
conformity with United States of America generally accepted accounting
principles.

3.   RELATIONSHIP WITH DEBIS AIRFINANCE IRELAND PLC AND MANAGEMENT ARRANGEMENTS

     GE Capital Aviation Services Limited ("GECAS") provides, in consideration
for management fees, certain management services to Airplanes Group pursuant to
a servicing agreement entered into by GECAS with certain members of Airplanes
Group and their subsidiaries. Under certain circumstances GECAS may resign from
the performance of its duties in relation to the management of all the aircraft
generally or, the management of one or more aircraft individually, provided in
either case that a replacement has been appointed to manage the aircraft. In
addition, Airplanes Group will, under certain circumstances, have the right to
terminate the servicing agreement.

     As a holder of the majority of the Class E Notes, GE Capital has the right
to appoint one director to the board of Airplanes Limited and one of the
controlling trustees of Airplanes Trust. Airplanes Limited has a board

                                       F-7
<PAGE>   96
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

3.   RELATIONSHIP WITH DEBIS AIRFINANCE IRELAND PLC AND MANAGEMENT ARRANGEMENTS
     -- (CONTINUED)

of directors of five directors, including the director appointed by the holders
of the Class E Notes. The controlling trustees of Airplanes Trust are the same
individuals.

     Certain cash management and administrative services are being provided by
debis subsidiaries to Airplanes Group, pursuant to a cash management agreement
and administrative agency agreement entered into by such debis subsidiaries with
Airplanes Group.

     In the year to March 31, 2001, fees of $23.3 million and $9.6 million
(2000: $21.8 million and $9.4 million) were charged by GECAS and debis
respectively.

     Although Airplanes Group's portfolio will at all times be held in two
different entities, Airplanes Limited and Airplanes Trust, Airplanes Group is
managed and the note covenants structured on the basis of a single economic
entity owning a single aircraft portfolio.

4.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Airplanes Group's accounting policies conform with United States generally
accepted accounting principles. The following paragraphs describe the main
accounting policies followed in these financial statements.

     (a) Revenue Recognition

     Revenue from aircraft on operating leases is recognised as income as it
accrues over the period of the leases. Unearned revenue from capital and sales
type leases is amortised and included in income.

     (b) Aircraft

     Aircraft, including engines, are stated at cost less accumulated
depreciation.

     Aircraft carrying values are periodically assessed for impairment in
accordance with Statement of Financial Accounting Standards No. 121 "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of" ("FAS 121"). The statement requires the recognition of an impairment loss
for an asset held for use when the estimate of un-discounted future cashflows
expected to be generated by the asset is less than its carrying amount.
Measurement of impairment loss is to be recognised based on the fair value of
the asset. Fair market values reflects the underlying economic value of the
aircraft, including engines, in normal market conditions (where supply and
demand are in reasonable equilibrium) and assumes adequate time for a sale and a
willing buyer and seller. Short term fluctuations in the market place are
disregarded and it is assumed that there is no necessity either to dispose of a
significant number of aircraft simultaneously or to dispose of aircraft quickly.
The fair market value of the assets is based on independent valuations of the
aircraft in the fleet and estimates of discounted future cash flows.

     FAS 121 also requires that long-lived assets to be disposed of, be reported
at the lower of the carrying amount or fair value less estimated disposal costs.

     Cost comprises the invoiced cost net of manufacturers' discounts.
Depreciation is calculated on a straight line basis. The estimates of useful
lives and residual values are reviewed periodically. The current estimates for
residual values are generally 15% of cost, and for useful lives are as follows:

<TABLE>
<CAPTION>
                                                              YEARS          FROM
                                                              -----    ----------------
<S>                                                           <C>      <C>
Stage 2 aircraft............................................  20-25    Manufacture date
Refurbished and upgraded aircraft -- converted to
  freighters................................................  20       Conversion date
Turboprop aircraft..........................................  22.5     Manufacture date
All other aircraft..........................................  25       Manufacture date
</TABLE>

                                       F-8
<PAGE>   97
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

4.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

     (c) Net Investment in Capital and Sales Type Leases

     The amounts due from lessees under capital leases, where the entire cost of
the asset is recovered, are shown in the balance sheet at the net amount
receivable under these leases. The related finance revenue is recognised as
income over the period of the lease in proportion to the amounts outstanding.

     (d) Provision for Maintenance

     In most lease contracts the lessee has the obligation for maintenance costs
on airframes and engines and in many lease contracts the lessee makes a full or
partial prepayment, calculated at an hourly rate, from which maintenance
expenditures for major checks are disbursed. The undisbursed portion of these
prepayments are included in the provision for maintenance which may from time to
time include prepayments made by current lessees and prior lessees. At the time
an aircraft is re-leased to a new lessee, an assessment is made of the expected
maintenance reserve requirement, any excess reserve is then released through the
Statement of Operations.

     Maintenance provisions also include the directors' estimate of maintenance
costs which are Airplanes Group's primary responsibility and certain amounts in
respect of the risk of lessees defaulting on obligations, which could result in
Airplanes Group incurring maintenance costs which are the lessee's primary
responsibility.

     (e) Allowance for doubtful debts

     Allowances are made for doubtful debts where it is considered that there is
a significant risk of non recovery.

     The assessment of risk of non recovery is primarily based on the extent to
which amounts outstanding exceed the expected value of security held together
with an assessment of the financial strength and condition of a lessee and the
economic conditions existing in the lessee's operating environment.

     (f) Provision for Loss Making Leases

     A lease agreement is deemed to be "Loss Making" in circumstances where the
contracted rental payments are insufficient to cover the depreciation and
allocated interest cost attributable to the relevant aircraft, together with
direct costs such as legal fees and other costs attributable to the lease over
its term. At March 31, 2001, March 31, 2000, and March 31, 1999 the attributable
allocated interest cost excludes the element of the interest on the Class E
Notes, 9% per annum, which is payable only in the event that the principal
amount on all the Notes is repaid. Provision is made for the expected losses on
such leases.

     (g) Taxation

     Income taxes are accounted for under the asset and liability method.
Deferred income tax assets and liabilities are recognised for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carry forwards. Deferred income tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred income tax assets and
liabilities of a change in tax rates is recognised in the period that includes
the enactment date.

     Income tax is provided based on the results for the year. Airplanes
Limited's underlying taxable entities in Ireland are subject to Irish Corporate
Income Tax on approved trading operations at a rate of 10% until December 31,
2005 and thereafter, at a rate of 12.5%. Airplanes Trust's underlying taxable
entities in the US are subject to US Federal and State taxes on their trading
operations.

                                       F-9
<PAGE>   98
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

4.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

     (h) Concentrations of Credit Risk

     Financial instruments which potentially subject Airplanes Group to
significant concentrations of credit risk consist primarily of trade accounts
receivable and interest rates swaps and similar hedging instruments. Details of
Airplanes Group's interest rate swaps and similar hedging instruments are set
out at (i) below.

     Credit risk with respect to trade accounts receivable is generally
diversified due to the number of lessees comprising Airplanes Group's customer
base and the different geographic areas in which they operate. At March 31, 2001
Airplanes Group owned 193 aircraft which it leased to 64 lessees in 34
countries. The geographic concentrations of leasing revenues is set out in Note
14.

