##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 20-F
 (Mark One)
 o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF
1934
 OR
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the fiscal year ended December 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number 1-33200
 GENESIS LEASE LIMITED
  Bermuda
  4450 Atlantic Avenue
 Westpark
 Shannon
 Co. Clare, Ireland
 John McMahon, Telephone number: +353 61 233 300, Fax number: +353 61 364 642
 Securities registered or to be registered pursuant to Section 12(b) of the Act.
 Title of each class
    
    Name of each exchange on which registeredAmerican Depositary Shares
    
    New York Stock ExchangeCommon Shares, par value of $0.001 per share
    
    New York Stock Exchange*
 *
    
    Not for trading, but only in connection with the registration of American Depositary Shares
representing these shares, pursuant to the requirements of the Securities and Exchange
Commission.
        o þ
  o þ
  þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filero
  U.S. GAAP þ
    
    International Financial Reporting Standards as issued
    
    Other oby the International Accounting Standards Board o
  o o
  o þ




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PRELIMINARY NOTE
 This Annual Report should be read in conjunction with the financial statements and
accompanying notes included in this report.
 This Annual Report contains forward-looking statements that involve risks and uncertainties. These
statements include forward-looking statements both with respect to us specifically and the aircraft
leasing industry generally. Statements that include the words expect, intend, plan,
believe, project, anticipate, will, and similar statements of a future or forward-looking
nature identify forward-looking statements. The forward-looking statements contained in this
Annual Report are based on managements current expectations and are subject to uncertainty and
changes in circumstances. There can be no assurance that future developments affecting us will be
those that we have anticipated. Actual results may differ materially from these expectations due to
changes in global, regional or local political, economic, business, competitive, market, regulatory
and other factors, many of which are beyond our control. We believe that these factors include, but
are not limited to, those described under Item 3.D. Risk Factors and elsewhere in this Annual
Report. Should one or more of these risks or uncertainties materialize, or should any of our
assumptions prove incorrect, our actual results may vary in material respects from those projected
in these forward-looking statements. We undertake no obligation to publicly update or review any
forward-looking statement, whether as a result of new information, future developments or
otherwise.
 We acquired our initial portfolio of 41 commercial jet aircraft (the Initial Portfolio) from
affiliates of General Electric Company (GE) on December 19, 2006, with the net proceeds of our
initial public offering (IPO), a private placement of shares to GE (the private placement) and
the issuance of aircraft lease-backed notes in a securitization transaction (the securitization).
Since our IPO, we have increased our portfolio from 41 to 54 aircraft through acquisitions from
affiliates of GE and from independent airlines in purchase-leaseback transactions
 Unless the context requires otherwise, when used in this Annual Report, (1) the term Company
refers only to Genesis Lease Limited, (2) the terms Genesis, we, our and us refer to
Genesis Lease Limited and its subsidiaries, including Genesis Funding Limited (Genesis Funding),
Genesis Acquisition Limited (Genesis Acquisition) and Genesis Portfolio Funding I Limited
(Genesis Portfolio), (3) GECAS refers to GE Commercial Aviation Services Limited, together with
its subsidiaries, (4) our predecessor refers to the combination of the 41 aircraft included in
our Initial Portfolio from the date that each aircraft was acquired by an affiliate of GE, as such
aircraft were owned by affiliates of GE until the completion of our IPO on December 19, 2006, (5)
all references to our shares refer to our common shares held in the form of American Depositary
Shares, (ADSs), and (6) all percentages and weighted averages of the aircraft in our portfolio
have been calculated using the average of half life appraised base values as at December 31, 2008,
and percentages may not total due to rounding.
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INDEX
 PART ONEItem 1. Identity of Directors, Senior Management and Advisors  Not
Applicable
    
    
    4Item 2. Offer Statistics and Expected Timetable  Not Applicable
    
    
    4Item 3. Key Information
    
    
    4A. Selected Financial Data
    
    
    4B. Capitalization and Indebtedness  Not Applicable
    
    
    5C. Reasons for the Offer and Use of Proceeds  Not Applicable
    
    
    5D. Risk Factors
    
    
    5Item 4. Information on the Company
    
    
    32A. History and Development of the Company
    
    
    32B. Business Overview
    
    
    32C. Organizational Structure
    
    
    36D. Property, Plants and Equipment
    
    
    36Item 4A. Unresolved Staff Comments  Not Applicable
    
    
    46Item 5. Operating and Financial Review and Prospects
    
    
    46A. Results of Operations
    
    
    46B. Liquidity and Capital Resources
    
    
    55C. Research and Development  Not Applicable
    
    
    63D. Trend Information
    
    
    63E. Off-Balance Sheet Arrangements  Not Applicable
    
    
    64F. Contractual Obligations
    
    
    64G. Safe Harbor
    
    
    66Item 6. Directors, Senior Management and Employees
    
    
    67A. Directors and Senior Management
    
    
    67B. Compensation
    
    
    70C. Board Practices
    
    
    73D. Employees
    
    
    74E. Share Ownership
    
    
    74Item 7. Major Shareholders and Related Party Transactions
    
    
    75A. Major Shareholders
    
    
    75B. Related Party Transactions
    
    
    75C. Interests of Experts and Counsel  Not Applicable
    
    
    75Item 8. Financial Information
    
    
    76A. Combined and Consolidated Financial Information and Other
Financial Information
    
    
    76B. Significant Changes  Not Applicable
    
    
    77Item 9. The Offer and Listing
    
    
    77
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Item 10. Additional Information
    
    
    78A. Share Capital  Not Applicable
    
    
    78B. Memorandum and Articles of Association
    
    
    78C. Material Contracts
    
    
    78D. Exchange Controls
    
    
    86E. Taxation
    
    
    86F. Dividends and Paying Agents  Not Applicable
    
    
    95G. Statement by Experts  Not Applicable
    
    
    95H. Documents on Display
    
    
    95I. Subsidiary Information  Not Applicable
    
    
    96Item 11. Quantitative and Qualitative Disclosures About Market Risk
    
    
    96Item 12. Description of Securities Other Than Equity Securities  Not
Applicable
    
    
    96PART TWOItem 13. Defaults, Dividend Arrearages and Delinquencies
    
    
    97Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    97Item 15. Controls and Procedures
    
    
    97Item 16A. Audit Committee Financial Expert
    
    
    99Item 16B. Code of Ethics
    
    
    99Item 16C. Principal Accountant Fees and Services
    
    
    99Item 16D. Exemptions from the Listing Standards for Audit Committees  Not Applicable
    
    
    99Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    99Item 16G. Corporate Governance
    
    
    100PART THREEItem 17. Financial Statements  Not Applicable
    
    
    101Item 18. Financial Statements
    
    
    101Item 19. Exhibits
    
    
    101EX-4.24.1: AMENDMENT NO. 1 TO CREDIT AGREEMENTEX-4.24.2: AMENDMENT NO. 2 TO CREDIT AGREEMENTEX-4.24.3: AMENDMENT NO. 3 TO CREDIT AGREEMENTEX-4.24.4: AMENDMENT NO. 4 TO CREDIT AGREEMENTEX-4.30: CHANGE OF CONTROL PLANEX-8.1: SUBSIDIARIESEX-12.1: CERTIFICATIONEX-12.2: CERTIFICATIONEX-13.1: CERTIFICATIONEX-13.2: CERTIFICATION
  3




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PART I
 
 Item 1. Identity of Directors, Senior Management and Advisors
  
 Item 2. Offer Statistics and Expected Timetable
  
 Item 3. Key Information
 
 A. Selected Financial Data
  CombinedandCombined
    
    
    Combined
    
    
    Consolidated
    
    
    Consolidated
    
    
    ConsolidatedYears Ended December 31,2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008(USD in thousands, except share and per share data)RevenuesRental of Flight Equipment
    
    $
    99,414
    
    
    $
    117,861
    
    
    $
    153,187
    
    
    $
    181,333
    
    
    $
    215,985Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,771
    
    
    
    8,045Total revenue
    
    
    99,414
    
    
    
    117,861
    
    
    
    153,187
    
    
    
    188,104
    
    
    
    224,030ExpensesDepreciation
    
    
    35,005
    
    
    
    42,462
    
    
    
    51,398
    
    
    
    62,259
    
    
    
    78,690Interest
    
    
    28,680
    
    
    
    34,995
    
    
    
    46,026
    
    
    
    55,236
    
    
    
    70,971Maintenance expense
    
    
    1,019
    
    
    
    1,989
    
    
    
    2,327
    
    
    
    1,073
    
    
    
    3,344Selling, general and administrative
    
    
    2,400
    
    
    
    3,144
    
    
    
    7,312
    
    
    
    20,991
    
    
    
    23,884Other expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,337
    
    
    
    Total operating expenses
    
    
    67,104
    
    
    
    82,590
    
    
    
    107,063
    
    
    
    142,896
    
    
    
    176,889Income Before Taxes
    
    
    32,310
    
    
    
    35,271
    
    
    
    46,124
    
    
    
    45,208
    
    
    
    47,141Provision for income taxes
    
    
    14,892
    
    
    
    13,900
    
    
    
    17,367
    
    
    
    6,053
    
    
    
    6,224Net Income
    
    $
    17,418
    
    
    $
    21,371
    
    
    $
    28,757
    
    
    $
    39,155
    
    
    $
    40,917
 Earnings Per Share
  2006
    
    2007
    
    2008Weighted average number of shares outstanding:Basic
    
    
    1,116,296
    
    
    
    35,859,164
    
    
    
    35,968,128Diluted
    
    
    1,118,050
    
    
    
    35,867,105
    
    
    
    35,968,128
  Net income per shareBasic
    
    $
    25.76
    
    
    $
    1.09
    
    
    $
    1.14Diluted
    
    $
    25.72
    
    
    $
    1.09
    
    
    $
    1.14
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As at December 31,2004
    
    2005
    
    2006
    
    2007
    
    2008(USD in thousands)Balance Sheet Data:Cash and cash equivalents
    
    $
    
    
    
    $
    
    
    
    $
    26,855
    
    
    $
    30,101
    
    
    $
    60,206Restricted cash
    
    
    
    
    
    
    
    
    
    
    15,471
    
    
    
    32,982
    
    
    
    33,718Total assets
    
    
    936,918
    
    
    
    1,082,997
    
    
    
    1,316,058
    
    
    
    1,675,169
    
    
    
    1,757,695Long-term debt
    
    
    
    
    
    
    
    
    
    
    810,000
    
    
    
    1,050,961
    
    
    
    1,128,393Total liabilities
    
    
    92,115
    
    
    
    101,006
    
    
    
    839,383
    
    
    
    1,132,830
    
    
    
    1,282,258GE net investment
    
    
    844,803
    
    
    
    981,991
    
    
    
    
    
    
    
    
    
    
    
    Total shareholders equity
    
    
    
    
    
    
    
    
    
    
    476,675
    
    
    
    542,339
    
    
    
    475,437Total liabilities and GE net
investment/shareholders
equity
    
    $
    936,918
    
    
    $
    1,082,997
    
    
    $
    1,316,058
    
    
    $
    1,675,169
    
    
    $
    1,757,695
 
 B. Capitalization and Indebtedness
  
 C. Reasons for the Offer and Use of Proceeds
  
 D. Risk Factors
 You should carefully consider the following risks. These risks could materially and adversely
affect our business, prospects, financial condition, results of operations, cash flows and ability
to pay dividends and cause the trading price of our shares to decline. Additional risks and
uncertainties not currently known to us or that we currently deem to be immaterial may also
materially and adversely affect our business, prospects, financial condition, results of
operations, cash flows and ability to pay dividends.
 Risks Related to Our Business
 Changes in economic conditions could adversely affect our business.
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We will need additional capital to finance our growth, and we may not be able to obtain such
capital on terms acceptable to us, or at all.
     A deterioration in the financial condition of the commercial airline industry would have an adverse
impact on our ability to lease our aircraft.
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
    
    a higher incidence of lessee defaults, lease restructurings, repossessions and
airline bankruptcies and restructurings, resulting in lower lease margins due to
maintenance, legal and other costs associated with the repossession, as well as lost
revenue for the time the aircraft are off lease and possibly lower lease rates from the
new lessees; and
 
    
    an inability to lease aircraft on commercially acceptable terms, resulting in lower
lease margins due to aircraft not earning revenue and resulting in storage, insurance and
maintenance costs.
 The aviation industry is inherently cyclical and a significant downturn in the industry would
adversely impact our lessees ability to make payments to us, which would adversely affect our
financial results and growth prospects.
    The recent changes in demand and supply of aircraft could depress lease rates and the value of our
aircraft portfolio.
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A decrease in lease rates and the value of our leased assets could have an adverse effect on our
financial results, growth prospects and ability to meet our obligations.
  
    
    cancellations of orders for aircraft;
    
    accuracy of estimates relating to future supply and demand made by manufacturers and
lessees;
    
    operating costs, availability of jet fuel and general economic conditions affecting
our lessees operations;
    
    geopolitical and other events, including war, acts of terrorism, outbreaks of
epidemic diseases and natural disasters;
    
    governmental regulation, including new airworthiness directives and environmental
regulations;
    
    manufacturer production levels, technological innovation and delays in delivery of
aircraft;
    
    retirement and obsolescence of aircraft models;
    
    manufacturers merging or exiting the industry or ceasing to produce aircraft or
engine types;
    
    reintroduction into service of aircraft or engines previously in storage; and
    
    airport and air traffic control infrastructure constraints.
  Factors that increase the risk of decline in aircraft value and achievable lease rates could have
an adverse effect on our financial results and growth prospects and on our ability to meet our
obligations.
  
    
    the particular maintenance and operating history of the airframes and engines;
    
    the number of operators using that type of aircraft or engine;
    
    whether an aircraft or other aviation asset is subject to a lease and, if so, whether
the lease terms are favorable to the lessor;
    
    the age of our aircraft and other aviation assets;
    
    airworthiness directives and service bulletins;
    
    aircraft noise and emission standards;
    
    any tax, customs, regulatory and other legal requirements that must be satisfied when
an aircraft is purchased, sold or re-leased;
    
    compatibility of our aircraft configurations or specifications with other aircraft
owned by operators of that type; and
    
    decreases in the creditworthiness of our lessees.
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We operate in a highly competitive market for investment opportunities in aircraft and other
aviation assets.
  
    
    airlines;
    
    aircraft manufacturers;
    
    financial institutions (including those seeking to dispose of repossessed aircraft at
distressed prices);
    
    aircraft brokers;
    
    special purpose vehicles formed for the purpose of acquiring, leasing and selling
aircraft; and
    
    public and private partnerships, investors and funds, including private equity and
hedge funds.
   If demand for leased aircraft does not increase, we may not be able to expand our business.
  9




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Fuel prices affect the profitability of the airline industry, and increases in fuel prices may have
an adverse effect on our lessees ability to meet their lease payment obligations to us.
   
    
    lead to further airline bankruptcies, which may lead to cancellations of our leases
and the return of our aircraft;
    
    impair our lessees ability to make rental and other lease payments;
    
    lead to lease restructurings and aircraft repossessions; and
    
    increase the costs of servicing and remarketing our aircraft at favorable rates.
  The effects of terrorist attacks and geopolitical conditions may negatively affect the airline
industry. This may cause our lessees to default on their lease payment obligations to us.
  
    
    higher costs to airlines because of increased security measures;
    
    the inconvenience of additional security measures;
    
    the price and availability of jet fuel and the cost and
    
    significantly higher costs of aircraft insurance coverage for claims caused by acts
of war, terrorism, sabotage, hijacking and other similar perils, and the extent to which
such insurance has been or will continue to be available.
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We depend on aircraft and engine manufacturers success in remaining financially stable and
producing aircraft.
  
    
    an inability to acquire aircraft and related components on terms that will allow us
to lease those aircraft and related components to customers at our anticipated profit
levels, resulting in lower growth rates or a contraction in our fleet;
    
    poor customer support from the manufacturers of aircraft and components resulting in
reduced demand for a particular manufacturers product, creating downward pressure on
demand for those aircraft and components in our fleet and reduced market lease rates for
those aircraft; and
    
    reduction in our competitiveness due to deep discounting by the manufacturers, which
may lead to reduced market lease rates and may adversely affect the value of our portfolio
and our ability to remarket or sell some of the aircraft in our fleet.
 Unforeseen difficulties and costs associated with the acquisition, financing and/or management of
our aircraft portfolio and other aviation assets could reduce or prevent our future growth and
profitability.
  
