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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 20-F

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009Commission file number 001-33159

AerCap Holdings N.V.(Exact name of Registrant as specified in its charter)

The Netherlands(Jurisdiction of incorporation or organization)

AerCap
AerCap House
Stationsplein 965
1117 CE Schiphol
The Netherlands
+ 31 20 655 9655(Address of principal executive offices)

Wouter
M. den Dikken, AerCap House, Stationsplein 965, 1117 CE Schiphol, The Netherlands,
Telephone number: +31 20 655 9655, Fax number: +31 20 655 9100
(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)

Securities
registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange on which registeredOrdinary Shares

The New York Stock Exchange


Securities
registered or to be registered pursuant to Section 12(g) of the Act:None

Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act:None

Indicate
the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.

Ordinary Shares, Euro 0.01 par value

85,036,957


Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes o    No ý

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934. Yes o    No ý

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o

Accelerated filer ý

Non-accelerated filer o (Do not check if a smaller reporting company)

Smaller reporting company o


Indicate
by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ý

International Financial Reporting Standards as issued by the International Accounting Standards Board o

Other o


If
"Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to
follow: Item 17 o    Item 18 o

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes o    No ý



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Special Note About Forward Looking Statements

1PART IItem 1. Identity of Directors, Senior Management and
Advisers

2Item 2. Offer Statistics and Expected
Timetable

2Item 3. Key Information

2Risk Factors

5Item 4. Information on the Company

26Item 4A. Unresolved Staff Comments

48Item 5. Operating and Financial Review and
Prospects

48Item 6. Directors, Senior Management and
Employees

94Item 7. Major Shareholders and Related Party
Transactions

104Item 8. Financial Information

106Item 9. The Offer and Listing.

106Item 10. Additional Information.

107Item 11. Quantitative and Qualitative Disclosures About
Market Risk.

123Item 12. Description of Securities Other than Equity
Securities.

125PART IIItem 13. Defaults, Dividend Arrearages and
Delinquencies.

126Item 14. Material Modifications to the Rights of Security
Holders and Use of Proceeds.

126Item 15. Controls and Procedures.

126Item 16A. Audit committee financial
expert.

127Item 16B. Code of Conduct.

127Item 16C. Principal Accountant Fees and
Services.

127Item 16D. Exemptions from the Listing Standards for Audit
Committees.

128Item 16E. Purchases of Equity Securities by the Issuer and
Affiliated Purchasers.

128Item 16G. Corporate Governance

128PART IIIItem 17. Financial Statements.

129Item 18. Financial Statements.

129Item 19. Exhibits.

129Signatures

132Index to Consolidated Financial Statements

F-1


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SPECIAL NOTE ABOUT FORWARD LOOKING STATEMENTS

This annual report includes forward looking statements, principally under the captions "Item 3. Key
InformationRisks Related to our Business", "Item 4. Information on the Company" and "Item 5. Operating and Financial Review and Prospects". We have based these forward
looking statements largely on our current beliefs and projections about future events and financial trends affecting our business. Many important factors, in addition to those discussed in this annual
report, could cause our actual results to differ substantially from those anticipated in our forward looking statements, including, among other things:



The
words "believe", "may", "aim", "estimate", "continue", "anticipate", "intend", "expect" and similar words are intended to identify forward looking statements. Forward looking
statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth
opportunities, the effects of future regulation and the effects of competition. Forward looking statements speak only as of the date they were made and we undertake no obligation to update publicly or
to revise any forward looking statements because of new information, future events or other factors. In light of the risks and
uncertainties described above, the forward looking events and circumstances described in this annual report might not occur and are not guarantees of future performance.

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PART I

Item 1.    Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2.    Offer Statistics and Expected Timetable

Not applicable.

Item 3.    Key Information

Selected financial data.

The following table presents AerCap Holdings N.V.'s (the successor company) and AerCap B.V.'s (the predecessor company)
selected consolidated financial data for each of the periods indicated, prepared in accordance with US GAAP. You should read this information in conjunction with AerCap Holdings N.V.'s
audited consolidated financial statements and related notes and "Item 5. Operating and Financial Review and Prospects".

AerCap
Holdings N.V. was formed as a Netherlands public limited liability company ("naamloze vennootschap or N.V.") on
July 10, 2006 and acquired all of the assets and liabilities of AerCap Holdings C.V., a Netherlands limited partnership on October 27, 2006. This acquisition was a transaction under
common control and accordingly, AerCap Holdings N.V. recognized the acquisition of the assets and liabilities of AerCap Holdings C.V. at their carrying values. AerCap Holdings C.V. was formed
on June 27, 2005 for the purpose of acquiring all of the shares and certain liabilities of AerCap B.V. (formerly known as debis AirFinance B.V.), in connection with our
acquisition by funds and accounts affiliated with Cerberus Capital Management, L.P., or the Cerberus Funds (referred to herein as the 2005 Acquisition). The historical consolidated financial
data of AerCap Holdings C.V. are presented as if AerCap Holdings N.V. had been the acquiring entity of AerCap B.V. on June 30, 2005. The financial information presented as of
December 31, 2008 and 2009 and for the years ended December 31, 2007, 2008 and 2009 was derived from AerCap Holdings N.V.'s audited consolidated financial statements included in
this annual report. The financial information presented as of December 31, 2005, 2006 and 2007 and for the year ended December 31, 2006 and for the six months ended June 30, 2005
and December 31, 2005 was derived from AerCap Holdings N.V. audited consolidated financial statements not included in this annual report. The financial information presented includes the
results of AeroTurbine from the date of its acquisition on April 26, 2006, referred to herein as the AeroTurbine Acquisition.

Genesis
Lease Limited, AerCap and AerCap International Bermuda Limited, a wholly-owned subsidiary of AerCap Holdings N.V., entered into an Agreement and Plan of Amalgamation dated
as of September 17, 2009 (as amended, the "Amalgamation Agreement"), pursuant to which Genesis Lease Limited will amalgamate with AerCap International Bermuda Limited in an all
share-for-share transaction (the "Amalgamation"). Under the terms of the Amalgamation Agreement, Genesis shareholders will receive one AerCap ordinary share for every Genesis
common share they own. The transaction is subject to approval by Genesis shareholders and satisfaction of customary closing conditions. All regulatory approvals have been obtained and the registration
statement was declared effective by the Securities and Exchange Commission ("SEC") on February 3, 2010. The Genesis shareholders are scheduled to vote on the Amalgamation on March 23,
2010. We expect to close the transaction on March 25, 2010. See page 49 for more information relating to Genesis.

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Consolidated Income Statement Data:

AerCap B.V.

AerCap Holdings N.V.Six
months ended
June 30,
2005

Six
months ended
December 31,
2005(1)

Year ended December 31,2006(2)

2007

2008

2009(In thousands, except share and per share amounts)RevenuesLease revenue

$
162,155

$
173,568

$
443,925

$
554,226

$
605,253

$
650,604Sales revenue


75,822


12,489


301,405


558,263


616,554


324,781Management fee revenue


6,512


7,674


14,072


14,343


11,749


12,074Interest revenue


13,130


20,335


34,681


29,742


18,515


10,105Other revenue


3,459


1,006


20,336


19,947


4,181


5,703Total revenues


261,078


215,072


814,419


1,176,521


1,256,252


1,003,267ExpensesDepreciation


66,407


45,918


102,387


141,113


169,392


220,996Cost of goods sold


57,632


10,574


220,277


432,143


506,312


248,897Interest on debt


69,857


44,742


166,219


234,770


219,172


92,152Asset impairment














18,789


32,574Other expenses


32,386


26,524


46,523


39,746


73,827


82,182Selling, general and administrative expenses(3)


19,559


26,949


149,364


116,328


128,268


116,201Total expenses


245,841


154,707


684,770


964,100


1,115,760


793,002Income from continuing operations before income taxes


15,237


60,365


129,649


212,421


140,492


210,265Provision for income taxes


556


(10,604
)

(21,246
)

(25,123
)

431


(3,894
)Net income

$
15,793

$
49,761

$
108,403

$
187,298

$
140,923

$
206,371Net loss (income) attributable to non-controlling interest, net of tax








588


1,155


10,883


(41,205
)Net income attributable to AerCap Holdings N.V.

$
15,793

$
49,761

$
108,991

$
188,453

$
151,806

$
165,166Earnings per share, basic and diluted

$
21.45

$
0.64

$
1.38

$
2.22

$
1.79

$
1.94Weighted average shares outstanding, basic and diluted


736,203


78,236,957


78,982,162


85,036,957


85,036,957


85,036,957


(1)We
were formed on June 27, 2005; however, we did not commence operations until June 30, 2005, when we acquired all of the shares and certain
of the liabilities of AerCap B.V. Our initial accounting period was from June 27, 2005 to December 31, 2005, but we generated no material revenue or expense between
June 27, 2005 and June 30, 2005 and did not have any material assets before the 2005 Acquisition. For convenience of presentation only, we have labeled our initial accounting period in
the table headings in this annual report as the six months ended December 31, 2005.(2)Includes
the results of AeroTurbine for the period from April 26, 2006 (date of acquisition) to December 31, 2006.(3)Includes
share based compensation of $78.6 million ($69.1 million, net of tax), $10.9 million ($9.5 million, net of tax),
$7.5 million ($6.4 million, net of tax) and $3.9 million ($3.2 million, net of tax) in the years ended December 31, 2006, 2007, 2008 and 2009, respectively.


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Consolidated Balance Sheets Data:

As of December 31,2005

2006

2007

2008

2009(US dollars in thousands)AssetsCash and cash equivalents

$
183,554

$
131,201

$
241,736

$
193,563

$
182,617Restricted cash


157,730


112,277


95,072


113,397


140,746Flight equipment held for operating leases, net


2,189,267


2,966,779


3,050,160


3,989,629


5,230,437Notes receivable, net of provisions


196,620


167,451


184,820


134,067


138,488Prepayments on flight equipment


115,657


166,630


247,839


448,945


527,666Other assets


218,371


373,698


574,600


531,225


549,547Total assets

$
3,061,199

$
3,918,036

$
4,394,227

$
5,410,826

$
6,769,501Debt


2,172,995


2,555,139


2,892,744


3,790,487


4,846,664Other liabilities


468,443


579,956


520,328


494,284


509,505Total liabilities


2,641,438


3,135,095


3,413,072


4,284,771


5,356,169AerCap Holdings N.V. shareholders' equity


419,761


751,004


950,373


1,109,037


1,258,009Non-controlling interest(1)





31,937


30,782


17,018


155,323Total equity


419,761


782,941


981,155


1,126,055


1,413,332Total liabilities and equity

$
3,061,199

$
3,918,036

$
4,394,227

$
5,410,826

$
6,769,501


(1)In
December 2007, the FASB issued ASC 810, requiring non-controlling interests (sometimes called minority interests) to be presented as a
component of equity on the balance sheet. Pursuant to the transition provisions of the statement, AerCap adopted ASC 810 as of January 1, 2009. The presentation and disclosure requirements have
been applied retrospectively for AerCap for all periods presented.


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RISK FACTORS

Risks Related to Our Business

We require significant capital in 2010 and 2011 to fund our obligations under our forward purchase commitments. The global recession and financial crisis may decrease the
amount of capital available to us and may adversely impact the operating cash flows we would use to fund these obligations.

As of December 31, 2009, we, either directly or through our joint venture AerVenture Limited ("AerVenture"), had 32 new A320
family aircraft, 21 new A330 wide-body aircraft and two new Boeing 737-800 aircraft under forward purchase commitments, with 36 aircraft scheduled to be delivered in 2010 and
10 aircraft scheduled to be delivered in 2011. The remaining nine aircraft are scheduled to be delivered in 2012 and 2013. As of December 31, 2009, our commitments in 2010 and 2011 to make
pre-delivery and final delivery payments under our forward purchase commitments was less than/(exceeded) the amounts available under our committed borrowing facilities, cash in bank, and
other related sources of cash, including the completion of the Amalgamation with Genesis, by $160 million and $(17) million, respectively. In order to meet our commitments under our forward
purchase contracts during 2010 and 2011, including commitments by our joint venture AerVenture, and to maintain an adequate level of unrestricted cash we will need to raise additional funds through a
combination of (i) accessing committed debt facilities, (ii) securing additional financing for pre-delivery and final delivery payment obligations, (iii) selling
aircraft or other aircraft investments, including participations in our joint ventures, (iv) accessing restricted cash in our cash restricted entities, and (v) if necessary, generating
proceeds from potential capital market transactions. Due to the level of existing committed pre-delivery or final delivery debt commitments, we expect that only a portion of the additional
funding to meet our forward purchase commitments can be sourced through additional debt funding.

The
global recession and financial crisis have caused banks and financial institutions to significantly decrease the amount of capital available for lending and have significantly
increased the risk premium of such borrowings. Should banks with whom we have committed borrowing facilities default in their obligations towards us, such defaults may decrease the amounts available
under our committed borrowing facilities.

We
have historically relied on sales of aircraft as an integral part of our liquidity strategy in order to meet cash requirements for our operations and committed capital expenditures.
As a result of the global recession and the corresponding decrease in capital available to finance the purchase price of aviation assets, we have experienced a decrease in demand and offer prices from
third-party investors interested in buying our aircraft and engines. In addition, insolvencies of aircraft operators and sales of aircraft portfolios by aircraft lessors have and are expected to
increase the supply of aircraft available for sale, negatively affecting prices for aircraft. In this challenging market, we may experience a significant decrease in aircraft sales revenue which could
adversely affect our liquidity and the cash available to fund our forward purchase commitments.

Since
a significant portion of our aircraft (55% of the net book value of our flight equipment as of December 31, 2009) are owned by special purpose entities, or "restricted cash
entities", and are subject to financing structures which require that most, if not all, cash, after the payment of required expenses, be utilized to service outstanding debt in those structures, there
is limited free cash made available to
us from the operations of these entities to fund our general operations or to fund the purchase commitment obligations of other group entities. In addition, AeroTurbine's credit facility also limits
the dividends it can pay us to $10 million per year.

The
global recession and financial crisis are also having a significant negative impact on our lessees. If our lessees, in particular those outside our restricted cash entities, are
unable to meet their

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obligations
under their leases with us, our cash flow will be negatively impacted both by the non-receipt of lease rentals and the costs associated with repossession and re-leasing or sale
of the leased aircraft.

Our
typical sources of funding may not be sufficient to meet our operating requirements and fund our forward purchase commitments in 2010 and 2011 and we may be required to raise
additional capital through the issuance of new equity or equity-linked securities. If we issue new equity or equity-linked securities, the percentage ownership of our then current shareholders would
be diluted. Any newly issued equity or equity- linked securities may have rights, preferences or privileges senior to those of our ordinary shares.

Our business model depends on the continual re-leasing of our aircraft and engines when current leases expire and the leasing of new aircraft on order, and due
to current market conditions, we may not be able to do so on favorable terms, if at all.

Our business model depends on the continual re-leasing of our aircraft and engines when our current leases expire in order
to generate sufficient revenues to finance our operations and pay our debt service obligations. Between December 31, 2009 and December 31, 2012, aircraft leases accounting for 32.3% of
our lease revenues for the year ended December 31, 2009, are scheduled to expire and the aircraft subject to those leases that we do not sell prior to lease termination will need to be
re-leased or the current leases will need to be extended. In 2009, we generated $53.2 million of revenues from leases that were scheduled to expire in 2010, $61.8 million of
revenues from leases that are scheduled to expire in 2011 and $95.0 million of revenues from leases that are scheduled to expire in 2012. In addition, the majority of our engines are subject to
short-term leases, which are generally less than 180 days. Our ability to re-lease our existing aircraft and engines or lease a new aircraft prior to delivery will
depend on general market and competitive conditions at the time the leases expire. The global recession put downward pressure on aircraft lease rates, in particular the lease rates for older less
fuel-efficient aircraft and wide-body aircraft used for freight. If we are unable to re-lease an existing aircraft or engine or lease a new aircraft prior to
delivery on acceptable terms, our lease revenue and margin may decline and we may need to sell the aircraft or engines at unfavorable prices to provide adequate funds for our debt service obligations
and to otherwise finance our operations.

Our financial condition is dependent, in part, on the financial strength of our lessees; lessee defaults, bankruptcies and other credit problems could adversely affect our
financial results.

Our financial condition depends on the financial strength of our lessees, our ability to appropriately assess the credit risk of our
lessees and the ability of lessees to perform under our leases. In 2009, we generated 64.8% of our revenues from leases to the aviation industry, and as a result, we are indirectly affected by all the
risks facing airlines today. If the global recession continues, we expect aircraft passenger traffic to decline and freight traffic to continue to contract. If this occurs, we believe it is likely
that additional lessees will default on their leases or file for bankruptcy.

The
ability of our lessees to perform their obligations under our leases will depend primarily on the lessee's financial condition and cash flow, which may be affected by factors outside
our control, including:



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Generally,
airlines with high debt leverage are more likely than airlines with stronger balance sheets to seek operating leases. As a result, most of our existing lessees are not rated
investment grade by the principal U.S. rating agencies and may suffer liquidity problems, and, at any point in time, may experience lease payment difficulties or be significantly in arrears in their
obligations under our leases.
Turmoil in global financial markets and the general economic environment may have an additional negative effect on the ability of airlines to find adequate sources of financing to fund operations.
Some lessees encountering financial difficulties may seek a reduction in their lease rates or other concessions, such as a decrease in their contribution toward maintenance obligations. Further or
future downturns in the aviation industry could greatly exacerbate the weakened financial condition and liquidity problems of some of our lessees and further increase the risk of delayed, missed or
reduced rental payments. We may not correctly assess the credit risk of each lessee or charge lease rates which correctly reflect the related risks and our lessees may not be able to continue to meet
their financial and other obligations under our leases in the future. A delayed, missed or reduced rental payment from a lessee decreases our revenues and cash flow. Our default levels may increase
over time if economic conditions do not improve. If lessees of a significant number of our aircraft or engines default on their leases, our financial results will be adversely affected.

If our lessees encounter financial difficulties and we decide to restructure our leases, the restructuring would likely result in less favorable leases which could adversely
affect our financial results.

If a lessee is late in making payments, fails to make payments in full or in part under a lease or has advised us that it will fail to
make payments in full or in part under a lease in the future, we may elect or be required to restructure the lease, which could result in less favorable terms or termination of a lease without
receiving all or any of the past due amounts. We may be unable to agree upon acceptable terms for some or all of the requested restructurings and as a result may be forced to exercise our remedies
under those leases. If we, in the exercise of our remedies, repossess an aircraft or engine, we may not be able to re-lease the aircraft or engine promptly at favorable rates, if at all.
You should expect that additional restructurings and/or repossessions with some lessees will occur in the future. If additional repossessions occur we will incur significant cost and expenses which
are unlikely to be recouped and terms and conditions of possible lease restructurings may result in a significant reduction of lease revenue, all of which may adversely affect our financial results.

In 2009, we incurred significant costs resulting from lease defaults and if the global recession continues, we expect lease defaults to increase in 2010 which could
adversely affect our financial results.

During 2009 none of our lessees leasing our aircraft defaulted. In 2008, however, several of our lessees leasing our aircraft defaulted
and the total cost of these defaults in terms of lost revenue during off-lease periods and related technical costs totaled approximately $24.9 million during 2009. If the global
recession continues, additional lessees might default on their lease obligations or file for

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bankruptcy
in 2010. If we are required to repossess an aircraft or engine they lease, we may be required to incur significant unexpected costs. Those costs include legal and other expenses of court or
other governmental proceedings, including the cost of posting surety bonds or letters of credit necessary to effect repossession of aircraft or engine, particularly if the lessee is contesting the
proceedings or is in bankruptcy. In addition, during these proceedings the relevant aircraft or engine is not generating revenue. We may also incur substantial maintenance, refurbishment or repair
costs that a defaulting lessee has failed to pay and that are necessary to put the aircraft or engine in suitable condition for re-lease or sale. It may also be necessary to pay off liens,
taxes and other governmental charges on the aircraft to obtain clear possession and to remarket the aircraft effectively, including, in some cases, liens that the lessee may have incurred in
connection with the operation of its other aircraft. We may also incur other costs in connection with the physical possession of the aircraft or engine.

We
may also suffer other adverse consequences as a result of a lessee default and the related termination of the lease and the repossession of the related aircraft or engine. Our rights
upon a lessee default vary significantly depending upon the jurisdiction and the applicable law, including the need to obtain a court order for repossession of the aircraft and/or consents for
de-registration or re-export of the aircraft. When a defaulting lessee is in bankruptcy, protective administration, insolvency or similar proceedings, additional limitations
may apply. Certain jurisdictions give rights to the trustee in bankruptcy or a similar officer to assume or reject the lease or to assign it to a third party, or entitle the lessee or another third
party to retain possession of the aircraft or engine without paying lease rentals or performing all or some of the obligations under the relevant lease. In addition, certain of our lessees are owned
in whole, or in part, by government related entities, which could complicate our efforts to repossess our aircraft or engines in that government's jurisdiction. Accordingly, we may be delayed in, or
prevented from, enforcing certain of our rights under a lease and in re-leasing the affected aircraft or engine.

If
we repossess an aircraft or engine, we will not necessarily be able to export or de-register and profitably redeploy the aircraft or engine. For instance, where a lessee
or other operator flies only domestic routes in the jurisdiction in which the aircraft or engine is registered, repossession may be more difficult, especially if the jurisdiction permits the lessee or
the other operator to resist de-registration. We may also incur significant costs in retrieving or recreating aircraft or engine records required for registration of the aircraft or
engine, and in obtaining the
certificate of airworthiness for an aircraft. If we incur significant costs repossessing our aircraft or engines, are delayed in repossessing our aircraft or engines or are unable to obtain possession
of our aircraft or engines as a result of lessee defaults, our financial results may be materially and adversely affected.

The business of leasing, financing and selling aircraft, engines, and parts has historically experienced prolonged periods of oversupply during which lease rates and
aircraft values have declined, and any future oversupply could materially and adversely affect our financial results.

In the past, the business of leasing, financing and selling aircraft, engines, and parts has experienced prolonged periods of aircraft
and engine shortages and oversupply. As a result of the global recession and financial crisis, we believe that the business of leasing, financing and selling aircraft, engines, and parts has moved
from a market that had been characterized by relative shortage to one of oversupply, especially for certain older, less-fuel efficient aircraft. The oversupply of a specific type of
aircraft or engine typically depresses the lease rates for, and the value of, that type of aircraft or engine. The supply and demand for aircraft and engines is affected by various cyclical and
non-cyclical factors that are outside of our control, including:



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During
the recent global recession and financial crisis a number of airlines have postponed or cancelled delivery of new aircraft and have reduced the size of the fleet of aircraft they
operate. These measures increase the number of available new and used aircraft in the market place which, along with the factors described above, may produce sharp and prolonged decreases in aircraft
and engine lease rates and values, and have a material adverse effect on our ability to re-lease our aircraft and engines and/or sell our aircraft engines and parts at attractive prices.
Any of these factors could materially and adversely affect our financial results.

Over
the last two years, we have experienced a slowdown in demand for our older less fuel-efficient aircraft, such as our older Boeing 737-300s, -400s
and -500s (737 classics), other older Boeing aircraft and older Airbus A320s. As of December 31, 2009, 9.4% of our owned fleet, by book value, consists of older, less
fuel-efficient aircraft in excess of 15 years of age. This slow-down in demand has put downward pressure on lease rates for these aircraft and made it more difficult for
us to lease these aircraft when their leases expire or are terminated. If the global recession continues, we expect significant declines in aircraft passenger traffic and further declines in freight
traffic, which would likely result in further decreases in lease rates for older less fuel-efficient aircraft, as well as lower aircraft lease rates for more modern-fuel
efficient aircraft. These decreases would adversely affect our financial results.

The value and lease rates of our aircraft and engines could decline and this would have a material adverse effect on our financial results.

Aircraft and engine values and lease rates have historically experienced sharp decreases due to a number of factors including, but not
limited to, decreases in passenger air travel and air cargo demand, increases in fuel costs, government regulation and increases in interest rates. In addition to factors linked to the aviation
industry generally, many other factors may affect the value and lease rates of our aircraft and engines, including:



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Any
decrease in the value and lease rates of aircraft or engines which may result from the above factors or other unanticipated factors, may have a material adverse effect on our
financial results.

The recent changes in demand and supply of aircraft could depress lease rates and the value of our aircraft portfolio.

The global recession and financial crisis and the slowdown in air travel have contributed to a decrease in the demand by airlines for
aircraft, while a number of airline bankruptcies, as well as financial challenges potentially facing other airlines and a potential consolidation of the aviation industry, may result in an increase in
the supply of aircraft. In addition, the significant decline in freight traffic has decreased the demand for freight aircraft, in particular wide-body aircraft. This shift in supply/demand
dynamics is putting downward pressure on aircraft lease rates and values, and in particular the lease rates for older less fuel-efficient aircraft and wide-body aircraft used
for freight. This decrease in lease rates will adversely affect our lease revenues in future periods as our current leases terminate and to the extent that airlines default on their leases.

In
addition, several large portfolios of leased aircraft have been or may be available for sale including ILFC which is the largest aircraft lessor in the world, measured by portfolio
value. In addition, Royal Bank of Scotland has announced its plans to sell RBS Aviation, its aviation finance and leasing subsidiary. Due to the global recession, if any of these aircraft portfolios
were sold, we expect that such sales would result in lower aircraft values since there are few buyers with access to capital to compete for purchases of aircraft portfolios. In particular, if any of
these portfolios were sold or liquidated in a disorderly fashion, we would expect the prices received for the aircraft to be significantly below recent market aircraft prices. If this occurred, we
would expect our aircraft sales revenue to be significantly and adversely impacted as a result of the lower prices we could receive for sales of our own aircraft. In this situation, we may curtail or
stop our aircraft sales.

Furthermore,
the decrease in capital available to finance the purchase price of aviation assets resulting from the ongoing global financial crisis has reduced the level of activity in
the secondary trading market for such aircraft and engines since many purchasers have been unable to obtain the necessary financing. A prolonged slowdown in secondary market activity will limit our
ability to generate cash from sales of
aviation assets which will have a material adverse impact on our financial condition and liquidity. In addition the significant decrease of activity in the secondary aircraft trading market is likely
to result in lower prices for any aircraft sold.

We were required to write-down the value of some of our assets during 2009 due to the global recession and financial crisis and a prolongation or worsening of
these conditions could require us to make additional significant write-downs.

We test long-lived assets for impairment whenever events or changes in circumstances indicate that the assets' carrying
amounts are not recoverable from their undiscounted cash flows. As a result of the global recession and financial crisis, we performed impairment analysis of our long-lived assets during

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the
year 2009 and as of December 31, 2009. In this impairment analysis, we focused on aircraft older than 15 years, since the cash flows supporting our carrying values of those aircraft
are more dependent upon current lease contracts, which leases are more sensitive to weakness in the current global economic environment. In addition, we believe that residual values of older aircraft
are more exposed to non-recoverable declines in value in the current economic environment. In the year ended December 31, 2009, we recognized an impairment of $32.6 million.
The impairment primarily related to ten A320 aircraft, which were older than 15 years, and for six of the ten aircraft the impairment was triggered by the receipt of $21.0 million of
end-of-lease payments from the previous lessees. These end-of-lease payments were recorded as lease revenue during 2009.

As
a result of the global recession and financial crisis and the uncertainties regarding its potential impact on our business, our estimates and assumptions regarding forecasted cash
flows from our long-lived assets, the duration of the economic downturn, or the duration or strength of the recovery, made for purposes of our long-lived asset impairment tests
may prove to be inaccurate predictions of the future. If our assumptions regarding the forecasted cash flows of certain long-lived assets are not achieved, especially for aircraft older
than 15 years, it is possible that an impairment may be triggered for other long-lived assets in 2010 and that any such impairment amounts may be material.

Our limited control over our joint ventures may delay or prevent us from implementing our business strategy which may adversely affect our financial results.

We are currently joint venture partners in several joint ventures, including AerDragon, an unconsolidated joint venture which owns nine
aircraft and has six A320 aircraft on
order with Airbus, AerCap Partners, a consolidated joint venture which owns 19 Boeing aircraft and AerVenture, a consolidated joint venture which owns 28 A320 family aircraft and has 32 A320 family
aircraft on order with Airbus. It is our strategy to enter into additional joint ventures in the future. Under the AerDragon, AerCap Partners and AerVenture joint venture agreements, we share control
over significant decisions with our joint venture partners. Since we have limited control over our joint ventures and may not be able to exercise control over any future joint venture, we may not be
able to require our joint ventures to take actions that we believe are necessary to implement our business strategy. Accordingly, this limited control could have a material adverse effect on our
financial results.

Changes in interest rates may adversely affect our financial results.

We use floating rate debt to finance the acquisition of a significant portion of our aircraft and engines. All of our revolving credit
facilities bear floating interest rates. As of December 31, 2008 and December 31, 2009, we had $3.5 billion and $4.2 billion, respectively, of indebtedness outstanding that
was floating rate debt. We incurred floating rate interest expense of $62.9 million in the year ended December 31, 2009. If interest rates increase, we would be obligated to make higher
interest payments to our lenders. Our practice has been to protect ourselves against interest rate increase on a portion of our floating-rate liabilities by entering into derivative
contracts, primarily interest rate caps. However, we remain exposed to changes in interest rates to the extent that our derivative contracts are not correlated to our financial liabilities. In
addition, we are exposed to the credit risk that the counter parties to our derivative contracts will default in their obligations. If we incur significant fixed rate debt in the future, increased
interest rates prevailing in the market at the time of the incurrence or refinancing of such debt will also increase our interest expense.

Decreases
in interest rates may also adversely affect our lease revenues generated from leases with lease rates tied to floating interest rates. In the year ended December 31,
2009, 15.3% of our basic lease revenue was attributable to leases with lease rates tied to floating interest rates. Therefore, if interest rates were to decrease, our lease revenue would decrease. In
addition, since our fixed rate leases are based, in part, on prevailing interest rates at the time we enter into the lease, if interest rates decrease, new fixed rate leases we enter into may be at
lower lease rates and our lease revenue will be

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adversely
affected. As of December 31, 2009, if interest rates were to increase by 1%, we would expect to incur an increase in interest expense on our floating rate indebtedness of
approximately $41.9 million on an annualized basis, including the offsetting benefits of interest rate caps currently in effect, and, if interest rates were to decrease any further, we would
expect our lease revenue to decrease by up to $5.8 on an annualized basis.

Our substantial indebtedness incurred to acquire our aircraft and engines requires significant debt service payments.

As of December 31, 2009, our consolidated indebtedness was $4.8 billion and represented 72% of our total assets as of
that date and our interest expense (including the impact of hedging activities) was $92.2 million for the year ended December 31, 2009. Due to the capital intensive nature of our
business and our strategy of expanding our aircraft and engine portfolios, we expect that we will incur additional indebtedness in the future and continue to maintain high levels of indebtedness. If
market conditions worsen and precipitate further declines in aircraft and aviation related markets, our operations may not generate sufficient cash to service our debt which will have a material
adverse impact on us. Our high level of indebtedness:



The concentration of some aircraft and engine models in our aircraft and engine portfolios could adversely affect our business and financial results should any problems
specific to these particular models occur.