     Many of Airplanes Group's lessees are in a relatively weak financial
position because of the difficult economic conditions in the civil aviation
industry as a whole and because, in general, weakly capitalised airlines are
more likely to seek operating leases.

     The exposure of Airplanes Group's aircraft to particular countries and
customers is managed partly through concentration limits provided for under the
terms of the notes and through obtaining security from lessees by way of
deposits, letters of credit and guarantees. Airplanes Group will continue to
manage its exposure to particular countries, regions and lessees through
concentration limits. In the normal course of its business Airplanes Group has
reached agreements with certain of its lessees to restructure their leases and
defer certain receivable balances. Details of accounts receivable, deferred
balances and provision for bad and doubtful debts are set out in Note 6.

     Colombia has recently suffered economically as a result of the
deterioration in the value of the Colombian peso and the resulting negative
impact on the Colombian economy. As of March 31, 2001 Airplanes Group leased 10
aircraft to 3 lessees in Colombia. In particular, at March 31 Airplanes Group
leased 6 aircraft to one lessee who was $13.2 million in arrears. The servicer
is in discussion with the lessee regarding its continued operation of the leases
which may include a reduction in rentals or the return of some or all of the
aircraft.

     Airplanes Group's Brazilian lessees also continue to experience significant
difficulties due to over-capacity and adverse market conditions. At March 31,
2001, 16 of Airplanes Group's aircraft were being operated by 3 Brazilian
lessees. Restructuring arrangements have been agreed with certain of the
Brazilian lessees allowing for rescheduling of balances owing to Airplanes
Group. Receivable balances with Brazilian lessees in total were $3 million at
March 31, 2001.

     Trading conditions in the civil aviation industry in Asia have been
adversely affected by the severe economic and financial difficulties experienced
recently in the region where at March 31, 2001 18 of Airplanes Group's aircraft
were being operated by nine lessees. A restructuring agreement was signed in the
year ended March 31, 2000 with a Philippine lessee, whose balance of $2.7m was
deferred and will be repaid over 36 months to September 2002. At March 31, 2001
the lessee was current on all payments under the restructuring agreement.

     (i) Fair Value of Financial Instruments

     Statement of Financial Accounting Standards No. 107 "Disclosures about Fair
Value of Financial Instruments" defines the fair value of a financial instrument
as the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale.
Fair values of financial instruments have been determined with reference to
available market information and the valuation methodologies discussed below.
However, considerable management judgement is required in interpreting market
data to arrive at estimates of fair values. Accordingly, the estimates presented
herein may not be indicative of the amounts that Airplanes Group could realise
in a current market exchange.

        (i)   The fair value of cash, trade receivables and trade payables
              approximates the carrying amount because of the nature and short
              maturity of these instruments.

                                       F-10
<PAGE>   99
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

4.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

        (ii)   The fair value of the A, B, C and D Notes issued by Airplanes
               Group outstanding at March 31, 2001 and 2000 was $2,767 million
               and $2,965 million respectively. While the amount subscribed for
               the E Notes was based on the appraised value of the aircraft at
               the Closing Date, the fair value of these Notes at March 31, 2001
               cannot be determined, as it represents the holders' residual
               interest in the aircraft owned by Airplanes Group.

        (iii)   Airplanes Group manages its interest rate exposure through the
                use of interest rate swaps and options to enter into interest
                rate swaps ("Swaptions"). At March 31, 2001 and 2000 Airplanes
                Group had entered into interest rate swaps with an aggregate
                notional principal amount of $1.96 billion and $2.09 billion
                respectively. Under these swap arrangements Airplanes Group will
                pay fixed and receive floating amounts on a monthly basis. The
                objective of Airplanes Group's interest rate risk management
                policy is to correlate certain floating rate interest payments
                on the bonds to contracted fixed rental payments in its
                portfolio. The fair value of these swaps at March 31, 2001 and
                2000 was an unrealised loss of $38.0 million and an unrealized
                profit of $15.8 million respectively.

        Interest rate exposures which may arise in the event that lessees paying
        fixed rate rentals default is managed in part through the purchase of
        Swaptions. At March 31, 2001 and 2000 Airplanes Group had entered into
        Swaptions with a notional value of $378 million and $289 million
        respectively. The fair value of the Swaptions at March 31, 2001 and 2000
        was $3.5 million and $0.08 million respectively.

     Airplanes Group is exposed to losses in the event of non-performance by
counterparties to interest rate swap and Swaption agreements. However, Airplanes
Group does not anticipate non-performance by these counterparties.

     Counterparty risk is monitored on an ongoing basis. Counterparties are
subject to the prior approval of the Directors of Airplanes Limited and the
Controlling Trustees of Airplanes Trust. Airplanes Group's counterparties at
March 31, 2001 comprise three major U.S./European financial institutions.

     (j) Foreign Currency Transactions

     Airplanes Group's foreign currency transactions are not significant as
virtually all revenues and most costs are denominated in US dollars.

     (k) New Pronouncement

     Derivative Instruments and Hedging Activities

     In June 1998 the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Certain Hedging Activities." In June 2000 the FASB
issued SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain
Hedging Activity, an Amendment of SFAS 133." SFAS No. 133 and SFAS No. 138
require that all derivative instruments be recorded on the balance sheet at
their respective fair values. SFAS No. 133 and SFAS No. 138 are effective for
all fiscal quarters of all fiscal years beginning after June 30, 2000. Airplanes
Group adopted SFAS No. 133 and SFAS No. 138 on April 1, 2001.

     Following adoption of these standards, for all future financial periods,
all derivatives will be recognized on the balance sheet at their fair value. All
derivatives will be designated as either a hedge of the fair value of a
recognized asset or liability or of an unrecognized firm commitment ("fair
value" hedge), a hedge of a forecasted transaction or of the variability of cash
flows to be received or paid related to a recognized asset or liability ("cash
flow" hedge), a foreign-currency fair-value or cash-flow hedge ("foreign
currency" hedge) or a "held for trading" instrument ("trading" instrument).

                                       F-11
<PAGE>   100
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

4.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

Airplanes Group expects that all of its interest rate swaps will be designated
as cash flow hedges while its swaptions will be designated as trading
instruments.

     Airplanes Group is in the process of formally documenting all relationships
between hedging instruments and hedged items, as well as its risk-management
objective and strategy for undertaking various hedge transactions. This process
includes linking all derivatives that are designated as cash-flow hedges to
specific liabilities on the balance sheet. Airplanes Group will formally assess,
both at the hedge's inception and on an ongoing basis, whether the derivatives
that are used in hedging transactions are highly effective in offsetting changes
in cash flows of hedged items.

     Changes in the fair value of a derivative that is highly effective and that
is designated and qualifies as a cash-flow hedge will be recorded in other
comprehensive income, until earnings are affected by the variability in cash
flows of the designated hedged item.