    
    fail to realize anticipated benefits, such as new customer relationships or cash flow
enhancements;
    
    impair our liquidity by using a significant portion of our available cash or
borrowing capacity to finance acquisitions;
    
    significantly increase our interest expense and financial leverage to the extent we
incur additional debt to finance acquisitions;
    
    incur or assume unanticipated liabilities, losses or costs associated with the
aircraft or other aviation assets that we acquire; or
    
    incur other significant charges, including asset impairment or restructuring charges.
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The terms of our indebtedness may limit our operational flexibility.
  
    
    our aircraft leases and several of our aircraft serve as collateral for our
financings, the terms of which restrict our ability to sell aircraft and require us to use
proceeds from sales of aircraft, in part, to repay amounts outstanding under those
financings;
    
    we are required to dedicate a significant portion of our cash flow from operations to
debt service payments, thereby reducing the amount of our cash flow available to fund
working capital, make capital expenditures and satisfy other needs;
    
    restrictions on our subsidiaries ability to distribute excess cash flow to us under
certain circumstances;
    
    lessee, geographical and other concentration limits on flexibility in leasing our
aircraft;
    
    requirements to obtain policy provider consents and rating agency confirmations for
certain actions (in the case of the notes issued in the securitization); and
    
    restrictions on our ability to incur additional debt, create liens on assets, sell
assets, make freighter conversions and make certain investments or capital expenditures.
  We are a holding and a financing company and rely on our subsidiaries to provide us with funds
necessary to meet our financial obligations.
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We may not be able to refinance the notes issued in the securitization on favorable terms or at
all, which may require us to seek more costly or dilutive financing for our investments or to
liquidate assets.
  Most of our debt obligations are subject to interest rate risk.
  We may not be able to pay or maintain dividends on our shares. The failure to do so would adversely
affect the trading price of our shares.
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
    
    lack of availability of cash to pay dividends due to changes in our operating cash
flow, capital expenditure requirements, working capital requirements and other cash needs;
    
    our inability to refinance the notes that we have issued in the securitization before
December 2011, when we will be required to apply all available cash flow from our Initial
Portfolio to repay the principal amount thereof on a monthly basis;
    
    our inability to renew, extend or repay our debt facilities when due, which could
prevent our subsidiaries from making any distributions to us;
    
    restrictions imposed by our financing arrangements, including under the notes issued
in the securitization, our debt facilities and any indebtedness incurred in the future to
refinance our existing debt or to expand our aircraft portfolio;
    
    application of funds to make and finance acquisitions of aircraft and other aviation
assets;
    
    reduced levels of demand for, or value of, our aircraft;
    
    increased supply of aircraft;
    
    obsolescence of aircraft;
    
    lower lease rates on new aircraft and re-leased aircraft;
    
    delays in re-leasing our aircraft after the expiration or early termination of
existing leases;
    
    impaired financial condition and liquidity of our lessees;
    
    deterioration of economic conditions in the commercial aviation industry generally;
    
    unexpected or increased fees and expenses payable under our agreements with GECAS and
its affiliates and other service providers;
    
    poor performance by GECAS and its affiliates and other service providers and our
limited rights to terminate them;
    
    unexpected or increased maintenance, operating or other expenses or changes in the
timing thereof;
    
    a decision by our board of directors to modify or revoke its policy to distribute a
portion of our cash flow available for distribution;
    
    changes in Irish tax law, the tax treaty between the United States and Ireland (the
Irish Treaty) or our ability to qualify for the benefits of such treaty;
    
    restrictions under Bermuda law on the amount of dividends that we may pay; and
    
    the other risks discussed under this Item 3.D. Risk Factors.
  The death, incapacity or departure of senior management could harm our business and financial results.
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Risks Relating to Our Aircraft and Leases
 The concentration of aircraft types in our portfolio could harm our business and financial results should any difficulties specific to these particular types of aircraft occur.
  We will need to re-lease or sell aircraft as leases expire to continue to generate sufficient funds to meet our debt obligations, and finance our growth and operations.
We may not be able to re-lease or sell aircraft on favorable terms, or at all.
  The advent of superior aircraft technology could cause our existing aircraft portfolio to become
outdated and therefore less desirable, which could adversely affect our financial results and
growth prospects and our ability to compete in the marketplace.
  Depreciation expenses and impairment charges could have a material adverse effect on our financial
condition and results of operations.
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Aircraft
liens could impair our ability to repossess, re-lease or sell our aircraft.
   Some of the aircraft in our portfolio have been damaged and subsequently repaired.
  Government regulations could require substantial expenditures, reduce our profitability and limit
our growth.
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Various environmental regulations may cause lessees to default on their lease payment obligations
to us.
 
  
  17




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It may be difficult or impossible to obtain title to two of the aircraft in our portfolio upon a
bankruptcy or default by its owner and manager.
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We rely on our lessees continuing performance of their lease obligations.
   
    
    result in a grounding of the aircraft;
    
    cause us to incur costs in restoring the aircraft to an acceptable maintenance
condition to re-lease the aircraft;
    
    adversely affect lease terms in the re-lease of the aircraft; and
    
    adversely affect the value of the aircraft.
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Lease defaults could result in significant expenses and loss of revenues.
   Risks associated with the concentration of our lessees in certain geographical regions could harm
our business.
  European concentration.
 Asian concentration.
 North American concentration.
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Because many of our lessees operate in emerging markets, we are indirectly subject to many of the
economic and political risks associated with competing in such markets.
  Some of our leases provide the lessees with early termination rights.
  We cannot assure you that all lessees will comply with the registration requirements in the
jurisdictions where they operate.
  Our lessees may have inadequate insurance coverage or fail to fulfill their respective indemnity
obligations, which could result in us not being covered for claims asserted against us and may
negatively affect our business, financial condition and results of operations.
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Risks Related to Our Relationships with GECAS, Its Affiliates and Other Service Providers
 We depend on GECAS to service our portfolio and additional aircraft that we acquire in the future.
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GECAS and its affiliates may have conflicts of interest with us, and their limited contractual or
other duties may not restrict them from favoring their own business interests to our detriment.
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Our servicing agreements limit our remedies against GECAS for unsatisfactory performance and
provide certain termination rights to the policy provider.
  
    
    the transfer of aircraft, leases or other assets to our company;
    
    determining the adequacy of the terms of any aircraft lease, including rent payments
or security deposits;
    
    determining the reliability or creditworthiness of any lessee; or
    
    our compliance with the terms of our agreements with other parties, including the
indenture for the securitization and our credit facility.
   Even if we are dissatisfied with GECASs performance, there are only limited circumstances under
which we will be able to terminate the servicing agreements and we may not terminate the servicing
agreement for our Initial Portfolio without the prior written consent of the policy provider.
  
    
    GECAS ceases to be at least majority-owned directly or indirectly by General Electric
Capital Corporation, or GE Capital, or its ultimate parent, GE;
    
    GECAS fails in any material respect to perform any material services under the
servicing agreements which results in liability of GECAS due to its gross negligence or
willful misconduct (including willful misconduct constituting fraud) in respect of its
obligation to apply the standard of care or conflicts standard in respect of performance
of the services in a manner that is materially adverse to us and our applicable
subsidiaries taken as a whole;
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
    
    GECAS fails in any material respect to perform any material services under the
servicing agreements in accordance with the standard of care or the conflicts standard in
a manner that is materially adverse to us and our applicable subsidiaries taken as a
whole;
    
    GECAS, GE Capital or GE becomes subject to bankruptcy or insolvency proceedings;
    
    with respect to the master servicing agreement, we have insufficient funds for the
payment of certain dividends while a significant portion of our available aircraft remain
off-lease for a specified period;
    
    with respect to the servicing agreement for our Initial Portfolio, we have
insufficient funds for the payment of interest on the notes for a period of at least 60
days;
    
    with respect to the servicing agreement for our Initial Portfolio, at least 15% of
the number of aircraft assets remain off-lease but available for re-lease for a period of
at least three months following specified events set forth in the trust indenture; or
    
    with respect to the servicing agreement for our Initial Portfolio, without limiting
GECASs rights under the security trust agreement, GECAS takes any steps for the purpose
of processing the appointment of an administrative receiver or the making of any
administrative order or for instituting a bankruptcy, reorganization, arrangement,
insolvency, winding up, liquidation, composition or any similar proceeding under the laws
of any jurisdiction with respect to any person in the Genesis Funding, and any of its
subsidiaries, or any of the aircraft assets.
    25




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##### Table of Contents



We may compete with GECAS for acquisitions and dispositions of aircraft as well as the re-leasing
of our aircraft that are not serviced by GECAS.
  The terms of certain agreements with GECAS and other affiliates of GE were negotiated without
independent assessment on our behalf, and these terms may be less advantageous to us than if they
had been the subject of arms-length negotiations.
  Risks Related to Our Financial Information
 The historical financial information included in this Annual Report for periods prior to
December 19, 2006, the completion of our IPO, does not reflect the financial condition, results of
operations or cash flows we would have achieved during the periods presented as a stand-alone
company, and therefore may not be a reliable indicator of our future financial performance.
  
    
    The historical combined financial information included in this Annual Report for
periods prior to our IPO does not reflect our ongoing cost structure, management, financing
costs or business operations. Instead, this combined financial information represents the
combination of results attributable to some of the aircraft included in our Initial
Portfolio of 41 aircraft as owned, managed, financed and operated by GECAS and its
affiliates. Following our acquisition of the Initial Portfolio, the cost of financing and
operating these aircraft has changed due to:
 
    
    the fact that the historical combined financial information for periods prior
to the completion of our IPO reflects allocations of corporate expenses from affiliates
of
 26




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##### Table of Contents




    
    the need for additional personnel and service providers to perform services
previously provided by GECAS and other affiliates of GE;
    
    legal, accounting, compliance and other costs associated with being a public
company with listed equity, including compliance with the Sarbanes-Oxley Act of 2002
and rules subsequently implemented by the Securities and Exchange Commission, or the
SEC, and the New York Stock Exchange, or the NYSE; and
    
    the fact that the historical combined financial information prior to our IPO
reflects only the number of aircraft included in our Initial Portfolio owned by
affiliates of GE for the periods or as of the dates specified therein, rather than all
of the aircraft currently included in our portfolio.
 
    
    Our predecessors working capital requirements were satisfied as part of GEs
corporate-wide cash management policies. Although we have access to a credit facility for
the acquisition of additional aircraft, we may not be able to obtain financing on terms as
favorable as our predecessor obtained from or through GE and our cost of debt will likely
be higher.
    
    The depreciation of capitalized major maintenance costs and our maintenance expenses
are higher than reflected in the historical combined financial information due to the aging
of our aircraft.
    
    Our effective tax rate is lower than our predecessors as a result of our tax residency
in Ireland. Our cash tax payments are also lower as a result of our ability to depreciate
aircraft under Irish tax law over eight years, which is a more accelerated rate than our
predecessor used to depreciate aircraft under U.S. tax law.
 Our subsidiaries in many cases have owned their aircraft prior to our acquisition of them and may
have unknown contingent liabilities that we may be required to fund.
   
    
    the existence of a valid and final transfer of the beneficial interests of entities
that hold the aircraft or entities that hold the beneficial interests of any such entities
and that were sold to us by affiliates of GE;
    
    the title of our aircraft-owning subsidiaries to the applicable aircraft; and
    
    the lack of additional liabilities of our aircraft-owning subsidiaries or liens on
the aircraft other than disclosed to us or otherwise permitted.
  27




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##### Table of Contents



Risks Related to the Ownership of Our Shares
 Market interest rates may have an effect on the trading value of our shares.
  We have anti-takeover provisions in our bye-laws that may discourage a change of control.
  
    
    provisions that permit us to require any competitor of GECAS that acquires beneficial
ownership of more than 10% of our common shares either to tender for all of our remaining
common shares for no less than their fair market value, or sell such number of common
 shares to us or to third parties as would reduce its beneficial ownership to less than
10%, in either case within 90 days of our request to so tender or sell;
    
    provisions that reduce the vote of each common share held by a competitor of GECAS
that beneficially owns 10% or more, but less than 50%, of our common shares to one-fifth
of one vote per share on all matters upon which shareholders may vote;
    
    provisions that permit our board of directors to determine the powers, preferences
and rights of our preference shares and to issue such preference shares without
shareholder approval;
    
    advance notice requirements by shareholders for director nominations and actions to
be taken at annual meetings; and
    
    no provision for cumulative voting in the election of directors, such that all the
directors standing for election may be elected by our shareholders by a plurality of votes
cast at a duly convened annual general meeting, the quorum for which is two or more
persons present in person or by proxy at the start of the meeting and representing in
excess of 50% of all votes attaching to all shares in issue entitling the holder to vote
at the meeting.
  We are a Bermuda company that is managed and controlled in Ireland. It may be difficult for
investors to enforce judgments against us or against our directors and executive officers.
  28




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Shareholders of our company may have greater difficulties in protecting their interests than
shareholders of U.S. corporations.
  Risks Related to Taxation
 We are a passive foreign investment company, or PFIC. Unless U.S. holders of our shares make
certain elections under U.S. federal income tax rules, they are subject to certain adverse U.S.
federal income tax rules.
  29




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##### Table of Contents



We may fail to qualify for tax treaty benefits and U.S. statutory tax exemptions which would reduce
our net income and cash flow by the amount of the applicable tax.
  We may become subject to income or other taxes in the jurisdictions in which our aircraft operate,
where our lessees are located or where we perform certain services which would adversely affect our
business and reduce cash available for distributions to shareholders.
   30




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##### Table of Contents



The tax rate applicable to us and our Irish tax resident subsidiaries would be higher than we
expect if we or they were considered not to be carrying on a trade in Ireland for the purposes of
Irish law.
    31




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##### Table of Contents



Item 4. Information on the Company
 
 A. History and Development of the Company
      
 B. Business Overview
 Our Company
 
 32




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##### Table of Contents



Our Acquisition Strategy
    33




---



##### Table of Contents



Competition
  
    
    airlines;
    
    aircraft manufacturers;
    
    financial institutions (including those seeking to dispose of repossessed aircraft at
distressed prices);
    
    aircraft brokers;
    
    special purpose vehicles formed for the purpose of acquiring, leasing and selling aircraft;
and
    
    public and private partnerships, investors and funds, including private equity and hedge
funds.
   Insurance
  34




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##### Table of Contents



Government Regulation
   35




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##### Table of Contents



C. Organizational Structure
   
 D. Property, Plants and Equipment
 Our Aircraft Portfolio
   36




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##### Table of Contents



Our Portfolio
 Equipment
    
    AirframeLessee
    
    Type
    
    Type
    
    Engine Type(1)
    
    Build Date
    
    PercentABX Air
    
    767-200PC
    
    Cargo(2)
    
    CF6-80A
    
    November 1984
    
    
    0.20
    %ABX Air
    
    767-200PC
    
    Cargo(3)
    
    CF6-80A
    
    February 1985
    
    
    0.20
    %Air Baltic
    
    737-500
    
    Narrow-body
    
    CFM56-3C1
    
    October 1991
    
    
    0.50
    %Air Berlin
    
    737-700
    
    Narrow-body
    
    CFM56-7B26
    
    November 2001
    
    
    1.70
    %Air Berlin
    
    737-700
    
    Narrow-body
    
    CFM56-7B26
    
    October 2001
    
    
    1.70
    %Air Canada
    
    A319-100
    
    Narrow-body
    
    CFM56-5B6/P
    
    March 2003
    
    
    1.60
    %Air China Cargo
    
    747-400SF
    
    Cargo(4)
    
    PW 4056-3
    
    January 1991
    
    
    3.50
    %Air China Cargo
    
    747-400SF
    
    Cargo(5)
    