Due to the high concentration of Airbus A320 family aircraft and CFM International CFM56 family engines in our aircraft and engine
portfolios, our financial results may be adversely affected if the demand for these aircraft or engine models declines, if they are redesigned or replaced by their manufacturer or if these aircraft or
engine models experience design or technical problems. As of December 31, 2009, 79.8% of the net book value of our aircraft portfolio was represented by Airbus aircraft. Our owned aircraft
portfolio included 11 aircraft types, the five highest concentrations of which together represented 93.6% of our aircraft by net book value. The five highest concentrations were Airbus A320 aircraft,
representing 39.4% of the net book value of our aircraft portfolio, Airbus A330 aircraft, representing 19.5% of the net book value of our aircraft portfolio, Boeing 737 aircraft, representing 14.3% of
the net book value of our aircraft portfolio, Airbus A319 aircraft, representing 11.4% of the net book value of our aircraft portfolio and Airbus A321 aircraft representing 9.0% of net book value of
our aircraft portfolio. No other aircraft type represented more than 10% of our portfolio by net book value. In addition to our significant number of existing Airbus aircraft, as of
December 31, 2009, we have 32 new Airbus A320 family aircraft on order through AerVenture and we have 21 new Airbus A330 wide-body aircraft on order. We also have a significant
concentration of CFM56 engines in our engine portfolio. As of December 31, 2009, 61.2% of the net book value of our engine portfolio was represented by CFM56 engines and 15.4% was represented
by CF6 engines.

Should
any of these aircraft or engine types or aircraft manufactured by Airbus in general encounter technical or other problems, the value and lease rates of those aircraft or engines
will likely decline, and we may be unable to lease the aircraft or engines on favorable terms, if at all. Any

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significant
technical problems with any such aircraft or engine models could result in the grounding of the aircraft or engines.

Any
decrease in the value and lease rates of our aircraft and engines may have a material adverse effect on our financial results.

We are indirectly subject to many of the economic and political risks associated with emerging markets, which could adversely affect our financial results.

A significant number of our aircraft and engines are leased to airlines in emerging market countries. As of December 31, 2009,
we leased 62.6% of our aircraft and 32.5% of our engines, weighted by net book value, to airlines in emerging market countries. The emerging markets in which our aircraft and engines are operated
include China, India, Indonesia, Kazakhstan, Pakistan, Republic of Korea, Thailand, Vietnam, Bulgaria, Czech Republic, Hungary, Russia, Turkey, Brazil, Ecuador, El Salvador, Mexico, Jamaica,
Trinidad & Tobago, Ethiopia, Jordan, Morocco, South Africa, Tunisia and United Arab Emirates. We also may lease aircraft and engines to airlines in other emerging market countries in the
future.

Emerging
market countries have less developed economies that are more vulnerable to economic and political problems and may experience significant fluctuations in gross domestic product,
interest rates and currency exchange rates, as well as civil disturbances, government instability, nationalization and expropriation of private assets and the imposition of taxes or other charges by
government authorities. The occurrence of any of these events in markets served by our lessees and the resulting economic instability that may arise could adversely affect the value of our ownership
interest in aircraft or engines subject to lease in such countries, or the ability of our lessees which operate in these markets to meet their lease obligations. As a result, lessees which operate in
emerging market countries may be more likely to default than lessees that operate in developed countries. In addition, legal systems in emerging market countries may be less developed, which could
make it more difficult for us to enforce our legal rights in such countries. For these and other reasons, our financial results may be materially and adversely affected by adverse economic and
political developments in emerging market countries.

We are exposed to significant regional political and economic risks due to the concentration of our lessees in certain geographical regions which could adversely affect our
financial results.

Through our lessees, we are exposed to local economic and political conditions. Such adverse economic and political conditions include
additional regulation or, in extreme cases, requisition of our aircraft or engines. The effect of these conditions on payments to us will be more or less pronounced, depending on the concentration of
lessees in the region with adverse conditions. The airline industry is highly sensitive to general economic conditions. A recession or other worsening of economic conditions, as currently seen in many
regions, may have a material adverse effect on the ability of our lessees to meet their financial and other obligations under our leases. Furthermore a disruption in the financial markets, terrorist
attack, high fuel prices or a weak local currency may increase the adverse impact on our lessees.

Lease
rental revenues from lessees based in Asia accounted for 25.0% of our lease revenues in 2009. In recent periods, Asia has been one of the highest growth areas for airline passenger
traffic and freight traffic, which has resulted in strong demand for aircraft from the region. In 2009, most of the Asian economies, in particular, China, Korea, Taiwan, India and Japan, experienced
significant economic slowdowns or contractions as a result of the global recession. As a result, according to International Air Transport Association ("IATA"), international airline passenger traffic
in 2009 declined 5.6% compared to 2008 and freight traffic declined 9.2% in December 2009. These declines have adversely affected the financial condition of most airlines in the region. If the global
economic

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downturn
persists, we expect further continued declines in freight and passenger traffic in this region, which would adversely impact aircraft demand and lease rates and our ability to lease and
release our aircraft.

Lease
rental revenues from lessees based in Europe accounted for 50.3% of our lease revenues in 2009. Commercial airlines in Europe face, and can be expected to continue to face,
increased competitive pressures, in part as a result of the deregulation of the airline industry by the European Union and the resulting expansion of low-cost carriers. European countries
generally have relatively strict environmental regulations and traffic constraints that can restrict operational flexibility and decrease aircraft productivity, which could significantly increase
operating costs of all aircraft, including our aircraft, thereby adversely affecting our lessees. The global recession has resulted in economic contraction in most of Europe. As a result, according to
IATA, international airline passenger traffic in 2009 declined 5% compared to 2008 and freight traffic declined 16.1% in 2009. These declines have adversely affected the financial condition of most
airlines in the region. If the global economic downturn persists, we expect continued declines in freight and passenger traffic in this region, which would adversely impact aircraft demand and lease
rates and our ability to lease and release our aircraft.

Lease
rental revenues from lessees based in North America, accounted for 13.7% of our lease revenues in 2009. In the recent past years, a number of North American passenger airlines
filed for bankruptcy and several major U.S. airlines ceased operations altogether, including Aloha, ATA Airlines and Skybus. The global recession has resulted in a significant economic contraction in
North America, and in the United States in particular. As a result, according to IATA, international airline passenger traffic in 2009 declined 5.6% compared to 2008 and freight traffic declined 10.6%
in 2009. These declines have adversely affected the financial condition of most airlines in the region. If the global economic downturn persists, we expect continued declines in freight and passenger
traffic in this region, which would adversely impact aircraft demand and lease rates and our ability to lease and release our aircraft.

Lease
rental revenues from lessees based in Latin America accounted for 6.3% of our lease revenues in 2009. The economies of Latin American countries are generally characterized by lower
levels of foreign investment and greater economic volatility when compared to industrialized countries. Although during 2009 Latin American airlines saw international passenger traffic grow by 0.3%
according to IATA, weakened yields and increasing capacity could still negatively impact the financial health of some Latin American airlines, including our lessees.

Lease
rental revenues from lessees based in Africa/Middle East accounted for 4.7% of our lease revenues in 2009. In recent periods the airline industry in the Middle East experienced
tremendous growth as a result of high oil prices, strong economic growth, significant investment in attracting tourism and gradual deregulation of the airline industry. The rapid traffic growth in the
Middle East continued during the global recession, although it was outpaced by capacity growth as a result of committed capacity growth through a significant order backlog at Airbus and Boeing. The
remaining capacity growth committed by airlines in this region could have an adverse impact on the financial health of some Middle Eastern airlines, including our lessees.

If we or our lessees fail to maintain our aircraft or engines, their value may decline and we may not be able to lease or re-lease our aircraft and engines at
favorable rates, if at all, which would adversely affect our financial results.

We may be exposed to increased maintenance costs for our leased aircraft and engines associated with a lessee's failure to properly
maintain the aircraft or engine or pay supplemental maintenance rent. If an aircraft or engine is not properly maintained, its market value may decline which would result in lower revenues from its
lease or sale. Under our leases, our lessees are primarily responsible for maintaining the aircraft and engines and complying with all governmental requirements applicable

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to
the lessee and the aircraft and engines, including operational, maintenance, government agency oversight, registration requirements and airworthiness directives. Although we require many of our
lessees to pay us a supplemental maintenance rent, failure of a lessee to perform required maintenance during the term of a lease could result in a decrease in value of an aircraft or engine, an
inability to re-lease an aircraft or engine at favorable rates, if at all, or a potential grounding of an aircraft or engine. Maintenance failures by a lessee would also likely require us
to incur maintenance and modification costs upon the termination of the applicable lease, which could be substantial, to restore the aircraft or engine to an acceptable condition prior to sale or
re-leasing. Supplemental maintenance rent paid by our lessees may not be sufficient to fund our maintenance costs. Our lessees' failure to meet their obligations to pay supplemental
maintenance rent or perform required scheduled maintenance or our inability to maintain our aircraft or engines may materially and adversely affect our financial results.

Competition from other aircraft or engine lessors with greater resources or a lower cost of capital than us could adversely affect our financial results.

The aircraft and engine leasing industry is highly competitive. Our competition is comprised of major aircraft leasing companies
including GE Commercial Aviation Services, International Lease Finance Corp., CIT Aerospace, Aviation Capital Group, RBS Aviation
Capital, AWAS, Babcock & Brown, BOC Aviation and AirCastle Advisors, and six major engine leasing companies, including GE Engine Leasing, Engine Lease Finance Corporation, Pratt &
Whitney Engine Leasing LLC, Willis Lease Finance Corporation, Rolls Royce and Partners Finance and Shannon Engine Support Ltd. Some of our competitors are significantly larger and have
greater resources or lower cost of capital than us; accordingly, they may be able to compete more effectively in one or more of our markets. GE Commercial Aviation Services is able to operate with an
integrated business model similar to our own, and therefore directly competes with each aspect of our business.

In
addition, we may encounter competition from other entities such as:



Some
of these competitors have greater operating and financial resources and access to lower capital costs than us. We may not always be able to compete successfully with such
competitors and other entities, which could materially and adversely affect our financial results.

Aircraft have limited economically useful lives and depreciate over time, which can adversely affect our financial condition.

As our aircraft age, they will depreciate and generally the aircraft will generate lower revenues and cash flows. As of
December 30, 2009, 9.4% of our aircraft portfolio by net book value was older than 15 years. If we do not replace our older depreciated aircraft with newer aircraft, our ability to
maintain or increase our revenues and cash flows will decline. In addition, since we depreciate our aircraft for accounting purposes on a straight line basis to the aircraft's estimated residual value
over its estimated

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useful
life, if we dispose of an aircraft for a price that is less than the depreciated book value of the aircraft on our balance sheet, we will recognize a loss on the sale.

The advanced age of some of our aircraft may cause us to incur higher than anticipated maintenance expenses, which could adversely affect our financial results.

As of December 31, 2009, 9.4% of our net book value of our aircraft portfolio related to aircraft that were over 15 years
of age. In general, the costs of operating an aircraft, including maintenance expenditures, increase as the aircraft ages. In addition, older aircraft are typically less fuel-efficient,
noisier and produce higher levels of emissions, than newer aircraft and may be more difficult to re-lease or sell. In a depressed market, the value of older aircraft may decline more
rapidly than the values of newer aircraft and our operating results may be adversely affected. Increased variable expenses like fuel, maintenance and increased governmental regulation could make the
operation of older aircraft or engines less profitable and may result in increased lessee defaults. Incurring higher than anticipated maintenance expenses associated with the advanced age of some of
our aircraft or our inability to sell or re-lease such older aircraft would materially and adversely affect our financial results.

The advent of superior aircraft and engine technology could cause our existing aircraft and engine portfolio to become outdated and therefore less desirable, which could
adversely affect our financial results.

As manufacturers introduce technological innovations and new types of aircraft and engines, some of the aircraft and engines in our
aircraft and engine portfolios may become less desirable to potential lessees. In addition, the imposition of increased regulation regarding stringent noise or emissions restrictions may make some of
our aircraft and engines less desirable in the
marketplace. Any of these risks may adversely affect our ability to lease or sell our aircraft or engines on favorable terms, if at all, which would have a material adverse effect on our financial
results.

If our lessees' insurance coverage is insufficient, it could adversely affect our financial results.

While we do not directly control the operation of any of our aircraft or engines, by virtue of holding title to aircraft, directly or
indirectly, in certain jurisdictions around the world, we could be held strictly liable for losses resulting from the operation of our aircraft and engines, or may be held liable for those losses on
other legal theories. We require our lessees to obtain specified levels of insurance and indemnify us for, and insure against, liabilities arising out of their use and operation of the aircraft or
engine.

However,
following the terrorist attacks of September 11, 2001, aviation insurers significantly reduced the amount of insurance coverage available to airlines for liability to
persons other than employees or passengers for claims resulting from acts of terrorism, war or similar events. At the same time, aviation insurers significantly increased the premiums for third party
war risk and terrorism liability insurance and coverage in general. As a result, the amount of third party war risk and terrorism liability insurance that is commercially available at any time may be
below the amount stipulated in our leases.

Our
lessees' insurance or other coverage may not be sufficient to cover all claims that may be asserted against us arising from the operation of our aircraft and engines by our lessees.
Inadequate insurance coverage or default by lessees in fulfilling their indemnification or insurance obligations will reduce the insurance proceeds that would be received by us in the event we are
sued and are required to make payments to claimants, which could materially and adversely affect our financial results.

Furthermore,
the global recession and financial crisis also had an impact on insurance companies. Our lessee insurance coverage is dependent on the financial condition of insurance
companies. If insurance companies are unable to meet their obligations, it could adversely impact our financial results.

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If our lessees fail to appropriately discharge aircraft liens, we may be obligated to pay the aircraft liens, which could adversely affect our financial results.

In the normal course of their business, our lessees are likely to incur aircraft and engine liens that secure the payment of airport
fees and taxes, custom duties, air navigation charges, including charges imposed by Eurocontrol, landing charges, crew wages, repairer's charges, salvage or other liens that may attach to our aircraft
or engine. These liens may secure substantial sums that may, in certain jurisdictions or for certain types of liens, particularly liens on entire fleets of aircraft, exceed the value of the particular
aircraft or engine to which the liens have attached. Aircraft and engines may also be subject to mechanical liens as a result of routine maintenance performed by third parties on behalf of our
customers. Although the financial obligations relating to these liens are the responsibility of our lessees, if they fail to fulfill their obligations, the liens may attach to our aircraft or engines
and ultimately become our responsibility. In some jurisdictions, aircraft and engine liens may give the holder thereof the right to detain or, in limited cases, sell or cause the forfeiture of the
aircraft or engine.

Until
they are discharged, these liens could impair our ability to repossess, re-lease or sell our aircraft or engines. Our lessees may not comply with their obligations
under their leases to discharge aircraft liens arising during the terms of their leases. If they do not, we may find it necessary to pay the claims secured by such aircraft liens in order to repossess
the aircraft or engine. Such payments would materially and adversely affect our financial results.

In certain countries, an engine affixed to an aircraft may become an accession to the aircraft and we may not be able to exercise our ownership rights over the engine.

In some jurisdictions, an engine affixed to an aircraft may become an accession to the aircraft, so that the ownership rights of the
owner of the aircraft supersede the ownership rights of the owner of the engine. If an aircraft is security for the owner's obligations to a third party, the security interest in the aircraft may
supersede our rights as owner of the engine. This legal principle could limit our ability to repossess an engine in the event of an engine lease default while the aircraft with our engine installed
remains in such jurisdiction. We would suffer a substantial loss if we were not able to repossess engines leased to lessees in these jurisdictions, which would materially and adversely affect our
financial results.

Failure to obtain certain required licenses, certificates and approvals could adversely affect our ability to re-lease or sell aircraft and engines, our ability
to perform maintenance services or to provide cash management services, which would materially and adversely affect our financial condition and results of operations.

Under our leases, we may be required in some instances to obtain specific licenses, consents or approvals for different aspects of the
leases. These required items include consents from governmental or regulatory authorities for certain payments under the leases and for the import, re-export or deregistration of the
aircraft and engines. Subsequent changes in applicable law or administrative practice may increase such requirements. In addition, a governmental consent, once given, might be withdrawn. Furthermore,
consents needed in connection with future re-leasing or sale of an aircraft or engine may not be forthcoming. To perform some of our cash management services and insurance services from
Ireland under our management arrangements with our joint ventures and securitization entities, we require a license from the Irish regulatory authorities, which we have obtained. In addition, to meet
our MRO customers' requirements to maintain certain flight certifications, AeroTurbine requires certificates from the Federal Aviation Administration, or FAA, and the European Aviation Safety Agency,
or EASA, which it has obtained. A failure to maintain these licenses or certificates or obtain any required license or certificate, consent or approval, or the occurrence of any of the foregoing
events, could adversely affect our ability to provide qualifying services or re-lease or sell our

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aircraft
or engines, which would materially and adversely affect our financial condition and results of operations.

Our ability to operate in some countries is restricted by foreign regulations and controls on investments.

Many countries restrict or control foreign investments to varying degrees, and additional or different restrictions or policies adverse
to us may be imposed in the future. These restrictions and controls have limited, and may in the future restrict or preclude, our investment in joint ventures or the acquisition of businesses outside
of the United States, or may increase the cost to us of entering into such transactions. Various governments, particularly in the Asia/Pacific region, require governmental approval before foreign
persons may make investments in domestic businesses and also limit the extent of any such investments. Furthermore, various governments may require governmental approval for the repatriation of
capital by, or the payment of dividends to, foreign investors. Restrictive policies regarding foreign investments may increase our costs of pursuing growth opportunities in foreign jurisdictions,
which could materially and adversely affect our financial results.

There are a limited number of aircraft and engine manufacturers and the failure of any manufacturer to meet its aircraft and engine delivery obligations to us could
adversely affect our financial results.

The supply of commercial jet aircraft is dominated by two airframe manufacturers, Boeing and Airbus, and three engine manufacturers, GE
Aircraft Engines, Rolls Royce plc and Pratt & Whitney. As a result, we are dependent on these manufacturers' success in remaining financially stable, producing products and related
components which meet the airlines' demands and fulfilling their contractual obligations to us. For Airbus, the impact of delayed deliveries of the A380 has resulted in substantial financial losses
for the manufacturer, which subsequently forced Airbus to resort to a significant cost saving program. A strengthening of the Euro against the US dollar will put further cost pressure on Airbus.
Although Boeing is not exposed to the same Euro-US dollar currency risk, announced delays in the Boeing 787 program could potentially lead to similar consequences to those resulting from
the Airbus A380 program delays.

Should
the manufacturers fail to respond appropriately to changes in the market environment or fail to fulfill their contractual obligations, we may
experience:



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We and our customers are subject to various environmental regulations that may have an adverse impact on our financial results.

Governmental regulations regarding aircraft and engine noise and emissions levels apply based on where the relevant airframe is
registered, and where the aircraft is operated. For example, jurisdictions throughout the world have adopted noise regulations which require all aircraft to comply with noise level standards. In
addition, the United States and the International Civil Aviation Organization, or ICAO, have adopted a more stringent set of standards for noise levels which apply to engines manufactured or certified
beginning in 2006. Currently, United States regulations do not require any phase-out of aircraft that qualify with the older standards, but the European Union established a framework for
the imposition of operating limitations on aircraft that do not comply with the newer standards. These regulations could limit the economic life of our aircraft and engines, reduce their value, limit
our ability to lease or sell the non-compliant aircraft and engines or, if engine modifications are permitted, require us to make significant additional investments in the aircraft and
engines to make them compliant.

In
addition to more stringent noise restrictions, the United States, European Union and other jurisdictions are beginning to impose more stringent limits on the emission of nitrogen
oxide, carbon monoxide and carbon dioxide from engines. Though current emissions control laws generally apply to newer engines, new laws could be passed in the future that also impose limits on older
engines, and therefore any new engines we purchase, as well as our older engines, could be subject to existing or new emissions limitations or indirect taxation. For example, the European Union issued
a directive in January 2009 to include aviation within the scope of its greenhouse gas emissions trading scheme, thereby requiring that all flights arriving, departing or flying within any European
Union country, beginning on January 1, 2012, comply with the scheme and surrender allowances for emissions, regardless of the age of the engine used in the aircraft. In the US similar
legislation is currently being proposed. Limitations on emissions such as the one in the European Union could favor younger more fuel efficient aircraft since they generally produce lower levels of
emissions per passenger, which could adversely affect our ability to re-lease or otherwise dispose of less efficient aircraft on a timely basis, at favorable terms, or at all. This is an
area of law that is rapidly changing and as of yet remains specific to certain jurisdictions. While we do not know at this time whether new emission control laws will be passed, and if passed what
impact such laws might have on our business, any future emissions limitations could adversely affect us.

Our
operations are subject to various federal, state and local environmental, health and safety laws and regulations in the United States, including those relating to the discharge of
materials into the air, water and ground, the generation, storage, handling, use, transportation and disposal of hazardous materials, and the health and safety of our employees. A violation of these
laws and regulations or permit conditions can result in substantial fines, permit revocation or other damages. Many of these laws impose liability for clean-up of contamination that may
exist at our facilities (even if we did not know of or were not responsible for the contamination) or related personal injuries or natural resource damages or costs relating to contamination at third
party waste disposal sites where we have sent or may send waste. We cannot assure that we will be in complete compliance with these laws, regulations or permits at all times. We may have liability
under environmental laws or be subject to legal actions brought by governmental authorities or other parties for actual or alleged violations of, or liability under, environmental, health and safety
laws, regulations or permits.

We are the manager for several securitization vehicles and joint ventures and our financial results would be adversely affected if we were removed from these positions.

We are the aircraft manager for various securitization vehicles, joint ventures and third parties and receive annual fees for these
services. In 2009, we generated revenue of $12.1 million from providing aircraft management services to non-consolidated securitization vehicles and joint ventures and third

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parties.
We may be removed as manager by the affirmative vote of a requisite number of holders of the securities issued by the securitization vehicles upon the occurrence of specified events and at
specified times under our joint venture agreements. If we are removed, in the case of our consolidated
securitization vehicles and joint ventures, our expenses would increase since such securitization vehicles or joint ventures would have to hire an outside aircraft manager and, in the case of
non-consolidated securitization vehicles, joint ventures and third parties, our revenues would decline as a result of the loss of our fees for providing management services to such
entities. If we are removed as aircraft manager for any securitization vehicle or joint venture that generates a significant portion of our management fees, our financial results could be materially
and adversely affected.

The departure of senior managers could adversely affect our financial results.

Our future success depends, to a significant extent, upon the continued service of our senior management personnel. For a description
of the senior management team, see "Item 6. Directors, Senior Management and Employees". The departure of senior management personnel could have a material adverse effect on our ability to
achieve our business strategy.

Risks Related to the Aviation Industry

Interruptions in the capital markets could impair our lessees' ability to finance their operations which could prevent the lessees from complying with payment obligations to
us.

The global financial markets have been highly volatile and the availability of credit from financial markets and financial institutions
has been systematically reduced. Many of our lessees have expanded their airline operations through borrowings and are leveraged. These lessees will depend on banks and the capital markets to provide
working capital and to refinance existing indebtedness. To the extent such funding is unavailable or available only at high interest costs or on unfavorable terms, and to the extent financial markets
do not allow equity financing as an alternative, our lessees operations and operating results may be adversely affected and they may not comply with their respective payment obligations to us.

Airline reorganizations could impair our lessees' ability to comply with their lease payment obligations to us.

In recent years, several airlines have filed for protection under their local bankruptcy and insolvency laws and, in 2009, certain
smaller airlines, have gone into liquidation. Historically, airlines involved in reorganizations have undertaken substantial fare discounting to maintain cash flows and to encourage continued customer
loyalty. The bankruptcies have led to the grounding of significant numbers of aircraft, rejection of leases and negotiated reductions in aircraft lease rentals, with the effect of depressing aircraft
market values.

Additional
reorganizations or liquidations by airlines under applicable bankruptcy or reorganization laws or further rejection or abandonment of aircraft by airlines in bankruptcy
proceedings may depress aircraft values and aircraft lease rates. Additional grounded aircraft and lower market values would adversely affect our ability to sell certain of our aircraft or
re-lease other aircraft at favorable rates.

A return to historically high fuel prices or continued rapid fluctuations in fuel prices and high fuel costs could affect the profitability of the aviation industry and our
lessees' ability to meet their lease payment obligations to us, which would adversely affect our financial results.

Fuel costs represent a major expense to companies operating in the aviation industry. Fuel prices have fluctuated widely depending
primarily on international market conditions, geopolitical and environmental events and currency/exchange rates. Fuel costs are not within the control of lessees and significant increases in fuel
costs or hedges that inaccurately assess the direction of fuel costs would materially and adversely affect their operating results.

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Factors
such as natural disasters can significantly affect fuel availability and prices. In August and September 2005, Hurricanes Katrina and Rita inflicted widespread damage along the
Gulf Coast of the United States, causing significant disruptions to oil production, refinery operations and pipeline capacity in the region, and to oil production in the Gulf of Mexico. These
disruptions resulted in decreased fuel availability and higher fuel prices. Also the perception of a structural shortage in oil supplies that resulted in the 2008 oil price boom, and saw fuel prices
increase to historical highs before declining substantially as a result of the 2009 global financial crisis, poses a substantial risk to the airline industry.

A
return to 2008 historically high fuel prices that are not hedged appropriately would have a material adverse impact on airlines' profitability. Swift movements in fuel prices when
airlines have hedged their fuel costs can adversely affect profitability and liquidity as airlines may be required to post cash collateral under hedge agreements. Due to the competitive nature of the
aviation industry, operators may be unable to pass on increases in fuel prices to their customers by increasing fares in a manner that fully off-sets the increased fuel costs they may
incur. In addition, they may not be able to manage this risk by appropriately hedging their exposure to fuel price fluctuations. If fuel prices return to historically high levels due to future
terrorist attacks, acts of war, armed hostilities, natural disasters or for any other reason, they are likely to cause our lessees to incur higher costs and/or generate lower revenues, resulting in an
adverse affect on their financial condition and liquidity. Consequently, these conditions may adversely affect our lessees' ability to make rental and other lease payments, result in lease
restructurings and/or aircraft and engine repossessions, increase our costs of servicing and marketing our aircraft and engines, impair our ability to re-lease them or otherwise dispose of
them on a timely basis at favorable rates or terms, if at all, and reduce the proceeds received for such assets upon any disposition. Any of these events could adversely affect our financial results.

If the effects of terrorist attacks and geopolitical conditions continue to adversely affect the financial condition of the airlines, our lessees might not be able to meet
their lease payment obligations, which would adversely affect our financial results.

As a result of the September 11, 2001 terrorist attacks in the United States and subsequent terrorist attacks abroad, notably in
the Middle East, Southeast Asia and Europe, increased security restrictions were implemented on air travel, costs for aircraft insurance and security measures have increased, passenger and cargo
demand for air travel decreased and operators have faced and continue to face increased difficulties in acquiring war risk and other insurance at reasonable costs. In addition, war or armed
hostilities, or the fear of such events could further exacerbate many of the problems experienced as a result of terrorist attacks. Uncertainty regarding the situation in Iraq, the Israeli/Palestinian
conflict and tension over Iran's and Pakistan's nuclear programs, may lead to further instability in the Middle East. Future terrorist attacks, war or armed hostilities, or the fear of such events,
could further adversely affect the aviation industry and may have an adverse effect on the financial condition and liquidity of our lessees, aircraft and engine values and rental rates, and may lead
to lease restructurings or repossessions, all of which could adversely affect our financial results.

Terrorist
attacks and adverse geopolitical conditions have negatively impacted the aviation industry and concerns about such events could also result in:



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Future
terrorist attacks, acts of war or armed hostilities may cause certain aviation insurance to become available only at significantly increased premiums, which may only provide
reduced amounts of coverage that are insufficient to comply with the levels of insurance coverage currently required by aircraft and engine lenders and lessors or by applicable government regulations,
or to not be available at all.

Although
the Aircraft Transportation Safety and System Stabilization Act adopted in the United States on September 22, 2001 and similar programs instituted by the governments of
other countries provide for limited government coverage under government programs for specified types of aviation insurance, these programs may not continue and governments may not pay under these
programs in a timely fashion.

Future
terrorist attacks, acts of war or armed hostilities are likely to cause our lessees to incur higher costs and to generate lower revenues, which could result in an adverse effect
on their financial condition and liquidity. Consequently, these conditions may affect their ability to make rental and other lease payments to us or obtain the types and amounts of insurance required
by the applicable leases, which may in turn lead to aircraft groundings, may result in additional lease restructurings and repossessions, may increase our cost of re-leasing or selling the
aircraft and may impair our ability to re-lease or otherwise dispose of them on a timely basis at favorable rates or on favorable terms, if at all, and may reduce the proceeds received for
our aircraft and engines upon any disposition. These results could adversely affect our financial results.

The effects of H1N1 or other epidemic diseases may adversely affect the airline industry in the future, which might cause our lessees to not be able to meet their lease
payment obligations to us, which would adversely affect our financial results.

The linking of the 2003 outbreak of SARS to air travel materially and adversely affected passenger demand for air travel at that time.
While the World Heath Organization's travel bans related to SARS were lifted, SARS had a continuing negative affect on the aviation industry, which was evidenced by a sharp reduction in passenger
bookings and the cancellation of many flights after the air travel bans had been lifted. While these effects were felt most acutely in Asia, the effect of SARS on the aviation industry also adversely
affected other areas, including North America.

The
2009 global outbreak of H1N1 had less of an impact on the aviation industry then SARS, but still shows that pandemics of diseases could potentially severely impact the airline
industry in the future. Additional outbreaks or the fear of such events, could adversely affect passenger demand for air travel and the aviation industry. These consequences could result in our
lessees' inability to satisfy their lease payment obligations to us, which in turn would adversely affect our financial results

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Risks Related to Our Organization and Structure

If the ownership of our ordinary shares continues to be highly concentrated, it may prevent minority shareholders from influencing significant corporate decisions and may
result in conflicts of interest.

The Cerberus Funds and accounts affiliated with Cerberus Capital Management, L.P., or Cerberus, own 40.2% of our ordinary
shares. As a result, Cerberus may be able to significantly influence fundamental corporate matters and transactions, including the appointment of our directors, mergers, amalgamations, consolidations
or acquisitions, the sale of all or substantially all of our assets, the amendment of our articles of association and our dissolution. This concentration of ownership may delay, deter or prevent acts
that would be favored by our other shareholders, such as a change of control transaction that would result in the payment of a premium to our other shareholders. In addition, this concentration of
share ownership may adversely affect the trading price of our ordinary shares if the perception among investors exists that owning shares in a company with a significant shareholder is not desirable.

We are a Netherlands public limited liability company ("naamloze vennootschap or N.V.") and it may be difficult for you to obtain or enforce judgments against us or
our executive officers, some of our directors and some of our named experts in the United States.

We were formed under the laws of The Netherlands and, as such, the rights of holders of our ordinary shares and the civil liability of
our directors will be governed by the laws of The Netherlands and our articles of association. The rights of shareholders under the laws of The Netherlands may differ from the rights of shareholders
of companies incorporated in other jurisdictions. Some of the named experts referred to in this annual report are not residents of the United States, and most of our directors and our executive
officers and most of our assets and the assets of our directors are located outside the United States. In addition, under our articles of association, all lawsuits against us and our directors and
executive officers shall be governed by the laws of The Netherlands and must be brought exclusively before the Courts of Amsterdam, The Netherlands. As a result, you may not be able to serve process
on us or on such persons in the United States or obtain or enforce judgments from U.S. courts against them or us based on the civil liability provisions of the securities laws of the United States.
There is doubt as to whether the courts of The Netherlands courts would enforce certain civil liabilities under U.S. securities laws in original actions and enforce claims for punitive damages.

Under
our articles of association, we indemnify and hold our directors, officers and employees harmless against all claims and suits brought against them, subject to limited exceptions.
Under our articles of association, to the extent allowed by law, the rights and obligations among or between us, any of our current or former directors, officers and employees and any current or
former shareholder shall be governed exclusively by the laws of The Netherlands and subject to the jurisdiction of The Netherlands courts, unless such rights or obligations do not relate to or arise
out of their capacities listed above. Although there is doubt as to whether U.S. courts would enforce such provision in an action brought in the United States under U.S. securities laws, such
provision could make judgments obtained outside of The Netherlands more difficult to enforce against our assets in The Netherlands or jurisdictions that would apply Netherlands law.