     Airplanes Group will discontinue hedge accounting prospectively when it is
determined that the derivative is no longer highly effective in offsetting
changes in the cash flows of the hedged item, the derivative expires or is sold,
terminated, or exercised, or management determines that designation of the
derivative as a hedging instrument is no longer appropriate.

     In all situations in which hedge accounting is discontinued, we will
continue to carry the derivative at its fair value on the balance sheet, and
recognise any changes in its fair value in earnings.

     In all situations where derivatives are designated as trading instruments,
they will be carried at fair value on the balance sheet and any changes in fair
value will be recognized in earnings.

5.   CASH

<TABLE>
<CAPTION>
                                                                        MARCH 31,
                                                     ------------------------------------------------
                                                              2000                      2001
                                                     ----------------------    ----------------------
                                                     AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                                      LIMITED       TRUST       LIMITED       TRUST
                                                     ---------    ---------    ---------    ---------
                                                          ($ MILLIONS)              ($ MILLIONS)
<S>                                                  <C>          <C>          <C>          <C>
Cash...............................................     197            6          191            6
                                                        ===          ===          ===          ===
</TABLE>

     Substantially all of the cash balances at March 31, 2001 and 2000 are held
for specific purposes under the terms of the Transaction. Included in the cash
balances at March 31, 2001 and 2000 is restricted cash of $6 million.

                                       F-12
<PAGE>   101
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

6.   ACCOUNTS RECEIVABLE

<TABLE>
<CAPTION>
                                                                        MARCH 31,
                                                     ------------------------------------------------
                                                              2000                      2001
                                                     ----------------------    ----------------------
                                                     AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                                      LIMITED       TRUST       LIMITED       TRUST
                                                     ---------    ---------    ---------    ---------
                                                          ($ MILLIONS)              ($ MILLIONS)
<S>                                                  <C>          <C>          <C>          <C>
Trade receivables..................................      24            8           19           11
Allowance for doubtful debts.......................     (10)          (5)         (12)          (7)
                                                        ---          ---          ---          ---
                                                         14            3            7            4
                                                        ===          ===          ===          ===
Included in trade receivables are deferred amounts
  as follows:-
  Gross deferred lease receivables.................       5           --            7            2
  Allowance for doubtful debts.....................      (1)          --           (4)          (2)
                                                        ---          ---          ---          ---
                                                          4           --            3           --
                                                        ===          ===          ===          ===
</TABLE>

     Deferred lease receivables at March 31, 2001 represent deferrals of rent,
maintenance and miscellaneous payments due from lessees. The most significant of
these lessees are located in Colombia and Brazil where the air transport sector
is suffering from substantial over capacity and the effects of difficult
economic conditions (see Note 4(h)).

     Receivables include amounts classified as due after one year of $3.2
million (Airplanes Limited $3.2 million and Airplanes Trust $Nil) at March 31,
2001 and $2.3 million (Airplanes Limited $2.3 million and Airplanes Trust $Nil)
at March 31, 2000.

7.   AMOUNTS DUE FROM AIRPLANES LIMITED TO AIRPLANES TRUST

<TABLE>
<CAPTION>
                                                                        MARCH 31,
                                                     ------------------------------------------------
                                                              2000                      2001
                                                     ----------------------    ----------------------
                                                     AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                                      LIMITED       TRUST       LIMITED       TRUST
                                                     ---------    ---------    ---------    ---------
                                                          ($ MILLIONS)              ($ MILLIONS)
<S>                                                  <C>          <C>          <C>          <C>
Amount receivable from Airplanes Limited/Payable to
  Airplanes Trust..................................     (28)          28          (46)          46
                                                        ===          ===          ===          ===
</TABLE>

     Included in the balance at March 31, 2000 and March 31, 2001 was $80
million payable from Airplanes Trust to Airplanes Limited in respect of aircraft
sales and purchases. The remaining balance of $126 million (2000: $108m)
represents the net amount due to Airplanes Trust in respect of Airplanes Trust's
trading activities, including servicing of its debt obligations.

                                       F-13
<PAGE>   102
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

8.   NET INVESTMENT IN CAPITAL AND SALES TYPE LEASES

     The following are the components of the net investment in capital and sales
type leases of Airplanes Limited:

<TABLE>
<CAPTION>
                                                              2000                      2001
                                                     ----------------------    ----------------------
                                                     AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                                      LIMITED       TRUST       LIMITED       TRUST
                                                     ---------    ---------    ---------    ---------
                                                          ($ MILLIONS)              ($ MILLIONS)
<S>                                                  <C>          <C>          <C>          <C>
Total minimum lease payments receivable............      16           --            7           --
Estimated residual values of leased assets.........      10           --            7           --
Less unearned revenue..............................     (11)          --           (7)          --
                                                        ---          ---          ---          ---
Net investment in capital and sales type leases....      15           --            7           --
                                                        ===          ===          ===          ===
</TABLE>

     Aggregate lease rentals in respect of such capital and sales type leases
for the years ended March 31, 1999, 2000 and 2001 amounted to $20 million,
(Airplanes Limited $15 million, Airplanes Trust $5 million), $10 million
(Airplanes Limited $5 million, Airplanes Trust $5 million) and $6 million
(Airplanes Limited $6 million, Airplanes Trust $Nil) respectively.

     Unearned revenue of $8 million (Airplanes Limited $5 million, Airplanes
Trust $3 million) $4 million (Airplanes Limited $1 million, Airplanes Trust $3
million) and $4 million (Airplanes Limited $4 million, Airplanes Trust $Nil) for
the years ended March 31, 1999, 2000 and 2001, respectively, was amortised and
included in revenue.

     Minimum future payments to be received on such capital leases for aircraft
at March 31, 2001 are as follows:

<TABLE>
<CAPTION>
                                                              MINIMUM LEASE
                                                           PAYABLES RECEIVABLE
                                                           -------------------
                                                                AIRPLANES
                                                                 LIMITED
                                                           -------------------
                                                              ($ MILLIONS)
<S>                                                        <C>
Year ending March 31, 2002...............................           7
                                                                   ==
</TABLE>

                                       F-14
<PAGE>   103
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

9.   AIRCRAFT

<TABLE>
<CAPTION>
                                                                        MARCH 31,
                                                     ------------------------------------------------
                                                              2000                      2001
                                                     ----------------------    ----------------------
                                                     AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                                      LIMITED       TRUST       LIMITED       TRUST
                                                     ---------    ---------    ---------    ---------
                                                          ($ MILLIONS)              ($ MILLIONS)
<S>                                                  <C>          <C>          <C>          <C>
AIRCRAFT
  Cost...........................................      4,137         386         4,137         345
  Less Accumulated depreciation..................     (1,440)       (151)       (1,594)       (136)
                                                      ------        ----        ------        ----
                                                       2,697         235         2,543         209
                                                      ======        ====        ======        ====
FLEET ANALYSIS
On operating lease for a further period of:
  More than five years...........................        310          --           294          30
  From one to five years.........................      1,992         220         1,676         116
  Less than one year.............................        276          15           522          63
Non revenue earning aircraft:
  Available for lease............................         94          --            36          --
  Available for lease, subject to letters of
     intent......................................         25          --            15          --
                                                      ------        ----        ------        ----
                                                       2,697         235         2,543         209
                                                      ======        ====        ======        ====
</TABLE>

     Certain aircraft are subject to purchase options granted to existing
lessees.