    PW 4056-3
    
    August 1991
    
    
    3.50
    %Air Europa
    
    737-800
    
    Narrow-body
    
    CFM56 7B26
    
    November 2005
    
    
    2.30
    %American
    
    737-800
    
    Narrow-body
    
    CFM56-7B27
    
    September 2001
    
    
    1.90
    %American
    
    737-800
    
    Narrow-body
    
    CFM56-7B27
    
    September 2001
    
    
    1.90
    %China Southern
    
    737-800
    
    Narrow-body
    
    CFM56-7B26
    
    November 2005
    
    
    2.30
    %China Southern
    
    737-800
    
    Narrow-body
    
    CFM56-7B26
    
    September 2005
    
    
    2.30
    %El Al
    
    737-800
    
    Narrow-body
    
    CFM56-7B26
    
    February 1999
    
    
    1.60
    %EVA Airways
    
    A330-200
    
    Wide-body
    
    CF6-80E1A3
    
    February 2005
    
    
    4.50
    %Garuda
    
    737-400
    
    Narrow-body
    
    CFM56-3C1
    
    July 1998
    
    
    0.90
    %Germanwings
    
    A319-100
    
    Narrow-body
    
    CFM56-5B6/P
    
    November 1999
    
    
    1.30
    %Germanwings
    
    A319-100
    
    Narrow-body
    
    CFM56-5B6/P
    
    December 1999
    
    
    1.30
    %GOL
    
    737-800
    
    Narrow-body
    
    CFM56-7B27
    
    August 2006
    
    
    2.40
    %GOL
    
    737-800
    
    Narrow-body
    
    CFM56-7B27
    
    August 2006
    
    
    2.50
    %Iberworld
    
    A320-200
    
    Narrow-body
    
    CFM56-5B4/P
    
    March 2002
    
    
    1.70
    %IndiGo
    
    A320-200
    
    Narrow-body
    
    V2527-A5
    
    July 2007
    
    
    2.50
    %IndiGo
    
    A320-200
    
    Narrow-body
    
    V2527-A5
    
    September 2007
    
    
    2.50
    %JAL
    
    B767-300ER
    
    Widebody
    
    CF6-80C2B7F
    
    January 2008
    
    
    4.70
    %KTHY
    
    737-800
    
    Narrow-body
    
    CFM56-7B26
    
    May 2001
    
    
    1.70
    %
 37




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##### Table of Contents



Equipment
    
    AirframeLessee
    
    Type
    
    Type
    
    Engine Type(1)
    
    Build Date
    
    PercentLion Air
    
    737-400
    
    Narrow-body
    
    CFM56-3C1
    
    January 1991
    
    
    0.60
    %LOT
    
    ERJ170-100
    
    Regional Jet
    
    CF34-8E5
    
    April 2004
    
    
    1.10
    %LOT
    
    ERJ170-100
    
    Regional Jet
    
    CF34-8E5
    
    February 2004
    
    
    1.10
    %LTU
    
    A320-200
    
    Narrow-body
    
    CFM56-5B4/P
    
    February 2001
    
    
    1.60
    %LTU
    
    A320-200
    
    Narrow-body
    
    CFM56-5B4/P
    
    May 2001
    
    
    1.60
    %MyTravel
    
    A320-200
    
    Narrow-body
    
    CFM56-5B4/P
    
    January 2003
    
    
    1.90
    %MyTravel
    
    A320-200
    
    Narrow-body
    
    CFM56-5B4/P
    
    February 2003
    
    
    1.90
    %MyTravel
    
    A320-200
    
    Narrow-body
    
    CFM56-5B4/P
    
    February 2003
    
    
    1.90
    %Norwegian Air
    
    737-800
    
    Narrow-body
    
    CFM56-7B26
    
    April 2001
    
    
    1.80
    %PAL
    
    A320-200
    
    Narrow-body
    
    CFM56-5B4/P
    
    December 1998
    
    
    1.40
    %Sichuan Airlines
    
    A320-200
    
    Narrow-body
    
    V2527E-A5
    
    May 2001
    
    
    1.70
    %Skymark
    
    737-800
    
    Narrow-body
    
    CFM56-7B26
    
    December 2005
    
    
    2.30
    %Sun Express
    
    737-800
    
    Narrow-body
    
    CFM56-7B26
    
    March 2001
    
    
    1.80
    %TAM
    
    A320-200
    
    Narrow-body
    
    V2527-A5
    
    September 2001
    
    
    1.70
    %Travel Service
    
    737-800
    
    Narrow-body
    
    CFM56-7B26
    
    April 2000
    
    
    1.80
    %Travel Service
    
    737-800
    
    Narrow-body
    
    CFM56-7B26
    
    June 2001
    
    
    1.80
    %Unidentified(6)
    
    A320-200
    
    Narrow-body
    
    V2527-A5
    
    July 2007
    
    
    2.50
    %Unidentified(6)
    
    A320-200
    
    Narrow-body
    
    V2527-A5
    
    September 2007
    
    
    2.50
    %Unidentified(6)
    
    737-800
    
    Narrow-body
    
    CFM56-7B26
    
    May 2000
    
    
    1.70
    %Unidentified(6)
    
    737-800
    
    Narrow-body
    
    CFM56-7B27
    
    June 2000
    
    
    1.70
    %United
    
    A320-200
    
    Narrow-body
    
    V2527-A5
    
    October 2001
    
    
    1.70
    %United
    
    A320-200
    
    Narrow-body
    
    V2527-A5
    
    September 2001
    
    
    1.70
    %United
    
    A320-200
    
    Narrow-body
    
    V2527-A5
    
    September 2001
    
    
    1.70
    %USA 3000
    
    A320-200
    
    Narrow-body
    
    CFM56-5B4/P
    
    August 2002
    
    
    1.80
    %UEAir
    
    A319-100
    
    Narrow-body
    
    CFM56-5B6/P
    
    January 1999
    
    
    1.30
    %UEAir
    
    A319-100
    
    Narrow-body
    
    CFM56-5B6/P
    
    January 1999
    
    
    1.30
    %VRG
    
    737-700
    
    Narrow-body
    
    CFM56-7B26
    
    November 1999
    
    
    1.40
    %VRG
    
    737-700
    
    Narrow-body
    
    CFM56-7B26
    
    September 1999
    
    
    1.40
    %Vueling
    
    A320-200
    
    Narrow-body
    
    CFM56-5B4/P
    
    February 2005
    
    
    2.10
    %
 
 (1)
    
    Engine manufacturer key: CFM
    
    CFM International
 38




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CF34/CF6
    
    General ElectricV
    
    International Aero EnginesPW
    
    Pratt & Whitney
 
 (2)
    
    Converted to cargo in December 2000. However, the aircraft does not have a main deck cargo
door installed as the current lessees operations as a package carrier do not require such
door.(3)
    
    Converted to cargo in March 2001. However, the aircraft does not have a main deck cargo door
installed as the current lessees operations as a package carrier do not require such door.(4)
    
    Converted to cargo in June 2006.(5)
    
    Converted to cargo in September 2006.(6)
    
    These aircraft are subject to contracted
lease agreements with two new customers for delivery in the second quarter
of 2009. However, one of the customers may not be in a position to
take delivery of two of these aircraft.  Percent ofTotalAppraisedAircraft Age
    
    Number
    
    ValuePassenger0 to 5 years
    
    
    15
    
    
    
    37.7
    %5 to 10 years
    
    
    31
    
    
    
    51.5
    %10 to 15 years
    
    
    2
    
    
    
    2.3
    %15+ years
    
    
    2
    
    
    
    1.0
    %Cargo(1)
    
    
    4
    
    
    
    7.5
    %Total
    
    
    54
    
    
    
    100
    %
 
 (1)
    
    The cargo aircraft were converted from passenger configuration in December 2000, March 2001,
June 2006 and September 2006.  
 
 (1)
    
    The four cargo aircraft in our portfolio were manufactured in 1984, 1985 and 1991 (two
aircraft). 39




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##### Table of Contents



Percent ofTotalAppraisedAirframe Type
    
    Number
    
    ValuePassenger narrow-bodyA320-200
    
    
    18
    
    
    
    34.2
    %737-800
    
    
    16
    
    
    
    31.9
    %A319-100
    
    
    5
    
    
    
    6.8
    %737-700
    
    
    4
    
    
    
    6.3
    %737-400
    
    
    2
    
    
    
    1.4
    %737-500
    
    
    1
    
    
    
    0.5
    %Total narrow-body
    
    
    46
    
    
    
    81.1
    %Passenger wide-body767-300ER
    
    
    1
    
    
    
    4.7
    %A330-200
    
    
    1
    
    
    
    4.5
    %Total wide-body
    
    
    2
    
    
    
    9.2
    %Regional passengerERJ-170-100
    
    
    2
    
    
    
    2.2
    %Total regional jet
    
    
    2
    
    
    
    2.2
    %Cargo wide-body747-400SF
    
    
    2
    
    
    
    7.0
    %767-200PC(1)
    
    
    2
    
    
    
    0.5
    %Total cargo
    
    
    4
    
    
    
    7.5
    %Total
    
    
    54
    
    
    
    100
    %
 
 (1)
    
    These aircraft do not have main deck cargo doors installed as the current lessees operations
as a package carrier do not require such doors. 40




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41




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Percent ofTotalAppraisedGeographic Profile
    
    Number
    
    ValueEurope
    
    
    20
    
    
    
    32.7
    %Asia/Pacific
    
    
    15
    
    
    
    35.1
    %United States and Canada
    
    
    9
    
    
    
    12.7
    %Central and South America and Mexico
    
    
    5
    
    
    
    9.6
    %Africa/Middle East
    
    
    1
    
    
    
    1.6
    %Undesignated (1)
    
    
    4
    
    
    
    8.3
    %Total
    
    
    54
    
    
    
    100.0
    %
 
 (1)
    
    As at December 31, 2008, four aircraft were non revenue earning and on the ground. Our Leases
 Lease Terms
  
 
 (1)
    
    The maturity schedule assumes that neither the lessee nor lessor exercise any extension or
early terminations options.(2)
    
    New long-term lease agreements are in place with new customers for the two leases expiring in
2009.(3)
    
    As at December 31, 2008, four aircraft were non-revenue
generating but subject to contracted lease agreements with two new
customers for delivery in the second quarter of 2009. Two of these
leases will expire in 2014 and two in 2017. However, one of the
customers may not be in a position to take delivery of two of these
aircraft.  42




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##### Table of Contents



Purchase Options.
 Extension Options.
 Early Termination Rights.
  43




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##### Table of Contents



Operating Costs and Expenses.
 Security Deposits and Letters of Credit.
 Maintenance Obligations.
  Compliance with Laws.
 General. i.e
 44




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##### Table of Contents



Lease Restructurings.
 Aircraft Repossessions.
 Lease Management and Remarketing
  45




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##### Table of Contents



Properties
  
 Item 4A. Unresolved Staff Comments
  
 Item 5. Operating and Financial Review and Prospects
 The following discussion and analysis of our financial condition and results of operations should
be read in conjunction with our combined and consolidated financial statements and related notes
included elsewhere in this Annual Report The combined and consolidated financial statements for
each of the three years ended December 31, 2008 have been prepared in accordance with U.S. GAAP,
and are presented in U.S. dollars. The discussion below contains forward-looking statements that
are based upon our current expectations and are subject to uncertainty and changes in
circumstances. Actual results may differ materially from these expectations due to changes in
global, regional or local political, economic, business, competitive, market, regulatory and other
factors, many of which are beyond our control. See Preliminary Note and Item 3.D.Risk Factors.
 
 A. Results of Operations
 History
  46




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December 31,
    
    Number of Aircraft2004
    
    
    312005
    
    
    372006
    
    
    412007
    
    
    532008
    
    
    54
   47




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##### Table of Contents




    
    marketing, technical and operating management services relating to the aircraft;
    
    risk management approvals and services relating to the aircraft;
    
    insurance for general corporate, property, casualty and hull coverage;
    
    information technology services;
    
    human resources, including employee benefit processing and payroll administration;
    
    financial advisory services such as tax consulting, capital markets services and
financial and accounting support services;
    
    legal services;
    
    occupancy costs such as rent and utilities; and
    
    other corporate services.
   48




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Critical Accounting Policies and Estimates
 
 Revenue  Rental of Flight Equipment
   Flight Equipment under Operating Leases
  Accounting for Planned Major Maintenance Activities
  49




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##### Table of Contents



Accounting for the
Impairment or Disposal of Long-lived Assets
   Business Combinations and Goodwill
 Business Combinations.
 50




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Goodwill and Other
Intangible Assets Business Combinations
   Maintenance Expense
  Income taxes
 Accounting for Income Taxes,
 51




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Share-based based compensation
 Share-Based Payment
 Derivative financial instruments
 , Accounting for Derivative Instruments and Hedging
Activities
 52




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##### Table of Contents



Results of Operations
  CombinedandConsolidated
    
    Consolidated
    
    ConsolidatedYears Ended December 31,2006
    
    2007
    
    2008(USD in thousands, except share and per share data)RevenuesRental of Flight Equipment
    
    $
    153,187
    
    
    $
    181,333
    
    
    $
    215,985Other income
    
    
    
    
    
    
    6,771
    
    
    
    8,045Total revenue
    
    
    153,187
    
    
    
    188,104
    
    
    
    224,030ExpensesDepreciation
    
    
    51,398
    
    
    
    62,259
    
    
    
    78,690Interest
    
    
    46,026
    
    
    
    55,236
    
    
    
    70,971Maintenance expense
    
    
    2,327
    
    
    
    1,073
    
    
    
    3,344Selling, general and administrative
    
    
    7,312
    
    
    
    20,991
    
    
    
    23,884Other expenses
    
    
    
    
    
    
    3,337
    
    
    
    Total operating expenses
    
    
    107,063
    
    
    
    142,896
    
    
    
    176,889Income Before Taxes
    
    
    46,124
    
    
    
    45,208
    
    
    
    47,141Provision for income taxes
    
    
    17,367
    
    
    
    6,053
    
    
    
    6,224Net Income
    
    $
    28,757
    
    
    $
    39,155
    
    
    $
    40,917
 Year Ended December 31, 2008 Compared to Year Ended December 31, 2007
     53




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Increase in:Net income
    
    $3.0 millionEarnings per share
    
    $
    0.08
     Year Ended December 31, 2007 Compared to Year Ended December 31, 2006
     54




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B. Liquidity and Capital Resources
 Our Cash Flows
 Year Ended December 31, 2008 compared to Year Ended December 31, 2007
    55




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Year Ended December 31, 2007 compared to Year Ended December 31, 2006
  
 Fair Value Measurement
   Fair Value Measurements
  56




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Our Future Sources of Liquidity
       57




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Capital Expenditures
  Business Combinations
 Maintenance
   58




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Seasonality
  Securitization
     Interest Rate
  Maturity Date
  Payment Terms
  59




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Redemption
  Redemption Date
    
    PriceBefore December 19, 2009
    
    101%On or after December 19, 2009
    
    100%
 Collateral
  Certain Covenants
  Liquidity Facility
   60




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Term Loan Facilities
    Fees.
 Interest Rate
 Maturity Date; Payment Terms
 Prepayment.
 Guarantee.
 Collateral.
 Covenants.
 61




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##### Table of Contents



Revolving Credit Facility
      Commitment fees
 Interest Rate.
 Maturity Date
 Prepayment
 Collateral
 62




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Covenants.
 
 
 C. Research and Development
  
 D. Trend Information
  
    
    General economic conditions. The long-term demand for air travel is expected to
continue to grow. Although the record fuel prices seen in 2008 have materially abated,
the extreme dislocation in the financial markets has continued into 2009 and a number
of major economies have entered recession. These developments contributed to a number
of airline bankruptcies, particularly in the United States and in Europe. While we are
not immune to these developments, we are positioned to address many of these challenges
given our focus on maintaining a young, modern, fuel efficient portfolio of aircraft, a
well diversified global customer base, long term leases and with GECAS as our servicer.
Nevertheless, the aircraft industry continues to be subject to demand shifts, and any
downturn in discretionary business or consumer spending could have a significant impact
on air traffic and aircraft demand.
    
    Large and growing commercial aircraft fleet to meet global demand. The ongoing trend
towards growth in air travel is expected to be adversely affected in the short to
medium term as a result of reduced global economic growth expectations. We do not know
how long this economic downturn may prevail. Nevertheless, over the long term, we
expect that economic development in emerging markets, competitive pricing resulting
from the continued growth of low-cost carriers and relaxation of regulatory constraints
will continue to drive further increases in air travel and aircraft demand. Boeing has
forecasted that by 2027 the fleet will reach 35,800 aircraft, of which 31,910 will be
mainline passenger jets with 90 passenger seats or more. Airbus has estimated that the
commercial jet aircraft fleet will increase to 37,774 aircraft by 2026, of which 28,534
will be mainline passenger jets of more than 100 seats. In dollar terms, the current
global fleet has an estimated value of $350 billion and is estimated to grow by at
least $40 billion per year for the next 20 years.
    