Our international operations expose us to geopolitical, economic and legal risks associated with a global business.

We conduct our business in many countries, and we anticipate that revenue from our international operations, particularly from the
Asia/Pacific region, will continue to account for a significant amount of our future revenue. There are risks inherent in conducting our business internationally, including:



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These
factors may have a material adverse effect on our financial results.

If our subsidiaries do not make distributions to us we will not be able to pay dividends.

Substantially all of our assets are held by and our revenues are generated by our subsidiaries. While we do not currently, or intend
to, pay dividends, we will be limited in our ability to pay dividends unless we receive dividends or other cash flow from our subsidiaries. Substantially all of our owned aircraft are held through
special purpose subsidiaries or finance structures which borrow funds to finance or refinance the aircraft. The terms of such financings place restrictions on distributions of funds to us. If these
limitations prevent distributions to us or our subsidiaries do not generate positive cash flows, we will be limited in our ability to pay dividends and may be unable to transfer funds between
subsidiaries if required to support our subsidiaries.

Risks Related to Taxation

We may become a passive foreign investment company, or PFIC, for U.S. federal income tax purposes.

We cannot yet determine whether we will be classified as a PFIC for the 2010 fiscal year. The determination as to whether a foreign
corporation is a PFIC is a complex determination based on all of the relevant facts and circumstances and depends on the classification of various assets and income under PFIC rules. In our case, the
determination is further complicated by our potential acquisition of Genesis Lease Limited, the application of the PFIC rules to leasing companies and to joint ventures and financing structures common
in the aircraft leasing industry. It is
unclear how some of these rules apply to us. Further, this determination must be tested annually and our circumstances may change in any given year. We do not intend to make decisions regarding the
purchase and sale of aircraft with the specific purpose of reducing the likelihood of our becoming a PFIC. Accordingly, our business plan may result in our engaging in activities that could cause us
to become a PFIC. If we are or become a PFIC, U.S. shareholders may be subject to increased U.S. federal income taxes on a sale or other disposition of our ordinary shares and on the receipt of
certain distributions and will be subject to increased U.S. federal income tax reporting requirements. See "Item 10. Additional InformationU.S. Tax Considerations" for a more
detailed discussion of the consequences to you if we are treated as a PFIC and a discussion of certain elections that may be available to mitigate the effects of that treatment. We urge you to consult
your own tax advisors regarding the application of the PFIC rules to your particular circumstances.

We may become subject to income or other taxes in jurisdictions which would adversely affect our financial results.

We and our subsidiaries are subject to the income tax laws of Ireland, The Netherlands, Sweden and the United States and other
jurisdictions in which our subsidiaries are incorporated or based. In addition, we or our subsidiaries may be subject to additional income or other taxes in these and other jurisdictions by reason of
the management and control of our subsidiaries, our activities and operations, where our aircraft operate or where the lessees of our aircraft (or others in possession of our aircraft) are located.
Although we have adopted guidelines and operating procedures to ensure our subsidiaries are appropriately managed and controlled to reduce the exposure to such additional taxation, we may

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be
subject to such taxes in the future and such taxes may be substantial. The imposition of such taxes could have a material adverse effect on our financial results.

We may incur current tax liabilities in our primary operating jurisdictions in the future.

We expect to make current tax payments in some of the jurisdictions where we do business in the normal course of our operations. Our
ability to defer the payment of some level of income taxes to future periods is dependent upon the continued benefit of accelerated tax depreciation on our flight equipment in some jurisdictions, the
continued deductibility of external and intercompany financing arrangements and the application of tax losses prior to their expiration in certain tax jurisdictions, among other factors. The level of
current tax payments we make in any of our primary operating jurisdictions could adversely affect our cash flows and have a material adverse effect on our financial results.

We may become subject to additional Irish taxes based on the extent of our operations carried on in Ireland.

Our Irish tax resident subsidiaries are currently subject to Irish corporate income tax on trading income at a rate of 12.5%, on
capital gains at 25%, and on other income at 25%. We expect that substantially all of our Irish income will be treated as trading income for tax purposes in future periods. As of December 31,
2009, we had $355 million of Irish tax losses available to carry forward against our trading income. The continued application of the 12.5% tax rate to trading income generated in our Irish tax
resident subsidiaries and the ability to carry forward Irish tax losses to shelter future taxable trading income depends in part on the extent and nature of activities carried on in Ireland both in
the past and in the future. AerCap Ireland and its Irish tax resident subsidiaries intend to carry on their activities in Ireland so that the 12.5% rate of tax applicable to trading income will apply
and that they will be entitled to shelter future income with tax losses that arose from the same trading activity. We may not continue to be entitled to apply our loss carryforwards against future
taxable trading income in Ireland.

We may fail to qualify for benefits under one or more tax treaties.

We do not expect that our subsidiaries located outside of the United States will have any material U.S. federal income tax liability by
reason of activities we carry out in the United States and the lease of assets to lessees that operate in the United States. However, this conclusion will depend, in part, on continued qualification
for the benefits of income tax treaties between the United States and other countries in which we are subject to tax (particularly The Netherlands and Ireland). That in turn may depend on the nature
and level of activities carried on by us and our subsidiaries in each jurisdiction, the identity of the owners of equity interests in subsidiaries that are not wholly owned and the identities of the
direct and indirect owners of our indebtedness.

The
nature of our activities may be such that our subsidiaries may not continue to qualify for the benefits under income tax treaties with the United States and that may not otherwise
qualify for treaty benefits. Failure to so qualify could result in the imposition of U.S. federal taxes which could have a material adverse effect on our financial results.

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Item 4.    Information on the Company

We are an integrated global aviation company with a leading market position in aircraft and engine leasing, trading and parts sales. We
possess extensive aviation expertise that permits us to extract value from every stage of an aircraft's lifecycle across a broad range of aircraft and engine types. It is our strategy to acquire
aviation assets at attractive prices, lease the assets to suitable lessees, and manage the funding and other lease related costs efficiently. We also provide aircraft management services and perform
aircraft and limited engine MRO services and aircraft disassemblies through our certified repair stations. We believe that by applying our expertise through an integrated business model, we will be
able to identify and execute on a broad range of market opportunities that we expect will generate attractive returns for our shareholders. We are headquartered in The Netherlands and have offices in
Ireland, the United States, Singapore, China and the United Kingdom. with a total of 345 employees, as of December 31, 2009.

We
operate our business on a global basis, providing aircraft, engines and parts to customers in every major geographical region. As of December 31, 2009, we owned 180 aircraft
and 85 engines, managed 45 aircraft, had 53 new aircraft and one new engine on order, had entered into purchase contracts for two aircraft and had executed letters of intent to purchase 11 aircraft
and six engines. We also had entered into sales contracts for five forward order aircraft.

We
lease most of our aircraft to airlines under operating leases. Under an operating lease, the lessee is responsible for the maintenance and servicing of the equipment during the lease
term and the lessor receives the benefit, and assumes the risk of the residual value of the equipment at the end of the lease. As of December 31, 2009, our owned and managed aircraft and
engines were leased to 91 commercial airline and cargo operator customers in 42 countries and managed from our offices in The Netherlands, Ireland, the United States, Singapore, China and the United
Kingdom.

We
have the infrastructure, expertise and resources to execute a large number of diverse aircraft and engine transactions in a variety of market conditions. From January 1, 2007
to December 31, 2009, we have executed over 800 aircraft and engine transactions, including 249 aircraft leases, 140 engine leases, 234 aircraft purchase or sale transactions, 92 engine
purchase or sale transactions and the disassembly of 29 aircraft, 14 airframes and 61 engines. Our teams of dedicated marketing and asset trading professionals have been successful in leasing and
trading our aircraft and engine portfolios. Between January 1, 2007 and December 31, 2009, our weighted average owned aircraft utilization rate was 98.1%. Our utilization rate for
aircraft is calculated based on the average number of months the aircraft are on lease each year. The utilization rate is weighted proportionate to the net book value of the aircraft at the end of the
period measured.

We
were formed as a Netherlands public limited liability company ("naamloze vennootschap or N.V.") on July 10, 2006 to
acquire all of the assets and liabilities of AerCap Holdings C.V., a Netherlands limited partnership. AerCap Holdings C.V. was formed on June 27, 2005 for the purpose of acquiring all of the
shares and certain liabilities of AerCap B.V. (formerly known as debis AirFinance B.V.). On June 30, 2005, AerCap Holdings C.V. acquired all of AerCap B.V.'s shares and the
liabilities owed by AerCap B.V. to its prior shareholders for a total consideration of $1.37 billion, $370.0 million of which was funded with equity contributions from the
Cerberus funds. On April 26, 2006, we acquired all of the existing share capital of AeroTurbine, Inc., an engine trading and leasing and parts sales company. On October 27, 2006,
AerCap Holdings N.V. acquired all of the assets and liabilities of AerCap Holdings C.V. On November 27, 2006, we completed the initial public offering of 26.1 million of our
ordinary shares on The New York Stock Exchange. On August 6, 2007 we completed the secondary offering of 20 million additional ordinary shares on The New York Stock Exchange.

Genesis
Lease Limited, AerCap and AerCap International Bermuda Limited, a wholly-owned subsidiary of AerCap Holdings N.V., entered into an Agreement and Plan of Amalgamation dated
as of

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September 17,
2009, pursuant to which Genesis Lease Limited will amalgamate with AerCap International Bermuda Limited in an all share-for-share transaction. Under the
terms of the Amalgamation Agreement, Genesis shareholders will receive one AerCap ordinary share for every Genesis common share they own. The transaction is subject to approval by Genesis shareholders
and satisfaction of customary closing conditions. All regulatory approvals have been obtained and the registration statement was declared effective by the SEC on February 3, 2010. The Genesis
shareholders are scheduled to vote on the Amalgamation on March 23, 2010. We expect to close the transaction on March 25, 2010. See page 49 for more information relating to
Genesis.

Our
principal executive offices are located at AerCap House, Stationsplein 965, 1117 CE Schiphol, The Netherlands, and our general telephone number is +31
20 655-9655. Our website address iswww.aercap.com. Information contained on our website does not constitute a part of this
annual report. Puglisi & Associates is our authorized representative in the United States. The address of Puglisi & Associates is 850 Liberty Avenue, Suite 204, Newark, DE 19711
and their general telephone number is (302) 738-6680.

Our Business Strategy

Leverage Our Ability to Manage Aircraft and Engines Profitably throughout their Lifecycle. We intend to continue to leverage our integrated business model by selectively:



Our
ability to profitably manage aircraft throughout their lifecycle depends in part on our ability to successfully source acquisition opportunities of new and used aircraft at favorable
prices, as well as secure long-term funding for such acquisitions, lease aircraft and engines at profitable rates, minimize downtime between leases and associated technical expenses and
opportunistically sell aircraft and engines.

Efficiently Manage our Liquidity.As of December 31, 2009, we had access to $3.1 billion of committed undrawn credit
facilities.
However, in response to the global recession, we continue to seek new sources of liquidity and maintain and safeguard our existing cash balances. We strive to maintain a diverse financing strategy,
both in terms of capital providers and structure, through the use of bank debt, securitization structures and export/import financings including European Export Credit Agencies ("ECA")-guaranteed
loans, in order to maximize our financial flexibility. We also leverage our long-standing relationships with the major aircraft financers and lenders to secure access to capital. In
addition, we attempt to maximize the cash flows from our restricted cash entities to those entities which are not cash restricted and continue to pursue the sale of aircraft to generate additional
cash flows.

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Expand Our Aircraft and Engine Portfolio.We intend to grow our portfolio of aircraft and engines through portfolio purchases,
new aircraft
purchases, sale-leasebacks, airline refleetings, acquisitions and other opportunistic transactions that increase our aircraft and engine portfolio. We will rely on our experienced team of
aircraft and engine market professionals to identify and purchase assets we believe are being sold at attractive prices or that we believe will increase in demand and value. In addition, we intend to
continue to rebalance our aircraft and engine portfolios through acquisitions, sales and selective disassemblies to maintain the appropriate mix of aviation assets to meet our customers' needs.

Maintain a Diversified and Satisfied Customer Base.We currently lease our 180 owned aircraft to 56 different airlines in 34
different countries. We
monitor our exposure concentrations by both lessee and country jurisdiction and intend to maintain a well diversified customer base. We believe we offer a quality product, both in terms of asset and
customer service, to all of our customers. We have successfully worked with many airlines to find mutually beneficial solutions to operational and financial challenges. We believe we maintain
excellent relations with our customers. We have been able to achieve a high utilization rate on our aircraft and engine assets as a result of our customer reach and quality product offering.

Enter into Joint Ventures.We intend to continue to leverage our leading market position, extensive knowledge of the aircraft and
engine leasing
markets and aircraft and engine management capabilities by entering into joint ventures that increase our purchasing power, our ability to obtain price discounts on large aircraft orders and reduce
our capital expenditures. We also enter into joint ventures for diversification and risk management purposes. We expect to benefit from greater geographical and product diversity made possible for our
portfolio through the use of joint venture structures. In addition, we expect to generate fees from our joint ventures by providing them with aircraft management services.

Obtain Maintenance Cost Savings.We seek to reduce our aircraft and engine maintenance costs by using aircraft and engine parts
we obtain from the
selective disassembly of acquired and existing airframes and engines. We intend to achieve further maintenance cost savings by using our fleet of serviceable spare engines as replacements for engines
leased on aircraft that are undergoing overhaul and repair services.

Acquire Complementary Businesses.We intend to selectively pursue acquisitions that we believe will enhance our ability to
manage aircraft and
engines profitably throughout their lifecycle. The synergies, economies of scale and operating efficiencies we expect to derive from our acquisitions will allow us to strengthen our competitive
advantages and diversify our sources of revenue.

Aircraft

Overview

We operate our aircraft business on a global basis. As of December 31, 2009, we owned and managed 225 aircraft. We owned 180
aircraft in our aircraft business and managed 45 aircraft. As of December 31, 2009, we leased these aircraft to 71 commercial airline and cargo operator customers in 37 countries. In addition,
as of December 31, 2009, we had 32 new Airbus A320 narrowbody aircraft on order through AerVenture and 21 new Airbus A330 wide-body aircraft on order. We also had entered into a
purchase contract for two new Boeing 737 aircraft and had executed letters of intent for the purchase of 11 additional aircraft. Including all owned and
managed aircraft, aircraft under contract or letter of intent and aircraft in our order book, our portfolio totaled 291 aircraft as of December 31, 2009. As of December 31, 2009, we also
had entered into sales contracts for two A320 aircraft and three A330 forward order aircraft.

Genesis
Lease Limited, AerCap and AerCap International Bermuda Limited, a wholly-owned subsidiary of AerCap Holdings N.V., entered into an Agreement and Plan of Amalgamation dated
as of

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September 17,
2009, pursuant to which Genesis Lease Limited will amalgamate with AerCap International Bermuda Limited in an all share-for-share transaction. Under the
terms of the Amalgamation Agreement, Genesis shareholders will receive one AerCap ordinary share for every Genesis common share they own. The transaction is subject to approval by Genesis shareholders
and satisfaction of customary closing conditions. The Genesis shareholders are scheduled to vote on the Amalgamation on March 23, 2010. We expect to close the transaction on March 25,
2010. The Genesis aircraft portfolio consists of 54 aircraft. See page 49 for more information relating to Genesis.

Over
the life of the aircraft, we seek to increase the returns on our investments by managing our aircraft's lease rates, time off-lease, financing costs and maintenance
costs, and by carefully timing their sale or disassembly. We lease most of our aircraft to airlines under operating leases. Under an operating lease, the lessee is responsible for the maintenance and
servicing of the equipment during the lease term and the lessor receives the benefit, and assumes the risk, of the residual value of the equipment at the end of the lease. Rather than purchase their
aircraft, many airlines operate their aircraft under operating leases because operating leases reduce their capital requirements and costs and allow them to manage their fleet more efficiently. Over
the past 20 years, the world's airlines have increasingly turned to operating leases to meet their aircraft needs.

Our
contract lease terms generally range from 12 months to 144 months. By varying our lease terms, we mitigate the effects of changes in cyclical market conditions at the
time aircraft become eligible for re-lease. In periods of strong aircraft demand, we seek to enter into medium and long-term leases to lock-in the generally higher
market lease rates during those periods, while, in periods of low aircraft demand we seek to enter into short-term leases to mitigate the effects of the generally lower market lease rates
during those periods. In addition, we generally seek to reduce our leasing transition costs by entering into lease extensions rather than taking re-delivery of the aircraft and leasing it
to a new customer. The terms of our lease extensions reflect the market conditions at the time the lease extension is signed and typically contain different terms than the original lease.

Upon
expiration of an operating lease, we extend the lease term, take redelivery of the aircraft, remarket and re-lease it to new lessees, sell the aircraft, or transfer the
aircraft to our disassembly business for sale of its parts. Typically, we re-lease our leased aircraft well in advance of the expiration of the then current lease and deliver the aircraft
to a new lessee in less than
two months following redelivery by the prior lessee. During the period in which an aircraft is in between leases, we typically perform routine inspections and the maintenance necessary to place the
aircraft in the required condition for delivery and, in some cases, make modifications requested by our next lessee.

Our
extensive experience, global reach and operating capabilities allow us to rapidly complete numerous aircraft transactions, which enables us to increase the returns on our aircraft
investments and reduce the time that our aircraft are not generating revenue for us. We successfully executed 501 aircraft transactions between January 1, 2007 and December 31, 2009.

The
following tables set forth information regarding the aircraft transactions we have executed between January 1, 2007 and December 31, 2009, the number of initial leases
and re-leases we entered into, the number of leases we extended, the number of leases we restructured, the number of aircraft we purchased and the number of aircraft we sold. The trends
shown in the table reflect the execution

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of
the various elements of our leasing strategy for our owned and managed portfolio, as described further below.

Owned AircraftActivity

2007

2008

2009

Total/
AverageNew leases on new aircraft


22


45


21


88New leases on used aircraft


10


34


6


50Extensions of lease contracts


12


34


24


70Average lease term for new leases (months)(1)(4)


96.5


123.2


138.3


120.1Average lease term for re-leases (months)(1)


72.0


63.6


42.3


62.3Average lease term for lease extensions (months)(2)


46.5


36.2


18.8


32.0Lease restructurings





1


13


14Aircraft purchases


40


58


41


139Aircraft sales


24


26


9


59Average aircraft utilization rates(3)


98.4
%

97.7
%

98.1
%

98.1
%


(1)Average
lease term of new leases and re-leases contracted during the period. The average lease term for new leases and re-leases is
calculated by reference to the period between the date of contractual delivery to the date of contractual redelivery of the aircraft.(2)Average
lease term for aircraft extensions contracted during the period. The average lease term for lease extensions is calculated by reference to the
period between the date of the original expiration of the lease and the new expiration date.(3)Our
utilization rate for aircraft is calculated based on the average number of months the aircraft are on lease each year. The utilization rate is weighted
proportionate to the net book value of the aircraft at the end of the period measured.(4)Including
the letters of intent signed during 2009, the average lease term is 140 months.


Managed AircraftActivity

2007

2008

2009

Total/
AverageNew leases on new aircraft








1


1New leases on used aircraft


7


12


4


23Extensions of lease contracts


6


6


5


17Average lease term for re-leases (months)(1)


48.0


64.0


53.0


57.2Average lease term for lease extensions (months)(2)


46.0


46.5


26.4


40.4Lease restructurings








4


4Aircraft purchases











Aircraft sales


25


5


6


36


(1)Average
lease term of re-leases contracted during the period. The average lease term for re-leases is calculated by reference to the
period between the date of contractual delivery to the date of contractual redelivery of the aircraft.(2)Average
lease term for aircraft lease extensions contracted during the period. The average lease term for lease extensions is calculated by reference to the
period between the date of the original expiration of the lease and the new expiration date.


The
tables above illustrate how we have implemented our leasing strategies in response to changing trends in the aircraft leasing market. For example, throughout 2007, as strengthening
in the commercial airline sector continued, we lengthened the terms of our owned aircraft leases to lock-in

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the
generally higher lease rates prevailing in the market at the time. During 2008 and 2009, average lease terms for re-leases and extensions have decreased as compared to 2007, in
reaction to the deterioration in lease rates resulting from the global economic slowdown occurring during much of 2008 and 2009. Leases of new aircraft generally have longer terms than used aircraft
which are re-leased. In addition, leases of more expensive aircraft generally have longer lease terms than less expensive aircraft. The average lease term for new leases increased in 2008
and continued to increase in 2009, due to the signing of longer-term lease contracts on new A330 aircraft, which are more expensive than new A320 aircraft, which comprised the bulk of new
leases in years previous to 2008. Lease terms for owned aircraft tend to be longer than for managed aircraft because the average age of our owned fleet is lower than that of our managed fleet.

Before
making any decision to lease an aircraft, we perform a review of the prospective lessee, which generally includes reviewing financial statements, business plans, cash flow
projections, maintenance records, operational performance histories, hedging arrangements for fuel, foreign currency and interest rates and relevant regulatory approvals and documentation. We also
perform on-site credit reviews for new lessees which typically includes extensive discussions with the prospective lessee's management before we enter into a new lease. Depending on the
credit quality and financial condition of the lessee, we may require the lessee to obtain guarantees or other financial support from an acceptable financial institution or other third parties.

We
require our aircraft lessees to provide us with security deposits in order to protect the value of our assets. We require all of our lessees to provide a security deposit for their
performance under their leases, including the return of the aircraft in the specified maintenance condition at the expiration of the lease. The size of the security deposit is normally equal to two
months' rent.

All
of our lessees are responsible for their maintenance costs during the lease term. Based on the credit quality of the lessee, we require some of our lessees to pay supplemental
maintenance rent to cover scheduled major component maintenance costs. If a lessee pays the supplemental maintenance rent, we reimburse them for their maintenance costs up to the amount of their
supplemental maintenance rent payments. Under the terms of our leases, at lease expiration, to the extent that a lessee has paid us more supplemental maintenance rent than we have reimbursed them for
their maintenance costs, we retain the excess rent. In most lease contracts not requiring the payment of supplemental rents, the lessee is required to re deliver the aircraft in a similar maintenance
condition as when accepted under the lease. To the extent that the delivery condition is different from the acceptance condition, there is normally an end of lease compensation adjustment for the
difference at re delivery. As of December 31, 2009, 90 of our 180 owned aircraft provided for the payment of supplemental maintenance rent. Whether a lessee pays supplemental maintenance rent
or not, we usually agree to compensate a lessee for scheduled maintenance on airframe and engines related to the
prior utilization of the aircraft. For this prior utilization, we have normally received compensation from prior lessees.

In
all cases, we require the lessee to reimburse us for any costs we incur if the aircraft is not in the required condition upon redelivery. All of our leases contain extensive
provisions regarding our remedies and rights in the event of a default by the lessee, and also include specific provisions regarding the required condition of the aircraft upon its redelivery.

Our
lessees are also responsible for compliance with all applicable laws and regulations governing the leased aircraft and all related costs. We require our lessees to comply with either
the FAA, EASA or their foreign equivalent standards.

During
the term of our leases, some of our lessees have experienced financial difficulties resulting in the need to restructure their leases. Generally, our restructurings have involved
a number of possible changes to the lease's terms, including the voluntary termination of leases prior to their scheduled expiration, the arrangement of subleases from the primary lessee to a
sublessee, the rescheduling of

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lease
payments and the exchange of lease payments for other consideration, including convertible bonds, warrants, shares and promissory notes. We generally seek to receive these and other marketable
securities from our restructured leases, rather than deferred receivables. In some cases, we have been required to repossess a leased aircraft and in those cases, we have usually exported the aircraft
from the lessee's jurisdiction to prepare it for remarketing. In the majority of these situations, we have obtained the lessee's cooperation and the return and export of the aircraft was completed
without significant delay, generally within two months. In some situations, however, our lessees have not cooperated in returning aircraft and we have been required to take legal action. In connection
with the repossession of an aircraft, we may be required to settle claims on the aircraft or to which the lessee is subject, including outstanding liens on the repossessed aircraft. Since our
inception in 1995, we have repossessed 63 aircraft under defaulted leases with 30 different lessees in 19 jurisdictions.

Aircraft Portfolio and Existing Lessees

Our aircraft portfolio consists primarily of modern, technologically advanced and fuel-efficient narrowbody aircraft, with
a particular concentration of Airbus A320 family. As of December 31, 2009, we owned and managed 225 aircraft. We owned 180 aircraft and managed 45 aircraft. Of the 225 aircraft as of
December 31, 2009, 216 were on operating lease and nine were off-lease (six owned and three managed). Of the nine aircraft off lease at December 31, 2009, one aircraft was
delivered to lessee in the beginning of 2010, four aircraft were under letter of intent for lease and four aircraft were subject to our regular remarketing efforts.
As of December 31, 2009, we leased the 174 owned aircraft on operating leases to 56 commercial airline and cargo operator customers in 34 countries. The weighted average age of our 180 owned
aircraft was 5.7 years as of December 31, 2009. We believe that we own one of the youngest aircraft fleets in the world.

The
following table provides details regarding our aircraft portfolio by type of aircraft as of December 31, 2009:

Managed
portfolioOwned portfolio



Number of
aircraft under
purchase
contract or
letter of intentTotal owned,
Managed and
ordered
aircraftAircraft type

Number of
aircraft
owned

Percentage of
total
net book value

Number of
aircraft

Number of
aircraft on
orderAirbus A300 Freighter


1


0.5
%

0


0


0


1Airbus A319


19


11.4
%

0


5


2


26Airbus A320


75


39.4
%

11


24


7


117Airbus A321


16


9.0
%

1


3


0


20Airbus A330


14


19.5
%

0


21


0


35Boeing 737Classics


14


2.3
%

27


0


0


41Boeing 737(NG)


19


12.0
%

0


0


4


23Boeing 757


11


2.7
%

3


0


0


14Boeing 767


4


2.3
%

2


0


0


6MD-11 Freighter


1


0.6
%

1


0


0


2MD-83


2


0.1
%

0


0


0


2MD 82


4


0.2
%

0


0


0


4Total


180


100.0
%

45


53


13


291


In
July 2008, we entered into an agreement with Airbus Freighter Conversions GmbH ("AFC") whereby AFC would convert 30 of our older Airbus A320s and A321s from passenger to
freighter aircraft. Delivery of the first converted aircraft is expected to take place in 2011, with the remaining 29 aircraft scheduled for conversion between 2012 and 2015. In the future we may
choose to acquire additional freighter aircraft or continue to convert some of our older A320 family passenger aircraft to freighter aircraft.

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Genesis Portfolio

The Genesis aircraft portfolio consists of 54 aircraft. As at December 31, 2009, 53 of those aircraft were in operation on lease
to 35 airlines located in 21 countries. The weighted average remaining lease term of the Genesis total portfolio of aircraft is 4.5 years. The Genesis portfolio includes 47
narrow-body aircraft (Boeing 737-400, 500, 700 and 800, Airbus A319-100, A321-231 and A320-200), three cargo aircraft (Boeing
747-400SF and 767-200PC), two regional jets (ERJ170-100) and two wide-body passenger aircraft (Airbus A330-200 and Boeing
767-300ER).

Aircraft on Order or Subject to Letters of Intent.

We have a large number of new aircraft on order, either directly or indirectly through AerVenture, and have signed letters of intent
for the purchase of a number of additional aircraft.

In
January 2006, AerVenture, placed an order with Airbus for the purchase of 70 new A320 family aircraft, including five aircraft subject to reconfirmation rights. During 2008 and the
first two months of 2009, AerVenture notified Airbus that AerVenture will not take delivery of the five aircraft subject to reconfirmation rights. In 2009 AerVenture added four additional aircraft to
the existing forward order. As of December 31, 2009, 28 aircraft had been delivered, three aircraft were transferred to AerCap, six aircraft were sold and 32 aircraft remain to be delivered
under the agreement. As of December 31, 2009, the 32 remaining aircraft consist of five A319 aircraft, 24 A320 aircraft and three A321 aircraft. The remaining 32 aircraft are scheduled to be
delivered between 2009 through 2013. Included in the 32 aircraft are two delivery positions which have been sold to a third party

In
December 2006, we placed an order with Airbus to acquire 20 new A330 wide-body aircraft. In May 2007, we added an additional ten A330 aircraft to this order. The original
delivery schedule for the 30 A330 aircraft order included delivery of two aircraft in 2008, eight aircraft in 2009, ten in 2010, four in 2011 and six in 2012. In 2008 two A330 aircraft were delivered
of which one was subsequently sold. In 2009 nine A330 aircraft were delivered and two additional A330 aircraft were added to the forward order. As of December 31, 2009, 21 of the aircraft
remained to be delivered pursuant to the agreement of which nine aircraft are scheduled to be delivered in 2010, seven aircraft are scheduled to be delivered in 2011 and five aircraft are scheduled to
be delivered in 2012. Included in the 21 aircraft are three aircraft which have been sold to a third party.

The
following table provides information regarding the letters of intent and purchase and sale agreements in place and executed as of December 31, 2009, excluding the
aforementioned A320 and A330 forward order aircraft.

Aircraft type

Number of
aircraft

Letter of Intent or Agreement

New/UsedPurchasesBoeing 737-800


2

Purchase Agreement

NewBoeing 737-700


4

Letter of Intent

UsedAirbus A320-200


4

Letter of Intent

UsedAirbus A320-200


3

Letter of Intent

New13SalesAirbus A330-300


3

Sale Agreement

NewAirbus A320-200


2

Sale Agreement

New5


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Although
we expect to be able in each case to negotiate and agree on final documentation with respect to our letters of intent, we may not be able to do so and therefore these
transactions may not in fact occur.

The
following table provides information regarding the percentage of lease revenue arising from leases of aircraft to the indicated lessees of our owned aircraft portfolio for the year
ended December 31, 2009.

Lessee

Percentage of
2009 lease revenue(2)TUI Aviation GmbH


12.2
%Aeroflot Russian Airlines


5.9
%Kingfisher Airlines Ltd.


4.8
%Asiana Airlines


3.9
%Wizz Air Hungary Ltd


3.6
%US Airways


3.4
%Thai International.


3.3
%Air France


3.1
%Air Berlin


3.0
%Mexicana


3.0
%Indian Airlines


2.7
%TAP (Transportes Aéreos Portugueses SA)


2.4
%Monarch Airlines


2.4
%Air Astana


2.2
%Air One


2.1
%British Midland


2.0
%Other(1)


40.0
%Total


100
%


(1)Consists
of more than 51 individual lessees. No other lessee accounted for more than 2.0% of our lease revenue in 2009.(2)The
Amalgamation with Genesis Lease Limited will not have a significant impact on the concentration of our aircraft lessees.


We
lease our aircraft to lessees located in numerous and diverse geographical regions and have focused our leasing efforts on the fast growing Asia/Pacific market. The following table
sets forth the

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percentage
of our total lease revenue by country of lessee in which we lease our owned aircraft for the year ended December 31, 2009.