<TABLE>
<CAPTION>
                                                             YEAR ENDED MARCH 31,
                                  --------------------------------------------------------------------------
                                           1999                      2000                      2001
                                  ----------------------    ----------------------    ----------------------
                                  AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                   LIMITED       TRUST       LIMITED       TRUST       LIMITED       TRUST
                                  ---------    ---------    ---------    ---------    ---------    ---------
                                       ($ MILLIONS)              ($ MILLIONS)              ($ MILLIONS)
<S>                               <C>          <C>          <C>          <C>          <C>          <C>
Depreciation expense..........       158          17           156          17           154          16
                                     ===          ==           ===          ==           ===          ==
</TABLE>

     At March 31, 2001 Airplanes Group owned 193 (2000:199) aircraft.

                                       F-15
<PAGE>   104
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

10. ACCRUED EXPENSES AND OTHER LIABILITIES

<TABLE>
<CAPTION>
                                                                        MARCH 31,
                                                     ------------------------------------------------
                                                              2000                      2001
                                                     ----------------------    ----------------------
                                                     AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                                      LIMITED       TRUST       LIMITED       TRUST
                                                     ---------    ---------    ---------    ---------
                                                          ($ MILLIONS)              ($ MILLIONS)
<S>                                                  <C>          <C>          <C>          <C>
Accrued expenses and other liabilities include:
  Unearned revenue...............................        14           2             12           2
  Provisions for loss making leases (Note 16)....        31          --             48          --
  Other accruals.................................        38          --             33           2
  Interest accrued...............................       685          69            982          97
  Trade payables.................................         3          --              1          --
  Deposits received..............................        36           3             35           3
                                                        ---          --          -----         ---
                                                        807          74          1,111         104
                                                        ===          ==          =====         ===
Of which:
  Payable within one year........................        77           4             79           3
  Payable after one year.........................       730          70          1,032         101
                                                        ---          --          -----         ---
                                                        807          74          1,111         104
                                                        ===          ==          =====         ===
</TABLE>

11. INDEBTEDNESS

     The components of the debt are as follows:

<TABLE>
<CAPTION>
                                                                        MARCH 31,
                                                     ------------------------------------------------
                                                              2000                      2001
                                                     ----------------------    ----------------------
                                                     AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                                      LIMITED       TRUST       LIMITED       TRUST
                                                     ---------    ---------    ---------    ---------
                                                          ($ MILLIONS)              ($ MILLIONS)
<S>                                                  <C>          <C>          <C>          <C>
Indebtedness in respect of Notes issued:
  Subclass A-4...................................        182          18            --          --
  Subclass A-6...................................        518          50           405          40
  Subclass A-7...................................        501          49            --          --
  Subclass A-8...................................        638          62           638          62
  Subclass A-9...................................         --          --           683          67
  Class B........................................        265          26           255          24
  Class C........................................        321          30           320          30
  Class D........................................        360          36           360          35
  Class E........................................        538          53           538          53
                                                       -----         ---         -----         ---
                                                       3,323         324         3,199         311
  Discounts/costs arising on issue of Notes......        (10)         (1)          (14)         (1)
                                                       -----         ---         -----         ---
                                                       3,313         323         3,185         310
                                                       =====         ===         =====         ===
</TABLE>

DEBT MATURITY

     The repayment terms of the A, B, C and D Notes are such that certain
principal amounts are expected to be repaid based on certain assumptions revised
in the Offering Memorandum dated March 8, 2001 (the "Expected Final Payment
Date") or refinanced through the issue of new Notes by specified Expected Final
Payment Dates but in any event are ultimately due for repayment on specified
final maturity dates (the "Final Maturity Date").

                                       F-16
<PAGE>   105
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

11.   INDEBTEDNESS -- (CONTINUED)

The Expected Final Payment Dates, Final Maturity Dates, Principal Amount and
interest rates applicable to each class of note are set out below:

<TABLE>
<CAPTION>
                              INTEREST      PRINCIPAL AMOUNT      EXPECTED FINAL          FINAL
CLASS/ SUBCLASS OF NOTES       RATES          AT YEAR END          PAYMENT DATE       MATURITY DATE
------------------------    ------------    ----------------    ------------------    --------------
                                               ($ M)
<S>                         <C>             <C>                 <C>                   <C>
Subclass A-6..........      (LIBOR+.34%)           445          January 15, 2004      March 15, 2019
Subclass A-8..........      (LIBOR+.375%)          700          March 15, 2003        March 15, 2019
Subclass A-9..........      (LIBOR+.55%)           750          November 15, 2008     March 15, 2019
Class B...............      (LIBOR+.75%)           279          February 15, 2017     March 15, 2019
Class C...............      (8.15%)                350          December 15, 2013     March 15, 2019
Class D...............      (10.875%)              395          February 15, 2017     March 15, 2019
Class E...............      (See below)            591          See below             See below
                                                 -----
                                                 3,510
                                                 =====
</TABLE>

     Discounts on Notes issues and costs arising on refinanced Notes are netted
against debt on the balance sheet. These amounts are accreted to the income
statement over the expected life of the refinancing Notes.

     On March 15, 2001, Airplanes Group successfully completed a $750 million
refinancing of its Subclass A-4 and Subclass A-7 Notes into new Subclass A-9
Notes.

     The dates on which principal repayments on the Notes will actually occur
will depend on the cash generated by Airplanes Group and in the event that the
Subclass A-8 Notes are not repaid or refinanced by the Expected Final Payment
Date, additional interest will arise.

     LIBOR on the Class A and Class B Notes equates to the London interbank
offered rate for one month US dollar deposits.

     Interest on the Class C and Class D fixed rate Notes is calculated on the
basis of a 360-day year, consisting of twelve 30-day months.

     The Class E Notes accrue interest for each Interest Accrual Period at a
rate of 20% per annum. The stated interest rate on the Class E Notes is adjusted
by reference to the U.S. Consumer Price Index. Except for the Class E Note
Minimum Interest Amount plus the Class E Notes Supplemental Interest Amount,
each of which are paid at a rate of 1% and 10% multiplied by the Outstanding
Principal Balance of the Class E Note, respectively, no interest will be payable
on the Class E Notes until all of the interest, principal and premium, if any,
on the Notes have been repaid in full. The principal on the Class E notes will
be repaid, subject to adequate funds being available after the interest on the
Class E Notes.

     In general the priority of the principal payments on the Notes is as set
out below;

     1.    Specified minimum principal amounts on the A and the B Notes in that
           order.

     2.    Additional amounts on the A Notes in the event that the value of the
           fleet falls below specified amounts.

     3.    Scheduled principal repayments on the C and D Notes in that order.

     4.    Specified additional amounts on the B Notes and the A Notes in that
           order.

     5.    Thereafter cash available to repay the principal on the Notes is
           applied on each payment date to repay the outstanding principal on
           the D Notes, the C Notes, the B Notes and the A Notes in that order.