    Continued growth in aircraft leasing with significant consolidation opportunities.
Over the past 20 years, the worlds airlines have leased a growing share of their
aircraft. According to market data, the proportion of the global fleet under operating
lease has increased from 17% in 1990 to approximately 30% in recent years. Lessors are
major providers of liquidity for used aircraft and provide airlines with a valuable
method of fleet management through the use of operating leases, financial leases and
sale/leaseback transactions. The two largest lessors, GECAS and ILFC, own or manage
approximately a combined 41% of the leased aircraft lessor portfolio, while seven other lessors each
controls between 3% and 5% of the lessor market. Beyond that, the operating lessor
market
 63




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is quite fragmented. We expect that leased aircraft will continue to comprise an increasing
percentage of total commercial aircraft. However, there may be some short term volatility
given the current credit environment and uncertain economic outlook. In addition,
prospective ownership changes of certain aircraft lessors, including ILFC, may have an
impact on aircraft lease values and values, as well as the aircraft financing market. It is
also quite possible that, given the fragmented nature of the lessor market, consolidation of
some of these companies could occur.
    
    Aircraft values and lease rates. For a number of aircraft types, particularly the
Boeing 737 Next Generation and the Airbus A320 family of aircraft, supply in recent
years has been limited up until 2008. However, the airline industry has been subject to
cyclical demand patterns and the current economic downturn could lead to a reduction in
lease rates and asset values. With the recent airline bankruptcies, some newer Boeing
737 and Airbus A320 family equipment have become available and as a result lease rates
and asset values for these types may suffer some short-term decline. Meanwhile, older
Boeing 737 Classic aircraft (-300, -400 & -500 series) have also become available, and
we expect the lease rates and values on these types may suffer a decline for longer
than the short term. Classic aircraft represent 1.9% of our total portfolio. Demand for
larger aircraft types, such as newer examples of the 767-300ER and A330 continues but
in the medium-term face market risks due to the emergence of newer technology and more
fuel-efficient aircraft, such as the Boeing 787 and the Airbus A350.
    
    Access to capital markets. Our liquidity needs include financings to acquire
additional aircraft and other aviation assets to drive our growth. We plan to finance
acquisitions through borrowings under our revolving credit facility and other sources
including through additional debt and equity issuances. Our ability to execute our
business strategy to acquire these additional aviation assets depends to a significant
degree on our ability to access debt and equity capital markets. Our access to these
markets will depend on a number of factors, such as our historical and expected
performance, compliance with the terms of our existing debt agreements, industry and
market trends, the availability of capital and relative attractiveness of alternative
investments. If we are unable to raise funds through debt and equity capital markets on
terms that are acceptable to us, then we may be unable to implement our growth strategy
of making acquisitions of additional aircraft that are accretive to cash flow.
 
 E. Off-Balance Sheet Arrangements
  
 F. Contractual Obligations
  64




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Year Ended2009
    
    2010
    
    2011
    
    2012
    
    2013
    
    Thereafter
    
    TotalPrincipal payments
under
securitization
notes (1)
    
    $
    1,000
    
    
    $
    12,000
    
    
    $
    14,615
    
    
    $
    70,206
    
    
    $
    68,351
    
    
    $
    630,328
    
    
    $
    796,500Interest payments
under
securitization
notes (2)
    
    
    45,266
    
    
    
    45,321
    
    
    
    45,388
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    135,975Principal payments
under debt
facilities (3)
    
    
    24,893
    
    
    
    20,746
    
    
    
    21,639
    
    
    
    22,551
    
    
    
    23,553
    
    
    
    218,511
    
    
    
    331,893Interest payments
under debt
facilities (4)
    
    
    18,074
    
    
    
    16,569
    
    
    
    12,502
    
    
    
    9,702
    
    
    
    3,059
    
    
    
    9,906
    
    
    
    69,812Commitment fees
payable under
credit facility (5)
    
    
    5,497
    
    
    
    1,979
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,476Fixed payments to
GECAS under our
servicing
agreements (6)
    
    
    2,305
    
    
    
    2,305
    
    
    
    2,305
    
    
    
    2,305
    
    
    
    2,305
    
    
    
    18,436
    
    
    
    29,961Total
    
    $
    97,035
    
    
    $
    98,920
    
    
    $
    96,449
    
    
    $
    104,764
    
    
    $
    97,268
    
    
    $
    877,181
    
    
    $
    1,371,617
 
 (1)
    
    The indenture that governs the notes issued in the securitization provides that beginning
December 19, 2011 (the fifth anniversary of the securitization), all base lease cash flows
received on the Initial Portfolio are applied to repay the outstanding principal balances of
those notes, after payment of certain expenses and other payments pursuant to the priorities
set forth in the indenture. Accordingly, because there are no specific repayment requirements,
the principal maturities shown in this table for periods after December 19, 2011 reflect an
estimate of the cash flows that would be required for payments on the notes based upon
estimates of (i) base lease cash flows and (ii) expenses and other payments specified in the
indenture. The maturities of the debt as presented in this table do not assume any
prepayments, defaults, aircraft sales, eligible extensions or potential refinancings.(2)
    
    The interest payable under our securitization notes will vary based on LIBOR. Interest
payments reflect amounts we expect to pay after giving effect to the interest rate swap we
have entered into during the period from 2007 to 2011. We have not entered into interest rate
swaps with respect to the securitization notes for periods after December 19, 2011. In
addition, as described in (1) above principal payments are not fixed in amount after December
19, 2011. Therefore, we cannot determine the amounts of our interest payments for the full
2011 period or for periods beyond 2011.(3)
    
    During 2008, Genesis entered into 3 term loans to refinance the 11 Airbus A320 and Boeing 737
aircraft previously financed through Genesis Acquisitions revolving credit facility and to
finance a Boeing 737-300ER aircraft and an A320-200 aircraft. The term loans mature in 2015,
2018 and 2019 respectively.(4)
    
    Interest payments on one of our debt facilities are charged at fixed rates, while interest
payments on the remaining facilities will vary based on LIBOR. Interest payments reflect only
amounts we expect to pay on fixed rate debt or fixed amounts we expect to pay after giving
effect to the interest rate swap we have entered into during the period from 2007 to 2012;
they do not reflect debt subject to floating interest rate charges. As at December 31, 2008
$273.9 million of the total principal outstanding of $331.9 million is the subject of fixed
rates (either directly or through the interest rate swap) however, 65




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the notional amount of the interest rate swap is subject to predetermined reductions over the
life of the swap.(5)
    
    Genesis Acquisition initially was required to pay commitment fees of 0.375% per annum on the unused
amount of the facility. Following the amendment to the revolving credit facility, the commitment
fees increased to 0.50% per annum from March, 3, 2009 and to the extent borrowings under the
facility are less than $200 million on September 30, 2009, the commitment fees will increase to
0.75% from September 30, 2009. Amounts in the table assume no borrowings under the facility after
December 31, 2008.(6)
    
    Pursuant to our servicing agreements, GECAS provides us with most services related to leasing
our fleet of aircraft, including marketing aircraft for lease and re-lease, collecting rents
and other payments from lessees, monitoring maintenance, insurance and other obligations under
leases and enforcing rights against lessees. Our servicing agreements with GECAS provide that
we will pay to GECAS a base fee of $150,000 per month for servicing the aircraft in our
Initial Portfolio, which increases by an additional monthly base fee of 0.01% of the
maintenance-adjusted base value (at the time of acquisition) for additional aircraft outside
of our Initial Portfolio serviced by GECAS. Under the servicing agreements, we are required to
pay GECAS additional servicing fees based on rents due and paid under aircraft leases and
proceeds of dispositions of aircraft and certain other fees for additional services. The
amounts presented in this table represent base fees only and assume no acquisitions or
dispositions of aircraft during any of these periods. 
 G. Safe Harbor
 
 66




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Item 6. Directors, Senior Management and Employees
 
 A. Directors and Senior Management
  Name
    
    Age
    
    PositionJohn McMahon
    
    
    47
    
    
    Chairman, Chief Executive Officer and PresidentAlan Jenkins
    
    
    36
    
    
    Chief Financial OfficerCian Dooley
    
    
    42
    
    
    Chief Commercial OfficerPaul T. Dacier
    
    
    51
    
    
    DirectorMichael Gradon
    
    
    49
    
    
    DirectorNiall Greene
    
    
    65
    
    
    DirectorBrian Hayden
    
    
    61
    
    
    DirectorDavid C. Hurley
    
    
    68
    
    
    DirectorDeclan McSweeney
    
    
    55
    
    
    DirectorAndrew L. Wallace
    
    
    65
    
    
    Director
 John McMahon
 Alan Jenkins
 67




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Cian Dooley
 Paul T. Dacier
 Michael Gradon
 68




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Niall Greene
 Brian Hayden
 David C. Hurley
 Declan McSweeney
 Andrew L. Wallace
 69




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B. Compensation
 Compensation of Directors and Officers
    Change of Control Benefits
  Equity Incentive Plan
  70




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71




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72




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C. Board Practices
 Board of Directors
  Committees of the Board
 Audit Committee.
 
    
    selecting independent auditors for approval by our shareholders;
    
    reviewing the scope of the audit to be conducted by our independent auditors, as well
as the results of their audit;
    
    approving audit and non-audit services provided to us by the independent auditors;
    
    reviewing the organization and scope of our internal system of audit, financial and
disclosure controls;
    
    overseeing our financial reporting activities, including our annual report, and the
accounting standards and principles followed;
    
    reviewing and approving related-party transactions and preparing reports for the
board of directors on such related-party transactions; and
    
    conducting other reviews relating to compliance by our employees with our policies
and applicable laws.
 73




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Compensation
Committee.
 Nominating
and Corporate Governance Committee.
 
 D. Employees
  
 E. Share Ownership
  74




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Item 7. Major Shareholders and Related Party Transactions
 
 A. Major Shareholders
 
  
 Shares Beneficially OwnedName
    
    Number
    
    PercentGE
    
    
    3,967,500
    
    
    
    11.6
    %Rivanna Capital, LLC (1)
    
    
    1,821,753
    
    
    
    5.3
    %
 
 (1)
    
    Information obtained solely by reference to the Schedule 13G filed with the SEC on
February 5, 2009 by Rivanna Capital, LLC and certain of its affiliates. 
 
 
 
 B. Related Party Transactions
 Servicing Agreements
  Asset Purchase Agreements
  Expense Agreement
  
 C. Interest of Experts and Counsel
  75




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Item 8. Financial Information
 
 A. Combined and Consolidated Financial Statements and Other Financial Information
  Legal Proceedings
  Dividend Policy
 Overview
   Possible Changes in Quarterly Dividends
  
    
    lack of availability of cash to pay dividends due to changes in our operating cash
flow, capital expenditure requirements, working capital requirements and other cash needs;
    
    our inability to refinance the notes that we have issued in the securitization before
December 2011, when we will be required to apply all available cash flow from our Initial
Portfolio to repay the principal amount thereof on a monthly basis;
    
    our inability to renew, extend or repay our debt facilities when due, which could
prevent our subsidiaries from making any distributions to us;
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
    
    restrictions imposed by our financing arrangements, including under the notes issued
in the securitization, our debt facilities and any indebtedness incurred in the future to
refinance our existing debt or to expand our aircraft portfolio;
    
    application of funds to make and finance acquisitions of aircraft and other aviation
assets;
    
    reduced levels of demand for, or value of, our aircraft;
    
    increased supply of aircraft;
    
    obsolescence of aircraft;
    
    lower lease rates on new aircraft and re-leased aircraft;
    
    delays in re-leasing our aircraft after the expiration or early termination of
existing leases;
    
    impaired financial condition and liquidity of our lessees;
    
    deterioration of economic conditions in the commercial aviation industry generally;
    
    unexpected or increased fees and expenses payable under our agreements with GECAS and
its affiliates and other service providers;
    
    poor performance by GECAS and its affiliates and other service providers and our
limited rights to terminate them;
    
    unexpected or increased maintenance, operating or other expenses or changes in the
timing thereof;
    
    a decision by our board of directors to modify or revoke its policy to distribute a
portion of our cash flow available for distribution;
    
    changes in Irish tax law, the tax treaty between the United States and Ireland (the
Irish Treaty) or our ability to qualify for the benefits of such treaty; and
    
    restrictions under Bermuda law on the amount of dividends that we may pay.
    
 B. Significant Changes
  
 Item 9. The Offer and Listing
  77




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High
    
    LowYear Ended December 31, 2006
    
    $
    23.75
    
    
    $
    23.00Year Ended December 31, 2007
    
    $
    28.61
    
    
    $
    17.00Year Ended December 31, 2008
    
    $
    21.29
    
    
    $
    2.33
  High
    
    LowYear Ended December 31, 2006Fourth Quarter (from December 14, 2006)
    
    $
    23.75
    
    
    $
    23.00Year Ended December 31, 2007First Quarter
    
    $
    26.80
    
    
    $
    22.65Second Quarter
    
    $
    28.61
    
    
    $
    25.61Third Quarter
    
    $
    28.25
    
    
    $
    17.92Fourth Quarter
    
    $
    25.38
    
    
    $
    17.00Year Ended December 31, 2008First Quarter
    
    $
    21.29
    
    
    $
    14.21Second Quarter
    
    $
    16.49
    
    
    $
    9.93Third Quarter
    
    $
    14.18
    
    
    $
    8.60Fourth Quarter
    
    $
    9.09
    
    
    $
    2.33
  High
    
    LowMonth ended September 30, 2008
    
    $
    12.20
    
    
    $
    8.60Month ended October 31, 2008
    
    $
    9.09
    
    
    $
    3.86Month ended November 30, 2008
    
    $
    5.68
    
    
    $
    2.39Month ended December 31, 2008
    
    $
    3.75
    
    
    $
    2.33Month ended January 31, 2009
    
    $
    4.25
    
    
    $
    2.50Month ended February 28, 2009
    
    $
    2.62
    
    
    $
    2.40
 
 Item 10. Additional Information
 
 A. Share Capital
  
 B. Memorandum and Articles of Association
  
 C. Material Contracts
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Servicing Agreements
   
    
    lease marketing and remarketing, including lease negotiation;
    
    collecting rental payments and other amounts due under leases, collecting additional
rent and maintenance payments where applicable, lease compliance and enforcement and
accepting delivery and redelivery of aircraft under lease;
    
    aircraft dispositions;
    
    monitoring the performance of maintenance obligations of lessees under the leases in
a manner consistent with the practices employed from time to time by GECAS with respect to
its own aircraft;
    
    limited assistance with any financing or refinancing of our indebtedness subject to
agreement or additional fees for such service;
    
    procuring legal and other professional services with respect to the lease, sale or
financing of the aircraft, any amendment or modification of any lease, the enforcement of
our rights under any lease, disputes that arise as to any aircraft or for any other
purpose that GECAS reasonably determines is necessary in connection with the performance
of its services;
    
    periodic reporting of operational information relating to the aircraft, including
providing certain reports to the policy provider; and
    
    certain aviation insurance related services.
  Aircraft Agreed to be Serviced
  79




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
    
    GECAS believes that the provision of any of the services or any actions, inactions or
consequences related thereto or arising therefrom, or any conditions, events or
circumstances existing at any time of determination, may directly or indirectly lead to or
create:
 
    
    a violation of any applicable law with respect to GECAS or its affiliates or
of any GE policies;
    
    an investigation by any governmental authority of or relating to GECAS or any
of its affiliates;
    
    a conflict of interest with respect to any person that is unacceptable to
GECAS;
    
    a requirement of resources being allocated to, or expenses being incurred in
connection with, the servicing of one or more of such aircraft, individually or in the
aggregate with respect to any group thereof, which will be materially different from
those being allocated to, or incurred in connection with, other aircraft which are
serviced by GECAS;
 
    
    an aircraft we wish to acquire is more than 20 years old when we acquire it or is not
manufactured by manufacturers based in North America, South America, Asia or Europe; or
such aircraft is of a model or type not then currently in the fleet owned by GECAS and its
affiliates or is of a model or type of which GECAS has decided to phase out of its owned
fleet;
    
    an aircraft we wish to acquire is on lease to or otherwise involves a person with
whom GECAS or any of its affiliates is involved in a legal proceeding or otherwise with
which GECAS or any of its affiliates has a material dispute;
    
    any default or event of default, or certain potential events of default, by us exists
under the Master Servicing Agreement or any other servicing agreement we have entered into
with GECAS, or any guarantees or any related or other agreements with GECAS or any of its
affiliates, which has not been or will not reasonably be expected to be cured on or before
the date that services in respect of any such additional aircraft are expected to
commence; or
    
    as we and GECAS so mutually agree (although neither party has any obligation to do
so).
 Operating Guidelines
   
    
    sales of our aircraft (other than sales made in accordance with the terms of any
lease in existence on the date of acquisition of the relevant aircraft);
 80