Country

Percentage of
2009 lease revenue(2)Germany


16.3
%USA


7.7
%India


7.5
%Russia


6.9
%UK


5.0
%Thailand


4.3
%Indonesia


4.2
%Korea


3.9
%France


3.7
%Hungary


3.6
%Mexico


3.0
%Italy


2.8
%Portugal


2.4
%Kazakhstan


2.2
%Greece


1.9
%Turkey


1.9
%El Salvador


1.8
%Trinidad & Tobago


1.8
%Pakistan


1.7
%Czech Republic


1.7
%Tunisia


1.6
%Jamaica


1.2
%Canada


1.2
%Iceland


1.2
%Jordan


1.2
%Bulgaria


1.2
%China


1.1
%Belgium


1.1
%Other(1)


5.9
%Total


100
%


(1)No
other country accounted for more than 1.0% of our lease revenue in 2009.(2)The
Amalgamation with Genesis Lease Limited will not have a significant impact on the geographic concentration of our aircraft lessees.


As
of December 31, 2009, leases representing approximately 32.3% of our lease revenues in 2009 were scheduled to expire before December 31, 2012. As of December 31,
2009, of our 180 owned aircraft, 174 aircraft were on lease and had a weighted average remaining lease period per aircraft of 53.9 months and six aircraft were off-lease.

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The
following table sets forth as of December 31, 2009 the number of leases that were scheduled to expire between December 31, 2009 and December 31, 2021 as a
percentage of our 2009 lease revenue.

Year

Percentage of 2009
lease revenue(1)

Number of aircraft
with leases expiring(2)2010


8.2
%

202011


9.5
%

202012


14.6
%

312013


11.5
%

212014


9.7
%

212015


8.2
%

162016


6.1
%

102017


1.8
%

32018


4.2
%

72019


5.4
%

142020


3.5
%

62021


1.6
%

5Total


84.3
%

174


(1)The
percentage of lease revenue reflected in the table above does not sum to 100% because it does not include lease revenue from our owned aircraft that
were sold in 2009 (0.9%), revenue from the six off-lease aircraft (2.9%), revenue from disassembled aircraft (2.9%), revenue from the leasing of engines and parts (7.1%) and lease revenue
from the aircraft subject to lease-in lease-out transactions (1.9%).(2)The
Amalgamation with Genesis Lease Limited will increase the number of aircraft with expiring leases in 2010 to 25, 2011 to 30 and 2012 to 33.


Aircraft Acquisitions and Dispositions

From January 1, 2007 to December 31, 2009, we purchased 139 aircraft and sold 59 aircraft. In addition, as of
December 31, 2009, we had negotiated and entered into contracts to purchase an additional 55 new aircraft and have executed letters of intent to purchase an additional 11 aircraft.

In
January 2006, we, through AerVenture, placed an order with Airbus for up to 70 new A320 family aircraft, including five aircraft subject to reconfirmation rights, originally scheduled
for delivery between 2007 and 2010. During 2008 and the first two months of 2009, AerVenture notified Airbus that AerVenture will not take delivery of the five aircraft subject to reconfirmation
rights. In 2008, three delivery positions were transferred to AerCap for deliveries which took place in 2008. In 2009 AerVenture added four additional aircraft to its forward order. In addition, in
2007 AerVenture entered into an amendment under its Airbus contract pursuant to which delivery positions for seven aircraft under the contract were effectively transferred to a third party buyer, five
of the seven aircraft were delivered to the buyer in 2009. As of December 31, 2009, 32 aircraft remain to be delivered under the forward order from 2010 through 2013. Included in the 32
aircraft are two delivery positions which have been sold to a third party.

In
addition, on May 11, 2007, we signed agreements with Airbus for the purchase of 30 A330s. In 2008 two A330 aircraft were delivered of which one was subsequently sold. In 2009
nine A330 aircraft were delivered and two additional A330 aircraft were added to the forward order. Of the total of 32 A330s subject to the forward orders, 21 aircraft remained to be delivered as of
December 31, 2009. Included in the 21 aircraft are three aircraft which have been sold to a third party.

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Due
to the AeroTurbine Acquisition and our large order book of aircraft, we believe that we are well positioned to take advantage of trading opportunities and expand our aircraft
portfolio. We believe that our global network of strong relationships with airlines, aircraft manufacturers, MRO service providers and commercial and financial institutions gives us a competitive
advantage in sourcing and executing transactions.

We
purchase new and used aircraft directly from aircraft manufacturers, airlines, financial investors and other aircraft leasing and finance companies. The aircraft we purchase are both
on-lease and off-lease, depending on market conditions and the composition of our portfolio. We believe there are additional opportunities to purchase aircraft at attractive
prices from investors in
aircraft assets who lack the infrastructure to manage their aircraft throughout their lifecycle. The buyers of our aircraft include airlines, financial investors and other aircraft leasing companies.
We primarily acquire aircraft at attractive prices in two ways: by purchasing large quantities of aircraft directly from manufacturers to take advantage of volume discounts, and by purchasing
portfolios consisting of aircraft of varying types and ages. In addition, we also opportunistically purchase individual aircraft that we believe are being sold at attractive prices, or that we expect
will increase in demand and or residual value. Through our airline marketing team, which is in frequent contact with airlines worldwide, we are also able to identify attractive acquisition and
disposition opportunities. We sell our aircraft when we believe the market price for the type of aircraft has reached its peak, or to rebalance the composition of our portfolio to meet changing
customer demands.

Our
dedicated portfolio management group consists of marketing, financial, engineering, technical and credit professionals. Prior to a purchase, this group analyzes the aircraft's price,
fit in our portfolio, specification/configuration, maintenance history and condition, the existing lease terms, financial condition and credit worthiness of the existing lessee, the jurisdiction of
the lessee, industry trends, financing arrangements and the aircraft's redeployment potential and value, among other factors.

Our
revolving credit facilities are designed to allow us to rapidly execute our portfolio management strategies by providing us with large scale committed funding to acquire new and used
aircraft, engines and parts. As of December 31, 2009, we had $3.1 billion of committed undrawn credit facilities, which are described below. This amount included $0.7 billion of
an undrawn facility that allows us to purchase aircraft of up to 15 years of age ("UBS warehouse facility"). In July 2008 we closed the $1 billion aircraft securitization, Aircraft Lease
Securitisation II Limited ("ALS II"), which provides committed long term financing to finance up to 30 new A320 family aircraft. As of December 31, 2009, ALS II had taken delivery and provided
financing for 22 new A320 family aircraft, with $0.3 billion remaining commitment to finance the remaining eight aircraft scheduled for delivery through May 2010.

As
of December 31, 2009, we had $2.9 billion of undrawn amounts under borrowing facilities, including ALS II and the UBS warehouse facility, to provide long term financing
for our remaining forward purchase commitments. Of the remaining 32 A320 family aircraft to be delivered as of December 31, 2009, we expect to finance eight aircraft through ALS II and 18
aircraft through the ECA facility or the UBS warehouse facility. Two of the 32 A320 family aircraft are subject to a sales agreement and for four aircraft, scheduled to be delivered in 2013, we do not
have committed funding available as of December 31, 2009. Of the remaining 21 A330 aircraft to be delivered as of December 31, 2009, we expect to finance six aircraft through the ECA
facility, four aircraft through a $272 million facility with China Development Bank Corporation ("CDB") and two through the UBS warehouse facility. Three of the 21 A330 aircraft are subject to
a sales agreement and for the remaining six aircraft, scheduled to be delivered in 2011 and 2012, we do not have committed funding available as of December 31, 2009.

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Joint Ventures

We expect to conduct some of our business in the future through joint ventures. Entering into joint venture arrangements allows us
to:



AerVenture.In December 2005, we established AerVenture and in January 2006, AerVenture placed an order with Airbus for up to 70
new A320 family
aircraft originally scheduled for delivery between 2007 and 2010. Five of the aircraft under the forward order were subject to reconfirmation rights and AerVenture elected to forego delivery of such
aircraft pursuant to such rights. As of December 31, 2009, 32 aircraft remained to be delivered in 2010 and through 2013. Included in the 32 aircraft are two delivery positions which have been
sold to a third party.

In
January 2006, we sold a 50% equity interest in AerVenture Ltd. ("AerVenture"), previously a wholly-owned entity, to LoadAir, a subsidiary of Al Fawares, an investment and
construction company based in Kuwait. AerVenture had contracted with Airbus for the delivery of up to 70 A320 family aircraft, including five aircraft subject to reconfirmation rights, with the intent
of leasing these aircraft to third parties. The joint venture agreement required us to make certain specified equity contributions and additional equity capital available to AerVenture depending on
capital needs in the future. We have entered into agreements to provide management and marketing services to AerVenture in return
for management fees. We determined that AerVenture was a variable interest entity for which we were the primary beneficiary. As such, we continued to consolidate AerVenture in our accounts since its
inception date. In March 2009, LoadAir failed to make $80.0 million in required capital contributions to AerVenture, and as a result, LoadAir lost its voting rights and economic rights in
AerVenture. In addition, all of the directors appointed by LoadAir were automatically removed. In June 2009, the 50% investment of LoadAir was redeemed by AerVenture in conjunction with the sale of a
50% equity interest in AerVenture to a new joint venture partner, Waha Capital PJSC ("Waha Capital"). We have determined that AerVenture continues to be a variable interest entity for which we are the
primary beneficiary. We consolidate AerVenture's financial results in our financial statements.

AerDragon.In May 2006, we signed a joint venture agreement with China Aviation Supplies Holding Company and affiliates of
Crédit
Agricole establishing AerDragon. AerDragon consists of two companies, Dragon Aviation Leasing Company Limited, based in Beijing with a registered capital of $10.0 million and AerDragon Aviation
Partners Limited, based in Ireland with a registered capital of $50.0 million. The registered capital of AerDragon was increased to $90.0 million in 2008. AerDragon is 50% owned by China
Aviation and 25% owned by each of us and Crédit Agricole. Following receipt of the local Chinese approvals required for it to begin operations, AerDragon commenced operations in October
2006. We provide certain aircraft and accounting related services to the joint venture. In the future, one of the main sources of aircraft for AerDragon is likely to be the acquisition of aircraft
through sale leaseback transactions with Chinese airlines. This joint venture enhances our presence in the increasingly important China market and will enhance our ability to lease our aircraft and
engines throughout the entire Asia/Pacific region. As of December 31, 2009, we do not consolidate AerDragon's financial results in our financial statements.

AerDragon
acquired its first two A320 aircraft from us and we guaranteed the performance of AerDragon under the debt secured by one of the two aircraft. AerDragon has signed a forward
order

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agreement
with Airbus for the delivery of 13 A320 family aircraft. As of December 31, 2009 seven of the 13 aircraft were delivered.

AerCap Partners.In June 2008, AerCap Partners I Holding Limited, or AerCap Partners, a 50% joint venture entered into between us
and Deucalion
Aviation Funds, acquired a portfolio of 19 aircraft from TUI Travel. The aircraft acquired are leased back to TUI Travel for varying terms. The aircraft portfolio was financed through a
$425.7 million senior debt facility and $125.6 million of subordinated debt consisting of $62.8 million from us and $62.8 million from our joint venture partner. On the
applicable maturity date under the senior debt facility, which for the first tranche is April 2012 and for the second tranche is April 2015, or, if earlier, in case of an AerCap insolvency, if the
joint venture partners do not make additional subordinated capital available to the joint venture, AerCap can be required to purchase the aircraft from the joint venture for a price equal to the
outstanding senior debt
facility balance plus certain expenses and taxes related to the purchase. We have also entered into agreements to provide management and marketing services to AerCap Partners. We consolidate AerCap
Partner's financial results in our financial statements.

Relationship with Airbus

We have a close and longstanding mutually advantageous relationship with Airbus. Our relationship dates back to our formation, when
Daimler AG (formerly known as Daimler-Benz AG and DaimlerChrysler AG), a principal shareholder of European Aeronautic Defense & Space CompanyEADS N.V., an 80%
shareholder of Airbus, was one of our founding shareholders. In the last 10 years, we, directly or through our joint ventures, have contracted to purchase over 100 commercial jet aircraft from
Airbus. We maintain a wide-ranging dialogue with Airbus seeking mutually beneficial opportunities such as taking delivery of new aircraft on short notice and purchasing used aircraft from
airlines seeking to renew their fleet with Airbus aircraft.

Aircraft Services

We are one of the aircraft industry's leading providers of aircraft asset management and corporate services to securitization vehicles,
joint ventures and other third parties. As of December 31, 2009, we had aircraft management and administration service contracts with seven parties covering over 300 aircraft, two of which
accounted for 82% of our aircraft services revenue in 2009. We categorize our aircraft services into aircraft asset management, administrative services and cash management services. Since we have an
established operating system to provide these services to manage our own aircraft assets, the incremental cost of providing aircraft management services to securitization vehicles, joint ventures and
third parties is limited. Our primary aircraft asset management activities are:



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We
charge fees for our aircraft management services based primarily on a mixture of fixed retainer amounts, but we also receive performance based fees related to the managed aircrafts'
lease revenues or sale proceeds, or specific upside sharing arrangements.

We
provide cash management and administrative services to securitization vehicles and joint ventures. Cash management services consist of treasury services such as the financing,
refinancing, hedging and on going cash management of these vehicles. Our administrative services consist primarily of accounting and secretarial services, including the preparation of budgets and
financial statements, and liaising with, in the case of securitization vehicles, the rating agencies.

Engine and Parts

Overview

On April 26, 2006, we acquired all of the share capital of AeroTurbine, Miami, Florida. AeroTurbine was established in 1997 and
is engaged in engine trading and leasing and the disassembly of airframes and engines for the sale of their component parts to the global aviation industry. We acquired AeroTurbine
to:



In
2008, we successfully completed our planned management transition at AeroTurbine.

Engine Acquisitions and Dispositions

Engine sales and purchases is a core part of our engine and parts business. We believe that our market insight and recurring customer
relationships have been the key factors underlying our success in this business.

We
purchase engines for which there is high market demand or for which we believe demand will increase in the future. We opportunistically sell and exchange engines when we believe that
the realizable value from a sale or exchange will equal or exceed the realizable value that we would expect to receive from leasing or disassembling the engine for the sale of its parts.

In
determining whether to purchase or sell an engine, we assess the value of each engine according to a number of factors, including its hardware composition, airworthiness directive
compliance and service bulletin status, life-limited parts thresholds, historical maintenance documentation, performance data and material certifications.

Our
extensive experience buying, selling, leasing, repairing and disassembling engines for their parts has provided us with in-depth trading and management expertise across
the most popular commercial product lines manufactured by General Electric, CFM International, Pratt & Whitney, Rolls Royce and International Aero Engines. We conduct extensive technical and
maintenance records due diligence before we purchase each engine. Our experienced team of dedicated acquisition and maintenance professionals is composed of licensed aircraft and engine mechanics,
licensed inspectors and aircraft maintenance record specialists who track and document the maintenance history of each engine and airframe that is to be acquired. We are frequently able to correct or
reconstruct engine maintenance records, which can lower the maintenance and acquisition cost of our engines and aircraft. Since commencing operations in 1997, AeroTurbine has sold over 342 engines,
generating revenues in excess of $357 million.

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We typically finance the purchase of engines with borrowed funds and internally generated cash flows. We believe that we are able to react more rapidly to engine
acquisition opportunities than most of our competitors because we have substantial committed financing and can often identify, conduct due diligence and close on prospective acquisitions in less than
one week. We have a $328.0 million committed revolving facility which we can use to fund acquisitions of aircraft, engines and aircraft parts. As of December 31, 2009, we had
$16.5 million of funds available under our revolving facility.

Engine Portfolio

We maintain a diverse inventory of high-demand, modern and fuel-efficient engines. As of December 31,
2009, we owned 85 engines, had one new engine on order and executed letters of intent to purchase an additional six engines. Our engine portfolio consists primarily of CFM56 series engines, one of the
most widely used engines in the commercial aviation market. As of December 31, 2009, 62 of our 85 engines were CFM56 series engines manufactured by CFM International.

We
expect to expand and further diversify our engine portfolio in the future through engine acquisitions and aircraft disassemblies. As our aircraft portfolio ages, and specific aircraft
become
suitable for disassembly, we intend to disassemble such aircraft and remove high demand engines for addition to our engine portfolio, while the remaining airframes and engines will be disassembled for
sale of their component parts. We also have the ability to perform limited MRO services on CFM56 series engines, which comprise most of the engines in our engine portfolio.

Airframe and Engine Disassembly and Parts Sales

Over time, the combined value of a typical aircraft's parts will eventually exceed the value of the aircraft as a whole operating
asset, at which time the aircraft may be retired from service. Traditional aircraft lessors and airlines often retire their aircraft by selling or consigning them to companies that specialize in
aircraft and engine disassembly. The AeroTurbine Acquisition has allowed us to incorporate this valuable revenue source into our integrated business model, which is focused on managing aircraft and
engines throughout their lifecycle.

We
sell airframe parts primarily to aircraft parts distributors and MRO service providers. Airframe parts comprise a broad range of aircraft sub-component groups, including
avionics, hydraulic and pneumatic systems, auxiliary power units, landing gear, interiors, flight control surfaces, windows and panels. We have disassembled 98 aircraft for the sale of their parts and
we believe that we were among the first to voluntarily and strategically disassemble Airbus A320 and A340 family aircraft. Our aircraft disassembly operations are focused on the strategic acquisition
of aircraft with engines that are among the most sought after in the secondary market.

We
are focused on developing long-term supply relationships with clients that perform MRO services on aircraft and engines. Parts sales allow us to increase the value of our
aircraft and engine assets by putting each sub-component (engines, airframes and related parts) to its most profitable use (sale, lease, and/or disassembly for parts sales). In addition,
this capability provides us with an additional cost advantage over our non-integrated competitors by providing us with a critical source of low cost replacement engines and parts to
support the maintenance of our aircraft and engine portfolios.

Prior
to the acquisition of our facility in Goodyear, Arizona, we outsourced the physical disassembly of our airframes into parts, but sold the airframe parts ourselves.

Engine Leasing

Generally, it is uneconomical for aircraft operators with small aircraft fleets to own the quantity of spare engines required to
adequately cover their operational requirements. As a result, aircraft

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operators
often lease spare engines when they send out their engines for off-site MRO. Spare engines are generally leased either directly from engine lessors like us, or from the MRO
service provider that is repairing the aircraft operator's engine. To meet their clients' needs, MRO service providers often lease engines from engine lessors. We are focused on the
short-term engine lease market with a typical lease term of 60 to 180 days. Short-term engine leases tend to have higher lease rates than long-term leases,
because lessees require the engines on short notice and are willing to pay a premium for the flexibility of a short-term lease. Engines subject to short-term leases typically
spend more time off-lease, while they are released with greater frequency.

The
short-term engine leasing market has also developed in part in response to airlines' need to rapidly place aircraft back in service in the event of an unexpected engine
problem. Short-term engine leases provide an alternative to owning spare engines or entering into long-term leases, where the engines can needlessly sit idle for long periods.
To meet clients' urgent engine leasing needs, we typically maintain a substantial inventory of ready-to-lease engines in our off-lease inventory. We believe that
our ability to modify and configure most of our lease portfolio engines is an important competitive advantage, since it can facilitate the rapid installation of our engines onto our customers'
aircraft. In addition, we have the capability to provide limited on-site maintenance and repair for most of our leased engines which, in some circumstances, enables us to facilitate the
return to service of our customers' grounded aircraft.

Our
engine leasing customer base is comprised of a wide variety of airlines and cargo and charter operators, in addition to MRO service providers, and other aircraft and engine leasing
companies. As of December 31, 2009, we had 85 engines on lease to 34 customers located in 20 countries.

We
generally receive a fixed rental payment for our leased engines plus a variable rental payment based on the use of the engine. We typically receive monthly rent for our engines in
advance, and additional rent for actual engine operation in arrears to compensate us for the anticipated future maintenance costs of such engines. Our engine lessees generally provide us with a
security deposit in the amount of two months' rent, in addition to which we receive the first month's rental payment in advance.

On
a few occasions, our engine lessees have experienced financial difficulties, requiring us to terminate or restructure our engine leases with the lessee. Over the past ten years, we
have only had to resort to legal action for the repossession of engines with two of our lease customers.

Airframe MRO Capability

On August 4, 2006, we leased an aircraft MRO facility located in Goodyear, Arizona, acquired certain assets and hired 74 of the
employees working at the facility. In connection with this lease, we acquired an additional repair station which is certified by the FAA and EASA and associated equipment which permits us to perform a
variety of MRO services on commercial transport aircraft, including aircraft heavy maintenance, limited powerplant repair to engine and line components, which includes starters, generators, hydraulic
pumps, and quick engine changes installation. The Goodyear facility includes a 226,000 square foot hangar with the ability to house up to four wide-body aircraft, or eight narrowbody
aircraft for the purpose of performing heavy maintenance repairs, aircraft disassemblies and engine changes. The ramp area outside of the hangar can facilitate both short and long term storage of up
to 14 aircraft. In addition to the hangar and ramp space, there is a significant storage field capable of storing over 120 aircraft with approximately 85 on site at the close of 2009. This transaction
was primarily made to reduce our cost of aircraft disassembly, support the expansion of our airframe parts distribution and airframe MRO business. In 2009, we disassembled six customer aircraft and 13
AeroTurbine aircraft. We also performed heavy airframe maintenance on four AerCap aircraft (two Boeing 737s and two A320 aircraft).

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After
completing a strategic review of its Engine Maintenance & Overhaul business unit segment in 2008, AeroTurbine, Inc. reduced the operations of its engine performance
restoration line. AeroTurbine will maintain current field service, accessories/line replaceable units (LRU) and light engine maintenance capabilities in support of its engine leasing business. As a
result, AeroTurbine reduced its workforce at the Miami, Florida location by approximately 50 positions.

Financing

Our management analyzes sources of financing based on the pricing and other terms and conditions in order to optimize the return on our
investments. We have the ability to access the bank, governmental secured debt, securitization and debt capital markets. We generally do not engage in financing transactions for individual aircraft or
engines. In April 2006, we entered into a $1.0 billion revolving credit facility with a syndicate of banks led by UBS to facilitate our growth strategy and the acquisition of aircraft up to
15 years of age. Simultaneously with the AeroTurbine Acquisition and the closing of the UBS facility, we put in place a $171.0 million facility which was later increased to
$328.0 million that enables us to acquire eligible aircraft engines and parts of any age. These facilities provide us with large scale committed financing that will allow us to rapidly execute
aircraft portfolio purchases.

Once
we obtain sufficient aircraft through our revolving credit facilities, we generally leverage our extensive financing experience and access to the securitization and other
long-term debt markets to obtain long-term, lower cost non-recourse financing. Since 1996, we have raised over $20 billion of funding in the global financial
markets including over $9 billion of funds through initial issuances and refinancings in the aircraft securitization market. In May 2007, we completed a $1.66 billion securitization of
70 aircraft subject to operating leases. This securitization was a refinancing of our 2005 securitization. In the refinancing, we added 28 aircraft to the securitization, including 24 which had been
previously secured by a variety of other debt structures and four which had yet to be purchased by us.

On
June 26, 2008, our consolidated subsidiary ALS II closed a $1 billion aircraft securitization. The securitization will provide long-term
non-recourse funding for 30 new A320 family aircraft which are part of the 70 aircraft order placed by AerVenture. In this securitization, each of the underwriting banks has committed to
make advances to ALS II. The proceeds received by ALS II from the advances and the issuances of certain additional notes, will be used by ALS II to acquire the 30 aircraft which will be leased to
customers of AerCap and AerVenture and to pay certain transaction expenses. As of December 31, 2009, 22 A320 family aircraft have been financed in ALS II.

On
January 5, 2009, we signed a facility agreement with Crédit Agricole and other banks and financial institutions, which contained the negotiated terms pursuant to
which the ECA have agreed to provide guarantees on up to $1.4 billion of financing. This represents a significant portion of the remaining financing needed for the Airbus A330 order delivering
between 2009 and 2012. The ECA consist of Coface in France, Export Credits Guarantee Department in the United Kingdom, and Euler-Hermes in Germany. The loans are to be provided by a syndicate of banks
led by Crédit Agricole acting as Global Arranger and are subject to customary Export Credit Agency requirements. As of December 31, 2009, nine A330 aircraft have been financed
under this facility.

In
March 2009, AerVenture closed a $846.0 million export credit facility with a syndicate of commercial banks led by Crédit Agricole to finance up to 20 Airbus A320
aircraft. Repayment under the credit
facility is guaranteed by the ECA. As of December 31, 2009, one aircraft has been financed under this facility.

In
November 2009, AerCap closed a $272.0 million facility with China Development Bank Corporation to finance four A330 aircraft. Currently no aircraft have been financed under
this facility.

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Subsidiaries

AerCap Holdings N.V.'s major subsidiaries as of December 31, 2009 were AerCap B.V., AeroTurbine Inc.,
AerCap Ireland Ltd., Sunflower Aircraft Leasing Ltd., AerCap Aircraft Leasing XXX B.V., AerCap Dutch Aircraft Leasing I B.V., AerVenture Ltd., Aircraft Lease
Securitisation Ltd., Aircraft Lease Securitisation II Ltd., AerFunding I Ltd. and AerCap Partners I Ltd. AerCap Holdings N.V. has numerous other subsidiaries, none
of which contribute more than 5% of our consolidated revenues or represent more than 5% of our total assets.

Employees

The table below provides the number of our employees at each of our principal geographical locations as of the dates indicated.

Location

December 31,
2007

December 31,
2008

December 31,
2009Amsterdam, The Netherlands


88


87


74Shannon, Ireland


42


44


50Fort Lauderdale, FL


16


17


18Miami, FL(1)


172


128


120Goodyear, AZ(1)


75


83


46Other(2)


9


23


37Total


402


382


345


(1)Employees
located in Miami, Florida and Goodyear, Arizona are employees of AeroTurbine which we acquired in April 2006.(2)We
lease small offices in Shanghai (China), Irvine (TX), Finchampsted (UK) and Singapore.


None
of our employees are covered by a collective bargaining agreement and we believe that we maintain excellent employee relations. Although under Netherlands law we are required to
have a works council for our operations in The Netherlands, our employees have not elected to date to organize a works council. A works council is an employee organization that is granted certain
statutory rights to be involved in certain of the company's decision making processes. The exercise of such rights, however, must take into account the interests of the company and its shareholders.

Organizational Structure

AerCap Holdings N.V. is a holding company which holds directly and indirectly consolidated investments in five main operating
companies, most of which in turn own special purpose entities which hold our aircraft and engine assets. AerCap Holdings N.V. employs 15 people and does not own significant assets outside of
its investments in its subsidiaries. Within the group, we also have several inactive subsidiaries or subsidiaries which are in the process of being liquidated. In addition to AerCap
Holdings N.V.'s ownership in our principal operating subsidiaries, it holds our economic interests in AerCap Partners (19 aircraft) and AerVenture (23 aircraft with 32 aircraft on order) which
in turn holds the economic interests in AerFunding (five aircraft). The five principal operating subsidiaries, their share ownership and the identity of their significant asset owning subsidiaries are
detailed below.

AerCap B.V.is owned 100% by AerCap Holdings N.V. AerCap B.V. is located in Amsterdam, The Netherlands, and through
its special purpose subsidiaries, owns the economic interests in 30 aircraft. AerCap B.V. does not employ any personnel.

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AerCap Group Services B.V.is owned 100% by AerCap Holdings N.V. AerCap Group Services, B.V. is located in Amsterdam,
The Netherlands and had 59 employees as of December 31, 2009. AerCap Group Services B.V. does not own significant assets, but provides a range of management services to other asset
owning companies in the AerCap group of companies.

AerCap Ireland Limitedis indirectly owned 100% by AerCap Holdings N.V. AerCap Ireland Limited is located in Shannon, Ireland and
holds our economic interests in Aircraft Lease Securitisation Limited ("ALS I"), which owns 62 aircraft. In addition, AerCap Ireland Limited owns 23 aircraft and 10 engines directly or through single
aircraft owning special purpose entities and holds the economic interests in AerFunding (six aircraft). AerCap Ireland Limited is also the holder of our joint venture investment in AerDragon. AerCap
Ireland Limited had 47 employees as of December 31, 2009.

AerCap, Inc.is owned 100% by AerCap Holdings N.V. AerCap, Inc. is located in Ft. Lauderdale, Florida. AerCap, Inc.
does not employ any personnel. AerCap, Inc. owns 100% of AerCap Group Services, Inc., which had 18 employees as of December 31, 2009 and provides a range of services to other
asset owning companies in the AerCap group of companies. AerCap, Inc. and its wholly owned subsidiaries (excluding AeroTurbine, Inc.) are the lessees under four lease-in,
lease-out transactions and own one aircraft. AerCap, Inc. owns 100% of the share capital of AeroTurbine, Inc.

AeroTurbine, Incis owned 100% by AerCap, Inc. AeroTurbine, Inc. is located in Miami, Florida, has a facility in Goodyear,
Arizona and employed 202 people as of December 31, 2009. AeroTurbine, Inc. owns 75 engines, 11 aircraft which are designated for disassembly and part-out and an inventory of
aircraft and engine parts for sale.

Competition

The aircraft leasing and sales business is highly competitive. We face competition from aircraft manufacturers, financial institutions,
other leasing companies, aircraft brokers
and airlines. Competition for a leasing transaction is based on a number of factors, including delivery dates, lease rates, term of lease, other lease provisions, aircraft condition and the
availability in the market place of the types of aircraft that can meet the needs of the customer. As a result of our geographical reach, diverse aircraft portfolio and success in remarketing our
aircraft, we believe we are a strong competitor in all of these areas; however, some of our competitors such as GE Commercial Aviation Service, have significantly larger and more diversified aircraft
portfolios and potentially greater access to financing than we do.

The
engine leasing industry is fragmented and is also highly competitive. The engine leasing industry is generally divided into two principal competitive segments: short-term
engine lessors that focus on providing temporary spare engine support while a customer's engine requires off-site MRO (typical 60 to 90 day lease periods) and long-term
engine lessors that focus on providing spare or primary engines to operators as an alternative to ownership of the engine by the lessee (typical lease periods of over one year). Though we are much
more active in the short-term engine leasing segment, we compete in both lease segments. The engine leasing market is primarily comprised of seven major engine leasing companies, including
ourselves. We believe we are a strong competitor, particularly in the short-term engine leasing segment, due to our rapid response in-house MRO capabilities; however, some of
our competitors such as GE Engine Leasing, Shannon Engine Support, Engine Lease Finance, Pratt & Whitney Engine Leasing LLC, Rolls Royce and Partners Finance and Willis Lease Finance,
have significantly larger and more diversified engine portfolios and greater access to financing than we do. We also encounter competition from airlines, financial institutions, engine brokers,
consignment agencies and special purpose entities with investment objectives similar to ours.

The
aircraft parts market is generally divided into two principal segments, consisting of (i) airframe parts sales and (ii) engine parts sales specialists. While we compete
in both markets with a few large companies, we also separately compete with numerous other parts sales organizations, MRO service

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providers,
original equipment manufacturers, commercial airlines and many smaller competitors primarily in the U.S. and Europe. Additionally, there are numerous small brokers and traders that
generally sell from limited inventories and participate in niche markets. Competition in the aircraft and engine parts markets is based on quality, ability to provide a timely and consistent source of
materials, ability to provide a multiple range of desirable products, speed of delivery and pricing.

Insurance

Our lessees are required under our leases to bear responsibility, through an operational indemnity subject to customary exclusions, and
to carry insurance for any liabilities arising out of the operation of our aircraft or engines, including any liabilities for death or injury to persons and damage to property that ordinarily would
attach to the operator of the aircraft or engine.
In addition, our lessees are required to carry other types of insurance that are customary in the air transportation industry, including hull all risks insurance for both the aircraft and each engine
whether or not installed on our aircraft, hull war risks insurance covering risks such as hijacking, terrorism, confiscation, expropriation, nationalization and seizure (in each case at a value
stipulated in the relevant lease which typically exceeds the net book value by 10%, subject to adjustment in certain circumstances) and aircraft spares insurance and aircraft third party liability
insurance, in each case subject to customary deductibles. We are named as an additional insured on liability insurance policies carried by our lessees, and we and/or our lenders are designated as a
loss payee in the event of a total loss of the aircraft or engine. We monitor the compliance by our lessees with the insurance provisions of our leases by securing confirmation of coverage from the
insurance brokers. We also purchase insurance which provides us with coverage when our aircraft or engines are not subject to a lease or where a lessee's policy lapses for any reason. In addition we
carry customary insurance for our property and parts inventory, and we also maintain customary product liability insurance covering liabilities arising from our aircraft, engine and aviation parts
trading activities. Insurance experts advise and make recommendations to us as to the appropriate amount of insurance coverage that we should obtain.