                                       F-17
<PAGE>   106
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

11.   INDEBTEDNESS -- (CONTINUED)

     To the extent any Minimum Principal Payment Amount, Supplemental Principal
Payment Amount or Principal Adjustment Amount is required to be paid with
respect to the class A notes, and there are sufficient funds in the collection
account to make that payment, these amounts will be applied to repay the
subclass of the class A notes in the following order:

     (1) First, any amount outstanding under the subclass A-6 notes.

     (2) Second, following their amortization commencement date, any amount
         outstanding under the subclass A-8 notes, and

     (3) Third, any amount outstanding under the subclass A-9 notes.

12. PROVISION FOR MAINTENANCE

<TABLE>
<CAPTION>
                                                                        MARCH 31,
                                                     ------------------------------------------------
                                                              2000                      2001
                                                     ----------------------    ----------------------
                                                     AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                                      LIMITED       TRUST       LIMITED       TRUST
                                                     ---------    ---------    ---------    ---------
                                                          ($ MILLIONS)              ($ MILLIONS)
<S>                                                  <C>          <C>          <C>          <C>
Balance at April, 1................................     266           17          258           16
Receivable during year.............................      62            2           49            1
Expenditure/Transfers..............................     (70)          (3)         (74)          (4)
                                                        ---          ---          ---          ---
Balance at March, 31...............................     258           16          233           13
                                                        ===          ===          ===          ===
</TABLE>

     The reserve for maintenance includes maintenance reserve funds received
from lessees, provisions to cover the directors' estimate of maintenance costs
where Airplanes Group has the primary obligation for maintenance.

13. SHARE CAPITAL

<TABLE>
<CAPTION>
                                                                 AIRPLANES
                                                                  LIMITED
                                                                 MARCH 31,
                                                              ----------------
                                                               2000      2001
                                                              ------    ------
<S>                                                           <C>       <C>
Ordinary shares, par value $1
Authorised 10,000...........................................  10,000    10,000
                                                              ------    ------
Issued 30...................................................      30        30
                                                              ======    ======
</TABLE>

     The holders of the issued ordinary shares are entitled to an annual
cumulative preferential dividend of $4,500. As Airplanes Limited does not have
distributable profits this dividend has not been paid. As at March 31, 2001 the
total unpaid cumulative preferential dividend amounted to $22,500.

                                       F-18
<PAGE>   107
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

14. REVENUES

<TABLE>
<CAPTION>
                                                             YEAR ENDED MARCH 31,
                                     ---------------------------------------------------------------------
                                             1999                    2000                    2001
                                     ---------------------   ---------------------   ---------------------
                                     AIRPLANES   AIRPLANES   AIRPLANES   AIRPLANES   AIRPLANES   AIRPLANES
                                      LIMITED      TRUST      LIMITED      TRUST      LIMITED      TRUST
                                     ---------   ---------   ---------   ---------   ---------   ---------
                                         ($ MILLIONS)            ($ MILLIONS)            ($ MILLIONS)
<S>                                  <C>         <C>         <C>         <C>         <C>         <C>
The distribution of revenues by
  geographic area is as follows:
  Europe...........................     203           1         181           1         165           1
  North America....................      41         126          49          36          57          49
  South America....................     215           8         177           2         171           1
  Asia/rest of world...............      63           1          57           2          47           1
                                        ---         ---         ---         ---         ---         ---
                                        521         137         464          41         440          52
                                        ===         ===         ===         ===         ===         ===
Of which, sales revenue to third
  parties represents...............     (37)        (95)         (3)         --           8          13
                                        ---         ---         ---         ---         ---         ---
Sale of shares to third parties
  represents.......................      --          --          (1)         --          --          --
                                        ---         ---         ---         ---         ---         ---
Leasing revenue....................     484          42         460          41         432          39
                                        ---         ---         ---         ---         ---         ---
Of which, maintenance revenue
  represents.......................      67           2          62           2          49           1
                                        ===         ===         ===         ===         ===         ===
</TABLE>

     At March 31, 2001, Airplanes Group had contracted to receive the following
minimum rentals under operating leases:

<TABLE>
<CAPTION>
                                                                         2001
                                                                ----------------------
                                                                AIRPLANES    AIRPLANES
                                                                 LIMITED       TRUST
                                                                ---------    ---------
                                                                     ($ MILLIONS)
<S>                                                             <C>          <C>
Year ending March 31, 2002..................................       354          31
  2003......................................................       242          19
  2004......................................................       145           4
  2005......................................................        86          --
  2006......................................................        56          --
  Thereafter................................................        42          --
                                                                   ---          --
                                                                   925          54
                                                                   ===          ==
</TABLE>

     Contracted rentals are based on actual rates up to the first recalculation
date, and thereafter are based on a budget LIBOR of 5.75%, and include aircraft
subject to letters of intent to lease.

     Each of Airplanes Limited and Airplanes Trust operates in one business
segment, the leasing of aircraft.

     For Airplanes Limited no customer accounted for more than 10% of leasing
revenue in fiscal 1999, 2000 or 2001. For Airplanes Trust: (a) two lessees each
accounted for more than 10% of leasing revenue for the year ended March 31,
1999, and individually these lessees accounted for 39% and 14% of leasing
revenue, respectively, (b) two lessees each accounted for more than 10% of
leasing revenue for the year ended March 31, 2000, and individually these
lessees accounted for 34% and 13% of leasing revenue respectively and (c) one
lessee accounted for more than 10% of leasing revenue in the year ended March
31, 2001 and individually this lessee accounted for 34% of leasing revenue.

                                       F-19
<PAGE>   108
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

15. NET INTEREST EXPENSE

<TABLE>
<CAPTION>
                                                           YEAR ENDED MARCH 31,
                                --------------------------------------------------------------------------
                                         1999                      2000                      2001
                                ----------------------    ----------------------    ----------------------
                                AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                 LIMITED       TRUST       LIMITED       TRUST       LIMITED       TRUST
                                ---------    ---------    ---------    ---------    ---------    ---------
                                     ($ MILLIONS)              ($ MILLIONS)              ($ MILLIONS)
<S>                             <C>          <C>          <C>          <C>          <C>          <C>
Interest on Notes issued......     402          40           438          43           501          49
Interest income...............     (14)         --           (13)         --           (14)         --
                                   ---          --           ---          --           ---          --
                                   388          40           425          43           487          49
                                   ===          ==           ===          ==           ===          ==
Cash paid in respect of
  interest....................     201          22           193          21           190          20
                                   ===          ==           ===          ==           ===          ==
</TABLE>

16. LOSS MAKING LEASES

<TABLE>
<CAPTION>
                                                           YEAR ENDED MARCH 31,
                                --------------------------------------------------------------------------
                                         1999                      2000                      2001
                                ----------------------    ----------------------    ----------------------
                                AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                 LIMITED       TRUST       LIMITED       TRUST       LIMITED       TRUST
                                ---------    ---------    ---------    ---------    ---------    ---------
                                     ($ MILLIONS)              ($ MILLIONS)              ($ MILLIONS)
<S>                             <C>          <C>          <C>          <C>          <C>          <C>
Provision raised..............       7          --             8          --            20          --
Utilisation...................     (18)         (1)          (11)         (1)           (3)         --
                                   ---          --           ---          --           ---          --
Net utilisation...............     (11)         (1)           (3)         (1)           17          --
                                   ===          ==           ===          ==           ===          ==
</TABLE>

     Provision is made for the expected losses where a lease agreement is deemed
to be loss making. The charge in respect of the loss making lease provisions and
the utilisation of these provisions are reflected on a net basis in the
Statement of Operations. These provisions are utilised as the corresponding
actual losses arise over the period of the lease. The actual losses are
reflected within the depreciation expense, interest expense or other costs
within the Statement of Operations.