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
    
    entering into or renewing leases or extending most leases if the resulting lease does
not comply with any applicable operating covenants set forth under our financing
agreements or if a new lease grants a purchase option in favor of the lessee;
    
    terminating any lease or leases to any single lessee for aircraft then having an
aggregate depreciated net book value in excess of $100 million unless such lease or leases
are substituted or replaced by other substantially similar lease or leases;
    
    unless provided for in our budget, entering into any contract for certain major
modification or maintenance of aircraft costing in excess of specified amounts;
    
    issuing any guarantee on our behalf, or otherwise pledging our credit, with certain
exceptions related to trade payables, bonds and similar instruments obtained to repossess
an aircraft, removing a lien or similar actions not involving payments or cash collateral
deposits on our behalf in excess of $3 million and issuing guarantees related to our other
obligations;
    
    except in limited circumstances, entering into, amending or granting a waiver with
respect to, any transaction between us and GE Capital or any of its affiliates not
contemplated in the servicing agreement including for the acquisition, sale or lease of
any aircraft assets from or to, or the obtaining of services by any such person (except
for the acquisition, sale, exchange or lease of or services in respect of any engine,
parts or components thereof, or aircraft spare parts or engine spare parts, components or
ancillary equipment or devices furnished therewith);
    
    incurring any actual or contingent liability unless (1) contemplated in our budget,
(2) incurred in entering into a lease or sale or performing any obligation under a lease
or sale contract or (3) incurred in the ordinary course of business and so long as such
individual liability does not result in a net out-of-pocket cash expenditure of more than
$3 million; and
    
    entering into any order or commitment to acquire, or acquiring, aircraft or, so long
as no individual net (after credit for exchanges, replacements or similar items)
out-of-pocket cash purchase price exceeds $3 million, aircraft engines unless, in the case
of aircraft engines, provided for in a lease or as provided for in our budget or if GECAS
determines the acquisition of the engine is necessary or appropriate.
  Budgets
  Standard of Care
  Term and Termination
  81




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
    
    GECAS ceases to be at least majority-owned directly or indirectly by GE Capital, or
its ultimate parent, GE;
    
    GECAS fails in any material respect to perform any material services under the
servicing agreement which results in liability of GECAS due to its gross negligence or
willful misconduct (including willful misconduct constituting fraud) in respect of its
obligation to apply the standard of care or conflicts standard in respect of performance
of the services in a manner that is materially adverse to us and our applicable
subsidiaries taken as a whole;
    
    GECAS fails in any material respect to perform any material services under the
servicing agreement in accordance with the standard of care or the conflicts standard in a
manner that is materially adverse to us and our applicable subsidiaries taken as a whole;
    
    GECAS, GE Capital or GE becomes subject to bankruptcy or insolvency proceedings;
    
    with respect to the Master Servicing Agreement and the GAL Servicing Agreement, we
have insufficient funds for the payment of certain dividends while a significant portion
of our available aircraft remain off-lease for a specified period;
    
    with respect to the Initial Portfolio Servicing Agreement, we have insufficient funds
for the payment of interest on the notes for a period of at least 60 days;
    
    with respect to the Initial Portfolio Servicing Agreement, at least 15% of the number
of aircraft assets remain off-lease but available for re-lease for a period of at least
three months following specified events set forth in the indenture; or
    
    with respect to the Initial Portfolio Servicing Agreement, without limiting GECASs
rights under the security trust agreement, GECAS takes any steps for the purpose of
processing the appointment of an administrative receiver or the making of any
administrative order or for instituting a bankruptcy, reorganization, arrangement,
insolvency, winding up, liquidation, composition or any similar proceeding under the laws
of any jurisdiction with respect to any person in the Genesis Funding, and any of its
subsidiaries, or any of the aircraft assets.
    82




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83




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Competitors
  Servicing Fees
  Conflicts of Interest
  84




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Indemnification
  Facility Agreement
  Revolving Credit Agreement
  85




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D. Exchange Controls
  
 E. Taxation
  Irish Tax Considerations
 You should consult your tax advisor prior to investing regarding all Irish, U.S.
federal, U.S. state, U.S. local, Bermuda and other country income and other tax consequences of an
investment in our shares, with specific reference to your own particular tax situation and recent
changes in applicable law
  
    
    An Irish Holder is a holder of our shares that (1) beneficially owns our shares by
virtue of holding the related ADSs evidenced by the relevant ADR; (2) in the case of
individual holders, is resident or ordinarily resident in Ireland under Irish taxation
laws; and (3) in the case of a holder that is a company, is resident in Ireland under Irish
taxation laws and is not also a resident of any other country under any double taxation
agreement entered into by Ireland.
    
    A Non-Irish Holder is a Holder of our shares that is not an Irish Holder and has
never been an Irish Holder.
    
    A US Holder is a holder of our shares that: (1) beneficially owns our shares by
virtue of holding the related ADSs evidenced by the relevant ADR; (2) is a resident of the
United States for the purposes of the Ireland/United States Double Taxation Convention;
(3) in the case of an individual holder, is not also resident or ordinarily resident in
Ireland for Irish tax purposes; (4) in the case of a corporate holder, is not resident in
Ireland for Irish tax purposes and is not ultimately controlled by persons
 86




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resident in Ireland; and (5) is not engaged in any trade or business and does not perform
independent personal services through a permanent establishment or fixed base in
Ireland.
 
    
    Relevant Territory is defined as a country with which Ireland has a double tax
treaty, (which includes the United States), or a member state of the European Union other
than Ireland.
 Irish Dividend Withholding Tax
  Irish Holders.
 Non-Irish Holders.
 
    
    who are ultimately controlled by persons resident in a Relevant Territory and who are
not ultimately controlled by persons not resident in a Relevant Territory; or
    
    who are resident in a Relevant Territory and not controlled by Irish residents; or
    
    whose principal class of shares or the principal class of shares of its 75% or
greater parents are substantially and regularly traded on a recognized stock exchange in a
Relevant Territory; or
    
    which are wholly owned by two or more companies, each of whose principal class of
shares are substantially and regularly traded on a recognized stock exchange in a Relevant
Territory
  U.S. Holders.
 
    
    where the depositary banks ADS register shows that the direct beneficial owner has a
U.S. address on the register; or
    
    if there is a further intermediary between the depositary bank and the beneficial
shareholder, where the depositary bank received confirmation from the intermediary that
the beneficial shareholders address in the intermediarys records is in the United
States.
   87




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##### Table of Contents



Income Tax
 Irish Holders. i.e
  Non-Irish Holders and U.S. Holders.
 
    
    an individual resident in a Relevant Territory; or
    
    a corporation that is ultimately controlled by persons resident in a Relevant
Territory; or
    
    a corporation whose principal class of shares (or its 75% or greater parents
principal class of shares) are substantially and regularly traded on a recognized stock
exchange in a Relevant Territory; or
    
    a corporation that is wholly owned by two or more corporations each of whose
principal class of shares is substantially and regularly traded on a recognized stock
exchange in a Relevant Territory; or
    
    otherwise entitled to an exemption from DWT.
  Taxation of Capital Gains
 Irish Holders.
 
 88




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##### Table of Contents



Non-Irish Holders and U.S. Holders.
 Irish Capital Acquisitions Tax
 
  Irish Stamp Duty
  U.S. Federal Income Tax Considerations
  89




---



##### Table of Contents



Taxation of U.S. Holders of Shares
  Tax Consequences of Passive Foreign Investment Company (PFIC) Status.
 90




---



##### Table of Contents




    
    Excess distributions by us to a U.S. Holder would be taxed in a special way. Excess
distributions are amounts received by a U.S. Holder with respect to our shares in any
taxable year that exceed 125% of the average distributions received by such U.S. Holder
from us in the shorter of either the three previous years or such U.S. Holders holding
period for shares before the present taxable year. Excess distributions must be allocated
ratably to each day that a U.S. Holder has held our shares. A U.S. Holder must include
amounts allocated to the current taxable year in its gross income as ordinary income for
that year. A U.S. Holder must pay tax on amounts allocated to each prior taxable year in
which we were a PFIC at the highest rate in effect for that year on ordinary income and
the tax is subject to an interest charge at the rate applicable to deficiencies for income
tax.
    
    The entire amount of gain realized by a U.S. Holder upon the sale or other
disposition of shares will also be treated as an excess distribution and will be subject
to tax as described above.
    
    The tax basis in shares that were acquired from a decedent who was a U.S. Holder
would not receive a step-up to fair market value as at the date of the decedents death
but would instead be equal to the decedents basis, if lower than fair market value.
  91




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##### Table of Contents



You should consult your tax advisor about the PFIC rules, including the advisability of making a
QEF election or mark-to-market election.
 Tax Consequences of CFC Status.
  You should consult your tax advisor about the application of the CFC rules to your particular
situation.
 Taxation of the Disposition of Shares.
 92




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##### Table of Contents



Information Reporting and Backup Withholding for U.S. Holders
   Information Reporting and Backup Withholding for Non-U.S. Holders
   Taxation of Genesis Lease Limited and Our Subsidiaries
  93




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##### Table of Contents



94




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##### Table of Contents



Bermuda Tax Considerations
  
 F. Dividends and Paying Agents
  
 G. Statement by Experts
  
 H. Documents on Display
 www.sec.gov
 95




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##### Table of Contents



I. Subsidiary Information
  
 Item 11. Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate Risk
  Sensitivity Analysis
   Foreign Currency Exchange Risk
  
 Item 12. Description of Securities Other than Equity Securities
  96




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##### Table of Contents



PART II
 
 Item 13. Defaults, Dividend Arrearages and Delinquencies
  
 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
  
 Item 15. Controls and Procedures
 (a) Disclosure Controls and Procedures
  (b) Managements Annual Report on Internal Control over Financial Reporting
   Internal ControlIntegrated
Framework
  97




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##### Table of Contents



(c) Report of Independent Registered Public Accounting Firm
            98




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##### Table of Contents



(d) Changes in Internal Control over Financial Reporting
  
 Item 16A. Audit Committee Financial Expert
  
 Item 16B. Code of Ethics
 www.genesislease.com
 
 Item 16C. Principal Accountant Fees and Services
 
 December 31, 2007
    
    
    December 31, 2008(USD in
    
    
    
    
    
    
    (USD inthousands)
    
    
    %
    
    
    thousands)
    
    
    %Audit fees(1)
    
    $
    876
    
    
    
    40.83
    %
    
    $
    566
    
    
    
    50.14
    %Audit related fees(2)
    
    
    529
    
    
    
    24.65
    %
    
    
    86
    
    
    
    7.62
    %Tax fees(3)
    
    
    741
    
    
    
    34.52
    %
    
    
    477
    
    
    
    42.24
    %Total
    
    $
    2,146
    
    
    
    100.0
    %
    
    $
    1,129
    
    
    
    100.0
    %
 
 (1)
    
    Audit fees relate to annual audit fees for Genesis Lease Limited and its subsidiaries.(2)
    
    Audit-related fees include general audit related accounting advice and fees charged in
respect of a potential transaction that was not consummated during the year ended December 31,
2008.(3)
    
    Tax fees relate to annual tax compliance fees for Genesis Lease Limited and its subsidiaries.  
 Item 16D. Exemptions from the Listing Standards for Audit Committees
  
 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  99




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##### Table of Contents



Total
    
    
    Average
    
    
    Total Number of Shares
    
    
    Approximate Dollar Value ofNumber
    
    
    Price
    
    
    Purchased as Part of
    
    
    Shares that May Yet Beof Shares
    
    
    Paid per
    
    
    Publicly Announced
    
    
    Purchased Under the Plans orPeriod
    
    Purchased
    
    
    Share
    
    
    Program
    
    
    ProgramsNovember
    
    
    1,298,504
    
    
    $
    3.0805
    
    
    
    1,298,504
    
    
    $
    15,999,958December
    
    
    492,900
    
    
    $
    3.2380
    
    
    
    1,791,404
    
    
    $
    14,403,948Total
    
    
    1,791,404
    
    
    $
    3.1238
    
    
    
    1,791,404
 
 Item 16G. Corporate Governance
  100




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##### Table of Contents



PART III
 
 Item 17. Financial Statements
  
 Item 18. Financial Statements
  
 Item 19. Exhibits
  1.1
    
    
    Memorandum of Association. (filed as Exhibit 3.1 to our Registration
Statement on Form F-1 filed on November 27, 2006) (SEC File No.
333-138967)1.2
    
    
    Bye-laws. (filed as Exhibit 3.2 to our Registration Statement on Form
F-1 filed on November 27, 2006) (SEC File No. 333-138967)2.1
    
    
    Form of Common Share Certificate. (filed as Exhibit 4.1 to our
Registration Statement on Form F-1 filed on November 27, 2006) (SEC
File No. 333-138967)2.2
    
    
    Deposit Agreement, between Deutsche Bank Trust Company Americas and
Genesis Lease Limited. (filed as Exhibit 4.2 to our Registration
Statement on Form F-1 filed on November 27, 2006) (SEC File No.
333-138967)2.3
    
    
    Form of American Depositary Receipt (included in Exhibit 2.2)4.1
    
    
    Private Placement Agreement, dated November 26, 2006, between GE
Capital Equity Investment, Inc. and Genesis Lease Limited. (filed as
Exhibit 10.1 to our Registration Statement on Form F-1 filed on
November 27, 2006) (SEC File No. 333-138967)4.2
    
    
    Registration Rights Agreement, dated December 19, 2006, between GE
Capital Equity Investment, Inc. and Genesis Lease Limited. (filed as
Exhibit 10.2 to our Registration Statement on Form F-1 filed on
November 27, 2006) (SEC File No. 333-138967)4.3
    
    
    Asset Purchase Agreement, dated December 19, 2006, between General
Electric Capital Corporation and Genesis Funding Limited. (filed as
Exhibit 10.3 to our Registration Statement on Form F-1 filed on
November 27, 2006) (SEC File No. 333-138967)4.4
    
    
    Master Servicing Agreement, dated December 19, 2006, between GE
Commercial Aviation Services Limited and Genesis Lease Limited.
(filed as Exhibit 10.4 to our Registration Statement on Form F-1
filed on November 27, 2006) (SEC File No. 333-138967)4.5
    
    
    Servicing Agreement, dated December 19, 2006, among GE Commercial
Aviation Services Limited, Financial Guaranty Insurance Company and
Genesis Funding Limited. (filed as Exhibit 10.5 to our Registration
Statement on Form F-1 filed on November 27, 2006) (SEC File No.
333-138967)4.6
    
    
    Business Opportunities Agreement, dated December 19, 2006, between GE
Commercial Aviation Services Limited and Genesis Lease Limited.
(filed as Exhibit 10.6 to our Registration Statement on Form F-1
filed on November 27, 2006) (SEC File No. 333-138967)4.7
    
    
    Transitional Support Agreement, dated December 19, 2006, between GE
Commercial Aviation Services Limited and Genesis Lease Limited.
(filed as Exhibit 10.7 to Amendment No. 1 to our Registration
Statement on Form F-1/A filed on December 7, 2006) (SEC File No.
333-138967)4.8
    
    
    Corporate Services Agreement, dated December 19, 2006, between AIB
International Financial Services Limited and Genesis Lease Limited.
(filed as Exhibit 10.8 to our Registration Statement on Form F-1
filed on November 27, 2006) (SEC File No. 333-138967)
 101




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##### Table of Contents



4.9
    
    
    Corporate Services Agreement, dated December 19, 2006, between AIB
International Financial Services Limited and Genesis Lease Limited.
(filed as Exhibit 10.9 to our Registration Statement on Form F-1
filed on November 27, 2006) (SEC FileNo. 333-138967)4.10
    
    
    Expense Agreement, dated December 19, 2006, between GE Commercial
Aviation Services Limited and Genesis Lease Limited. (filed as
Exhibit 10.10 to our Amendment No. 1 to our Registration Statement on
Form F-1/A filed on December 7, 2006) (SEC File No. 333-138967)4.11
    
    
    Indenture, dated December 19, 2006, among Deutsche Bank Trust Company
Americas, PK AirFinance US Inc., Financial Guaranty Insurance Company
and Genesis Funding Limited. (filed as Exhibit 10.11 to our
Registration Statement on Form F-1 filed on November 27, 2006) (SEC
File No. 333-138967)4.12
    
    
    Security Trust Agreement, dated December 19, 2006, between Deutsche
Bank Trust Company Americas and Genesis Funding Limited. (filed as
Exhibit 10.12 to our Registration Statement on Form F-1 filed on
November 27, 2006) (SEC File No. 333-138967)4.13
    