Regulation

While the air transportation industry is highly regulated, since we do not operate aircraft, we generally are not directly subject to
most of these regulations. However, our lessees are subject to extensive regulation under the laws of the jurisdiction in which they are registered and in which they operate. These regulations, among
other things, govern the registration, operation and maintenance of our aircraft and engines. Most of our aircraft are registered in the jurisdiction in which the lessee of the aircraft is certified
as an air operator. Both our aircraft and engines are subject to the airworthiness and other standards imposed by our lessees' jurisdictions of operation. Laws affecting the airworthiness of aviation
assets are generally designed to ensure that all aircraft, engines and related equipment are continuously maintained in proper condition to enable safe operation of the aircraft. Most countries'
aviation laws require aircraft and engines to be maintained under an approved maintenance program having defined procedures and intervals for inspection, maintenance and repair.

In
addition, under our leases, we may be required in some instances to obtain specific licenses, consents or approvals for different aspects of the leases. These required items include
consents from governmental or regulatory authorities for certain payments under the leases and for the import, re-export or deregistration of the aircraft and engines. Also, to perform
some of our cash management services and insurance services from Ireland under our management arrangements with our joint ventures and securitization entities, we are required to have a license from
the Irish regulatory authorities which we have obtained.

With
regard to our MRO activities, we maintain FAA and EASA certifications to conduct limited repair station tasks on engines. These certifications are subject to periodic review, and
involve

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regulatory
oversight and audit of the respective personnel and procedures utilized to conduct MRO services to aircraft, engines and components thereof, so as to ensure that our repair station managers
and mechanics are properly qualified to perform the work for which we are certified. In addition, our MRO facility is subject to environmental regulation regarding, among other things, the use,
storage and disposal of certain hazardous material.

Facilities

In April 2008, we relocated to a 37,000 square foot office facility in Amsterdam, the Netherlands. The new office has been contracted
under a five-year lease which commenced on April 1, 2008. We also lease a 31,000 square foot facility in Shannon, Ireland. We lease our Shannon facility under a 20-year
lease which began January 26, 2000 and have an option to terminate after ten years.

We
also have a ten-year lease, which began on January 1, 2004, for a 150,000 square foot complex located near the Miami International Airport that we use as an office
and warehouse. We lease our Goodyear facility, which includes a 226,000 square foot hangar and substantial additional space for outdoor storage of our aircraft, pursuant to a long-term
lease that expires in 2026.

In
addition to the above facilities, we also lease small offices in Shanghai (China), Irvine (Texas), Finchampsted (UK) and Singapore.

Trademarks

We have registered the "AerCap" name with WIPO International (Madrid) Registry and the Benelux Merkenbureau. The "AerCap" trademark and
the AeroTurbine name have been registered with the United States Patent and Trademark Office.

Litigation

In the ordinary course of our business, we are a party to various legal actions, which we believe are incidental to the operation of
our business. We believe that the outcome of the proceedings to which we are currently a party will not have a material adverse effect on our financial position, results of operations and cash flows.

VASP Litigation

We leased 13 aircraft and three spare engines to Viação Aerea de São Paulo, or VASP, a
Brazilian airline. In 1992, VASP defaulted on its lease obligations and we commenced litigation against VASP to repossess our aircraft. In 1992, we obtained a preliminary injunction for the
repossession and export of 13 aircraft and three spare engines from VASP. We repossessed and exported the aircraft and engines in 1992. VASP appealed this decision. In 1996, the High Court of the
State of Sao Paulo ruled in favor of VASP on its appeal. We were instructed to return the aircraft and engines to VASP for lease under the terms of the original lease agreements. The High Court also
granted VASP the right to seek damages in lieu of the return of the aircraft and engines. Since 1996 we have pursued this case in the Brazilian courts through various motions and appeals. On
March 1, 2006, the Superior Court of Justice dismissed our most recent appeal and on April 5, 2006 a special panel of the Superior Court of Justice confirmed the Superior Court of
Justice decision. On May 15, 2006 we appealed this decision to the Federal Supreme Court. In September 2009 the Federal Supreme Court of Justice presiding over the case ordered an opinion on
our appeal from the office of the Attorney General. This opinion was provided in October 2009. The Attorney General recommends that the extraordinary appeal should be accepted for trial and that the
case would be subjected to a new judgment, before the Superior Court of Justice. The Federal Supreme Court is not bound by the opinion of the Attorney General. However, our external legal counsel
informed us that it would be normal practice to take this opinion into

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consideration.
There are no assurances though whether the Federal Supreme court would rule in accordance with the Attorney General opinion or, if it did, what the outcome of the judgment of the
Superior Court of Justice would be.

On
February 23, 2006, VASP commenced a procedure for the calculation of the award for damages and since then both we and VASP have appointed experts to assist the court in
calculating damages. Our external legal counsel has advised us that even if we lose on the merits, they do not believe that VASP will be able to demonstrate any damages. We continue to actively pursue
all courses of action that may be available to us and intend to defend our position vigorously.

In
July 2006, we commenced a claim for damages in the English courts against VASP based on the damages we incurred as a result of the default by VASP under seven lease obligations where
the leases were governed by English law. VASP was served process in Brazil in October 2007 and in response has filed an application to challenge the jurisdiction of the English court which we will
oppose. VASP has applied to the Court to adjourn the date for the hearing of its application to challenge the jurisdiction of the English Court pending the sale of some of its assets in Brazil. We
have opposed this application and by an order dated March 6, 2008 the English court dismissed VASP's applications. In September 2008, the bankruptcy court in Brazil ordered the bankruptcy of
VASP. VASP has appealed this decision. In December 2008, we filed with the English court an application for default judgment for loss of profits plus accrued interest under seven lease agreements. On
March 16, 2009 we obtained a default judgment in which we have been awarded a claim of approximately $40.0 million for loss of profit plus accrued interest under seven lease agreements.
In order to obtain this award, we will need to begin enforcement proceedings in Brazil against VASP, which is currently in bankruptcy. We cannot assure you as to the outcome of this claim.

In
addition to the claim in the English courts we have also commenced proceedings in the Irish courts against VASP based on the damages we incurred as a result of the default of VASP
under nine lease obligations where the leases were governed by Irish law. The Irish courts have granted an order for service of process, however VASP is currently opposing this service of process in
Brazil.

Our
management, based on the advice of external legal counsel, has determined that it is not necessary to make any provision for this litigation.

Item 4A.    Unresolved Staff Comments

Not applicable.

Item 5.    Operating and Financial Review and Prospects

You should read this discussion in conjunction with our audited consolidated financial statements and the
related notes included in this annual report. Our financial statements are presented in accordance with generally accepted accounting principles in the United States of America, or US GAAP. The
discussion below contains forward looking statements that are based upon our current expectations and are subject to uncertainty and changes of circumstances. See "Item 3. Key
InformationRisk Factors" and "Special Note About Forward Looking Statements".

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Overview

Net income attributable to AerCap Holdings N.V. for the full year 2009 was $165.2 million. Net income attributable to
AerCap Holdings N.V. excluding non-cash charges relating to the mark-to-market of interest rate caps and share based compensation was $150.2 million,
down 24% as compared to $197.8 million in 2008. The after-tax gain relating to the mark-to-market of our interest rate caps was $18.2 million and the
after-tax charge from share based compensation was $3.2 million. The decrease in net income attributable to AerCap Holdings N.V. excluding the non-cash charges
was driven primarily by a reduction in the gain on sale of assets, the impact from airline defaults which occurred in 2008, and cumulative adjustment in 2008 for maintenance income relating to a
change in estimate. Net spread, the difference between basic lease rents and interest expense excluding the mark-to-market of interest rate caps, was $466.0 million for
full year 2009, up 30% as compared to 2008. This measure reflects the increase in leasing income. Total basic and fully diluted earnings per share for the full year 2009 were $1.94. Total basic and
fully diluted earnings per share excluding non-cash charges relating to mark-to-market of interest rate caps of $0.21 per share and share based compensation of
$0.04 per share were $1.77. The number of outstanding shares is currently 85.0 million.

Major Developments in 2009



Genesis Lease Limited

Genesis Lease Limited, AerCap and AerCap International Bermuda Limited, a wholly-owned subsidiary of AerCap Holdings N.V.,
entered into an Agreement and Plan of Amalgamation dated as of September 17, 2009, pursuant to which Genesis Lease Limited will amalgamate with AerCap International Bermuda Limited in an all
share-for-share transaction. Under the terms of the Amalgamation Agreement, Genesis shareholders will receive one AerCap ordinary share for every Genesis common share they own.
The Amalgamation is subject to approval by Genesis shareholders and has been submitted to the shareholders of Genesis Lease Limited for their consideration. The Genesis shareholders are scheduled to
vote on the Amalgamation on March 23, 2010. All regulatory approvals have been obtained and the registration statement was declared effective by the Securities and Exchange Commission on
February 3, 2010. The resulting amalgamated company will continue as a subsidiary of AerCap. After consummation of the Amalgamation, based on AerCap's and Genesis's respective capitalizations
as of September 30, 2009, we expect that the Genesis shareholders will own approximately 29% of AerCap's issued and outstanding ordinary shares.

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The
Genesis aircraft portfolio consists of 54 aircraft. As at December 31, 2009, 53 of those aircraft were in operation on lease to 35 airlines located in 21 countries. The
weighted average remaining lease term of the Genesis total portfolio of aircraft is 4.5 years. The Genesis portfolio includes 47 narrow-body aircraft (Boeing 737-400,
500, 700 and 800, Airbus A319-100, A321-231 and A320-200), three cargo aircraft (Boeing 747-400SF and 767-200PC), two regional jets
(ERJ170-100) and two wide-body passenger aircraft (Airbus A330-200 and Boeing 767-300ER).

Pursuant
to six servicing agreements, GE Capital Aviation Services ("GECAS") provides Genesis with most services related to leasing its 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. Under
the servicing agreements, Genesis is required to pay GECAS a base fee of $150,000 per month for servicing the aircraft in the Initial Portfolio of 41 aircraft. In addition, Genesis is 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.

In
2005, Genesis Funding Limited ("Genesis Funding"), a subsidiary of Genesis completed a securitization transaction that generated net proceeds of approximately $794.3 million
after deducting initial purchasers' discounts and fees. Under the terms of the securitization, a single class of notes were initially issued by Genesis Funding. The notes are direct obligations of
Genesis Funding and are not obligations of, or guaranteed by, Genesis Lease Limited. The proceeds from the sale of the notes, together with the proceeds from a sale of Genesis's equity were used by
Genesis Funding to finance the acquisition of 41 aircraft. Genesis has also entered into a number of other debt facilities, including a $200 million senior secured revolving credit facility, a
$75 million liquidity facility and term loans with a principal amount of $333 million.

Liquidity and Access to Capital

Aircraft and engine leasing is a capital intensive business and we have significant capital requirements. In prior years, we have
achieved positive consolidated cash flow from operations. We have substantial commitments to purchase aircraft under forward order contracts, including through AerVenture. These commitments include
requirements to make pre-delivery payments, as well as the requirement to pay the balance of the purchase price for aircraft on delivery. As of December 31, 2009, our commitments in
2010 and 2011 to make pre-delivery and final delivery payments under our forward purchase commitments was less than/(exceeded) the amounts available under our committed borrowing
facilities, cash in bank, and other related sources, including the completion of the Amalgamation with Genesis, of cash by $160 million and $(17) million, respectively.

Due
to the global recession, there has been a significant decrease in the amount of capital available to finance the purchase of aviation assets, including pre-delivery
payments on forward purchase commitments, which has made it more challenging and expensive for us to obtain new credit. We have historically relied on sales of aircraft as an integral part of our
liquidity strategy in order to meet cash requirements for our operations and committed capital expenditures. As a consequence of the global recession and the corresponding decrease in capital
available to finance the purchase of aviation assets, we have experienced a decrease in demand and offer prices from third-party investors interested in buying our aircraft.

In
order to access the required capital to meet our obligations under our forward purchase commitments, we have completed or have undertaken several initiatives as more fully described
below under "Liquidity and Capital Resources."

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Non Cash Charge for Share based Compensation

The non cash charge for share based compensation, net of tax, was $3.2 million for the full year 2009. The charge relates to
restricted shares and share options in entities that own a substantial percentage of our shares and which are held by members of our senior management, independent directors and a consultant and share
options in AerCap Holdings N.V. which are held by members of our senior management. The charge did not reduce our net equity.

Non Cash Charge for Mark-to-market of Interest Rate Caps

The non cash charge for mark-to-market of interest rate caps, net of tax and non-controlling
interest, was $18.2 million for the full year 2009. We use interest rate caps to hedge against the impact of interest rate increases on variable-rate debt. Our interest rate caps do
not qualify for hedge accounting under US GAAP and the periodic mark-to-market gains or losses of our caps is recorded as interest expense.

Aviation Assets

Our total assets and owned portfolio continue to grow. We acquired $1.9 billion of aviation assets including 41 aircraft and 25
engines in 2009. Total assets were $6.8 billion at December 31, 2009. Total assets increased 25% during 2009 which was driven by the acquisition of aviation assets. The increase in
flight equipment was the result of a net increase of 26 owned aircraft in our portfolio. The number of aircraft in our portfolio was 291 as of December 31, 2009, consisting of 180 owned
aircraft, 45 managed aircraft, 53 aircraft in our order book, two aircraft subject to purchase contract and 11 aircraft under letter of intent. The number of aircraft decreased by six units from 297
since the end of 2008. The decline in aircraft was largely driven by the sale/termination of managed aircraft. The number of engines owned or on contract was 92, an increase of 17 engines from 75
engines owned at the end of 2008.

Factors Affecting our Results

Our results of operations have been affected by a variety of factors, primarily:



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Factors Affecting the Comparability of Our Results

Our Acquisition by Cerberus

On June 30, 2005, AerCap Holdings C.V., a Netherlands partnership owned by Cerberus acquired all of AerCap B.V.'s
(formerly known as debis AirFinance B.V.) shares and $1.8 billion of liabilities owed by AerCap B.V. to its prior shareholders. In accordance with ASC 805, we allocated the
purchase consideration to the assets acquired and liabilities assumed based on their fair values. Since the purchase consideration of $1.4 billion was less than the $1.9 billion combined
carrying value of the liabilities and the equity purchased by Cerberus, the purchase price allocation resulted in lower carrying values for our assets after the 2005 Acquisition. The carrying values
of our assets and liabilities influence our results of operations and, accordingly, the net decrease in asset carrying values, which resulted from the 2005 Acquisition, has resulted in improved
operating performance. The material impacts on our consolidated income statement of the 2005 Acquisition relate to purchase accounting adjustments in our assets which are reflected in lower
depreciation expense and lower cost of goods sold due to reduced net book values, and in lower interest on debt expense. Other than the
corresponding effect on income from continuing operations before provision for income taxes and net income, the 2005 Acquisition did not materially impact any of the other line items in our
consolidated income statement.

AeroTurbine Acquisition

On April 26, 2006, we acquired all of the existing share capital of AeroTurbine, Inc., an engine trading and leasing and
part sales company. We acquired AeroTurbine to implement our strategy of managing aircraft profitably throughout their lifecycle, to diversify our investment in aviation assets and to obtain a more
significant presence in the market for older aircraft equipment. In accordance with ASC 805, we allocated the purchase price paid to the assets acquired and liabilities assumed based on their fair
values. Since the purchase consideration was greater than the combined carrying value of the assets purchased and liabilities assumed by us, the purchase price allocation resulted in higher carrying
values for the AeroTurbine assets as well as $25.6 million of intangible assets and goodwill of $6.8 million at the date of the AeroTurbine Acquisition. The inclusion of AeroTurbine in
our consolidated results has increased our lease and sales revenue and cost of goods sold through the addition of $345.1 million and $408.1 million of combined flight equipment and
inventory in our December 31, 2008 and December 31, 2009 consolidated balance sheets, respectively. In addition, the interest on AeroTurbine's debt has increased our consolidated
interest expense and the inclusion of AeroTurbine's operations has increased our selling, general and administrative expenses. More specifically, for the year ended December 31, 2006, we
recognized $62.4 million of non cash, share based compensation, net of taxes, in our consolidated selling, general and administrative expenses related to restricted shares granted in connection
with the AeroTurbine Acquisition.

Prior
to the AeroTurbine Acquisition, we operated our business as one reportable segment: leasing, financing, sales and management of commercial aircraft. From the date of the
AeroTurbine Acquisition, we manage our business and analyze and report our results on the basis of two business segments: leasing, financing, sales and management of commercial aircraft ("Aircraft")
and leasing, financing and sales of engines and parts ("Engines and Parts").

Stock Compensation Expenses

Our financial results for the year ended December 31, 2006 include a charge of $68.3 million, net of tax of
$10.3 million for non-cash, share based compensation expense related to the vesting of options and restricted stock previously granted or sold by the Cerberus Funds to the owners of
AeroTurbine at the time of its acquisition by us and to members of our senior management, our non-executive directors and one consultant primarily in connection with the 2005 Acquisition.
While we continue to

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recognize
some additional non-cash, share based compensation in connection with these restricted stock and options, as well as options issued in 2007 and 2008 by AerCap
Holdings N.V., future charges are not expected to be of a similar magnitude as those recognized in 2006. Our financial results for the year ended December 31, 2009 include a charge for
share based compensation of $3.9 million ($3.2 million net of tax).

Critical Accounting Policies Applicable to Us

Our Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our consolidated financial
statements, which have been prepared in accordance with US GAAP, and require us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and
accompanying notes. The use of estimates is or could be a significant factor affecting the reported carrying values of flight equipment, investments, trade and notes receivable, deferred tax assets
and accruals and reserves. Our estimates and assumptions are based on historical experiences and currently available information. We utilize professional appraisers and valuation experts, where
possible, to support our estimates, particularly with respect to flight equipment. Despite our best efforts, actual results may differ from our estimates under different conditions, sometimes
materially. A summary of our significant accounting policies is presented in Note 2 to our audited consolidated financial statements included elsewhere in this annual report. Critical
accounting policies and estimates are defined as those that are both most important to the portrayal of our financial condition and results of operations and require our judgments, estimates and
assumptions. Our most critical accounting policies and estimates are described below.

Lease Revenue Recognition

We lease flight equipment principally under operating leases and report rental income on a straight-line basis over the
life of the lease as it is earned. Virtually all of our lease contracts require payment in advance. Rents collected in advance of when they are earned are recorded as deferred revenue on our balance
sheet and recorded as lease revenue as they are earned. Provisions for doubtful notes and accounts receivables are recorded in the income statement when rentals become past-due and the
rentals exceed security deposits held, except where it is anticipated that the lease will end in repossession and then provisions are made regardless of the level of security deposits. Our management
monitors the status of customers and the collectability of their receivables based on factors such as the customer's credit worthiness, payment performance, financial condition and requests for
modifications of lease terms and conditions. Customers for whom collectability is not reasonably assured are placed on non-accrual status and revenue is recorded on a cash basis. When our
management deems the collectability to be reasonably assured, based on the above factors, the customer is removed from non-accrual status and revenue is recognized on an accrual basis. As
described below, revenue from supplemental maintenance rent is recognized when we no longer expect to reimburse maintenance rent to lessees.

Depreciation and Amortization

Flight equipment held for operating leases, including aircraft, is recorded on our balance sheet at cost less accumulated depreciation
and impairment. Aircraft are depreciated over the assets' useful life, which is 25 years from the date of manufacture for substantially all of our aircraft, using the straight-line
method to estimated residual values. Estimated residual values are generally determined to be approximately 15% of the manufacturer's price.

For
older engines purchased primarily for short-term leasing through our AeroTurbine operations, we depreciate current production model engines on a straight-line
basis over a 15-year period from the acquisition date to an estimated residual value. We estimate residual values of current production model engines based on observed current market
prices and management expectations of value trends.

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Out-of-production
engines are depreciated on a straight-line basis over an estimated useful life ranging from five to seven years to an estimated residual value.
For newer engines purchased primarily for longer-term leases, we depreciate over a 30-year period to a residual of 10% of cost. The carrying value of flight equipment that we
designate for disassembly is transferred to our inventory pool and is held for
sale at the time of such designation. We discontinue the depreciation of our flight equipment when it is held as inventory. Differences between our estimates of useful lives and residual values and
actual experience may result in future impairments of aircraft or engines and/or additional gains or losses upon disposal. We review residual values of aircraft and engines periodically based on our
knowledge of current residual values and residual value trends to determine if they are appropriate and record adjustments as necessary.

Intangibles
assets related to customer relationships are amortized over ten years, which is the length of time that we expect to benefit from existing customer relationships. The
amortization in each year is based on the anticipated sales in each year which benefit from such relationships. Our FAA certificate is amortized straight-line over 15 years, the
remaining estimated useful life of the engine type to which the repair station certificate relates.

Inventory

Inventory, which consists primarily of engine parts, is valued at the lower of cost or market value. For purchases of individual parts
and whole engines, the cost is the total cost paid to acquire an engine or aircraft as a whole and is then primarily determined using the specific identification method. For purchases of dismantled
engines, aircraft and bulk inventory, cost is determined using a ratio calculated based on the relationship of the cost of the dismantled engine, aircraft or bulk inventory at the time of purchase to
the total estimated sales value of the dismantled engine, aircraft or bulk inventory at the time of purchase. At the time of sale, this ratio is applied to the sale price of each individual part to
determine its cost. We evaluate this ratio periodically and if necessary we update sales estimates and make prospective adjustments to this ratio. Any inventory identified with an estimated sales
value lower than the carrying value is reduced to the estimated sales value at the time of the review.

Impairments

In accordance with ASC 360, our flight equipment held for operating lease and definite lived intangible assets are evaluated for
impairment when events and circumstances indicate that the carrying amounts of those assets may not be recoverable. We normally evaluate these events and circumstances on an annual basis. However,
given current market conditions the evaluation is performed on a quarterly basis. The review for recoverability includes an assessment of the estimated future cash flows associated with the use of an
asset and its eventual disposition. The assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other groups of assets. In relation to flight
equipment on operating lease, the impairment assessment is performed on each individual aircraft. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than
the carrying amount of the asset, an impairment loss is recognized. The loss is measured as the excess of the carrying amount of the impaired asset over its fair value. Fair value reflects the present
value of cash expected to be received from the asset in the future, including its expected residual value discounted at a rate commensurate with the associated risk. Future cash flows are assumed to
occur under then current market conditions and assume adequate time for a sale between a willing buyer and a willing seller. Expected future lease rates are based on all relevant information
available, including current contracted rates for similar assets, appraisal data and industry trends. Residual value assumptions generally reflect an asset's booked residual, except where more recent
industry information indicates a different value is appropriate. We generally focus our impairment assessment on older aircraft as the cash flows supporting the carrying value of such older

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aircraft
are more dependent upon current lease contracts, which leases are more sensitive to weaknesses in the global economic environment.

As
of December 31, 2009 we owned 180 aircraft of which 53 were older than 15 years. The 53 aircraft had a net book value of $452.4 million which represented 8.6% of
our total flight equipment held for operating lease. The undiscounted cash flows of the 53 aircraft older than 15 years were estimated at $562.4 million, which represents 24% excess
above net carrying value. As of December 31, 2009 four of the 53 aircraft did not pass the recoverability test, and a corresponding impairment of $9.2 million was recognized for these
four aircraft. The remaining 49 aircraft passed the recoverability test with undiscounted cash flows exceeding the carrying value of aircraft between 6% and 126%. The following assumptions drive the
undiscounted cash flows: contracted lease rents per aircraft through current lease expiry, subsequent re-lease rates based on current marketing information and residual values based on
current market transactions. We review and stress test our key assumptions to reflect any observed weakness in the global economic environment. Further deterioration of the global economic environment
and a further decrease of aircraft values might have a negative effect on the undiscounted cash flows of older aircraft and might triggering further impairments.

In
accordance with ASC 360, we evaluate any goodwill and indefinite lived intangible assets for impairment at the reporting unit level each year and upon the occurrence of events or
circumstances
that indicate that the asset may be impaired. We determine the fair value of our reporting units using discounted cash flow and earnings multiples approaches. When our valuation suggests that the fair
value of our reporting unit is less than our net equity, we determine the amount of implied goodwill by allocating the fair value of the reporting unit to our assets and liabilities as we would in
purchase accounting and adjust our goodwill to its implied value through an impairment entry. If we fail to meet our forecasted future cash flows or if weak economic conditions prevail in our primary
markets, the estimated fair values of our reporting unit may be adversely affected, resulting in impairment charges.

Accrued Maintenance Liability

In all of our leases, the lessees are responsible for maintenance and repairs of our flight equipment and related expenses during the
term of the lease. In some instances, we may incur maintenance and repair expenses for off-lease aircraft. We recognize leasing expenses in our income statement for all such expenditures.
In many operating lease and finance lease contracts, the lessee has the obligation to make a periodic payment of supplemental maintenance rent which is calculated with reference to the utilization of
airframes, engines and other major life-limited components during the lease. Up to 2008, we did not recognize such supplemental rent received as revenue, but as an accrued maintenance
liability. In 2008, we changed the methodology we employ to estimate of the amount of maintenance rent we expect to reimburse lessees. The change in estimate arose from the implementation of a new
model used to forecast future maintenance reimbursements.

We
record as revenue all maintenance rent receipts not expected to be repaid to lessees. In these leases, upon lessee presentation of invoices evidencing the completion of qualifying
maintenance on the aircraft or engine, we make a payment to the lessee to help compensate for the cost of the maintenance, up to the maximum of the supplemental maintenance rental payments made with
respect to the lease contract. In shorter-term lease contracts (primarily engine lease contracts) where the terms of the lease are designed specifically to allow us to directly manage the
occurrence, timing and associated cost of qualifying maintenance work on the flight equipment, supplemental rents collected during the lease are recognized as lease revenue. For flight equipment
subject to these shorter-term contracts, we record a charge to leasing expenses at the time maintenance work is performed on the flight equipment.

In
most lease contracts not requiring the payment of supplemental rents, the lessee is required to re-deliver the aircraft in a similar maintenance condition (normal wear and
tear excepted) as when

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accepted
under the lease, with reference to major life-limited components of the aircraft. To the extent that such components are redelivered in a different condition than at acceptance,
there is normally an end-of-lease compensation adjustment for the
difference at redelivery. We recognize receipts of end-of-lease compensation adjustments as lease revenue when received and payments of end-of-lease
adjustments as leasing expenses when paid.

In
addition, we may be obligated to make additional payments to the lessee for maintenance related expenses (lessor maintenance contributions or top-ups) primarily related to
usage of major life-limited components occurring prior to the lease. We record a charge to leasing expenses at the time of the occurrence of a lessor contribution or top-up
payment, except in instances where we have established an accrual as an assumed liability for such payment in connection with the purchase of an aircraft with a lease attached, in which case such
payments are charged against the existing accrual.

For
all of our lease contracts, any amounts of accrued maintenance liability existing at the end of a lease are released and recognized as lease revenue at lease termination. When flight
equipment is sold, the portion of the accrued maintenance liability which is not specifically assigned to the buyer is released from the balance sheet and recognized as sales revenue from the sale of
the flight equipment.

Consolidation

We consolidate all companies in which we have direct or indirect legal or effective control and all variable interest entities for
which we are deemed the primary beneficiary under ASC 810. Consolidated entities include certain joint ventures such as our AerVenture and AerCap Partners joint ventures, our aircraft lease
securitization vehicles, and our AerFunding financing vehicle, but exclude AerDragon. The determination of which entities are variable interest entities and of which variable interest entities we are
the primary beneficiary involves the use of significant estimates, including whether the entity has sufficient equity to finance its activities without additional subordinated financial support and
the expected cash flows to the entity and distributions of those cash flows in the future. We estimate expected cash flows based on the variable interest entities' contractual rights and obligations
as well as reasonable expectations for future business developments. We then adjust these cash flow estimates to simulate possible changes in economic trends which could impact the variable interest
entity to determine which entity will absorb a majority of the variability in order to determine if we are the primary beneficiary of the variable interest entity.

Deferred Income Taxes

We provide for income taxes according to ASC 740. We have significant tax loss carryforwards in certain of our subsidiaries. We
evaluate valuation allowances for tax losses at the individual company level or consolidated tax group level in accordance with the tax law in the
specific jurisdiction. We evaluate the potential for recovery of our tax losses by estimating the future taxable profits expected from each subsidiary and considering prudent and feasible tax planning
strategies. In estimating future taxable profits, we consider all current contracts and assets of the business, as well as a reasonable estimation of future taxable profits achievable by us. If we are
not able to achieve the level of projected taxable profits used in our assessment, and no tax planning strategies are available to us, an additional valuation allowance may be required against our tax
assets with a corresponding charge to our income statement in the future.

Revenues

Our revenues consist primarily of lease revenue from aircraft and engine leases, sales revenue, management fee revenue and interest
revenue.

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Lease Revenue.

Nearly all of our aircraft and engine lease agreements provide for the payment of a fixed, periodic amount of rent or a floating,
periodic amount of rent tied to interest rates during the term of the lease. In the year ended December 31, 2009, 15.3% of our basic aircraft lease revenue was attributable to leases tied to
floating interest rates. In limited circumstances, our leases may require a basic rental payment based partially or exclusively on the amount of usage during a period. In addition, many of our leases
require the payment of supplemental maintenance rent based on aircraft or engine utilization and lease term, or an end-of-lease compensation amount calculated with reference to
the technical condition of the aircraft or engine at lease expiration. The amount of lease revenue we recognize is primarily influenced by five factors:



In
addition to aircraft or engine specific factors such as the type, condition and age of the asset, the lease rates for our leases with fixed rental payments are determined in part by
reference to the prevailing interest rate for a debt instrument with a term similar to the lease term and with a similar credit quality as the lessee at the time we enter into the lease. Many of the
factors described in the bullet points above are influenced by global and regional economic trends, airline market conditions, the supply/demand balance for the type of flight equipment we own and our
ability to remarket flight equipment subject to expiring lease contracts under favorable economic terms.

We
operate our business on a global basis. As of December 31, 2009, we had 180 owned aircraft and 85 owned engines on lease to 91 customers in 42 countries, with only one lessee
accounting for more than 10% of lease revenue for the year ended December 31, 2009. The following table shows the regional profile of our lease revenue for the periods indicated:

AerCap Holdings N.V.Year ended
December 31, 2007

Year ended
December 31, 2008

Year ended
December 31, 2009Europe


39
%

42
%

50
%Asia/Pacific


33
%

28
%

25
%North America/Caribbean


17
%

18
%

14
%Latin America


10
%

10
%

6
%Africa/Middle East


1
%

2
%

5
%Total


100
%

100
%

100
%


The
geographical concentration of our customer base has varied historically, reflecting the opportunities available in particular markets at a given time.

Sales Revenue.