17. OTHER LEASE COSTS

<TABLE>
<CAPTION>
                                                           YEAR ENDED MARCH 31,
                                --------------------------------------------------------------------------
                                         1999                      2000                      2001
                                ----------------------    ----------------------    ----------------------
                                AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                 LIMITED       TRUST       LIMITED       TRUST       LIMITED       TRUST
                                ---------    ---------    ---------    ---------    ---------    ---------
                                     ($ MILLIONS)              ($ MILLIONS)              ($ MILLIONS)
<S>                             <C>          <C>          <C>          <C>          <C>          <C>
Maintenance receipts from
  lessees, transferred to
  reserves....................      67           2            62           2            49           1
Net release of excess
  maintenance reserves........      --          --           (11)         --           (10)         --
Other Lease Costs.............      13           1            20           1            42           1
                                   ---          --           ---          --           ---          --
                                    80           3            71           3            81           2
                                   ===          ==           ===          ==           ===          ==
</TABLE>

                                       F-20
<PAGE>   109
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

18. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

<TABLE>
<CAPTION>
                                                           YEAR ENDED MARCH 31,
                                --------------------------------------------------------------------------
                                         1999                      2000                      2001
                                ----------------------    ----------------------    ----------------------
                                AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES    AIRPLANES
                                 LIMITED       TRUST       LIMITED       TRUST       LIMITED       TRUST
                                ---------    ---------    ---------    ---------    ---------    ---------
                                     ($ MILLIONS)              ($ MILLIONS)              ($ MILLIONS)
<S>                             <C>          <C>          <C>          <C>          <C>          <C>
GECAS Management fees.........      22           2            20           2            21           2
Other selling, general and
  administrative expenses.....      10           1            11           1            12          --
                                   ---          --           ---          --           ---          --
                                    32           3            31           3            33           2
                                   ===          ==           ===          ==           ===          ==
</TABLE>

     In the year ended March 31, 2001, other selling, general and administrative
expenses included an amount of $9 million (Airplanes Limited $9 million,
Airplanes Trust $NIL million) payable to debis in respect of Administration and
Cash Management fees. A similar charge was also incurred in the years ended
March 31, 2000 and 1999.

19. PROVISION FOR INCOME TAXES

     References to Airplanes Limited and Airplanes Trust in the context of this
footnote refer to the underlying taxable entities of Airplanes Limited
(primarily Irish entities) and Airplanes Trust (primarily US entities).

(A)  AIRPLANES LIMITED

     Income tax benefit of Airplanes Limited consists of the following:

<TABLE>
<CAPTION>
                                                               YEARS ENDED MARCH 31,
                                                              -----------------------
                                                              1999     2000     2001
                                                              -----    -----    -----
                                                                   ($ MILLIONS)
<S>                                                           <C>      <C>      <C>
Current income tax..........................................    --       --       --
Deferred income tax.........................................     3      (15)       8
                                                               ---      ---      ---
                                                                 3      (15)       8
                                                               ===      ===      ===
</TABLE>

     Airplanes Limited's income from approved activities in Ireland is taxable
at a rate of 10% until December 31, 2005. Therefore income from trading
activities will be taxable at a rate of 12.5%.

     A reconciliation of differences between actual income tax benefit of
Airplanes Limited for 1999, 2000 and 2001 and the expected tax benefit based on
a tax rate of 10%, 12.5% and 12.5% is shown below:

<TABLE>
<CAPTION>
                                                               YEARS ENDED MARCH 31,
                                                              -----------------------
                                                              1999     2000     2001
                                                              -----    -----    -----
                                                                   ($ MILLIONS)
<S>                                                           <C>      <C>      <C>
Tax benefit at tax rate.....................................    17       22       41
Non deductible E Note interest..............................   (17)     (23)     (33)
Release of over provision in respect of prior year..........     3       --       --
Increase in deferred tax due to change in Irish tax rates...    --      (14)      --
                                                               ---      ---      ---
Actual tax charge...........................................     3      (15)       8
                                                               ===      ===      ===
</TABLE>

     E Note interest is not deductible for tax purposes in Ireland.

     The deferred tax provision at March 31, 1998 was based on calculations of
losses forward and capital allowances of Airplanes Limited at December 31, 1996
adjusted on an estimated basis to March 31, 1998. The release of the over
provision in respect of the prior year primarily relates to the finalisation of
these estimates.
                                       F-21
<PAGE>   110
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

19. PROVISION FOR INCOME TAXES -- (CONTINUED)

     Airplanes Limited has net operating loss carryforwards of approximately
$1,693 million as of March 31, 2001, which are available for offset against
future taxable income with no restrictions to expiration.

     The deferred tax assets and liabilities of Airplanes Limited are summarised
below:

<TABLE>
<CAPTION>
                                                               MARCH 31,
                                                              ------------
                                                              2000    2001
                                                              ----    ----
                                                              ($ MILLIONS)
<S>                                                           <C>     <C>
Deferred tax assets relating to:
  Net operating loss carryforwards..........................  190     211
Deferred tax liability relating to:
  Aircraft..................................................  256     269
                                                              ---     ---
Net deferred tax liability..................................   66      58
                                                              ===     ===
</TABLE>

(B)  AIRPLANES TRUST

     Income tax benefit of Airplanes Trust consists of the following:

<TABLE>
<CAPTION>
                                                               YEARS ENDED MARCH 31,
                                                              -----------------------
                                                              1999     2000     2001
                                                              -----    -----    -----
                                                                   ($ MILLIONS)
<S>                                                           <C>      <C>      <C>
Current income tax:
  Federal...................................................    --        8        4
  State.....................................................    --       --       --
                                                              ----     ----     ----
Total current...............................................    --        8        4
                                                              ----     ----     ----
Deferred income tax:
  Federal...................................................    --       --       (2)
  State.....................................................    --       --       --
Decrease in valuation allowance.............................    --       --       10
                                                              ----     ----     ----
Total deferred..............................................    --       --        8
                                                              ----     ----     ----
                                                                --        8       12
                                                              ====     ====     ====
</TABLE>

     A reconciliation of differences between actual income tax benefit of
Airplanes Trust for 1999, 2000 and 2001 and the expected tax benefit based on
the U.S. Federal statutory tax rate of 35% in 1999, 2000 and 2001 is shown
below:

<TABLE>
<CAPTION>
                                                               YEARS ENDED MARCH 31,
                                                              -----------------------
                                                              1999     2000     2001
                                                              -----    -----    -----
                                                                   ($ MILLIONS)
<S>                                                           <C>      <C>      <C>
Tax benefit at statutory rate...............................     5        9       11
Post acquisition net operating losses -- not utilised.......     4       --       --
State taxes net of federal..................................    (1)      --       --
Non deductible E-Note interest..............................    (6)      (8)     (11)
(Increase)/Decrease in valuation allowance..................    (2)       7       12
                                                              ----     ----     ----
                                                                --        8       12
                                                              ====     ====     ====
</TABLE>

     Airplanes Trust has Federal tax net operating loss carryforwards of
approximately $113 million as of March 31, 2001, which expire beginning in 2007
through 2020.