    
    Management Agreement, dated December 19, 2006, among Genesis Funding
Limited, Deutsche Bank Trust Company Americas, Financial Guaranty
Insurance Company, Phoenix American Financial Services, Inc. and
Genesis Lease Limited. (filed as Exhibit 10.13 to our Registration
Statement on Form F-1 filed on November 27, 2006) (SEC File No.
333-138967)4.14
    
    
    Cash Management Agreement, dated December 19, 2006, between Deutsche
Bank Trust Company Americas and Genesis Funding Limited. (filed as
Exhibit 10.14 to our Registration Statement on Form F-1 filed on
November 27, 2006) (SEC File No. 333-138967)4.15
    
    
    Liquidity Facility Agreement, dated December 19, 2006, among Deutsche
Bank Trust Company Americas, PK AirFinance US Inc. and Genesis
Funding Limited. (filed as Exhibit 10.15 to our Registration
Statement on Form F-1 filed on November 27, 2006) (SEC File No.
333-138967)4.16
    
    
    Policy Provider Indemnification Agreement, dated December 19, 2006,
among Deutsche Bank Trust Company Americas, Financial Guaranty
Insurance Company and Genesis Funding Limited. (filed as Exhibit
10.16 to our Registration Statement on Form F-1 filed on November 27,
2006) (SEC File No. 333-138967)4.17
    
    
    Schedule to the ISDA 2002 Master Agreement, dated December 19, 2006,
between Citibank, N.A. and Genesis Funding Limited. (filed as Exhibit
10.17 to our Registration Statement on Form F-1 filed on November 27,
2006) (SEC File No. 333-138967)4.18
    
    
    Commitment Letter, dated November 27, 2006, to Genesis Lease Limited
from Citigroup Global Markets Inc. and Wachovia Capital Markets, LLC.
(filed as Exhibit 10.18 to Amendment No. 1 to our Registration
Statement on Form F-1/A filed on December 7, 2006) (SEC File No.
333-138967)4.19
    
    
    Genesis Lease Limited Equity Incentive Plan. (filed as Exhibit 10.19
to our Registration Statement on Form F-1 filed on November 27, 2006)
(SEC File No. 333-138967)4.20
    
    
    Form of Director Service Agreement, between Genesis Lease Limited and
each director thereof. (filed as Exhibit 10.20 to our Registration
Statement on Form F-1 filed on November 27, 2006) (SEC File No.
333-138967)4.21
    
    
    Form of Share Option Award. (filed as Exhibit 10.23 to our
Registration Statement on Form F-1 filed on November 27, 2006) (SEC
File No. 333-138967)4.22
    
    
    Form of Restricted Share Award for Directors. (filed as Exhibit 10.24
to our Registration Statement on Form F-1 filed on November 27, 2006)
(SEC File No. 333-138967)4.23
    
    
    Form of Restricted Share Award for Executive Officers. (filed as
Exhibit 10.25 to our Registration Statement on Form F-1 filed on
November 27, 2006) (SEC File No. 333-138967)
 102




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4.24
    
    
    Credit Agreement, dated as of April 5, 2007, among Genesis
Acquisition Limited, as borrower, Genesis Lease Limited, as Manager,
the financial institutions party thereto as lenders, Citibank, N.A.,
as administrative agent, and Deutsche Bank Trust Company Americas, as
security trustee and account bank. (filed as Exhibit 10.1 to our
Current Report on Form 6-K filed on April 12, 2007 (SEC File No.
001-33200)4.25
    
    
    Security Trust Agreement, dated as of April 5, 2007, among Genesis
Acquisition Limited, certain affiliates of Genesis Acquisition
Limited, Citibank, N.A., as administrative agent, and Deutsche Bank
Trust Company Americas, as security trustee and account bank. (filed
as Exhibit 10.2 to our Current Report on Form 6-K filed on April 12,
2007) (SEC File No. 001-33200)4.26
    
    
    Servicing Agreement, dated as of April 5, 2007, between Genesis
Acquisition Limited and GE Commercial Aviation Services Limited.
(filed as Exhibit 10.3 to our Current Report on Form 6-K filed on
April 12, 2007) (SEC File No. 001-33200)4.27
    
    
    Asset Purchase Agreement, dated as of September 26, 2007, among
Genesis Acquisition Limited, General Electric Capital Corporation and
the other sellers listed on Schedule I thereto. (filed as Exhibit
10.1 to our Current Report on Form 6-K filed on October 5, 2007) (SEC
File No. 001-33200)4.28
    
    
    Facility Agreement, dated as of September 15, 2008, among Genesis
Portfolio Funding I Limited, as Borrower; Genesis Lease Limited, as
principal guarantor and as manager of the Borrower; DVB Bank AG, HSH
Nordbank AG and KFW IPEX-Bank GmbH, as joint arrangers and
underwriters; HSH Nordbank AG, as the facility agent and security
trustee; and the other parties named therein. (filed as Exhibit 10.1
to our Current Report on Form 6-K filed on November 10, 2008) (SEC
File No. 001-33200)4.29
    
    
    Deed of Proceeds and Priorities, dated as of September 15, 2008,
among Genesis Portfolio Funding I Limited, as Borrower; Genesis Lease
Limited, as principal guarantor and as manager of the Borrower; DVB
Bank AG, HSH Nordbank AG and KFW IPEX-Bank GmbH, as joint arrangers
and underwriters; HSH Nordbank AG, as the facility agent, security
trustee and hedging provider; and the other parties named therein.
(filed as Exhibit 10.2 to our Current Report on Form 6-K filed on
November 10, 2008) (SEC File No. 001-33200)
  4.24.1
    
    
    Amendment No. 1, dated as of
July 11, 2007, to the Credit Agreement, dated as of April
5, 2007, among Genesis Acquisition Limited, as borrower, Genesis Lease Limited, as
Manager, the financial institutions party thereto as lenders, Citibank, N.A., as
administrative agent, and Deutsche Bank Trust Company Americas, as security trustee
and account bank4.24.2
    
    
    Amendment No. 2, dated as of
August 3, 2007, to the Credit Agreement, dated as of April
5, 2007, among Genesis Acquisition Limited, as borrower, Genesis Lease Limited, as
Manager, the financial institutions party thereto as lenders, Citibank, N.A., as
administrative agent, and Deutsche Bank Trust Company Americas, as security trustee
and account bank4.24.3
    
    
    Amendment No. 3, dated as of
December 21, 2007, to the Credit Agreement, dated as of April
5, 2007, among Genesis Acquisition Limited, as borrower, Genesis Lease Limited, as
Manager, the financial institutions party thereto as lenders, Citibank, N.A., as
administrative agent, and Deutsche Bank Trust Company Americas, as security trustee
and account bank4.24.4
    
    
    Amendment No. 4, dated as of
March 3, 2009, to the Credit Agreement, dated as of April
5, 2007, among Genesis Acquisition Limited, as borrower, Genesis Lease Limited, as
Manager, the financial institutions party thereto as lenders, Citibank, N.A., as
administrative agent, and Deutsche Bank Trust Company Americas, as security trustee
and account bank4.30
    
    
    Change of Control Plan of Genesis Lease Limited, dated as of February 24, 20098.1
    
    
    List of Subsidiaries of Genesis Lease Limited12.1
    
    
    Certification of John McMahon pursuant to Section 302 of the Sarbanes Oxley Act of 200212.2
    
    
    Certification of Alan Jenkins pursuant to Section 302 of the Sarbanes Oxley Act of 2002
 103




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##### Table of Contents



13.1
    
    
    Certification of John McMahon pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes Oxley Act of 200213.2
    
    
    Certification of Alan Jenkins pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes Oxley Act of 2002
 104




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Combined and Consolidated Financial statements of Genesis Lease Limited
 Report of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets as at December 31, 2007 and 2008
    
    
    F-3Combined and Consolidated Statements of Income for the years ended
December 31, 2006, 2007 and 2008
    
    
    F-4Combined and Consolidated Statements of Shareholders Equity and
Accumulated Other Comprehensive Income for the years ended December
31, 2006, 2007 and 2008
    
    
    F-5Combined and Consolidated Statements of Cash Flows for the years ended
December 31, 2006, 2007 and 2008
    
    
    F-6Notes to the Combined and Consolidated Financial Statements
    
    
    F-8
 F-1




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
          F-2




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##### Table of Contents



GENESIS LEASE LIMITED
 
 CONSOLIDATED BALANCE SHEETS
 Years Ended December 312007
    
    
    2008(USD in thousands)ASSETSCash and cash equivalents (Note 4)
    
    $
    30,101
    
    
    $
    60,206Restricted cash (Note 4)
    
    
    32,982
    
    
    
    33,718Accounts receivable
    
    
    3,911
    
    
    
    548Other assets (Note 5)
    
    
    22,555
    
    
    
    34,761Flight equipment under operating leases, net (Note 6)
    
    
    1,555,809
    
    
    
    1,597,604Fixed assets, net (Note 7 & 8)
    
    
    1,024
    
    
    
    2,224Deferred income taxes (Note 10)
    
    
    28,787
    
    
    
    28,634Total Assets
    
    $
    1,675,169
    
    
    $
    1,757,695LIABILITIES AND SHAREHOLDERS EQUITYAccounts payable (Note 11)
    
    $
    17,207
    
    
    $
    35,445Other liabilities (Note 12)
    
    
    64,662
    
    
    
    118,420Debt (Note 13)Securitization notes
    
    
    810,000
    
    
    
    796,500Debt facilities
    
    
    
    
    
    
    331,893Revolving credit facility
    
    
    240,961
    
    
    
    Total Liabilities
    
    
    1,132,830
    
    
    
    1,282,258Commitments and contingencies (Note 23)
    
    
    
    
    
    
    Shareholders equity:Par value 0.001 U.S. dollars per share;
500,000,000 shares authorized: 36,069,069 and
34,341,095 shares issued and outstanding at
December 31, 2007 and December 31, 2008
respectively (Note 20)
    
    
    36
    
    
    
    34Additional paid-in capital
    
    
    585,411
    
    
    
    579,971Accumulated other comprehensive loss
    
    
    (28,325
    )
    
    
    (76,191
    )Accumulated deficit (Note 22)
    
    
    (14,783
    )
    
    
    (28,377
    )Total shareholders equity
    
    
    542,339
    
    
    
    475,437Total liabilities and shareholders equity
    
    $
    1,675,169
    
    
    $
    1,757,695
  F-3




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##### Table of Contents



GENESIS LEASE LIMITED
 
 COMBINED AND CONSOLIDATED STATEMENTS OF INCOME
 CombinedandConsolidated
    
    
    Consolidated
    
    
    ConsolidatedYears Ended December 312006
    
    
    2007
    
    
    2008(USD in thousands, except share and per share data)RevenuesRental of flight equipment
    
    $
    153,187
    
    
    $
    181,333
    
    
    $
    215,985Other income (Note 16)
    
    
    
    
    
    
    6,771
    
    
    
    8,045Total revenue
    
    
    153,187
    
    
    
    188,104
    
    
    
    224,030ExpensesDepreciation
    
    
    51,398
    
    
    
    62,259
    
    
    
    78,690Interest (Note 17)
    
    
    46,026
    
    
    
    55,236
    
    
    
    70,971Maintenance expense
    
    
    2,327
    
    
    
    1,073
    
    
    
    3,344Selling, general and administrative (Note 18)
    
    
    7,312
    
    
    
    20,991
    
    
    
    23,884Other expenses (Note 19)
    
    
    
    
    
    
    3,337
    
    
    
    Total operating expenses
    
    
    107,063
    
    
    
    142,896
    
    
    
    176,889Income Before Taxes
    
    
    46,124
    
    
    
    45,208
    
    
    
    47,141Provision for income taxes (Note 10)
    
    
    17,367
    
    
    
    6,053
    
    
    
    6,224Net Income
    
    $
    28,757
    
    
    $
    39,155
    
    
    $
    40,917
  Net income per shareBasic
    
    $
    25.76
    
    
    $
    1.09
    
    
    $
    1.14Diluted
    
    $
    25.72
    
    
    $
    1.09
    
    
    $
    1.14
  Pro forma net income per shareBasic
    
    $
    0.80Diluted
    
    $
    0.80
  F-4




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##### Table of Contents



GENESIS LEASE LIMITED
 
 COMBINED AND CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND
 ACCUMULATED OTHER COMPREHENSIVE INCOME
 Issued Common
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AccumulatedShares
    
    
    Additional
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    ComprehensivePaid-in
    
    
    GE Net
    
    
    Accumulated
    
    
    Comprehensive
    
    
    Income /Shares
    
    
    Amount
    
    
    Capital
    
    
    Investment
    
    
    Deficit
    
    
    Income / (loss)
    
    
    (loss)
    
    
    Total(USD in thousands, except share data)Balance at January 1, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    981,991
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    981,991Contributions for purchase of flight equipment and
pre-delivery payments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    194,272
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    194,272Contributions for cost allocations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,079
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,079Net income / (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,690
    
    
    
    (933
    )
    
    
    
    
    
    
    28,757
    
    
    
    28,757Distributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (150,484
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (150,484
    )Repayment of GE Net Investment on December 19, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,105,548
    )
    
    
    
    
    
    
    
    
    
    
    (29,690
    )
    
    
    (1,105,548
    )Special distribution to GE on December 19, 2006
    
    
    
    
    
    
    
    
    
    
    (335,990
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (335,990
    )Income tax effect of the transaction with GE on
December 19, 2006
    
    
    
    
    
    
    
    
    
    
    124,556
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    124,556Proceeds of initial public offering, net
    
    
    31,310,000
    
    
    
    31
    
    
    
    684,937
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    684,968Employee stock awards
    
    
    32,176
    
    
    
    
    
    
    
    699
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    699Other comprehensive income (Note 21)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,375
    
    
    
    3,375
    
    
    
    3,375Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,442Balance at December 31, 2006
    
    
    31,342,176
    
    
    
    31
    
    
    
    474,202
    
    
    
    
    
    
    
    (933
    )
    
    
    3,375
    
    
    
    
    
    
    
    476,675Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,155
    
    
    
    
    
    
    
    39,155
    
    
    
    39,155Dividends paid ($1.47 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (53,005
    )
    
    
    
    
    
    
    
    
    
    
    (53,005
    )Proceeds from the issue of common shares, net
    
    
    4,696,500
    
    
    
    5
    
    
    
    102,848
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    102,853Capital Contribution by GECAS
    
    
    
    
    
    
    
    
    
    
    7,251
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,251Employee stock awards
    
    
    30,393
    
    
    
    
    
    
    
    1,110
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,110Other comprehensive loss (Note 21)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31,700
    )
    
    
    (31,700
    )
    
    
    (31,700
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,455
    
    
    
    Balance at December 31, 2007
    
    
    36,069,069
    
    
    
    36
    
    
    
    585,411
    
    
    
    
    
    
    
    (14,783
    )
    
    
    (28,325
    )
    
    
    
    
    
    $
    542,339Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,917
    
    
    
    
    
    
    
    40,917
    
    
    
    40,917Dividends paid ($1.51 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (54,511
    )
    
    
    
    
    
    
    
    
    
    
    (54,511
    )Employee stock awards
    
    
    63,430
    
    
    
    
    
    
    
    1,104
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,104Tax effect of Capital Contribution by GECAS
    
    
    
    
    
    
    
    
    
    
    (906
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (906
    )Other comprehensive loss (Note 21)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (47,866
    )
    
    
    (47,866
    )
    
    
    (47,866
    )Repurchased shares
    
    
    (1,791,404
    )
    
    
    (2
    )
    
    
    (5,638
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,640
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (6,949
    )
    
    
    Balance at December 31, 2008
    
    
    34,341,095
    
    
    $
    34
    
    
    $
    579,971
    
    
    $
    
    
    
    $
    (28,377
    )
    
    $
    (76,191
    )
    
    
    
    
    
    $
    475,437
  F-5




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##### Table of Contents



GENESIS LEASE LIMITED
 
 COMBINED AND CONSOLIDATED STATEMENTS OF CASH FLOWS
 ConsolidatedandCombined
    
    
    Consolidated
    
    
    ConsolidatedYears Ended December 312006
    
    
    2007
    
    
    2008(USD in thousands)Cash flows provided by operations:Net income
    
    $
    28,757
    
    
    $
    39,155
    
    
    $
    40,917Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation and amortization
    
    
    52,062
    
    
    
    66,589
    
    
    
    83,378Realized gain on repurchase of Notes
    
    
    
    
    
    
    
    
    
    
    (6,039
    )Deferred income taxes
    
    
    15,789
    
    
    