Our sales revenue is generated from the sale of our aircraft, engines, and inventory. The price we receive for our aircraft, engines
and inventory is largely dependent on the condition of the asset being sold, prevailing interest rates, airline market conditions and the supply/demand balance for the type of

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asset
we are selling. The timing of the closing of aircraft and engine sales is often uncertain, as a sale may be concluded swiftly or negotiations may extend over several weeks or months. As a
result, even if sales are comparable over a long period of time, during any particular fiscal quarter or other reporting period we may close significantly more or fewer sale transactions than in other
reporting periods. Accordingly, sales revenue recorded in one fiscal quarter or other reporting period may not be comparable to sales revenue in other periods.

Management Fee Revenue.

We generate management fee revenue through a variety of management services that we provide to non-consolidated aircraft
securitization vehicles and joint ventures and third party owners of aircraft. Our management services include leasing and remarketing services, cash management and treasury services, technical
advisory services and accounting and administrative services. We currently generate almost three quarters of our management fee income from services we provide to two securitization vehicles,
Airplanes Group and AerCo. Since ALS I's results are consolidated in our financial statements, we do not generate any accounting revenue from the services we provide to it.

Interest Revenue.

Our interest revenue is derived primarily from deposit interest on unrestricted and restricted cash balances, interest earned on assets
supporting defeased liabilities and interest recognized on financial instruments we hold, such as notes issued by lessees in connection with lease restructurings and subordinated debt investments in
unconsolidated securitization vehicles or affiliates. The amount of interest revenue we recognize in any period is influenced by the amount of free or restricted cash balances, the scheduled
amortization of defeased liabilities, the principal balance
of financial instruments we hold, contracted or effective interest rates, and movements in provisions for financial instruments which can affect adjustments to valuations or provisions.

Other Revenue.

Our other revenue includes net gains or losses we generate from the sale of aircraft related investments, and reversals of provisions
on such investments such as our subordinated interests in securitization vehicles and notes, warrants or convertible securities issued by our lessees, which we receive from lessees as compensation for
amounts owed to us in connection with lease restructurings. The amount of other revenue recognized in any period is influenced by the number of saleable financial instruments we hold, the credit
profile of the obligor and the demand for such investments in the market at the time. Since there is limited or no market liquidity for some of the securities we receive in connection with lease
restructurings, making the securities difficult to value, and because many of the issuers of the securities are in a distressed financial condition, we may experience volatility in our revenues when
we sell our aircraft related investments due to significant changes in their value.

Operating Expenses

Our primary operating expenses consist of depreciation, interest on debt, other operating expenses, and selling, general and
administrative expenses.

Depreciation.

Our depreciation expense is influenced by the adjusted gross book values of our flight equipment, the depreciable life of the flight
equipment and the estimated residual value of the flight equipment. Adjusted gross book value is the original cost of our flight equipment, including purchase expenses, adjusted for subsequent
capitalized improvements, impairments, and accounting basis adjustments associated with business combinations.

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Cost of Goods Sold.

Our cost of goods sold consists of the net book value of flight equipment, including inventory, sold to third parties at the time of
the sale.

Interest on Debt.

Our interest on debt expense arises from a variety of funding structures and related derivative instruments as described in
"Indebtedness". Interest on debt expense in any period is primarily affected by contracted interest rates, principal amounts of indebtedness, including notional values of derivative
instruments and unrealized mark-to-market gains or losses on derivative instruments.

Other Operating Expenses.

Our other operating expenses consist primarily of operating lease-in costs, leasing expenses and provision for doubtful
notes and accounts receivable.

Our
operating lease-in costs relate to our lease obligations for aircraft we lease from financial investors and sublease to aircraft operators. We entered into all of our
lease-in transactions between 1988 and 1992 and the leases on the remaining four aircraft at December 31, 2009 expire between 2010 and 2014. As described in Note 15 to our
consolidated financial statements included in this annual report, we have established an onerous contract accrual equal to the difference between the present value of our lease expenses and the
sublease revenue we receive, discounted at appropriate discount rates. This amount is amortized monthly as a reduction of operating lease-in costs on a constant yield basis as we meet our
obligations to the aircrafts' legal owners under the applicable leases.

Our
leasing expenses consist primarily of maintenance expenses on our flight equipment, which we incur when our flight equipment is off-lease, lessor maintenance contribution
expenses, technical expenses we incur to monitor the maintenance condition of our flight equipment during a lease, end-of-lease payments, expenses to transition flight
equipment from an expired lease to a new lease contract and non-capitalizable flight equipment transaction expenses.

Our
provision for doubtful notes and accounts receivable consists primarily of provisions we establish to reduce the carrying value of our notes and accounts receivables to estimated
collectible levels.

The
primary factors affecting our other operating expenses are:



Selling, General and Administrative Expenses.

Our principal selling, general and administrative expenses consist of personnel expenses, including salaries, benefits, charges for
share based compensation, professional and advisory costs and office and travel expenses as summarized in Note 20 to our audited consolidated financial statements included in this annual
report. The level of our selling, general and administrative expenses is influenced primarily by our number of employees and the extent of transactions or ventures we pursue which require the
assistance of outside professionals or advisors. Our selling, general and administrative expenses also

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include
the mark-to-market gains and losses for our foreign exchange rate hedges related to our Euro denominated selling, general and administrative expenses.

Provisions for Income Taxes

Our operations are taxable primarily in four main jurisdictions in which we manage our business: The Netherlands, Ireland, the United
States and Sweden. Deferred income taxes are provided to reflect the impact of temporary differences between our US GAAP income from continuing operations before income taxes and our taxable
income. Our effective tax rate has varied significantly year to year from 2006 to 2008. The primary source of temporary differences is the availability of accelerated tax depreciation in our primary
operating jurisdictions. Our effective tax rate in any year depends on the tax rates in the jurisdictions from which our income is derived along with the extent of permanent differences between
US GAAP income from continuing operations before income taxes and taxable income.

We
have substantial tax losses in certain jurisdictions which can be carried forward, which we recognize as tax assets. We evaluate the recoverability of tax assets in each jurisdiction
in each period based upon our estimates of future taxable income in those jurisdictions. If we determine that we are not likely to generate sufficient taxable income in a jurisdiction prior to
expiration, if any, of the availability of tax losses, we establish a valuation allowance against the tax loss to reduce the tax asset to its recoverable
value. We evaluate the appropriate level of valuation allowances annually and make adjustments as necessary. Increases or decreases to valuation allowances can affect our provision for income taxes on
our consolidated income statement and consequently may affect our effective tax rate in a given year.

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Comparative Results of Operations

Results of Operations for the Year Ended December 31, 2009 Compared to the Year Ended December 31, 2008

Year ended
December 31,
2008

Year ended
December 31,
2009(US dollars in millions)RevenuesLease revenue

$
605.3

$
650.6Sales revenue


616.6


324.8Management fee revenue


11.7


12.1Interest revenue


18.5


10.1Other revenue


4.2


5.7Total revenues


1,256.3


1,003.3ExpensesDepreciation


169.4


221.0Asset Impairment


18.8


32.6Cost of goods sold


506.3


248.9Interest on debt


219.2


92.1Operating lease-in costs


14.5


13.1Leasing expenses


55.6


65.1Provision for doubtful accounts receivable


3.7


1.0Selling, general and administrative expenses


128.3


116.2Other expenses





3.0Total expenses


1,115.8


793.0Income from continuing operations before income taxes


140.5


210.3Provision for income taxes


0.4


(3.9
)Net income


140.9


206.4Net loss (income) attributable to non-controlling interest, net of taxes


10.9


(41.2
)Net income attributable to AerCap Holdings N.V.

$
151.8

$
165.2


Revenues.Our total revenues decreased by $253.0 million, or 20.1%, to $1,003.3 million in the year ended
December 31, 2009 from
$1,256.3 million in the year ended December 31, 2008. In the year ended December 31, 2009, we generated $780.4 million of revenue in our aircraft segment and
$222.9 million of revenue in our engine and parts segment, and, in the year ended December 31, 2008, we generated $1,069.8 million of revenue in our aircraft segment and
$186.4 million in our engine and parts segment. The principal categories of our revenue and their variances were:

Year ended
December 31,
2008

Year ended
December 31,
2009

Increase/
(decrease)

Percentage
Difference(US dollars in millions)Lease revenueBasic rents

$
520.8

$
581.9

$
61.1


11.7
%Maintenance rents and end of lease compensation


84.5


68.7


(15.8
)

(18.7
)%Sales revenue


616.6


324.8


(291.8
)

(47.3
)%Management fee revenue


11.7


12.1


0.4


3.4
%Interest revenue


18.5


10.1


(8.4
)

(45.4
)%Other revenue


4.2


5.7


1.5


35.7
%Total

$
1,256.3

$
1,003.3

$
(253.0
)

(20.1
)%


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Basic
rents increased by $61.1 million, or $11.7%, to $$581.9 million in the year ended December 31, 2009 from $520.8 million in the year ended
December 31, 2008. The increase in basic rents was attributable primarily to:



Maintenance
rents and end-of-lease compensation decreased by $15.8 million, or 18.7%, to $68.7 million in the year ended December 31, 2009
from $84.5 million in the year ended December 31, 2008. The decrease in maintenance rents is attributable to a change in the estimate of the amount of the maintenance rent expected to be
reimbursed to lessees implemented in 2008. The change of estimate was due to implementation of an improved model used to forecast future maintenance reimbursements, which resulted in the recording of
additional $12.9 million of maintenance revenue in the year ended December 31, 2008. AerCap records as revenue all maintenance rent receipts not expected to be repaid to lessees.

Sales
revenue decreased by $291.8 million, or 47.3%, to $324.8 million in the year ended December 31, 2009 from $616.6 million in the year ended
December 31, 2008. During 2009 we sold five forward order positions which are recorded in sales revenue on a net basis (i.e. sales price less cost of goods sold) at the time of the
related delivery. The recognition of the net gain on sale as sales revenue and the mix of aircraft types sold was the primary cause of the reduction in sales revenue. In the year ended
December 31, 2009, we sold five A320 forward order positions, two A320 aircraft and two A321 aircraft, whereas in the year ended December 31, 2008 we sold three A330 aircraft, three A321
aircraft, eight A320 aircraft, two Boeing 737 aircraft, one MD83 aircraft, six MD82 aircraft, one DC8 aircraft and two Fokker 100 aircraft.

Management
fee revenue did not materially change in the year ended December 31, 2009 compared to the year ended December 31, 2008.

Interest
revenue decreased by $8.4 million, or 45.4%, to $10.1 million in the year ended December 31, 2009 from $18.5 million in the year ended
December 31, 2008. The decrease was mainly caused by a decrease in deposit rates of interest and the unwinding in December, 2008 of one of our notes receivable in defeasance structures, which
earned $3.2 million interest income in the year ended December 31, 2008.

Other
revenue increased by $1.5 million, or 35.7%, to $5.7 million in the year ended December 31, 2009 from $4.2 million in the year ended December 31,
2008. In the year ended December 31, 2009, we sold shares in an investment in an airline obtained in a restructuring. In the year ended December 31, 2008 we sold an A340 aircraft held in
a joint venture which was 27% owned and recognized small amounts of revenue from the recovery of bankruptcy claims.

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Depreciation.Depreciation increased by $51.6 million, or 30.5%, to $221.0 million in the year ended December 31,
2009 from
$169.4 million in the year ended December 31, 2008 due primarily to the acquisition between January 1, 2008 and December 31, 2009 of 99 aircraft for lease with an aggregate
net book value of $3.1 billion at the date of acquisition, partially offset by the sale of 35 aircraft, during such period, with an aggregate net book value of $0.4 billion at the date
of sale.

Asset impairment.Asset impairment was $32.6 million in the year ended December 31, 2009. Asset impairment was caused
primarily by the
decrease in fair values of inventory parts, older fuel-inefficient aircraft and engines. In the year ended December 31, 2009 the impairment primarily related to ten older A320
aircraft and for six of the ten aircraft the impairment was triggered by the receipt of $21.0 million of end-of-lease payments from the previous lessees. These
end-of-lease payments were recorded as lease revenue during 2009.

Cost of Goods Sold.Cost of goods sold decreased by $257.4 million, or 50.8%, to $248.9 million in the year ended
December 31,
2009 from $506.3 million in the year ended December 31, 2008. The decrease in cost of goods sold is mainly a result of the net gain on sale treatment of the sale of five forward order
positions and the mix of aircraft types sold as described above.

Interest on Debt.Our interest on debt decreased by $127.1 million, or 58.0%, to $92.1 million in the year ended
December 31,
2009 from $219.2 million in the year ended December 31, 2008. The majority of the decrease in interest on debt was caused by:





Other Operating Expenses.Our other operating expenses increased by $5.4 million, or 7.3%, to $79.2 million in the year
ended
December 31, 2009 from $73.8 million in the year ended December 31, 2008. The principal categories of our other operating expenses and their variances were as follows:

Year ended
December 31,
2008

Year ended
December 31,
2009

Increase/
(decrease)

Percentage
difference(US$ in millions)Operating lease-in costs

$
14.5

$
13.1

$
(1.4
)

(9.7
)%Leasing expenses


55.6


65.1


9.5


17.1
%Provision for doubtful accounts receivable


3.7


1.0


(2.7
)

(73.0
)%Total

$
73.8

$
79.2

$
5.4


7.3
%


Our
operating lease-in costs decreased by $1.4 million in the year ended December 31, 2009, due to the changes in the lease terms associated with one aircraft.

Our
leasing expenses increased by $9.5 million, or 17.1%, to $65.1 million in the year ended December 31, 2009 from $55.6 million in the year ended
December 31, 2008. The increase is primarily

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due
to a $15.5 million increase of expenses in relation to airline defaults which occurred in 2008 plus an increase in lessor contributions and transition expenses.

Our
provision for doubtful accounts receivable decreased by $2.7 million, or 73.0%, to $1.0 million in the year ended December 31, 2009 from $3.7 million in
the year ended December 31, 2008. We did not have defaults that significantly affected the provision for doubtful accounts receivable in the year ended December 31, 2008 and 2009.

Selling, General and Administrative Expenses.Our selling, general and administrative expenses decreased by $12.1 million,
or 9.4%, to
$116.2 million in the year ended December 31, 2009 from $128.3 million in the year ended December 31, 2008. This decrease is due primarily to a decline in recorded USD
expenses for selling, general and administrative expenses paid in EUR as a result of a decrease in the average USD/EUR exchange rate between the nine month comparable periods, along with an employee
workforce reduction.

Other expenses.Our other expenses of $3.0 million in the year ended December 31, 2009, reflect an accrual for the
costs incurred by
the Company in connection with the proposed all share Amalgamation between AerCap Holdings N.V. and Genesis Lease Limited.

Income From Continuing Operations Before Income Taxes.For the reasons explained above, our income from continuing operations
before income taxes
increased by $69.8 million, or 49.7%, to $210.3 million in the year ended December 31, 2009 from $140.5 million in the year ended December 31, 2008.

Provision for Income Taxes.Our provision for income taxes increased by $4.3 million to a charge of $3.9 million in the
year ended
December 31, 2009 from a benefit of $0.4 million in the year ended December 31, 2008. Our effective tax rate was negative 1.9% (charge) for the year ended December 31, 2009
and was positive 0.3% (income) for the year ended December 31, 2008. Our effective tax rate in any year is impacted by the mix of operations among our different tax jurisdictions. In the fourth
quarter of the year ended December 31, 2007, we completed a corporate tax restructuring that resulted in more deductible expenses in one of our higher tax rate jurisdictions which positively
impacted the mix of our profits for income tax purposes in the years ended December 31, 2008 and 2009. Our income from continuing operations before income taxes per tax jurisdiction and
associated tax rates can be summarized as follows:

Year ended December 31,2008

2009

Tax rateTax jurisdictionThe Netherlands

$
7,825

$
(119,080
)

25.5
%Ireland


55,357


162,520


12.5
%United States of America


(26,058
)

(2,612
)

37.3
%Sweden


1,968


912


19.0
%Isle of Man


101,400


113,185


0.0
%Income arising from non taxable items (permanent differences)





55,340


0.0
%$
140,492

$
210,265Non-recoverable losses Netherlands (valuation allowance)

$


$
57,827


25.5
%


We
expect that our corporate tax restructuring will enable us to achieve a similar division of our income from continuing operations before income taxes per tax jurisdiction for the year
ended December 31, 2010.

Non-controlling interest, net of tax.Our non-controlling interest net of tax decreased by $52.1 million to
$41.2 million net income attributable to non-controlling interests in the year ended

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December 31,
2009 from $10.9 loss attributable to non-controlling interests million in the year ended December 31, 2008, due primarily to the increase in net income of our
consolidated joint ventures AerVenture and AerCap Partners.

Net Income attributable to AerCap Holdings N.V..For the reasons explained above, our net income attributable to AerCap
Holdings N.V.
increased by $13.4 million, or 8.8%, to $165.2 million in the year ended December 31, 2009 from $151.8 million in the year ended December 31, 2008.

Results of Operations for the Year Ended December 31, 2008 Compared to the Year Ended December 31, 2007

Year ended
December 31,
2007

Year ended
December 31,
2008(US dollars in millions)RevenuesLease revenue

$
554.2

$
605.3Sales revenue


558.3


616.6Management fee revenue


14.3


11.7Interest revenue


29.7


18.5Other revenue


20.0


4.2Total revenues


1,176.5


1,256.3ExpensesDepreciation


141.1


169.4Asset Impairment





18.8Cost of goods sold


432.2


506.3Interest on debt


234.8


219.2Operating lease-in costs


20.2


14.5Leasing expenses


18.8


55.6Provision for doubtful accounts receivable


0.7


3.7Selling, general and administrative expenses


116.3


128.3Total expenses


964.1


1,115.8Income from continuing operations before income taxes


212.4


140.5Provision for income taxes


(25.1
)

0.4Net income


187.3


140.9Net loss attributable to non-controlling interest, net of taxes


1.2


10.9Net income attributable to AerCap Holdings N.V.

$
188.5

$
151.8


Revenues.Our total revenues increased by $79.8 million, or 6.8%, to $1,256.3 million in the year ended
December 31, 2008 from
$1,176.5 million in the year ended December 31, 2007. In the year ended December 31, 2008, we generated $1,069.8 million of revenue in our aircraft segment and
$186.4 million of revenue in our engine and parts segment, and, in the year ended December 31, 2007,

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we
generated $980.0 million of revenue in our aircraft segment and $196.5 million in our engine and parts segment. The principal categories of our revenue and their variances were:

Year ended
December 31,
2007

Year ended
December 31,
2008

Increase/
(decrease)

Percentage
Difference(US dollars in millions)Lease revenueBasic rents

$
494.2

$
520.8

$
26.6


5.4
%Maintenance rents and end of lease compensation


60.0


84.5


24.5


40.8
%Sales revenue


558.3


616.6


58.3


10.4
%Management fee revenue


14.3


11.7


(2.6
)

(18.2
)%Interest revenue


29.7


18.5


(11.2
)

(37.7
)%Other revenue


20.0


4.2


(15.8
)

(79.0
)%Total

$
1,176.5

$
1,256.3

$
79.8


6.8
%


Basic
rents increased by $26.6 million, or 5.4%, to $520.8 million in the year ended December 31, 2008 from $494.2 million in the year ended
December 31, 2007. The increase in basic rents was attributable primarily to:





Maintenance
rents and end-of-lease compensation increased by $24.5 million, or 40.8%, to $84.5 million in the year ended December 31, 2008
from $60.0 million in the year ended December 31, 2007. The increase in maintenance rents is attributable, in part, to a change in the estimate of the amount of maintenance rent expected
to be reimbursed to lessees. The change in estimate is due to the implementation of a new model used to forecast future maintenance reimbursements, which was implemented on July 1, 2008. AerCap
records as revenue all maintenance rent receipts not expected to be repaid to lessees. In the six month period between July 1, 2008 and December 31, 2008, AerCap recorded
$20.8 million as maintenance revenue as a result of the change in estimate. Of the $20.8 million, $12.9 million was recorded on July 1, 2008 as a cumulative adjustment
relating to all prior periods and $7.8 million was recognized in relation to maintenance rents collected from lessees during the six months between July 1, 2008 and December 31,
2008. The remaining increase was largely due to the termination of leases due to airline defaults which resulted in the recording of maintenance rents.

Sales
revenue increased by $58.3 million, or 10.4%, to $616.6 million in the year ended December 31, 2008 from $558.3 million in the year ended
December 31, 2007. The increase in sales revenue is mainly a result of the mix of aircraft types sold. In the year ended December 31, 2008, we

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sold
three A330 aircraft, three A321 aircraft, eight A320 aircraft, two Boeing 737 aircraft, one MD83 aircraft, six MD82 aircraft, one DC8 aircraft and two Fokker 100 aircraft, whereas in the year
ended December 31, 2007, we sold four A330 aircraft, two A321 aircraft, one A300 aircraft, two Boeing 737 aircraft, one Boeing 767 aircraft, one Boeing 757 aircraft, one MD87 aircraft, one DHC8
aircraft and ten Fokker 100 aircraft.

Management
fee revenue decreased by $2.6 million, or 18.2%, to $11.7 million in the year ended December 31, 2008 from $14.3 million in the year ended
December 31, 2007. The decrease in management fee revenue was attributable primarily to the expiry of a management fee agreement when we sold the last remaining aircraft under management on
behalf of the aircraft owner.

Interest
revenue decreased by $11.2 million, or 37.7%, to $18.5 million in the year ended December 31, 2008 from $29.7 million in the year ended
December 31, 2007. The decrease was mainly caused by (i) the loss of interest income from a subordinated investment in an aircraft securitization (AerCo) which ceased paying interest on
such subordinated investment in the first quarter of 2007, (ii) the elimination of a fair value adjustment which was amortizing to interest income when we extinguished the underlying guarantee
liability at a discount to its carrying value, and (iii) a decrease in deposit rates of interest.

Other
revenue decreased by $15.8 million, or 79.0%, to $4.2 million in the year ended December 31, 2008 from $20.0 million in the year ended
December 31, 2007. In the year ended December 31, 2008, we sold an A340 aircraft held in a joint venture which was 27% owned. The sale resulted in other revenue of $3.2 million.
The remaining $1.0 million of other revenue recognized in the year ended December 31, 2008 was related to the recovery of bankruptcy claims. In the year ended December 31, 2007,
we recognized a gain of $10.7 million when we extinguished a guarantee liability in relation to the purchase of a portfolio of nine aircraft and three engines and a gain of $9.1 million
upon the sale of the rights associated with a claim from a lessee.

Depreciation.Depreciation increased by $28.3 million, or 20.0%, to $169.4 million in the year ended December 31,
2008 from
$141.1 million in the year ended December 31, 2007 due primarily to the acquisition of 98 new aircraft between January 1, 2007 and December 31, 2008 with a book value at
the time of the acquisition of $2.3 billion. The increase was partially offset by the sale of 50 aircraft during the same period with a book value at the time of sale of $0.9 billion.

Asset impairment.Asset impairment was $18.8 million in the year ended December 31, 2008. Asset impairment was caused
primarily by the
decrease in fair values of inventory parts, older fuel-inefficient aircraft and engines. In the year ended December 31, 2008 we impaired four MD82 aircraft, six engines which were
off-lease and our parts inventory.

Cost of Goods Sold.Cost of goods sold increased by $74.2 million, or 17.2%, to $506.3 million in the year ended
December 31,
2008 from $432.1 million in the year ended December 31, 2007. The increase in cost of goods sold is mainly a result of the mix of aircraft types sold described above.

Interest on Debt.Our interest on debt decreased by $15.6 million, or 6.6%, to $219.2 million in the year ended
December 31,
2008 from $234.8 million in the year ended December 31, 2007. The majority of the decrease in interest on debt was caused by:



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Other Operating Expenses.Our other operating expenses increased by $34.1 million, or 85.9%, to $73.8 million in the
year ended
December 31, 2008 from $39.7 million in the year ended December 31, 2007. The principal categories of our other operating expenses and their variances were as follows:

Year ended
December 31,
2007

Year ended
December 31,
2008

Increase/
(decrease)

Percentage
difference(US$ in millions)Operating lease-in costs

$
20.2

$
14.5

$
(5.7
)

(28.2
)%Leasing expenses


18.8


55.6


36.8


195.7
%Provision for doubtful accounts receivable


0.7


3.7


3.0


428.6
%Total

$
39.7

$
73.8

$
34.1


85.9
%


Our
operating lease-in costs decreased primarily due to the purchase of four aircraft in the year ended December 31, 2008 and four aircraft in the year ended
December 31, 2007, which were previously subject to head leases and the termination of those leases.

Our
leasing expenses increased by $36.8 million, or 195.7%, to $55.6 million in the year ended December 31, 2008 from $18.8 million in the year ended
December 31, 2007. The increase is primarily due to more transitions of aircraft from expiring leases to new leases and three airline defaults involving nine of our aircraft in 2008. In the
year ended December 31, 2008, we incurred leasing expenses totaling approximately $15 million related to the three lessee defaults.

Our
provision for doubtful accounts receivable increased by $3.0 million, or 428.6%, to $3.7 million in the year ended December 31, 2008 from $0.7 million in
the year ended December 31, 2007. The increase is primarily due to more airline defaults in 2008 as compared to 2007.

Selling, General and Administrative Expenses.Our selling, general and administrative expenses increased by $12.0 million,
or 10.3%, to
$128.3 million in the year ended December 31, 2008 from $116.3 million in the year ended December 31, 2007, due primarily to (i) the increase in the US Dollar/Euro
exchange rate, which resulted in a $5.4 million increase and (ii) severance payments of $2.9 million made as a result of redundancies of senior executives.

Income From Continuing Operations Before Income Taxes.For the reasons explained above, our income from continuing operations
before income taxes
decreased by $71.9 million, or 33.9%, to $140.5 million in the year ended December 31, 2008 from $212.4 million in the year ended December 31, 2007.

Non-controlling interest net of taxes.Our non-controlling interest, net of tax increased by $9.7 million to
$10.9 million in the year ended December 31, 2008 from $1.2 million in the year ended December 31, 2007, due primarily to a $21.7 million recognition of non cash
mark-to-market charges on derivatives in our 50% joint ventures AerCap Partners and AerVenture.

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Provision for Income Taxes.Our provision for income taxes decreased by $25.6 million to a benefit of $0.4 million in
the year ended
December 31, 2008 from a charge $25.1 million in the year ended
December 31, 2007. Our effective tax rate was positive 0.3% (income) for the year ended December 31, 2008 and was negative 11.8% (a charge) for the year ended December 31, 2007.
Our effective tax rate in any year is impacted by the mix of operations among our different tax jurisdictions. In the fourth quarter of the year ended December 31, 2007, we completed a
corporate tax restructuring that resulted in more deductible expenses in one of our higher tax rate jurisdictions which positively impacted the mix of our profits for income tax purposes in the year
ended December 31, 2008. In addition, the most significant portion of charges related to airline defaults and impairments occurred in higher tax rate jurisdictions and the most significant
portion of pre-tax earnings occurred in lower tax rate jurisdictions. Our income from continuing operations before income taxes per tax jurisdiction and associated tax rates can be
summarized as follows:

Year ended December 31,2007

2008

Tax rateTax jurisdictionThe Netherlands

$
62,220

$
7,825


25.5
%Ireland


84,614


55,357


12.5
%United States of America


14,014


(26,058
)

37.3
%Sweden


978


1,968


19.0
%Isle of Man


50,595


101,400


0.0
%$
212,421

$
140,492


We
expect that our corporate tax restructuring will enable us to achieve a similar division of our income from continuing operations before income taxes per tax jurisdiction for the year
ended December 31, 2009.

Net Income attributable to AerCap Holdings N.V..For the reasons explained above, our net income attributable to AerCap
Holdings N.V.
decreased by $36.7 million, or 19.4%, to $151.8 million in the year ended December 31, 2008 from $188.5 million in the year ended December 31, 2007.

Liquidity and Capital Resources

Aircraft and engine leasing is a capital intensive business and we have significant capital requirements. In prior years, we have
achieved positive consolidated cash flow from operations. However, as discussed below, a large portion of our operating cash flows and the net proceeds from aircraft sales are restricted in restricted
cash entities designed to repay indebtedness related to assets included in such structures. Our restricted cash entities include ALS I, ALS II, AerCap Partners and AeroTurbine. Since a significant
portion of our capital requirements are not in restricted cash entities, our management analyzes our cash flow at both the consolidated and unconsolidated levels to determine if we have sufficient
cash flow available to finance our capital needs in our restricted cash entities and outside our restricted cash entities. Our ability to increase our unconsolidated cash flow depends upon the cash
flow from operations at the holding company level, non-restricted cash entities and the various restricted cash entities, and also upon the restrictions in the borrowing documents of the
restricted cash entities.

Historically,
we have satisfied our liquidity requirements through several sources, including:



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We
have substantial commitments to purchase aircraft under forward order contracts, including through AerVenture. These commitments include requirements to make pre-delivery
payments, as well as the requirement to pay the balance of the purchase price for aircraft on delivery. As of December 31, 2009, we had 55 aircraft under forward purchase commitments, with 36
scheduled to be delivered in 2010 and 10 scheduled to be delivered in 2011. In addition, as of December 31, 2009, we had entered into sales contracts for two of the A320 family aircraft and
three A330 aircraft scheduled
to be delivered in the remainder of 2010. As of December 31, 2009, our commitments in 2010 and 2011 to make pre-delivery and final delivery payments under our forward purchase
commitments was less than/(exceeded) the amounts available under our committed borrowing facilities, cash in bank, and other related sources of cash, including the completion of the Amalgamation with
Genesis, by $160 million and $(17) million, respectively.

As
a result, we will need to raise additional funds though a combination of (i) accessing committed debt facilities, (ii) securing additional financing for
pre-delivery and final delivery payment obligations, (iii) selling aircraft or other aircraft investments, including participations in our joint ventures, (iv) accessing
restricted cash in our cash restricted entities, and (v) if necessary, generating proceeds from potential capital market transactions.

Due
to the global recession, there has been a significant decrease in the amount of capital available to finance the purchase of aviation assets, including pre-delivery
payments on forward purchase commitments, which has made it more challenging and expensive for us to obtain new credit.

We
have historically relied on sales of aircraft as an integral part of our liquidity strategy in order to meet cash requirements for our operations and committed capital expenditures.
As a consequence of the global recession and the corresponding decrease in capital available to finance the purchase of aviation assets, we have experienced a decrease in demand and offer prices from
third-party investors interested in buying our aircraft. In addition, insolvencies of aircraft operators and sales of aircraft portfolios by aircraft lessors have and are expected to increase the
supply of aircraft available for sale, negatively affecting prices for aircraft. In this challenging market, we may experience a significant decrease in aircraft sales revenue which could adversely
affect our liquidity and the cash available to fund our obligations under our forward purchase commitments.

We
currently generate significant cash flows from our aircraft and engine leasing business; however, since most of our owned aircraft are held through restricted cash entities (55% of
the net book value of our aircraft as of December 31, 2009) including consolidated joint ventures or finance structures which borrow funds to finance or refinance the aircraft, the net cash
(the cash generated after we pay the interest costs associated with the aircraft), available from our restricted cash entities is limited. Most of the net cash flow we generated in 2009 and expect to
generate in 2010 from our aircraft and engine leasing businesses was, or will be, used to repay indebtedness in our restricted cash entities. The provisions of our aircraft securitization vehicles,
ALS I and ALS II, prohibit distributions on the subordinated notes to us until such time as the senior classes of notes are repaid in full. Additionally, AeroTurbine's revolving credit facility limits
dividend payments to us to a maximum of $10.0 million per year. However, under limited circumstances, we are able to receive cash from AeroTurbine through the sale to it of assets at
arms-length prices. These assets are typically older generation aircraft which are scheduled to be disassembled by AeroTurbine. AeroTurbine generally funds these purchases by drawing on
its revolving credit facility. Additionally, our revolving warehouse credit facility with a syndicate of banks led by affiliates of UBS Real Estate Securities Inc., or "warehouse facility,"
permits limited distributions to us by the relevant subsidiary borrower during the

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first
two years provided specified principal payments are made. Furthermore, most of our commercial bank loans and export credit facility financings restrict the payment of dividends in the event that
the borrower is in default under the applicable loan, which can include the failure to meet financial ratios or tests. In some cases we have provided our restricted cash entities with subordinated
loans in connection with their original senior financing or we hold some of their senior debt. As a result, our liquidity also depends on the ability of our subsidiaries to distribute cash to us as
dividends and in the form of other distributions, including in the form of interest and principal payments and the return of subordinated investments.