                                       F-22
<PAGE>   111
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

19. PROVISION FOR INCOME TAXES -- (CONTINUED)

     Deferred tax assets and liabilities of Airplanes Trust are summarised
below:

<TABLE>
<CAPTION>
                                                              YEARS ENDED
                                                               MARCH 31,
                                                              ------------
                                                              2000    2001
                                                              ----    ----
                                                              ($ MILLIONS)
<S>                                                           <C>     <C>
Deferred tax assets relating to:
  Net operating loss carryforwards..........................   46      46
  Other.....................................................    3       4
  Valuation allowance.......................................  (10)     --
                                                              ---      --
                                                               39      50
                                                              ---      --
Deferred tax liabilities relating to:
  Aircraft..................................................   79      78
  AMT NOL Liability.........................................    8      12
                                                              ---      --
                                                               87      90
                                                              ---      --
  Net deferred tax liability................................   48      40
                                                              ===      ==
</TABLE>

     Although all of the aircraft are owned by Airplanes Trust, for tax
purposes, certain of the aircraft are treated as being leased from third parties
under US "safe-harbor lease" tax rules. Under existing tax laws, certain events
could reverse the cumulative effect of this tax treatment, in which case
Airplanes Trust would be required to make payments to the third parties under
the tax indemnification clauses included in the lease agreements. As of March
31, 1999, 2000 and 2001 the maximum potential exposure under these provisions is
$1.3 million, $0.7 million and $0.2 million, respectively. Airplanes Trust
believes that no events have taken place which could cause such payments to
become due.

     Pursuant to a tax sharing agreement between Airplanes Trust and debis,
Airplanes Trust is liable to debis for its share of the consolidated tax
liability in years subsequent to the completion of the Transaction up to
November 20, 1998, in which Airplanes Trust generates taxable income. However,
Airplanes Trust shall satisfy this liability in cash only to the extent that
payments due to tax authorities from debis are attributable to Airplanes Trust's
share of the consolidated tax liability; the remainder will be paid in the form
of subordinated notes. Conversely, Airplanes Trust is entitled to be reimbursed
by debis for any tax benefits provided up to November 20, 1998 to debis from
Airplanes Trust's tax losses. debis has also indemnified Airplanes Trust for any
tax liabilities of AeroUSA, Inc. (a subsidiary of Airplanes Trust) that relate
to tax years prior to the completion of the Transaction.

     Subsequent to November 20, 1998, AeroUSA, Inc. and AeroUSA 3, Inc. now file
consolidated United States federal tax returns and certain state and local tax
returns with General Electric Company ("GE"), such returns being filed on a
calendar basis. In addition, on November 20, 1998, Airplanes Trust entered into
a tax sharing agreement with GE which is substantially similar to the tax
sharing agreement between Airplanes Trust and debis which was in place prior to
that date, and which terminated on November 20, 1998, except with respect to
those provisions relating to the position prior to the date on which AeroUSA,
Inc. and AeroUSA 3, Inc. were deconsolidated from debis AirFinance, Inc.

     In relation to the tax year ended December 31, 2000, GE utilised $18.8
million of current year losses. As GE is an Alternative Minimum Tax (AMT) payer
the benefit realized will be $3.8 million and this amount will be paid to
Airplanes Group. The receivable for this amount has been included in other
assets at year end.

                                       F-23
<PAGE>   112
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)

20. COMMITMENTS

     CAPITAL COMMITMENTS

     Airplanes Group did not have any material contractual commitments for
capital expenditures at March 31, 2001.

21. CONTINGENT LIABILITIES

     GUARANTEES

     Airplanes Limited and Airplanes Trust have unconditionally guaranteed each
others' obligations under all classes of notes issued by Airplanes Limited and
Airplanes Trust, respectively, pursuant to the Transaction, details of which are
set out in Note 1.

     FOREIGN TAXATION

     The international character of Airplanes Group's operations gives rise to
some uncertainties with regard to the impact of taxation in certain countries.
The position is kept under continuous review and Airplanes Group provides for
all known liabilities.

                                       F-24
<PAGE>   113

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Airplanes U.S. Trust has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
                                          AIRPLANES U.S. TRUST

                                          By:      /s/ WILLIAM M. MCCANN
                                            ------------------------------------
                                            Name: William M. McCann
                                            Title:  Controlling Trustee

Dated:, June 28, 2001

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant in the capacities indicated on June 28, 2001.

<TABLE>
<CAPTION>
                    SIGNATURE                                            TITLE
                    ---------                                            -----
<C>                                                <S>
               /s/ HUGH R. JENKINS                 Controlling Trustee (principal executive officer)
-------------------------------------------------
                 Hugh R. Jenkins

               /s/ ROY M. DANTZIC                  Controlling Trustee (principal financial officer)
-------------------------------------------------
                 Roy M. Dantzic

              /s/ WILLIAM M. MCCANN                Controlling Trustee (principal accounting officer)
-------------------------------------------------
                William M. McCann

             /s/ RICHARD E. CAVANAGH               Controlling Trustee
-------------------------------------------------
               Richard E. Cavanagh

               /s/ BRIAN T. HAYDEN                 Controlling Trustee
-------------------------------------------------
                 Brian T. Hayden
</TABLE>
<PAGE>   114

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Airplanes Limited has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                          AIRPLANES LIMITED

                                          By:      /s/ WILLIAM M. MCCANN
                                            ------------------------------------
                                            Name: William M. McCann
                                            Title:  Director

Dated: June 28, 2001

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant in the capacities indicated on June 28, 2001.

<TABLE>
<CAPTION>
                         SIGNATURE                                            TITLE
                         ---------                                            -----
<C>                                                          <S>
                    /s/ HUGH R. JENKINS                      Director (principal executive officer)
-----------------------------------------------------------
                      Hugh R. Jenkins

                    /s/ ROY M. DANTZIC                       Director (principal financial officer)
-----------------------------------------------------------
                      Roy M. Dantzic

                   /s/ WILLIAM M. MCCANN                     Director (principal accounting officer)
-----------------------------------------------------------
                     William M. McCann

                  /s/ RICHARD E. CAVANAGH                    Director
-----------------------------------------------------------
                    Richard E. Cavanagh

                    /s/ BRIAN T. HAYDEN                      Director
-----------------------------------------------------------
                      Brian T. Hayden
</TABLE>
<PAGE>   115

                   AIRPLANES LIMITED AND AIRPLANES U.S. TRUST
                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT                           DESCRIPTION                            PAGE
-------                           -----------                            ----
<C>       <S>                                                            <C>

  3.1     Certificate of Incorporation of Atlanta Holdings Limited
          dated November 3, 1995 and Certificate of Incorporation on
          change of name to Airplanes Limited dated November 29,
          1995*.......................................................