    6,053
    
    
    
    6,151Non-cash operating expenses, excluding depreciation and
amortization
    
    
    699
    
    
    
    1,110
    
    
    
    1,062Changes in operating assets and liabilities:Decrease/(increase) in accounts receivable
    
    
    1,541
    
    
    
    (2,545
    )
    
    
    3,363Increase in restricted cash
    
    
    (15,471
    )
    
    
    (2,121
    )
    
    
    (7,480
    )Increase in other assets
    
    
    (208
    )
    
    
    (269
    )
    
    
    (1,110
    )Increase in accounts payable
    
    
    382
    
    
    
    8,557
    
    
    
    1,850Increase/(decrease) in other liabilities
    
    
    5,967
    
    
    
    2,134
    
    
    
    (1,731
    )Net cash provided by operating activities
    
    
    89,518
    
    
    
    118,663
    
    
    
    120,361Cash flows from investing activities:Purchases of flight equipment and capitalized
maintenance
    
    
    (194,272
    )
    
    
    (167,933
    )
    
    
    (36,300
    )Purchase of business
    
    
    
    
    
    
    (221,097
    )
    
    
    (66,874
    )Change in restricted cash
    
    
    
    
    
    
    (15,390
    )
    
    
    6,744Purchases of fixed assets
    
    
    
    
    
    
    (1,166
    )
    
    
    (1,848
    )Net cash used in investing activities
    
    
    (194,272
    )
    
    
    (405,586
    )
    
    
    (98,278
    )Cash flows from financing activities:Proceeds from GE for flight equipment
    
    
    194,272
    
    
    
    
    
    
    
    GE Net Investment and capital contribution
    
    
    (100,405
    )
    
    
    7,251
    
    
    
    Repayment of GE Net Investment on December 19, 2006
    
    
    (1,105,548
    )
    
    
    
    
    
    
    Special distribution to GE on December 19, 2006
    
    
    (335,990
    )
    
    
    
    
    
    
    Proceeds from issuance of common shares
    
    
    720,419
    
    
    
    108,020
    
    
    
    Payments for costs arising on issuance of common shares
    
    
    (35,451
    )
    
    
    (5,167
    )
    
    
    Proceeds from debt issuance
    
    
    810,000
    
    
    
    240,961
    
    
    
    338,000Repayment of debt
    
    
    
    
    
    
    
    
    
    
    (247,068
    )Payments for deferred financing costs and discounts
    
    
    (15,688
    )
    
    
    (7,891
    )
    
    
    (15,298
    )Share repurchases
    
    
    
    
    
    
    
    
    
    
    (5,640
    )Debt repurchases
    
    
    
    
    
    
    
    
    
    
    (7,461
    )Dividends paid
    
    
    
    
    
    
    (53,005
    )
    
    
    (54,511
    )Net cash provided by financing activities
    
    
    131,609
    
    
    
    290,169
    
    
    
    8,022Net change in cash and cash equivalents
    
    
    26,855
    
    
    
    3,246
    
    
    
    30,105Cash and cash equivalents at beginning of year
    
    
    
    
    
    
    26,855
    
    
    
    30,101Cash and cash equivalents at end of year
    
    $
    26,855
    
    
    $
    30,101
    
    
    $
    60,206Supplemental disclosure of cash flow information:Cash paid during the year for:Interest, net of amounts capitalized
    
    $
    44,490
    
    
    $
    51,045
    
    
    $
    65,996Interest capitalized
    
    $
    
    
    
    $
    
    
    
    $
    Income taxes
    
    $
    1,578
    
    
    $
    
    
    
    $
    73Non-cash addition to flight equipment excluded from
investing activities (primarily capitalized
accruals)
    
    $
    
    
    
    $
    5,864
    
    
    $
    16,631
 F-6




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##### Table of Contents



1. Description of business
      2. Basis of Presentation
   F-7




---



##### Table of Contents



2. Basis of Presentation (continued)
    
    
    marketing, technical and operating management services relating to the aircraft;
    
    risk management approvals and services relating to the aircraft;
    
    insurance for general corporate, property, casualty and hull coverage;
    
    information technology services; human resources, including employee benefit processing
and payroll administration;
    
    financial advisory services such as tax consulting, capital markets services and
financial and accounting support services;
    
    legal services;
    
    occupancy costs such as rent and utilities; and
    
    other corporate services.
   F-8




---



##### Table of Contents



2. Basis of Presentation (continued)
  
    
    On April 20, 2007 and June 12, 2007, Genesis signed agreements to purchase four new
Airbus A320 aircraft, two each from two airlines in India. Two of these aircraft were
delivered in July 2007 and the other two aircraft were delivered in September 2007. The
aircraft were leased back to the airlines. As the acquisition of the four aircraft did not
meet the definition of a business under Statement Financial Accounting Standard (SFAS)
141 Business Combinations, the transactions were accounted for as the acquisition of
assets.
    
    On September 26, 2007, Genesis signed an asset purchase agreement to acquire a portfolio
of eight modern, narrow-body commercial aircraft from affiliates of GECAS, which were
subject to leases with six airlines in three countries. Seven of the aircraft delivered in
September 2007 and one in November 2007. This acquisition has been treated as a purchase in
conformity with SFAS 141, Business Combinations. In connection with the acquisition, the
assets and liabilities relating to the delivered aircraft were accounting for using
purchase method and were stated at fair value upon their respective acquisition dates.
    
    On June 26, 2008, Genesis signed an asset purchase agreement to acquire a new Boeing
767-300ER wide-body commercial aircraft from a GE affiliate. This aircraft was delivered on
June 26, 2008. This acquisition has been treated as a purchase in conformity with SFAS 141,
Business Combinations. In connection with the acquisition, the assets and liabilities
relating to the delivered aircraft were accounted for using the purchase method and were
stated at fair value upon its acquisition date.
 3. Significant Accounting Policies
       F-9




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##### Table of Contents



3. Significant Accounting Policies (continued)
         Accounting for Planned Major Maintenance Activities
  F-10




---



##### Table of Contents



3. Significant Accounting Policies (continued)
  Accounting for the
Impairment or Disposal of Long-lived Assets
     Computer software
    
    3 yearsOffice equipment
    
    5 yearsLeasehold improvements
    
    10 years
 F-11




---



##### Table of Contents



3. Significant Accounting Policies (continued)
    Business Combinations. Goodwill and Other
Intangible Assets Business Combinations
     F-12




---



##### Table of Contents



3. Significant Accounting Policies (continued)
               F-13




---



##### Table of Contents



3. Significant Accounting Policies (continued)
  Accounting for Income Taxes,
 Accounting for
Uncertainty in Income Taxes
   Earnings Per Share,
   Share-Based Payment
 F-14




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##### Table of Contents



3. Significant Accounting Policies (continued)
  , Accounting for Derivative Instruments and Hedging
Activities
        Early Extinguishment of Debt, Rescission of FASB Statements Nos. 4, 44 and 62, Amendment of FASB Statement No. 13,
and Technical Corrections
 F-15




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##### Table of Contents



4. Cash and Cash Equivalents and Restricted Cash
 Consolidated
    
    
    ConsolidatedDecember 31,
    
    
    December 31,2007
    
    2008(USD in thousands)
    
    
    (USD in thousands)Cash and cash equivalents
    
    $
    30,101
    
    
    $
    60,206Restricted cash:Current
    
    
    19,742
    
    
    
    14,582Due greater than 12 months
    
    
    13,240
    
    
    
    19,136Total
    
    $
    32,982
    
    
    $
    33,718
   5. Other assets
  In-the-Deferred
    
    
    Fair
    
    
    Initial
    
    
    moneyfinancing
    
    
    value of
    
    
    direct
    
    
    leasecosts
    
    
    derivatives
    
    
    costs
    
    
    contract
    
    
    Other Costs
    
    
    Total(USD in thousands)January 1, 2007
    
    $
    15,666
    
    
    $
    3,857
    
    
    $
    2,652
    
    
    $
    
    
    
    $
    140
    
    
    $
    22,315Increase /(decrease) for year
    
    
    7,891
    
    
    
    (3,857
    )
    
    
    325
    
    
    
    389
    
    
    
    (56
    )
    
    
    4,692Amortization
    
    
    (3,923
    )
    
    
    
    
    
    
    (512
    )
    
    
    (17
    )
    
    
    
    
    
    
    (4,452
    )December 31, 2007
    
    
    19,634
    
    
    
    
    
    
    
    2,465
    
    
    
    372
    
    
    
    84
    
    
    
    22,555Increase for year
    
    
    16,347
    
    
    
    
    
    
    
    85
    
    
    
    
    
    
    
    955
    
    
    
    17,387Amortization
    
    
    (4,465
    )
    
    
    
    
    
    
    (645
    )
    
    
    (71
    )
    
    
    
    
    
    
    (5,181
    )December 31, 2008
    
    $
    31,516
    
    
    $
    
    
    
    $
    1,905
    
    
    $
    301
    
    
    $
    1,039
    
    
    $
    34,761
  6. Flight Equipment under Operating Leases, net
  F-16




---



##### Table of Contents



6. Flight Equipment under Operating Leases, net (continued)
 Consolidated
    
    
    ConsolidatedDecember 31,
    
    
    December 31,2007
    
    
    2008(USD in
    
    
    (USD inthousands)
    
    
    thousands)Flight equipment under operating leases :
    
    $
    1,818,802
    
    
    $
    1,938,639Less:Accumulated depreciation
    
    
    (262,993
    )
    
    
    (341,035
    )Flight equipment under operating leases, net
    
    $
    1,555,809
    
    
    $
    1,597,604
      Increase in:Net income
    
    $3.0 millionEarnings per share
    
    $
    0.08
 F-17




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##### Table of Contents



7. Fixed Assets, net
  December 31,
    
    
    December 31,2007
    
    
    2008(USD in thousands)Cost:Computer software
    
    $
    718
    
    
    $
    1,686Office equipment
    
    
    202
    
    
    
    385Leasehold improvements
    
    
    246
    
    
    
    9431,166
    
    
    
    3,014Accumulated Depreciation:Computer software
    
    
    106
    
    
    
    641Office equipment
    
    
    22
    
    
    
    85Leasehold improvements
    
    
    14
    
    
    
    64142
    
    
    
    790Net Book Value
    
    $
    1,024
    
    
    $
    2,224
 8. Business Combinations
 Business Combinations
  ConsolidatedDecember 31, 2007(USD in thousands)Sources:Cash on hand
    
    $
    65,686Borrowings under the Credit Facility
    
    
    155,411$
    221,097Uses:Net cash consideration
    
    $
    219,934Acquisition costs
    
    
    1,163$
    221,097
  F-18




---



##### Table of Contents



8. Business Combinations (continued)
 ConsolidatedDecember 31, 2007(USD in thousands)Flight equipment purchased under business combinations
    
    $
    226,884In-the-money lease contracts
    
    
    389Out of-the-money lease contracts
    
    
    (3,683
    )Rentals received in advance
    
    
    (1,802
    )Security deposits
    
    
    (691
    )Net assets acquired
    
    $
    221,097
  9. Rental of Flight Equipment
   ConsolidatedDecember 31,2008(USD in thousands)Year Ended December 312009
    
    $
    188,0142010
    
    
    186,9292011
    
    
    152,6862012
    
    
    138,0452013
    
    
    116,040Thereafter
    
    
    189,482$
    971,196
 10. Income Taxes (including deferred taxes)
  F-19




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##### Table of Contents



10. Income Taxes (including deferred taxes) (continued)
   Consolidated
    
    
    Consolidated
    
    
    ConsolidatedDecember 31,
    
    
    December 31,
    
    
    December 31,2006
    
    
    2007
    
    
    2008(USD in thousands)Deferred tax (benefit) /expense
Ireland
    
    $
    (133
    )
    
    $
    6,053
    
    
    $
    6,151Current tax expense
    
    
    1,578
    
    
    
    
    
    
    
    73Deferred tax expense  United States
    
    
    15,922
    
    
    
    
    
    
    
    Total tax expense
    
    $
    17,367
    
    
    $
    6,053
    
    
    $
    6,224
   Accelerated
    
    
    
    
    
    
    Realized gain ondepreciation
    
    
    Taxable
    
    
    repurchase of
    
    
    Unrealizedon flight
    
    
    operating
    
    
    securitization
    
    
    gain/(loss) onequipment
    
    
    losses (i)
    
    
    notes (ii)
    
    
    derivative (iii)
    
    
    Total(USD in thousands)Balance at January 1, 2007
    
    $
    (30,107
    )
    
    $
    (688
    )
    
    $
    
    
    
    $
    482
    
    
    $
    (30,313
    )Deferred tax expense /
(benefit) from temporary
differences
    
    
    19,526
    
    
    
    (13,472
    )
    
    
    
    
    
    
    (4,528
    )
    
    
    1,526Balance at December 31, 2007
    
    
    (10,581
    )
    
    
    (14,160
    )
    
    
    
    
    
    
    (4,046
    )
    
    
    (28,787
    )Income tax effect of
Capital Contribution from
GECAS (iv)
    
    
    
    
    
    
    906
    
    
    
    
    
    
    
    
    
    
    
    906Deferred tax expense /
(benefit) from temporary
differences
    
    
    23,098
    
    
    
    (17,768
    )
    
    
    755
    
    
    
    (6,838
    )
    
    
    (753
    )Balance at December 31, 2008
    
    $
    12,517
    
    
 $
    (31,022
    )
    
    $
    755
    
    
    $
    (10,884
    )
    
    $
    (28,634
    )
 
     F-20




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##### Table of Contents



10. Income Taxes (including deferred taxes) (continued)
 ConsolidatedDecember 31,Expiration of the tax loss carry forward
    
    2008(USD in thousands)2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    Indefinite
    
    
    248,176Total
    
    $
    248,176
     F-21




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##### Table of Contents



10. Income Taxes (including deferred taxes) (continued)
 Combined andConsolidated
    
    Consolidated
    
    ConsolidatedDecember 31,
    
    December 31,
    
    December 31,2006
    
    2007
    
    2008Irish corporation tax rate
    
    
    12.50
    %
    
    
    12.50
    %
    
    
    12.50
    %Increase in rate resulting from:State income tax, net of U.S. Federal benefit
    
    
    2.08
    %
    
    
    
    
    
    
    Effect of U.S. Federal income tax rate
    
    
    23.07
    %
    
    
    
    
    
    
    Other expenses not deductible for tax
    
    
    
    
    
    
    0.84
    %
    
    
    0.70
    %Effective income tax rate  U.S. / Irish
    
    
    37.65
    %
    
    
    13.34
    %
    
    
    13.20
    %
 11. Accounts payable
  Consolidated
    
    
    ConsolidatedDecember 31,
    
    
    December 31,2007
    
    
    2008(USD in thousands)Accrued maintenance costs
    
    $
    5,730
    
    
    $
    21,204Other expenses
    
    
    2,667
    
    
    
    Operational expenses
    
    
    8,810
    
    
    
    14,241Total
    
    $
    17,207
    
    
    $
    35,445
 12. Other Liabilities
  Out-of-the-
    
    
    
    
    
    
    InterestFair
    
    
    
    
    
    
    Rentals
    
    
    money
    
    
    
    
    
    
    payablevalue of
    
    
    Security
    
    
    received
    
    
    lease
    
    
    Accrued
    
    
    on debt,derivatives
    
    
    deposits
    
    
    in advance
    
    
    contract
    
    
    interest
    
    
    net
    
    
    Total(USD in thousands)January 1, 2007
    
    $
    
    
    
    $
    14,809
    
    
    $
    8,810
    
    
    $
    
    
    
    $
    1,430
    
    
    $
    1,547
    
    
    $
    26,596Increase / (decrease) for
period
    
    
    32,371
    
    
    
    (771
    )
    
    
    1,601
    
    
    
    3,682
    
    
    
    785
    
    
    
    520
    
    
    
    38,188Amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (122
    )
    
    
    
    
    
    
    
    
    
    
    (122
    )December 31, 2007
    
    
    32,371
    
    
    
    14,038
    
    
    
    10,411
    
    
    
    3,560
    
    
    
    2,215
    
    
    
    2,067
    
    
    
    64,662Increase /
(decrease) for
period
    
    
    54,659
    
    
    
    1,640
    
    
    
    (1,164
    )
    
    
    
    
    
    
    (1,394
    )
    
    
    510
    
    
    
    54,251Amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (493
    )
    
    
    
    
    
    
    
    
    