In
order to access the required capital to meet our other obligations under our forward purchase commitments, we have completed or have undertaken the following
initiatives:



In
the longer term, we expect to fund the growth of our business, including the acquisition of aircraft and engines, through internally generated cash flows, the incurrence of new bank
debt, the refinancing of existing bank debt and other capital raising initiatives. For additional information on the availability of funding under our contracted credit facilities see
"Indebtedness".

Consolidated Cash Flows

The following table presents our consolidated cash flows for 2008 and 2009. As described above, since substantially all of our owned
aircraft are held through restricted cash entities and a significant portion of our capital requirements are outside our restricted cash entities, our management analyzes our cash flow at both
consolidated and unconsolidated levels to make sure that we have sufficient cash flows available to finance our capital needs in our restricted cash entities and outside our restricted cash entities.
Therefore, you should read the following table and analysis in conjunction with the overview provided in the introduction to this section on Liquidity and Capital Resources.



2008

2009(US dollars in millions)Net cash flow provided by operating activities

$
202.6

$
399.2Net cash flow used in investing activities


(1,165.4
)

(1,591.6
)Net cash flow provided by financing activities


912.8


1,178.5


Cash
Flows Provided by Operating Activities. Our cash flows provided by operating activities increased by $196.6 million, or 97.0%, to $399.2 million for the year ended
December 31, 2009 from $202.6 million for the year ended December 31, 2008 primarily due to: (i) an increase in our aircraft portfolio and related basic lease revenues and
(ii) a decrease of our interest expenses. A significant portion of our operating cash flows stated above, including nearly all of our cash flows from our leasing

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operations
originate within restricted cash entities, where the financing structures in such restricted cash entities do not allow use of such cash flows to fund general operations or to fund
obligations of other group entities.

Cash
Flows Used in Investing Activities. Our cash flows used in investing activities increased by $426.2 million, or 36.6%, to $1,591.6 million in the year ended
December 31, 2009 from $1,165.4 million in the year ended December 31, 2008, primarily due to a $113.9 million increase in pre-delivery payments made in the
year ended December 31, 2009 as compared to 2008 and a $314.1 million decrease in asset sale proceeds generated in the year ended December 31, 2009 as compared to 2008.

Cash
Flows Provided by Financing Activities. Our cash flows provided by financing activities increased by $265.6 million, or 29.1%, to $1,178.5 million in the year ended
December 31, 2009 from $912.8 million in the year ended December 31, 2008. This increase in cash flows provided by financing activities was primarily due to an increase of
$129.1 million in new financing proceeds, net of repayments and debt issuance costs in the year ended December 31, 2009 as compared to 2008, an increase of $29.9 million of net
receipt of maintenance and security deposits and an increase of $106.7 million in the capital contributions from non-controlling interests as compared to 2008. Capital contributions
from non-controlling interests in the year ended December 31, 2009, included the receipt of $111.7 million from our new AerVenture partner, Waha Capital.



As of December 31, 2009, our outstanding indebtedness totaled $4.8 billion and primarily consisted of export credit
facilities, Japanese operating lease financings, commercial bank debt, revolving credit debt, securitization debt and capital lease structures.

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The
following table provides a summary of our indebtedness at December 31, 2009:

Debt Obligation

Collateral

Commitment

Outstanding

Undrawn
amounts

Weighted
average
interest
rate

Final stated
Maturity(US dollars in thousands)Export credit facilitiesA320 financings

18 aircraft

$
537,733

$
537,733

$



0.59
%

2020Export credit facilitiesA330 financings

9 aircraft


1,400,164


642,908


757,256


2.83
%

2021Export credit facilitiesAerVenture A320 financings

1 aircraft


843,886


35,221


808,665


4.55
%

2023CDB FacilityA330 financings




272,000





272,000





2023UBS revolving credit facility

11 aircraft


1,000,000


343,196


656,804


2.00
%

2014A320 and A330 Pre-delivery payment facility




538,950


404,562


134,388


2.14
%

2012ALS I debt

62 aircraft


973,513


973,513





0.49
%

2032ALS II debt

22 aircraft


946,278


634,059


312,219


2.08
%

2038AeroTurbine revolving credit facility

11 aircraft and 75 engines


328,000


311,497


16,503


1.75
%

2012Crédit Agricole Aircraft Acquisition facility

19 aircraft


122,475


122,475





1.98
%

2013TUI Portfolio Acquisition facility

19 aircraft


370,383


370,383





1.81
%

2015TUI Portfolio Subordinated debt*




63,317


63,317





20.00
%

2015Engine Acquisition facility

9 engines


91,744


52,762


38,982


1.98
%

2013Japanese operating lease financings

3 aircraft


86,059


86,059





0.90
%

2015Commercial bank debt

5 aircraft


132,426


132,426





2.97
%

2019Natixis Bond Facility




60,000


5,890


54,110


0.49
%

2011Nord LB A330 Facility




66,858





66,858





2012Capital lease obligations under defeasance structures

3 aircraft


130,663


130,663





5.38
%

2010Total



$
7,964,449

$
4,846,664

$
3,117,785


*Subordinated
debt issued to our joint venture partner relating to the TUI portfolio acquisition.


The weighted average interest rate in the table above excludes the impact of related derivative instruments which we hold to hedge our exposure to
interest rates.

See
"Indebtedness" for more information regarding our indebtedness and see "Interest Rate Risk" for more information on our portfolio of derivative financial instruments.

Contractual Obligations

Our contractual obligations consist of principal and interest payments on debt, executed purchase agreements to purchase aircraft,
operating lease rentals on aircraft under lease-in/lease-out structures and rent payments pursuant to our office leases. We intend to fund our contractual obligations through
our lines of credit and other borrowings as well as internally generated cash flows. We believe that our sources of liquidity will be sufficient to meet our contractual obligations.

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The
following table sets forth our contractual obligations and their maturity dates as of December 31, 2009:

Payments Due By Period as of December 31, 2009

Contractual Obligations

Less than
one year

One to
three years

Three to
five years

Thereafter

Total(U.S. dollars in thousands)Debt(1)

$
1,099,776

$
1,550,435

$
1,208,614

$
1,345,490

$
5,204,315Purchase obligations(2)


1,535,842


1,139,001


140,632





2,815,475Operating leases(3)


26,930


40,113


3,734


9,207


79,984Derivative obligations


4,294


(11,020
)

(17,916
)

(12,545
)

(37,187
)Total

$
2,666,842

$
2,718,529

$
1,335,064

$
1,342,152

$
8,062,587


(1)Includes
estimated interest payments based on one-month LIBOR of 0.231% and three-month LIBOR of 0.251% as of December 31, 2009.(2)Includes
21 new A330 wide-body aircraft on order from Airbus and 32 Airbus A320 family aircraft on order from Airbus by AerVenture.(3)Represents
contractual operating lease rentals on aircraft under lease-in/lease-out structures and contractual payments on our
office and facility leases in Amsterdam, The Netherlands, Miami, Florida, Fort Lauderdale, Florida, Goodyear, Arizona and Shannon, Ireland.


The
table below provides information as of December 31, 2009 regarding our debt and interest (1) obligations per facility type:

Less than
one year

One to
three years

Three to
five years

Thereafter

Total(US dollars in thousands)Pre-delivery payment facilities(2)

$
368,922

$
40,990

$


$


$
409,912Debt facilities with non-scheduled amortization(3)


350,536


781,323


863,531


614,745


2,610,135Capital lease obligations under defeasance structures(4)


135,890











135,890Other facilities


244,428


728,122


345,083


730,745


2,048,378Total

$
1,099,776

$
1,550,435

$
1,208,614

$
1,345,490

$
5,204,315


(1)Includes
estimated interest payments based on one-month LIBOR of 0.231% and three-month LIBOR of 0.251% as of December 31, 2009.(2)Repayment
of debt owed on pre-delivery payment facilities is essentially offset by proceeds received from aircraft purchase debt facilities.(3)Debt
is amortized by the amount of free cash flow generated within each of these facilities.(4)Obligations
are defeased through an offsetting notes receivable amount.


Under
the AerDragon joint venture agreement, we have contributed $25.0 million of equity to fund AerDragon's initial aircraft and engine purchases.

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Capital Expenditures

Our primary capital expenditure is the purchase of aircraft, including pre-delivery payments under our 1999 aircraft
purchase agreement with Airbus. The table below sets forth our capital expenditures for the historical periods indicated.

Year ended December 31,2007

2008

2009(US dollars in thousands)Capital expenditures

$
697,814

$
1,286,609

$
1,264,446Pre-delivery payments


164,074


339,422


453,305


In
2007, our principal capital expenditures were for five A319, three A320 and two A321 aircraft delivered under our forward order agreements and ten A320s, four
737-700/800s, two 737-200/300/400s, two 757s, one 767, six MD82s, one MD83, one DC8, two Bombardier CRJ-100s and one Canadair CL600 purchased in portfolio or single
aircraft purchase transactions. In 2008, our principal capital expenditures were for three A319, nine A320 and two A330 aircraft delivered under our forward order agreements and 10 A320, 11
B737-800, six B737-300, seven B757, two B767, four MD 82 and four MD 83 aircraft purchased in portfolio or single aircraft transactions. In 2009, our principal capital
expenditures were for three A319, 22 A320 and nine A330 aircraft delivered under our forward order agreements and four A320, one B737-800 and two 767-200 aircraft purchased in
portfolio or single aircraft transactions.

The
table below sets forth our expected capital expenditures for future periods indicated based on contracted commitments as of December 31, 2009.

2010

2011

2012

Thereafter(US dollars in thousands)Capital expenditures

$
1,409,981

$
625,048

$
435,676

$
138,429Pre-delivery payments


125,861


44,050


34,227


2,203Total

$
1,535,842

$
669,098

$
469,903

$
140,632


As
of December 31, 2009, we expect to make capital expenditures related to the 21 A330, 24 A320 aircraft, three A321 aircraft and five A319 aircraft on order by AerVenture in 2009
and thereafter. As we implement our growth strategy, currently focused on the mid- to long-term, and expand our aircraft and engine portfolio, we expect our capital
expenditures to increase in the future. We anticipate that we will fund these capital expenditures through internally generated cash flows, draw downs on our committed revolving credit facilities and
the incurrence of bank debt, and other debt and equity issuances.

Off-Balance Sheet Arrangements

As of December 31, 2007, we were obligated to make sublease payments under six aircraft operating leases of aircraft with lease
expiration dates between 2009 and 2013. In February 2008, we purchased two of the six aircraft that had been subject to operating leases and terminated the operating leases as described in
Note 15 to our consolidated financial statements included herein. As of December 31, 2009, we were obligated to make sublease payments under four aircraft operating leases of aircraft
with lease expiration dates between 2010 and 2013. We lease these four aircraft to aircraft operators. Since we are not fully exposed to the risks and rewards of ownership of these aircraft, we do not
include these aircraft on our balance sheet. In addition, we do not recognize a financial liability for our operating lease obligations under the leases on our balance sheet. Due to the fact that
sublease receipts related to these four aircraft are insufficient to cover our lease obligations, we have recognized an onerous contract accrual on our balance sheet which is equal to the difference
between the present

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value
of the lease expenses and the present value of the sublease income discounted at appropriate discount rates. This accounting treatment, however, does not result in the same presentation as if we
accounted for these aircraft as owned assets and the related operating lease obligations as debt liabilities. Note 15 of our consolidated financial statements included in this annual report
includes more information on this arrangement, including a table of future lease obligations by year.

We
continue to have an economic interest in AerCo. This interest is not assigned any value on our balance sheet because we do not expect to realize any value for our investment.

We
have other investments in companies or ventures in the airline industry which we obtain primarily through restructurings in our leasing business. The value of these investments are
immaterial to our financial position. We do not consolidate such companies on our balance sheet because the investments do not meet the requirements for consolidation.

As
discussed above, we have entered into a joint venture, AerDragon, that does not qualify for consolidated accounting treatment. This joint venture's assets and liabilities are off our
balance sheet and we only record our net investment under the equity method of accounting.

Management's use of "net income attributable to AerCap Holdings N.V. excluding non-cash charges relating to the mark-to-market of
our interest rate caps and share based compensation"

The following is a definition of a non-GAAP measure used in this report on Form 20-F and a
reconciliation of such measure to the most closely related GAAP measure:

Net income attributable to AerCap Holdings N.V. excluding non-cash charges relating to the mark-to-market of our interest rate caps and share
based compensation.This measure is determined by adding non-cash charges related to the mark-to-market losses on our interest
rate caps and share based compensation during the applicable period, net of related tax benefits, to GAAP net income. In addition to GAAP net income, we believe this measure may provide investors with
supplemental information regarding our operational performance and may further assist investors in their understanding of our operational performance in relation to past and future reporting periods.
We use interest rate caps to allow us to benefit from decreasing interest rates and protect against the negative impact of rising interest rates on its floating rate debt. Management determines the
appropriate level of caps in any period with reference to the mix of floating and fixed cash inflows from our lease and other contracts. We do not apply hedge accounting to our interest rate caps. As
a result, we recognize the change in fair value of the interest rate caps in our income statement during each period. The following is a reconciliation of net income attributable to AerCap
Holdings N.V. excluding non-cash charges relating to the mark-to-market of interest rate caps and share based compensation to net income for the years ended
December 31, 2009 and 2008:

Year ended
December 31,
2008

Year ended
December 31,
2009(US dollars in millions)Net income attributable to AerCap Holdings N.V.

$
151.8

$
165.2Plus: Non-cash charges relating to the mark-to-market of interest rate caps, net of tax


39.6


(18.2
)Non-cash charges related to share-based compensation, net of tax


6.4


3.2Net income attributable to AerCap Holdings N.V. excluding non-cash charges related to mark-to-market of interest rate caps and share-based
compensation

$
197.8

$
150.2


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Management's use of "net spread"

Net spread.This measure is the difference between basic lease rents and interest expense excluding the impact from the
mark-to-market of interest rate caps and non-recurring charges. We believe this measure may further assist investors in their understanding of the changes and
trends related to the earnings of our leasing activities. This measure reflects the impact from changes in the number of aircraft leased, lease rates, utilization rates, as well as the impact from the
use of interest rate caps instead of swaps to hedge our interest rate risk. The following is a reconciliation of net spread to basic rents for the year ended December 31, 2009 and 2008:

Year ended
December 31, 2008

Year ended
December 31, 2009(US dollars in millions)Basic rents

$
520.7

$
581.9Interest on debt


219.2


92.2Plus: mark-to-market of interest rate caps


(58.1
)

23.7Interest on debt excluding the impact of mark-to-market of interest rate caps and non-recurring charges from refinancing of securitized bonds


161.1


115.9Net spread

$
359.6

$
466.0


Recent Accounting Pronouncements

ASC 105

In June 2009, the FASB issued ASC 105Generally Accepted Accounting Principles. The
FASB Accounting Standards Codification ("ASC") is the source of authoritative U.S. GAAP recognized by the FASB to be applied by non-governmental entities. The ASC is effective for
interim and annual periods ending after September 15, 2009. ASC 105 brings together in one place all authoritative GAAP previously held at different levels of GAAP. Rules and interpretive
releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The Company adopted the ASC during the third quarter of 2009. As a result,
all references to prior accounting and reporting standards which have been superseded by the ASC have been changed to reflect the new reference within the ASC. The ASC does not replace or alter
guidance issued by the SEC or its staff for public companies in their filings with the SEC. The adoption of ASC 105 did not have a significant impact on our financial position or result of operations.

ASC 320

In April 2009, the Financial Accounting Standards Board ("FASB") issued an amendment to ASC 320 Investments-Debt and Equity Securities,which provides additional guidance for the other-than-temporary impairment
for debt securities and expands the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. The effective
date is for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted. The adoption of this ASC did not have an impact on our financial position or results
of operation.

ASC 820 and 825

In April 2009, the FASB provided new guidance in ASC 820Fair Value Measurements and
Disclosuresfor estimating fair value, when the volume and level of activity for an asset or liability have significantly decreased and for identifying circumstances that
indicate a transaction is not orderly. In

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August
2009, the FASB issued an amendment ASU 2009-05 to ASC 820 for estimating fair value of liabilities in the circumstances where a quoted price in an active market for the identical
liability is not available. ASC 825Financial Instruments,also effective starting from the second quarter of 2009, requires extensive additional fair
value disclosures for interim and annual reports. The adoption of these ASCs did not have an impact on our consolidated financial statements.

ASC 855

In May 2009, the FASB issued ASC 855Subsequent Events. ASC 855 addresses accounting
and disclosure requirements related to subsequent events. ASC 855 requires management to evaluate subsequent events through the date the financial statements are either issued or available to be
issued, depending on the company's expectation of whether it will widely distribute its financial statements to its shareholders and other financial statement users. ASC 855 is effective for interim
or annual financial periods ending after June 15, 2009 and should be applied prospectively. The adoption of ASC 855 did not have a significant impact on our financial position or results of
operation.

ASC 810

In June 2009, the FASB issued an amendment to consolidation standards ASC 810. It amends the consolidation analysis with an approach
focused on identifying which enterprise has the power to direct the activities of a VIE that most significantly affect the entity's economic performance and (i)the obligation to absorb losses of the
entity or(ii)the right to receive benefits from the entity,
and improves financial reporting by enterprises involved with VIEs. This standard is effective for interim and annual periods beginning on January 1, 2010 for us. Earlier application is
prohibited. We are assessing the effect the adoption of this standard will have on our financial position or results of operation.

INDEBTEDNESS

Export Credit FacilityAirbus A320 aircraft

General.In April 2003, we entered into an $840.0 million export credit facility for the financing of up to 20 Airbus A320
aircraft. Funding
under the facility is provided by commercial banks, but the repayment is guaranteed by the ECA. In January 2006, the export credit facility was amended and extended to cover an additional nine
aircraft and its size increased to a maximum of $1.215 billion. In November 2008, the export credit facility was further amended to cover an additional one aircraft and the maximum amount of
the facility remained unchanged. The terms of the lending commitment in the export credit facility are such that the export credit agencies only approve funding for aircraft that are due for delivery
on a six-months rolling basis and have no obligation to fund deliveries beyond that period. At December 31, 2009, we had financed 18 aircraft under this facility. We had
$537.7 million of loans outstanding under this facility as of December 31, 2009.

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Interest Rate.Set forth below are the interest rates for our export credit facilities.

Amount outstanding at
December 31, 2009

Interest rate(US dollars in thousands)Floating Rate Tranches:

$
141,704

Three-month LIBOR plus 0.12%234,577

Three-month LIBOR plus 0.25%63,239

Three-month LIBOR plus 0.27%5,057

Three-month LIBOR plus 0.30%95,813

Three-month LIBOR plus 0.90%Purchase accounting fair value adjustments


(2,657
)Total:

$
537,733


Maturity Date.We are obligated to repay principal on the export credit facility over a 10 or 12-year term.

Collateral.The export credit facilities require legal title to the aircraft be transferred to and held by a special purpose
company controlled by
the respective lenders. We have entered into lease agreements on these aircraft which transfer the risk and rewards of ownership of the aircraft to AerCap. The obligations outstanding under the export
credit facilities are secured by, among other things, a pledge
of the shares of the company which holds legal title to the aircraft financed under the facility. Each subsidiary's obligations under the financings are guaranteed by AerCap Holdings N.V.

Certain Covenants.The export credit facilities contain affirmative covenants customary for secured financings. The facilities
also contain net worth
financial covenants. In addition, loans under the 2003 export credit facilities contain change of control provisions that grant the lenders the right to prepayment of their loans in the event of a
change of control, unless the lenders consent to the change of control, which was obtained in connection with the 2005 Acquisition. A change of control occurs under our April 2003 export credit
facility if our shares cease to be listed on The New York Stock Exchange unless, at the time our shares cease to be listed on The New York Stock Exchange, at least 66.66% of our ordinary shares are
owned and controlled by one or more shareholders rated at least BBB- by Standard & Poor's Ratings Services and Baa3 or more by Moody's Investors Service, Inc.

Export Credit FacilityAirbus A330 aircraft

General.In December 2008, we entered into a $1.41 billion export credit facility for the financing of up to 15 Airbus A330
aircraft. Funding
under the facility is provided by commercial banks, but the repayment is guaranteed by the ECA. As of December 31, 2009, 9 aircraft under this facility have been delivered from the
manufacturer. We had $642.9 million of loans outstanding under this facility as of December 31, 2009.

Interest Rate.Set forth below are the interest rates for the first and the subsequent three of our export credit facilities.
The interest rates for
the remaining loans will be agreed on a rolling basis.

Amount outstanding at
December 31, 2009

Interest rate(US dollars in thousands)Floating rate tranches

$
300,091

Three-month LIBOR plus 1.30%Fixed rate tranches


342,817

3.94%Total:

$
642,908


Maturity Date.We are obligated to repay principal on the export credit facility over a 10 or 12 year term.

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Collateral.The export credit facilities require legal title to the aircraft be transferred to and held by a special purpose
company controlled by
the respective lenders. We will enter into lease agreements on these aircraft which transfer the risk and rewards of ownership of the aircraft to AerCap. The obligations outstanding under the export
credit facilities are secured by, among other things, a pledge of the shares of the company which holds legal title to the aircraft financed under the facility. Each subsidiary's obligations under the
financings are guaranteed by AerCap Holdings N.V.

Certain Covenants.The export credit facilities contain affirmative covenants customary for secured
financings. The facilities also contain net worth financial covenants. In addition, loans under the 2008 export credit facilities contain change of control provisions that grant the lenders the right
to prepayment of their loans in the event of a change of control, unless the lenders consent to the change of control. A change of control occurs under our December 2008 export credit facility if:



Export Credit FacilityAerVenture A320 aircraft

General.In March 2009, AerVenture, entered into a $846.0 million export credit facility for the financing of up to 20
Airbus A320 aircraft.
Funding under the facility is provided by commercial banks, but the repayment is guaranteed by the ECA. As of December 31, 2009, one aircraft under this facility has been delivered from the
manufacturer. We had $35.2 million of loans outstanding under this facility as of December 31, 2009.

Interest Rate.The interest rates for the loans will be agreed on a rolling basis.

Amount outstanding at December 31, 2009

Interest rate(US dollars in thousands)Fixed rate tranches

$
35,221


4.55
%


Maturity Date.We are obligated to repay principal on the export credit facility over a 10 or 12 year term.

Collateral.The export credit facilities require legal title to the aircraft be transferred to and held by a special purpose
company controlled by
the respective lenders. We will enter into lease agreements on these aircraft which transfer the risk and rewards of ownership of the aircraft to AerVenture. The obligations outstanding under the
export credit facilities are secured by, among other things, a pledge of the shares of the company which holds legal title to the aircraft financed under the facility. Each subsidiary's obligations
under the financings are guaranteed by AerVenture and AerCap Holdings N.V.

Certain Covenants.The export credit facilities contain affirmative covenants customary for secured financings. The facilities
also contain net worth
financial covenants. In addition, loans under the 2009 export credit facilities contain change of control provisions that grant the lenders the right to

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prepayment
of their loans in the event of a change of control, unless the lenders consent to the change of control. A change of control occurs under our March 2009 export credit facility if:



Aircraft Lease Securitisation I

General.On May 8, 2007, we completed a refinancing of our securitization of ALS I with the issuance of $1.66 billion
of securitized
notes in one class of AAA-rated class G-3 floating rate notes. The proceeds from the refinancing were used to redeem all outstanding ALS I debt, other than the most
junior class of notes, to refinance the indebtedness that had been incurred to purchase 24 previously acquired aircraft, and to finance the purchase of four additional new aircraft, increasing ALS I's
aircraft portfolio size to 70 aircraft.

Following
a number of aircraft sales, there are 62 aircraft in the ALS I portfolio as of December 31, 2009. The primary source of payments on the notes is lease payments on the
aircraft owned by the subsidiaries of ALS I. We retained the most junior class of notes in the securitization, as a result of which we still consolidate ALS I's results in our financial statements.

MBIA
Insurance Corporation issued a financial guaranty insurance policy to support the payment of interest when due and principal on the final maturity on the new notes, which are
currently rated B3 and BB+ by Moody's Investors Service and Standard & Poor's Ratings Services, respectively.

Liquidity.Crédit Agricole provided a liquidity facility in the amount of $72.0 million, which may be drawn upon to
pay
expenses of ALS I and its subsidiaries, senior hedge payments and interest on the new senior class of notes.

Interest Rate.Set forth below is the interest rate for the Class G-3 note:

Amount outstanding at
December 31, 2009

Interest rate(US dollars in thousands)Class G3 notes

$
973,513

One month LIBOR plus 0.26%


Aircraft Management Services.We provide lease and aircraft management and re-leasing and remarketing services for ALS I's
aircraft, for
which we receive a retainer fee of 0.212% per year of the initial appraised value of the aircraft, which was $2.1 billion, a monthly fee equal to 1.0% of the aggregate rent actually paid each
month, and a sales based incentive fee of 1.25% of the specified target sales prices for the sale or insured loss of an aircraft. The target sales price for an aircraft is 90% of the appraised value
of the aircraft, which is adjusted annually. We also provide insurance services for which we receive an annual fee of $50,000 and administrative services for which we receive

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a
monthly fee of $1,380 for each aircraft, subject to annual adjustments for inflation and a minimum of $0.2 million per year.

We
may be terminated as manager and administrative agent by ALS I or MBIA Insurance Corporation if we default on our obligations as manager or administrative agent or become insolvent.
In addition, we may be terminated as manager if:



We,
as manager, may not be removed or resign prior to the expiration of the servicing agreement unless a replacement manager has been appointed.

Payment Terms.The interest and principal payments on the notes are due on a monthly basis. To the extent that the amount of
funds available for
payment on any payment date exceeds the amount needed to pay all payments having an equal or higher priority under the trust indenture, any such excess funds will be applied to reduce the outstanding
principal balance of the new notes by distributing such excess amount in accordance with the priority of payments set forth in the trust indenture.

ALS
I may voluntarily redeem the new notes at a price that equals the outstanding principal balance of the applicable notes multiplied by a scheduled percentage. On the closing date of
the securitization, the scheduled percentage for the new notes was 101% for the class G-3 notes, and such percentage decreases gradually until May 15, 2010. On that date, the
redemption price of the notes will equal the outstanding principal balance of the notes. In addition, ALS I must pay any accrued but unpaid interest on the notes and any premium due to MBIA Insurance
Corporation upon redemption of the notes. ALS I may redeem the notes in whole or in part, provided that if a default notice has been given under the trust indenture or the maturity of any notes has
been accelerated then ALS I may only redeem the notes in whole.

Maturity Date.The final maturity date of the notes will be May 10, 2032.

Collateral.The property of ALS I includes the rights under the financial guaranty insurance policy. The notes are secured by
security interests in
and pledges or assignments of equity ownership and beneficial interests in the subsidiaries of ALS I, as well as by the interests of ALS I's subsidiaries' interests in leases of the aircraft they own,
by cash held by or for them and by their rights under agreements with the service providers. Rentals and reserves paid under leases of the ALS I aircraft will be placed in a collection account and
paid out according to a priority of payments.

Aircraft Lease Securitisation II Limited

General.On June 26, 2008, we completed a securitization in which ALS II issued securitized class A-1 notes and
class A-2 notes, rated A+ by Standard & Poor's and A1 by Moody's. The class A-1 notes each had an outstanding principal balance of zero, and were issued to
commitment holders. The commitment holders have committed to advance funds, subject to certain conditions, including that ALS II shall have acquired at least 15 aircraft, up to an aggregate amount of
$1 billion in connection with the purchase of aircraft by ALS II. The 15th aircraft is scheduled to be delivered to ALS II in

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May
2009. The principal balance of the class A-1 notes will increase in an amount equal to the amount advanced by each commitment holder. Funded class A-1 notes
may be exchanged for class A-2 notes subject to certain conditions. The aggregate principal balance of the class A-1 notes together with the
class A-2 notes will not exceed $1 billion. The class A-1 notes are ranked pari passu with the class A-2 notes.

The
advances made by the commitment holders will be applied to purchase 30 aircraft from AerVenture Leasing 1 Limited, a subsidiary of AerVenture, of which 22 had been delivered as of
December 31, 2009. The 30 aircraft are among the 70 aircraft being delivered by Airbus to AerVenture between 2007 and 2011. As of December 31, 2009, total Class A-1
commitment had been drawn of $687.8 million and total available commitments relating to the remainder of aircraft was $312.2 million. The primary source of payments on the notes will be
lease payments on the aircraft owned by subsidiaries of ALS II.

ALS
II also issued class E-1 notes (the most junior class of notes) to AerVenture Leasing 1 Limited on June 26, 2008, the proceeds of which will be applied to
pay expenses of ALS II during the period between June 26, 2008 and the first delivery of aircraft. Additional class E-1 notes will be issued to AerVenture Leasing 1 Limited
in connection with the sale of aircraft to ALS II, and will be issued to AerVenture Leasing 1 Limited, AerVenture and AerCap Holdings N.V. in certain other circumstances. We expect AerVenture
and AerVenture Leasing 1 Limited to retain this junior class of notes, and we expect to consolidate ALS II's financial results in our financial statements.

Liquidity.Crédit Agricole provided a liquidity facility in the amount $55 million, which may be drawn upon after
the initial
delivery of aircraft to ALS II to pay expenses of ALS II and its subsidiaries, commitment fees owed to the commitment holders, senior hedge payments and interest on the class A-1
notes and class A-2 notes.

Interest Rate.Set forth below is the interest rate for the subclasses of notes not held by us. LIBOR is the London interbank
offered rate for
one-month U.S. dollar deposits or, under certain circumstances, an interpolated LIBOR rate.

Amount outstanding at
December 31, 2009

Interest rate(US dollars in thousands)Class A-1 Notes

$
634,059

One month LIBOR plus 1.85%


Maturity Date.The final maturity date of the notes will be June 26, 2038.

Collateral.The notes are secured by security interests in and pledges or assignments of equity ownership and beneficial
interests in the
subsidiaries of ALS II, as well as by ALS II's subsidiaries' interests in leases of the aircraft they own, by cash held by or for them and by their rights under agreements with the service providers.
Rentals and reserves paid under leases of the ALS II aircraft will be placed in a collection account and paid out according to a priority of payments.

UBS Revolving Credit Facility

General.On April 26, 2006, our consolidated subsidiary, AerFunding 1 Limited entered into a non recourse senior secured
revolving credit
facility in the aggregate amount of up to $1.0 billion with UBS Real Estate Securities Inc., UBS Securities LLC, Deutsche Bank Trust Company Americas and certain other financial
institutions. The revolving loans under the UBS revolving credit facility are divided into two classes: class A loans, which have a maximum advance limit of $830.0 million and
class B loans, which have a maximum advance limit of $170.0 million. As of December 31, 2009, we had $343.2 million of loans outstanding under the UBS revolving credit
facility.