  3.2     Memorandum and Articles of Association of Airplanes Limited
          dated March 11, 1996**......................................

  3.3     Memorandum and Articles of Association of Airplanes Limited
          reprinted with amendments to June 29, 2000****..............

  3.4     Airplanes U.S. Trust Amended and Restated Trust Agreement
          among GPA, Inc., as Settlor, Wilmington Trust Company, as
          the Delaware Trustee, and the Controlling Trustees referred
          to therein dated March 11, 1996**...........................

  3.5     Amendment to Airplanes U.S. Trust Amended and Restated Trust
          Agreement dated June 29, 2000****...........................

  4.1     Pass Through Trust Agreement dated as of March 28, 1996
          among Airplanes Limited, Airplanes U.S. Trust and Bankers
          Trust Company, as Trustee**.................................

  4.2     Trust Supplement No. 7 dated as of March 28, 1996 to the
          Pass Through Trust Agreement**..............................

  4.3     Trust Supplement No. 8 dated as of March 28, 1996 to the
          Pass Through Trust Agreement**..............................

  4.4     Trust Supplement No. 9 dated as of March 16, 1998 to the
          Pass Through Trust Agreement***.............................

  4.5     Trust Supplement No. 11 dated as of March 16, 1998 to the
          Pass Through Trust Agreement***.............................

  4.6     Trust Supplement No. 12 dated as of March 16, 1998 to the
          Pass Through Trust Agreement***.............................

  4.7     Trust Supplement No. 13 dated as of March 15, 2001 to the
          Pass Through Trust Agreement*****...........................

  4.8     Trust Supplement A dated as of March 16, 1998 to the Pass
          Through Trust Agreement***..................................

  4.9     Form of Subclass A-6 Pass Through Certificate***............

  4.10    Form of Subclass A-8 Pass Through Certificate***............

  4.11    Form of Subclass A-9 Pass Through Certificate*****
          (included in Exhibit 4.7)...................................

  4.12    Form of Class B Pass Through Certificate***.................

  4.13    Form of Class C Pass Through Certificate**..................

  4.14    Form of Class D Pass Through Certificate**..................

  4.15    Airplanes Limited Indenture dated as of March 28, 1996 among
          Airplanes Limited, Airplanes U.S. Trust and Bankers Trust
          Company, as Trustee**.......................................

  4.16    Supplement No. 1 to the Airplanes Limited Indenture***......

  4.17    Supplement No. 2 to the Airplanes Limited Indenture*****....

  4.18    Airplanes U.S. Trust Indenture dated as of March 28, 1996
          among Airplanes U.S. Trust, Airplanes Limited and Bankers
          Trust Company, as Trustee**.................................

  4.19    Supplement No. 1 to the Airplanes Trust Indenture***........

  4.20    Supplement No. 2 to the Trust Indenture*****................

  4.21    Form of Floating Rate Subclass A-6 Note***..................
</TABLE>
<PAGE>   116

<TABLE>
<CAPTION>
EXHIBIT                           DESCRIPTION                            PAGE
-------                           -----------                            ----
<C>       <S>                                                            <C>

  4.22    Form of Floating Rate Subclass A-8 Note***..................

  4.23    Form of Floating Rate Subclass A-9 Note*****................

  4.24    Form of Floating Rate Class B Note***.......................

  4.25    Form of 8.15% Class C Note**................................

  4.26    Form of 10.875% Class D Note**..............................

  4.27    Form of 20.00% (inflation adjusted) Class E Note**..........

 10.1     Stock Purchase Agreement dated as of March 28, 1996 among
          AerFi, Inc., AerFi Group plc and Airplanes U.S. Trust**.....

 10.2     Stock Purchase Agreement dated as of March 28, 1996 among
          AerFi Group plc, Skyscape Limited and Airplanes Limited**...

 10.3     Administrative Agency Agreement dated as of March 28, 1996
          among AerFi Financial Services (Ireland) Limited, AerFi
          Group plc, Airplanes Limited, AerFi II Limited, Airplanes
          U.S. Trust and AeroUSA, Inc.**..............................

 10.4     Servicing Agreement dated as of March 28, 1996 among GE
          Capital Aviation Services, Limited, Airplanes Limited,
          AeroUSA, Inc., AerFi II Limited, Airplanes U.S. Trust and
          AerFi Cash Manager Limited**................................

 10.5     Reference Agency Agreement dated as of March 28, 1996 among
          Airplanes Limited, Airplanes U.S. Trust Bankers Trust
          Company, as Airplanes Limited Indenture Trustee and
          Airplanes U.S. Trust Indenture Trustee, Bankers Trust
          Company, as Reference Agent and AerFi Cash Manager Limited,
          as Cash Manager**...........................................

 10.6     Secretarial Services Agreement dated as of March 28, 1996
          between Airplanes Limited and Mourant & Co. Secretaries
          Limited, as Company Secretary**.............................

 10.7     Cash Management Agreement dated as of March 28, 1996 between
          AerFi Cash Manager Limited, as Cash Manager, AerFi Group
          plc, Airplanes Limited, Airplanes U.S. Trust and Bankers
          Trust Company, as Trustee under each of the Airplanes
          Limited Indenture, the Airplanes U.S. Trust Indenture and
          the Security Trust Agreement**..............................

 10.8     Form of Swap Agreement**....................................

 10.9     Security Trust Agreement dated as of March 28, 1996 among
          Airplanes Limited, Airplanes U.S. Trust, Mourant & Co.
          Secretaries Limited, the Issuer Subsidiaries listed therein,
          AerFi Financial Services (Ireland) Limited, AerFi Cash
          Manager Limited, AerFi Group plc, GE Capital Aviation
          Services, Limited, Bankers Trust Company, as Airplanes U.S.
          Trust Indenture Trustee and Airplanes Limited Indenture
          Trustee, Bankers Trust Company, as Reference Agent, and
          Bankers Trust Company, as Security Trustee**................

 12       Statement re Computation of Ratios*****.....................

 21       Subsidiaries of the Registrants*****........................
</TABLE>

     * Incorporated by reference to the Registration Statement on Form S-1 (File
       No. 33-99978), previously filed with the Commission on December 1, 1995,
       and Amendments No. 1 through 5 thereto.

   ** Incorporated by reference to the Report on Form 10-Q for the quarterly
      period ended December 31, 1996, previously filed with the Commission.

  *** Incorporated by reference to the Registration Statement on Form S-1 (File
      No. 33-99978), previously filed with the Commission on December 30, 1997,
      and Amendments No. 1 through 3, thereto.

 **** Incorporated by reference to the Report on Form 10-Q for the quarterly
      period ended June 30, 2000, previously filed with the Commission.

***** Incorporated by reference to the Registration Statement on Form S-4 (File
      No. 33-58608), previously filed with the Commission on April 10 2001 and
      Amendment No. 1 thereto.