    
    (493
    )December 31, 2008
    
    $
    87,030
    
    
    $
    15,678
    
    
    $
    9,247
    
    
    $
    3,067
    
    
    $
    821
    
    
    $
    2,577
    
    
    $
    118,420
 Fair Value Measurements
 F-22




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##### Table of Contents



12. Other Liabilities (continued)
         -
    
    How the reporting entitys own assumptions (that is, expected cash flows and
appropriately risk-adjusted discount rates) should be considered when measuring fair value
when relevant observable inputs do not exist.-
    
    How available observable inputs in a market that is not active should be considered
when measuring fair value.-
    
    How the use of market quotes (for example, broker quotes or pricing services for the
same or similar financial assets) should be considered when assessing the relevance of
observable and unobservable inputs available to measure fair value.
 F-23




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##### Table of Contents



12. Other Liabilities (continued)
  Fair Value Measurements
  UsingQuoted Prices in
    
    
    SignificantActive Markets
    
    
    Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    UnobservableDecember 31,
    
    
    Assets
    
    
    Inputs
    
    
    Inputs2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)(USD in thousands)Liabilities:Derivatives:Interest rate swaps
    
    $
    87,075
    
    
    $
    
    
    
    $
    87,075
    
    
    $
    Forward
foreign exchange contracts
    
    
    (45
    )
    
    
    
    
    
    
    (45
    )
    
    
    Total liabilities
    
    $
    87,030
    
    
    $
    
    
    
    $
    87,030
    
    
    $
    
   13. Debt
  Consolidated
    
    
    ConsolidatedDecember 31,
    
    
    December 31,2007
    
    
    2008(USD in thousands)Securitization notes
    
    $
    810,000
    
    
    $
    796,500Debt facilities
    
    
    
    
    
    
    331,893Revolving credit facility
    
    
    240,961
    
    
    
    Total debt
    
    $
    1,050,961
    
    
    $
    1,128,393
 F-24




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##### Table of Contents



13. Debt (continued)
  ConsolidatedDecember 31, 2008(USD in thousands)Within one year
    
    $
    25,893Two years
    
    
    32,746Three years (1)
    
    
    36,254Four years (1)
    
    
    92,757Five years (1)
    
    
    91,904Thereafter (1)
    
    
    848,839Total
    
    $
    1,128,393
 
 (1)
    
    The indenture that governs the notes issued in the securitization provides that beginning
December 19, 2011 (the fifth anniversary of the securitization), all base lease cash flows
received on the Initial Portfolio of 41 aircraft are applied to repay the outstanding
principal balances of those notes, after payment of certain expenses and other payments
pursuant to the priorities set forth in the indenture. Accordingly, because there are no
specific repayment requirements, the principal maturities shown in this table for periods
after December 19, 2011 reflect an estimate of the cash flows that would be required for
payments on the notes based upon estimates of (i) base lease cash flows and (ii) expenses and
other payments specified in the indenture. The maturities of the debt as presented in this
table do not assume any defaults, aircraft sales, eligible extensions or potential
refinancings. Securitization Notes
     F-25




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##### Table of Contents



13. Debt (continued)
 Interest Rate
  Maturity Date
  Payment Terms
  Redemption
   Redemption Date
    
    PriceBefore December 19, 2009
    
    
    101
    %On or after December 19, 2009
    
    
    100
    %
 Collateral
  F-26




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##### Table of Contents



13. Debt (continued)
 Certain Covenants
  Term Loan Facilities
    Fees
 Interest Rate
 Maturity Date; Payment Terms
 Prepayment.
 Guarantee.
 Collateral.
 F-27




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##### Table of Contents



13. Debt (continued)
  Covenants.
 Liquidity Facility
   Revolving Credit Facility
      Commitment fees
 Interest Rate.
 F-28




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##### Table of Contents



13. Debt (continued)
 Maturity Date.
 Prepayment
 Collateral
 
 Covenants
 
 14. Share-Based Compensation
 Equity Plan
  F-29




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##### Table of Contents



14. Share-Based Compensation (continued)
  Restricted Shares
 i.e
     Weighted-AverageNumber of
    
    
    Grant-DateShares
    
    
    Fair ValueNonvested at January 1, 2008
    
    
    
    
    
    
    Granted
    
    
    63,430
    
    
    $
    18.57Vested
    
    
    (63,430
    )
    
    $
    18.57Forfeited
    
    
    
    
    
    
    Nonvested at December 31, 2008
    
    
    
    
    
    $
    
  Share Options
    F-30




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##### Table of Contents



14. Share-Based Compensation (continued)
  December 31,
    
    December 31,2007
    
    2008Expected volatility
    
    
    32.4
    %
    
    
    36.44
    %Expected dividend yield
    
    
    9.6
    %
    
    
    11.4
    %Risk-free rate
    
    
    3.5
    %
    
    
    3.3
    %Expected term (in years)
    
    
    6.0
    
    
    
    6.0
    Weighted-
    
    
    AggregateWeighted-
    
    
    Average
    
    
    IntrinsicAverage
    
    
    Remaining
    
    
    ValueNumber of
    
    
    Exercise
    
    
    Contractual
    
    
    (USD inShares
    
    
    Price
    
    
    Term
    
    
    thousands)Outstanding at January 1, 2008
    
    
    297,754
    
    
    $
    23.06Granted
    
    
    2,000
    
    
    
    15.51Exercised
    
    
    
    
    
    
    Forfeited or expired
    
    
    
    
    
    
    Outstanding at December 31, 2008
    
    
    299,754
    
    
    $
    23.01
    
    
    
    7.9
    
    
    
    Exercisable at December 31, 2008
    
    
    191,512
    
    
    $
    23.04
    
    
    
    7.8
    
    
    
    
  15. Net income per share
 Earnings per
Share
   F-31




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##### Table of Contents



15. Net income per share (continued)
   Combined andConsolidated
    
    
    Consolidated
    
    
    ConsolidatedYear Ended
    
    
    Year Ended
    
    
    Year EndedDecember 31,
    
    
    December 31,
    
    
    December 31,2006
    
    
    2007
    
    
    2008(USD in thousands, except share and per share data)NumeratorNet income
    
    $
    28,757
    
    
    $
    39,155
    
    
    $
    40,917DenominatorNo. of shares outstanding at beginning of period
    
    
    1,116,296
    
    
    
    31,342,176
    
    
    
    36,069,069Underwriters exercise of over allotment option
    
    
    
    
    
    
    4,503,478
    
    
    
    Restricted shares granted
    
    
    
    
    
    
    13,510
    
    
    
    53,840Repurchased shares
    
    
    
    
    
    
    
    
    
    
    (154,781
    )Weighted
average shares for basic earnings per share
    
    
    1,116,296
    
    
    
    35,859,164
    
    
    
    35,968,128Effect of dilutive share options
    
    
    1,754
    
    
    
    7,941
    
    
    
    Weighted
average shares for diluted earnings per share
    
    
    1,118,050
    
    
    
    35,867,105
    
    
    
    35,968,128Net income per shareBasic
    
    $
    25.76
    
    
    $
    1.09
    
    
    $
    1.14Diluted
    
    $
    25.72
    
    
    $
    1.09
    
    
    $
    1.14
      F-32




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##### Table of Contents



15. Net income per share (continued)
 Combined andConsolidatedYear ended 
December 31,2006No. of shares outstanding at beginning of period
    
    
    31,342,176Underwriters exercise of over allotment option
    
    
    4,696,500Weighted average shares for basic earnings per share
    
    
    36,038,676Effect of dilutive share options
    
    
    2,740Weighted average shares for diluted earnings per share
    
    
    36,041,416Pro forma net income per shareBasic
    
    $
    0.80Diluted
    
    $
    0.80
 16. Other Income
  Combined andConsolidated
    
    
    Consolidated
    
    
    ConsolidatedDecember 31,
    
    
    December 31,
    
    
    December 31,2006
    
    
    2007
    
    
    2008(USD in thousands)Interest income
    
    $
    
    
    
    $
    6,771
    
    
    $
    2,006Realized gains on repurchase of securitization notes (i)
    
    
    
    
    
    
    
    
    
    
    6,039Total
    
    $
    
    
    
    $
    6,771
    
    
    $
    8,045
 
  F-33




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##### Table of Contents



17. Interest Expense
  Combined andConsolidated
    
    
    Consolidated
    
    
    ConsolidatedDecember 31,
    
    
    December 31,
    
    
    December 31,2006
    
    
    2007
    
    
    2008(USD in thousands)GE allocated costs
    
    $
    44,490
    
    
    $
    
    
    
    $
    Interest on long term debt, net
    
    
    1,514
    
    
    
    51,313
    
    
    
    66,506Amortization of deferred financing costs
    
    
    22
    
    
    
    3,923
    
    
    
    4,465Total
    
    $
    46,026
    
    
    $
    55,236
    
    
    $
    70,971
    ConsolidatedDecember 31,2008Fixed
    
    From 4.62% to 4.95%Variable
    
    From 0.58% to 4.97%
 F-34




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##### Table of Contents



17. Interest Expense (continued)
  NotionalPrincipal
    
    
    Net Fair Value
    
    
    CarryingAmount
    
    
    (a)
    
    
    amount (b)(USD in
    
    
    (USD in
    
    
    (USD inthousands)
    
    
    thousands)
    
    
    thousands)Current portion
    
    $
    15,768
    
    
    $
    (35,538
    )
    
    $
    1,561Due greater than 12 months
    
    
    1,005,874
    
    
    
    (51,537
    )
    
    
    $
    1,021,642
    
    
    $
    (87,075
    )
    
    $
    1,561
 
 (a)
    
    Genesis Funding has entered into an interest rate swap contract with an initial and current
notional amount totaling $810.0 million. The fair value of the interest rate swap contract was
$(71.1) million as at December 31, 2008. The deferred tax benefit attributable to the change
in fair value was $(8.9) million and the net amount of $(62.2) million is reflected in
Accumulated other comprehensive loss.On September 19, 2008, Genesis Portfolio assumed Genesis Acquisitions interest rate swap
contract with an initial and current notional amount totaling $211.6 million. The fair
value of the interest rate swap contract was $(16.0) million as at December 31, 2008. The
deferred tax benefit attributable to the changes in fair value was $(2.0) million and the
net amount of $(14.0) million is reflected in Accumulated other comprehensive loss.(b)
    
    The carrying amount represents the accrued interest payable on interest rate swaps which is
included in other liabilities.  18. Selling, general and administrative expenses
  Combined andConsolidated
    
    
    Consolidated
    
    
    ConsolidatedDecember 31,
    
    
    December 31,
    
    
    December 31,2006
    
    
    2007
    
    
    2008(USD in thousands)Salaries and benefits
    
    $
    1,380
    
    
    $
    5,446
    
    
    $
    7,012Servicer fees
    
    
    155
    
    
    
    5,124
    
    
    
    6,035Professional fees
    
    
    882
    
    
    
    5,077
    
    
    
    5,255GE allocated costs
    
    
    3,917
    
    
    
    
    
    
    
    Share based compensation (note 14)
    
    
    699
    
    
    
    1,110
    
    
    
    1,104Consultancy costs
    
    
    
    
    
    
    1,949
    
    
    
    835Other
    
    
    279
    
    
    
    2,285
    
    
    
    3,643Total
    
    $
    7,312
    
    
    $
    20,991
    
    
    $
    23,884
 F-35




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##### Table of Contents



19. Other expenses
  Combined andConsolidated
    
    
    Consolidated
    
    
    ConsolidatedDecember 31,
    
    
    December 31,
    
    
    December 31,2006
    
    
    2007
    
    
    2008(USD in thousands)Transaction costs
    
    $
    
    
    
    $
    3,337
    
    
    $
    Total
    
    $
    
    
    
    $
    3,337
    
    
    $
    
  20. Share Capital
 Consolidated
    
    
    ConsolidatedDecember 31,
    
    
    December 31,2007
    
    
    2008(USD in thousands)Authorized share capitalCommon shares at par value of $0.001
(500,000,000 authorized)
    
    $
    500
    
    
    $
    500Issued share capitalCommon shares at par value of $0.001
(36,069,069 as at December 31, 2007;
34,341,095 as at December 31, 2008)
    
    $
    36
    
    
    $
    34
     F-36




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##### Table of Contents



20. Share Capital (continued)
     21. Other Comprehensive Income / (Loss)
  Consolidated
    
    
    ConsolidatedDecember 31,
    
    
    December 31,2007
    
    
    2008(USD in thousands)Change in fair value of derivatives
    
    $
    (36,228
    )
    
    $
    (54,704
    )Deferred tax (expense) / benefit on fair
value of derivative
    
    
    4,528
    
    
    
    6,838Other comprehensive income / (loss)
    
    $
    (31,700
    )
    
    $
    (47,866
    )
  22. Accumulated Deficit
  Consolidated
    
    
    ConsolidatedDecember 31, 2007
    
    
    December 31, 2008(USD in thousands)Accumulated deficit as at beginning of year
    
    $
    (933
    )
    
    $
    (14,783
    )Net income for the period
    
    
    39,155
    
    
    
    40,917Dividends paid during the year
    
    
    (53,005
    )
    
    
    (54,511
    )Accumulated deficit as at end of year
    
    $
    (14,783
    )
    
    $
    (28,377
    )
 F-37




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##### Table of Contents



23. Commitments and Contingencies
       Indemnifications
    24. Geographic Information
  F-38




---



##### Table of Contents



24. Geographic Information (continued)
 Combined andConsolidated
    
    
    Consolidated
    
    
    ConsolidatedDecember 31,
    
    
    December 31,
    
    
    December 31,2006
    
    
    2007
    
    
    2008(USD in
    
    
    
    
    
    
    (USD in
    
    
    
    
    
    
    (USD inthousands)
    
    
    %
    
    
    thousands)
    
    
    %
    
    
    thousands)
    
    
    %Europe
    
    $
    55,563
    
    
    
    36
    %
    
    $
    60,574
    
    
    
    33
    %
    
    $
    83,105
    
    
    
    38
    %Asia/Pacific
    
    
    48,508
    
    
    
    32
    %
    
    
    66,114
    
    
    
    37
    %
    
    
    79,114
    
    
    
    37
    %United States and Canada
    
    
    28,217
    
    
    
    18
    %
    
    
    29,496
    
    
    
    16
    %
    
    
    29,879
    
    
    
    14
    %Africa and the Middle East
    
    
    13,453
    
    
    
    9
    %
    
    
    13,323
    
    
    
    7
    %
    
    
    10,200
    
    
    
    5
    %Central, South America and Mexico
    
    
    7,446
    
    
    
    5
    %
    
    
    11,826
    
    
    
    7
    %
    
    
    13,687
    
    
    
    6
    %$
    153,187
    
    
    
    100
    %
    
    $
    181,333
    
    
    
    100
    %
    
    $
    215,985
    
    
    
    100
    %
  Combined andConsolidated
    
    Consolidated
    
    ConsolidatedDecember 31,
    
    December 31,
    
    December 31,2006
    
    2007
    
    2008(USD in
    
    
    
    
    
    (USD in
    
    
    
    
    
    (USD inthousands)
    
    %
    
    thousands)
    
    %
    
    thousands)
    
    %China
    
    $
    25,087
    
    
    
    17
    %
    
    $
    33,780
    
    
    
    19
    %
    
    $
    33,319
    
    
    
    15
    %United States
    
    $
    24,863
    
    
    
    16
    %
    
    $
    26,145
    
    
    
    14
    %
    
    $
    26,501
    
    
    
    12
    %Germany
    
    $
    
    
    
    
    
    %
    
    $
    
    
    
    
    
    %
    
    $
    24,504
    
    
    
    11
    %Spain
    
    $
    21,523
    
    
    
    14
    %
    
    $
    21,176
    
    
    
    12
    %
    
    $
    22,350
    
    
    
    10
    %
   Unscheduled Lease Terminations During Year Ended December 31, 2008
   F-39




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##### Table of Contents



24. Geographic Information (continued)
   25. Related Party Transactions
  Aircraft Purchase Agreement
  Servicing Agreements
  Expense Agreement
  26. New Accounting Pronouncements
 Business Combinations
 F-40




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26. New Accounting Pronouncements (continued)
  Accounting and reporting on
Non-controlling Interests in Consolidated Financial Statements
 Disclosures about Derivative Instruments and
Hedging Activities, an amendment of FASB Statement No. 133
 The Hierarchy of Generally Accepted Accounting
Procedures ,
  F-41




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27. Subsequent Events
    F-42




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SIGNATURE
  GENESIS LEASE LIMITEDBy:
    /s/ John McMahonJohn McMahonPresident and Chief Executive Officer