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Borrowings
under the UBS revolving credit facility can be used to finance between 66% and 79% of the appraised value of the acquired aircraft or, in the case of Boeing 737NG and Airbus
A320 family aircraft, between 74% and 80% of the lower of the purchase price and the appraised value of the acquired aircraft. In addition, value enhancing expenditures and required liquidity reserves
are also funded by the lenders. All borrowings under the UBS revolving credit facility are subject to the satisfaction of customary conditions and restrictions on the purchase of aircraft that would
result in our portfolio becoming too highly concentrated, with regard to both aircraft type and geographical location. Notwithstanding these restrictions, we believe that the UBS revolving credit
facility provides us with significant flexibility to purchase and finance aircraft.

Interest Rate.Borrowings under the UBS revolving credit facility bear interest (a) in the case of class A loans,
based on the
Eurodollar rate plus the class A applicable margin, or (b) in the case of class B loans, based on the Eurodollar rate plus the class B applicable margin. The following
table sets forth the applicable margin for the two classes of the UBS revolving credit facility during the periods specified:

Class A

Class BBorrowing period(1)


1.35
%

3.75
%First 180 days following conversion


2.10
%

4.50
%From 181 days to 360 days following conversion


2.60
%

5.00
%From 361 days to 450 days following conversion


2.85
%

5.25
%From 450 days to 541 days following conversion


3.10
%

5.50
%Thereafter


3.35
%

5.75
%


(1)The
borrowing period is four years from May 8, 2007 after which the loan converts to a term loan.


Additionally,
we are subject to (a) a 0.25% fee on any unused portion of the unused class A loan commitment and (b) a 0.50% fee on any unused portion of the unused
class B loan commitment.

Payment Terms.Interest on the loans is due on a monthly basis. Principal on the loans amortizes on a monthly basis to the
extent funds are
available. All outstanding principal not paid during the term is due on the maturity date.

Prepayment.Advances under the UBS revolving credit facility may be prepaid without penalty upon notice, subject to certain
conditions. Mandatory
partial prepayments of borrowings under the UBS revolving credit facility are required:



Maturity Date.The maturity date of the UBS revolving credit facility is May 12, 2014.

Cash Reserve.AerFunding is required to maintain up to 6.0% of the borrowing value of the aircraft in reserve for the benefit of
the class A
and B lenders. Amounts held in reserve for the benefit of the class A and B lenders are available to the extent there are insufficient funds to pay required expenses,
hedge payments or principal of or interest on the class A and B loans on any payment date. The amounts on reserve are funded by the lenders.

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Collateral.Borrowings under the UBS revolving credit facility are secured by, among other things, security interests in and
pledges or assignments
of equity ownership and beneficial interests in all of the subsidiaries of AerFunding, as well as by AerFunding's interests in the leases of its assets.

Certain Covenants.The UBS revolving credit facility contains covenants that, among other things, restrict, subject to certain
exceptions, the
ability of AerFunding and its subsidiaries to:



AeroTurbine Crédit Agricole Credit Facility

General.On December 19, 2007, AeroTurbine entered into a second amended and restated senior credit agreement with
Crédit
Agricole and certain other financial institutions identified therein. Pursuant to this agreement, the total commitment of the credit facility under the first amended senior credit agreement increased
from $220.0 million to $328.0 million, and a letter of credit facility in the commitment amount of $10.0 million (which amount is included in the total commitment of
$328.0 million) was added. As of December 31, 2009, AeroTurbine had $311.5 million outstanding under the Crédit Agricole credit facility.

Interest Rate.Under the Crédit Agricole credit facility, AeroTurbine can borrow revolving loans based on either LIBOR or
ABR (which
is a rate per annum equal to the greater of the prime rate in effect on such day and the federals funds effective rate in effect on such day plus 1/4 of 1%). Set forth below are the
interest rates for the Crédit Agricole revolving loan facility.

Interest rateAmount outstanding at
December 31, 2009ABR Loans

LIBOR Loans(US dollars in thousands)Revolving Loan Facility

$
311,497


ABR + 0.25
%

LIBOR + 1.25
%


Prepayment.Advances under the Crédit Agricole credit facility may be prepaid without prepayment penalty. Mandatory
prepayments of the
Crédit Agricole facility are required:



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Payment Terms.Payments of interest under the revolving loan facility are due quarterly (or, if the interest period is less than
three months for a
LIBOR loan, the last day of the interest period for that loan). Payments of principal on the revolving loan facility are due on the maturity date. All outstanding revolving loans not paid during the
term shall be due on the maturity date. AeroTurbine will reimburse the letter of credit issuer for any drawing made under any outstanding letter of credit on the date AeroTurbine receives notice of
such drawing (if such notice is received prior to 12 noon on such date) or on the immediately following business day (if such notice is received at or after 12 noon on such date).

Maturity Date.The maturity date of the Crédit Agricole credit facility is December 19, 2012.

Collateral.Borrowings under the Crédit Agricole credit facility are secured by security interests in and pledges or
assignments of
all the shares and other ownership interests in AeroTurbine and its subsidiaries, as well as by all assets of AeroTurbine and its subsidiaries.

Certain Covenants.The Crédit Agricole credit facility contains a number of covenants that, among other things, restrict,
subject to
certain exceptions, the ability of AeroTurbine to:



Japanese Operating Lease Financings

General.In 2004 we entered into several Japanese operating lease financing structures to finance aircraft acquisitions. Funding
under these
structures is provided through a combination of senior commercial bank debt and subordinated loans from Japanese investors. At December 31, 2009, we had financed three aircraft under Japanese
operating lease financings. The aggregate principal amount of the loans outstanding under Japanese operating leases financings was $86.1 million as of December 31, 2009.

Interest Rate.Set forth below are the interest rates for our senior loans and subordinated debt.

Amount outstanding at
December 31, 2009

Average interest rates(US dollars in thousands)Senior debt

$
52,372


Three month LIBOR plus 0.96%Subordinated debt


33,687


Fixed rates 4.03%Total

$
86,059


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Collateral.Our Japanese operating leases financings require legal title to the aircraft be transferred to and held by a special
purpose company
controlled by the respective lenders. We have entered into lease agreements on the subject aircraft which transfer the risk and rewards of ownership of the aircraft to us. The obligations outstanding
under our Japanese operating leases financings are secured by a pledge of the shares of the company which holds legal title to the aircraft financed under the facility. Each subsidiary's obligations
under the financings are guaranteed by AerCap Holdings N.V.

Certain Covenants.Our Japanese operating leases financings contain affirmative covenants customary for secured financings.

Long-Term Commercial Bank FinancingsCDBfour Airbus A330 aircraft

General.In November 2009, 100% subsidiaries of AerCap Ireland Limited, entered into four facilities with China Development Bank
Corporation, each
for the financing of the acquisition of one Airbus A330 aircraft scheduled for delivery during 2010 and 2011. As of December 31, 2009, no amounts had been drawn from the facility.

Interest Rate.Borrowings under each facility will bear interest at a floating interest rate of three-month LIBOR plus a margin
of 3.0% which is
payable quarterly in arrears after the initial drawing on the facility.

Repayment.Each loan in respect of each aircraft will be repaid in quarterly installments over the term of the loan.

Maturity Date.The maturity date of the facilities will be 12 years after the initial drawing on the respective facility.

Prepayment.Borrowings under the facilities may be prepaid (subject to minimum amounts of $2.0 million or integral
multiples of
$1.0 million and subject to the subsidiary giving the agent at least 15 Business Days' notice) without premium or penalty, except for break funding costs if payment is made on a day other than
an interest payment date.

Collateral.The obligations outstanding under the facilities are secured by, among other things, a pledge of the shares of the
subsidiaries, and
mortgages over each aircraft. The obligations of the subsidiaries under the facilities and the related documentation are guaranteed by AerCap Holdings N.V.

Certain Covenants.The facilities contain customary covenants for secured financings.

Crédit Agricole Aircraft Acquisition Facility

General.On October 12, 2006, a wholly owned subsidiary entered into a senior secured loan facility in the aggregate amount
of up to
$248.0 million with Crédit Agricole and certain other financial institutions in order to finance the purchase of up to 25 aircraft from GATX. Borrowings under the senior facility
were used to finance the lesser of 70% of the purchase price of each aircraft and a scheduled percentage of the loan amount allocated to such aircraft. Concurrently with the facility, we provided
junior and subordinated debt to finance the balance of the purchase price. This subsidiary entered into (a) a junior loan facility with us in an aggregate amount of up to $30.5 million
to finance a portion of the purchase price of each aircraft not financed under the senior facility and (b) a subordinated note purchase agreement to finance the portion of the purchase price of
each such aircraft not financed under the senior facility or the junior facility.

We,
or one of our wholly owned subsidiaries currently provide the junior loan facility and the subordinated note financing.

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On
December 20, 2007, the original facility was amended and supplemented to allow for an additional senior facility in an aggregate amount of up to $150.0 million to be
provided by Crédit Agricole and certain other financial institutions. A wholly-owned subsidiary is an additional borrower under the additional senior facility. This additional facility
is available to finance a percentage (calculated by reference to relevant aircraft types and lease status) of the purchase price of a variety of specified aircraft makes and models. We concurrently
provide subordinated debt to finance the balance of the purchase price of such additional aircraft under the amended subordinated note purchase agreement, to which the additional borrower has acceded.
As of December 31, 2009, the amount outstanding under the senior facility was $122.5 million.

The
original borrower and the additional borrower are jointly and severally liable for their respective obligations and liabilities under the original facility, the additional facility
and all related documentation.

Interest Rate.Borrowings under the senior facilities bear interest at a rate of one month LIBOR plus 1.75% per annum for the
first five years of the
term, and at a rate of one month LIBOR plus 2.25% per annum for the remainder of the term.

Amount outstanding at
December 31, 2009

Interest rates(US dollars in thousands)Crédit Agricole

$
122,475

One month LIBOR plus 1.75%


Prepayment.After full repayment of amounts outstanding under the liquidity facility described below, prepayment of borrowings
under the senior
facilities is permitted with notice, subject to a prepayment fee during the initial two years of the senior facility. Mandatory prepayments of borrowings related to a particular aircraft are
required:



Payment Terms.Payments of principal and interest under the loan are due on a monthly basis, and all outstanding principal not
paid during the term
is due on the final maturity date.

Maturity Date.The final maturity date of the loans is October 17, 2014.

Put to AerCap.If the junior and senior loans attributable to any financed aircraft are not paid by the earlier of (a) the
21st anniversary of the date of manufacture of such aircraft and (b) the final maturity date of the loans, then the collateral agent for the lenders may cause such aircraft to be sold to
our wholly owned subsidiary, AerCap B.V., for a purchase price equal to the outstanding principal amount of the junior and senior loans attributable to such aircraft together with breakage
costs plus a pro rata portion of any amounts outstanding under the liquidity facility and taxes and expenses.

Liquidity Facility.Crédit Agricole have provided a liquidity facility in the maximum amount of $27.0 million
through December
2009; thereafter the liquidity facility is available in an amount equal to the difference between (i) $27.0 million multiplied by a fraction, the numerator of which is the aggregate
outstanding principal amount under the senior facilities and the denominator of which is the aggregate amount outstanding under the senior facilities at December 2009. The liquidity facility may be
drawn upon to finance any shortfall in certain amounts owed on any repayment date, including, minimum principal payments, payments of interest due under the senior or junior facility and certain
expenses.

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Aircraft Management Services.We will provide aircraft management services in respect of the financed aircraft, for which we
will receive a fee.

Collateral.Borrowings under the senior facility are secured by mortgages on the aircraft and security
interest in and pledges or assignments of all the shares and other ownership interests in the borrowers and their subsidiaries, as well as their bank accounts and lease interests.

Certain Covenants.The loans include general and operating covenants that restrict the borrowers from incurring additional
indebtedness and other
limitations which are customary for such credit facilities.

TUI Portfolio Acquisition Facility

General.In June 2008, AerCap Partners I Holding Limited, or AerCap Partners, a 50% joint venture established between us and
Deucalion Aviation
Funds, entered into a sale and leaseback transaction pursuant to which it agreed to purchase 11 Boeing B737-800, six Boeing B757-200 and two Boeing B767-300
aircraft from the TUI Travel Group, or TUI, and lease the aircraft back to TUI.

To
finance the purchase of the 19 aircraft, a subsidiary of AerCap Partners, AerCap Partners 1 Limited, entered into a senior facility in an amount of up to $448.6 million with
Crédit Agricole, KfW IPEX-Bank GmbH, Deutsche Bank AG London Branch and HSH Nordbank AG which was arranged by Crédit Agricole and KfW
IPEX-Bank GmbH. The senior facility is divided into two tranches, the first being used to finance the purchase of the 11 Boeing B737-800 aircraft and the second to
finance the purchase of the other eight aircraft. AerCap Partners pay the lenders for the amounts drawn on the senior facility in monthly installments. The principal amount outstanding under the loan
in relation to the first tranche must be repaid in full on April 1, 2015 and the principal amount outstanding under the loan in relation to the second tranche on April 1, 2012. The
aggregate principal amount of the loans outstanding under the senior facility as of December 31, 2009 was $370.4 million.

Following
drawdown of the amounts in relation to the 19 aircraft, the remaining commitment under the facility was cancelled subsequent to June 30, 2008.

Interest Rate.Borrowings under the first tranche of the senior facility bear interest at a floating interest rate of one month
LIBOR plus a margin
of 1.575% until April 1, 2013 and a margin of 1.75%
thereafter. Borrowings under the second tranche of the senior facility bear interest at a floating interest rate of one month LIBOR plus a margin of 1.575% until April 1, 2010 and 2.00%
thereafter. Interest under the senior facility is payable monthly in arrears on each repayment date.

Amount outstanding at
December 31, 2009

Interest rate(US dollars in thousands)Senior Facility

$
370,383

One month LIBOR plus 1.575%


Prepayment.Borrowings under the facilities may be prepaid (subject to minimum payment amounts and notice provisions) without
penalty, except for
break funding costs if payment is made on a day other than a repayment date. However, a prepayment fee of 1% of the amount prepaid is payable to the lenders if such prepayment exceeds
$15.0 million in aggregate in each of the first and second years following the signing date.

Put Option.If AerCap Partners 1 Limited is the owner of the aircraft on the relevant put option date relating to the 19 aircraft
(April 1,
2015 with respect to the 11 B737-800 aircraft and April 1, 2012 with respect to the remaining eight aircraft) and amounts under the facility remain outstanding with respect to the
aircraft subject to the put option, Crédit Agricole can require AerCap Holdings N.V. (i) to purchase the subject aircraft, (ii) to purchase the subject aircraft and
the shares of the relevant lessor of the subject aircraft or (iii) to purchase the beneficial interest that AerCap Partners 1 Limited

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has
in the subject aircraft. Crédit Agricole can, subject to certain provisions including cure rights of Deucalion Aviation Funds, also exercise the put option on an AerCap
Holdings N.V. insolvency event.

Maturity Date.The maturity date of the senior facility is, in respect of the first tranche, April 1, 2015, and, in respect
of the second
tranche, April 1, 2012.

Collateral.Borrowings under the senior facility are secured by, among other things, charges over the shares in AerCap Partners,
AerCap Partners I
Holding Limited and Lantana Aircraft Leasing Limited, charges over various bank accounts, mortgages over the financed aircraft and security assignments of, inter alia, the lease agreements and letters
of credit provided to AerCap Partners by Royal Bank of Scotland plc.

Certain Covenants.The senior facility contains customary covenants for secured financings through special purpose companies.
AerCap Partners also
covenants in the senior facility (a) to provide loan-to-value ratio appraisals to the agent on agreed dates and (b) that the ratio of tranche 1 aircraft to
all financed aircraft must be at least 43%.

TUI Portfolio Subordinated Debt

General.On June 20, 2008, AerCap and our joint venture partner in the TUI portfolio acquisition each subscribed
$63.3 million of 20%
fixed rate subordinated loan notes, or subordinated loan notes, issued by AerCap Partners. The subordinated debt held by AerCap is eliminated in consolidation of the joint venture. The subordinated
loan notes are fully subordinated in all respects including in priority of payment to, amongst other debts of AerCap Partners, the senior facility. As is the case in respect of the senior facility,
the obligation of AerCap Partners to make payments in respect of the subordinated loan notes is limited in recourse to certain amounts actually received by AerCap Partners.

Interest Rate.Interest accrues on the subordinated loan notes at a rate of 20% per annum. Subject to certain exceptions,
interest is payable
quarterly in arrears on the tenth business day after March 31, June 30, September 30 and December 31. Where (i) the amount which, pursuant to the terms of the senior
facility, is available to AerCap Partners to make payments in respect of, amongst other things,
the subordinated loan notes is insufficient to meet the interest payments or (ii) the terms of the senior facility prohibit the payment in full of interest on the relevant payment date, then
AerCap Partners must pay the maximum amount of interest that can properly be paid to the noteholder on the relevant interest payment date and the unpaid interest carries interest at a rate of 20% per
annum until paid.

Maturity Date.Outstanding subordinated loan notes must be redeemed by the later of December 31, 2015 and the date falling
six months after
the later of the senior facility tranche 1 maturity date and the senior facility tranche 2 maturity date.

Voluntary Redemption.Subject to certain conditions, including (while the senior facility security remains outstanding) the
consent of the collateral
trustee, AerCap Partners may at any time redeem all or any of the outstanding subordinated loan notes.

Collateral.The collateral granted in respect of the senior facility also secures the debt constituted by the subordinated loan
notes. However, the
rights of the holders of subordinated loan notes in respect of this security are subordinated to the rights of the senior facility lenders, amongst others.

AerCap Engine Leasing Limited Credit Agreement

General.On June 25, 2008, AerCap Engine Leasing Limited, a wholly owned subsidiary, entered into a credit agreement with
Citibank, N.A. and
certain other financial institutions to finance the acquisition of aircraft engines. Pursuant to this agreement, the total commitment of the credit

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agreement
was $100 million. The borrowing period is two years from June 25, 2008 after which the loan converts to a term loan. The aggregate principal amount of the loans outstanding
under AerCap Engine Leasing Limited was $52.8 million as of December 31, 2009

Interest Rate.Under the Citibank credit agreement, AerCap Engines can borrow loans based on LIBOR up to the total commitment.
Set forth below are
the interest rates for the Citibank credit agreement.

Amount outstanding at
December 31, 2009

Interest rate(US dollars in thousands)Credit Agreement Engine Facility

$
52,761

One month LIBOR plus 1.725%


Prepayment.Loans under the Citibank credit agreement may be prepaid without prepayment premium or penalty. Mandatory
prepayments of the Citibank
credit agreement are required:



Payment Terms.Payments of interest under the credit agreement are due quarterly. Payments of principal are due on the maturity
date, and during the
Extension Term (as defined below), if any, principal payments are also due quarterly in an amount equal to 0.75% of the then aggregate outstanding principal amount of the loans.

Maturity Date.The maturity date of the Citibank credit agreement is June 25, 2010. AerCap Engine Leasing Limited has
elected to extend the
maturity date by an additional three years (the "Extension Term") to June 25, 2013, subject to certain conditions, including but not limited to AerCap Engine Leasing Limited posting cash
collateral in an amount equal to 2.5% of the then aggregate outstanding principal amount of the loans.

Collateral.Borrowings under the Citibank credit agreement are secured by security interests in and pledges or assignments of
all the shares and
other ownership interests in AerCap Engine Leasing Limited and its subsidiaries, as well as by all assets of AerCap Engine Leasing Limited and its subsidiaries.

Certain Covenants.The Citibank credit agreement contains a number of covenants that, among other things, restrict, subject to
certain exceptions,
the ability of AerCap Engine Leasing Limited to:



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A320 and A330 Pre-delivery Payment facilities

General.In January 2006, AerVenture signed a purchase agreement for the purchase of up to 70 aircraft from Airbus. As of
December 31, 2009,
there are 30 aircraft remaining to be delivered to AerVenture and are scheduled for delivery up to November 2013.

In
December 2006, we signed a purchase agreement to purchase up to 20 Airbus A330 aircraft. In May 2007, the purchase agreement was amended to add ten additional aircraft. As of
December 31, 2009, 11 of the aircraft had been delivered and the remaining aircraft are scheduled to be delivered prior to the end of 2012.

In
connection with the scheduled delivery of these A320 and A330 aircraft, the following facilities have been entered into to finance a portion of these required payments to
Airbus:



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Interest Rate.Borrowings under each of the facilities bear floating rate interest and margins as set out in the table below.
The aggregate principal
amount of the loans outstanding under the pre-delivery payment facilities was $404.6 million as of December 31, 2009.

Number of
aircraft

Amount
outstanding at
December 31,
2009

Interest rates(US dollars in thousands)AerVenture A320 HSH Nordbank AG Facility


26

$
173,564

One month LIBOR plus 1.20%AerCap Ireland A330 Citigroup Facility


2


45,629

One month LIBOR plus 1.00%AerCap Ireland A330 European financial institution facility


3


83,459

One month LIBOR plus 1.20%AerCap Ireland A330 US Dollar facility


1


15,131

One month LIBOR plus 4.00%AerCap Ireland A330 Euro facility


5


30,797

One month EURIBOR plus 5.50%AerCap Ireland A330 China Development Bank Facility


4


55,982

Three month LIBOR plus 3.30%Total




$
404,562


Prepayment.Borrowings under each of the pre-delivery payment facilities may be prepaid (subject to minimum payment and notice
provisions) without penalty, except for break funding costs if payment is made on a day other than an interest payment date.

Maturity Date.The maturity date of the each pre-delivery payment facility will be the earlier of (a) the delivery date for
the
final aircraft to be delivered and (b) the Maturity Date as outlined in the table above.

Collateral.Borrowings under the pre-delivery payment facilities are secured by, among other things, the partial assignment of
the
airframe and engine purchase agreements in respect of the A320 and A330 aircraft covered by each facility, including the right to take delivery of the aircraft where the lenders have provided the
pre-delivery payments and the aircraft remains undelivered.

Certain Covenants.The facilities contain customary covenants for secured pre-delivery payment financings.

In
connection with the Euro facility entered into with HSH Nordbank AG, the continued availability of this financing under the Facility Agreement dated June 30, 2009, between
AerCap as Borrower and HSH as Lender, Agent and Security Trustee was contractually conditioned on AerCap Ireland Limited or an affiliate acquiring one Boeing 747-400 ERF aircraft or
another solution acceptable to HSH on or before March 31, 2010. Under this agreement, the failure to make such a purchase or reach another acceptable solution, accelerates the final repayment
date to May 31, 2010.

AerCap
did not and does not expect to purchase the aircraft. AerCap does not, however, expect to be obliged to repay all amounts outstanding on May 31, 2010. AerCap expects the
repayment of the debt will follow the original anticipated repayment schedule which is at the time of each aircraft delivery.

Other Commercial Bank Financings

We have entered into various commercial bank financings to fund the purchase of aircraft. The financings mature at various dates
through 2019. The interest rates are LIBOR based with spreads ranging up to 1.50%, or fixed rate up to 5.00%. The financings are secured by, among other things, a

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pledge
of the shares of the subsidiaries owning the related aircraft, a guarantee from us and, in certain cases, a mortgage on the applicable aircraft. The aggregate principal amount of the loans
outstanding under the commercial bank financings was $138.3 million as of December 31, 2009.

All
of our financings contain affirmative covenants customary for secured financings. Four of the commercial bank financings contain change of control provisions that grant the lenders
the right to prepayment of their loans in the event of a change of control, unless the lenders consent to the change of control.

Item 6.    Directors, Senior Management and Employees

Directors and senior management.

Name

Age

PositionDirectors(1)Pieter Korteweg


68

Non-Executive Chairman of the Board of DirectorsRonald J. Bolger


62

Non-Executive Director, Vice ChairmanJames N. Chapman


47

Non-Executive DirectorKlaus W. Heinemann


58

Executive Director, Chief Executive OfficerW. Brett Ingersoll


46

Non-Executive DirectorMarius J.L. Jonkhart


59

Non-Executive DirectorGerald P. Strong


65

Non-Executive DirectorDavid J. Teitelbaum


38

Non-Executive DirectorRobert G. Warden


37

Non-Executive DirectorExecutive OfficersWouter M. (Erwin) den Dikken


42

Chief Legal Officer; Chief Executive Officer AerCap IrelandPaul E. Rofe


50

Group TreasurerSoeren E. Ferré


42

Head of Europe, Middle East, Africa & Asia/Pacific Regions; Chief Executive Officer AerCap Group Services B.V.Keith A. Helming


51

Chief Financial OfficerAengus Kelly


36

Chief Executive Officer AerCap, Inc.Michael King


43

Chief Executive Officer AeroTurbine, Inc.Cole T. Reese


45

Chief Operating Officer AerCap Group Services B.V.


---

Directors

Pieter Korteweg.Mr. Korteweg has been a director of our company since September 20, 2005. He serves as Vice Chairman
of Cerberus
Global Investment Advisors, LLC, and Director of Cerberus entities in the Netherlands. In addition, he serves as Non-executive Member of the Board of Showa
Jisho Co. Ltd (Tokyo), Member of the Supervisory Board of BawagPSK Bank (Vienna) and Non-executive Member of the Board of LucidaPlc. (London). He currently also serves as
Member of the Supervisory Board of Mercedes Benz Nederland BV and as senior advisor to Anthos B.V.

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Mr. Korteweg
previously served as Non-executive Member of the Board of Aozora Bank Ltd., (Tokyo), Chairman of the Supervisory Board of Pensions and Insurance Supervisory
Authority of The Netherlands, Chairman of the Supervisory Board of the Dutch Central Bureau of Statistics and Vice-Chairman of the Supervisory Board of De Nederlandsche Bank. From 1987 to
2001, Mr. Korteweg was President and Chief Executive Officer of the Group Executive Committee of Robeco Group in Rotterdam. From 1981 to 1986, he was Treasurer-General at The Netherlands
Ministry of Finance. In addition, Mr. Korteweg was a professor of economics from 1971 to 1998 at Erasmus University Rotterdam in The Netherlands. Mr. Korteweg holds a PhD in Economics
from Erasmus University Rotterdam.

Ronald J. Bolger.Mr. Bolger has been a director of our company since October 11, 2005. Mr. Bolger currently
serves as a member
of the board of directors of a number of companies including Ely Capital Ltd., Irish Food Processors, C & D Foods Ltd., Galway Clinic Doughiska Ltd. and Fine Grain Property
Consortium. He is a former Managing Partner of KPMG Ireland and has wide experience in the financial services industry. He served on the Irish Prime Minister's Committee for Dublin's International
Financial Services Centre from 1987 to 2002. Mr. Bolger was appointed Honorary Consul General of Singapore in Ireland in 2000. Mr. Bolger is a Chartered Accountant and holds a BA in
Economics from University College Dublin.

James N. Chapman.Mr. Chapman has been a director of our company since December 7, 2005. Mr. Chapman is
non-executive Vice Chairman and Director of SkyWorks Leasing, LLC,
an aircraft management services company based in Greenwich, Connecticut, which he joined in December 2004. Prior to SkyWorks, Mr. Chapman joined Regiment Capital Advisors, an investment advisor
based in Boston specializing in high yield investments, which he joined in January 2003. Prior to Regiment, Mr. Chapman was a capital markets and strategic planning consultant and worked with
private and public companies as well as hedge funds (including Regiment) across a range of industries. Mr. Chapman was affiliated with The Renco Group, Inc. from December 1996 to
December 2001. Presently, Mr. Chapman serves as a member of the board of directors of American Media, Inc., Hayes-Lemmerez International, Inc., LNR Property Corporation,
MXenergy, Inc., Scottish Re Group Ltd. and Tembec Inc., as well as a number of private companies. Mr. Chapman received an MBA with distinction from Dartmouth College and
was elected as an Edward Tuck Scholar. He received his BA, with distinction,magna cum laude, from Dartmouth College and was elected to Phi Beta Kappa, in
addition to being a Rufus Choate Scholar.

Klaus W. Heinemann.Mr. Heinemann has been the Chief Executive Officer of our company since April 2003 and has over
25 years of
experience in the aviation financing industry. Mr. Heinemann has been a director of our company since 2002. Mr. Heinemann joined our company in October 2002 from DVB Bank, where he was a
Member of the Executive Board. In 1988 he joined the Long-Term Credit Bank of Japan in London as Deputy General Manager and Head of the Aviation Group. He was later appointed as Joint
General Manager of the Head Office at the Long-Term Credit Bank of Japan, where he was responsible for the Transportation Finance division before this division was sold to DVB Bank in
1998. Mr. Heinemann started his career with Bank of America in 1976, where he helped to build up its Aviation Finance department in Europe. Mr. Heinemann holds the degree of Diplom
Kaufmann (Bachelor of Commerce) from the University of Hamburg.

W. Brett Ingersoll.Mr. Ingersoll has been a director of our company since September 20, 2005. He is currently a
Managing Director of
Cerberus Capital Management, L.P., Co-Head of its Private Equity Practice and a member of its Investment Committee. Mr. Ingersoll is also a director of ACE Aviation
Holdings Inc. and a member of the Audit, Finance and Risk Committee and the Human Resources and Compensation Committee of ACE Aviation Holdings Inc. In addition, Mr. Ingersoll is
a director of various public and private companies, including IAP Worldwide Services, Inc., Talecris Bio Therapeutics, Inc., Entrecap LLC and Endura Care, LLC. Prior to
joining Cerberus in 2002,

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Mr. Ingersoll
was a Partner at JP Morgan Partners (formerly Chase Capital Partners) from 1993 to 2002. Mr. Ingersoll received his MBA from Harvard Business School and his BA from Brigham
Young University.

Marius J.L. Jonkhart.Mr. Jonkhart has been a director of our company since October 11, 2005. He is
currently also a member of the Supervisory Boards of BAWAG P.S.K. AG, Corus Nederland N.V., Orco Bank International N.V. and Staatsbosbeheer, and a non-executive director of
Aozora Bank. Mr. Jonkhart is an advisor to Cerberus Global Investment Advisors, LLC. Mr. Jonkhart is an independent consultant. He was previously the Chief Executive Officer of De
Nationale Investerings Bank N.V. and the Chief Executive Officer of NOB Holding N.V. He also served as the director of monetary affairs of the Dutch Ministry of finance. In addition, he
has been a professor of finance at Erasmus University Rotterdam. He has served as a member of a number of supervisory boards, including the Supervisory Boards of the Connexxion Holding N.V.,
European Investment Bank, Bank Nederlandse Gemeenten N.V., Postbank N.V., NPM Capital N.V., Kema N.V., AM Holding N.V. and De Nederlandsche Bank N.V. He has
also served as chairman of the Investment Board of ABP Pension Fund and several other funds. Mr. Jonkhart holds a Master's degree in Business Administration, a Master's degree in Business
Economics and a PhD in Economics from Erasmus University Rotterdam.

Gerald P. Strong.Mr. Strong has been a director of our company since July 26, 2006. He currently is a Partner of
Cerberus UK Advisors
running operations in Europe. Mr. Strong has extensive senior experience in a number of industries, including airlines, global communications, retailing, and consumer products. He has served
senior roles in the restructuring and building of a number of international businesses in his career. Mr. Strong was Chairman of the Advisory Board on Telecom Security to the government of the
United Kingdom from 2002 to 2005 and President and Chief Executive Officer of Teleglobe International Holdings Limited. He is also a member of the Governing Council of the Ashridge Business School, a
Director of Focus Ltd., Chairman of Torex Ltd and Chairman of Virtual IT. Mr. Strong received his BA with honors from Trinity College, Dublin.

David J. Teitelbaum.Mr. Teitelbaum has been a director of our company since September 20, 2005. Mr. Teitelbaum
is a Managing
Director of Cerberus Capital Management, LLC and has worked for Cerberus and/or its affiliates since 1997. Prior to joining Cerberus, Mr. Teitelbaum worked in the investment banking
department of Donaldson, Lufkin & Jenrette. Mr. Teitelbaum holds a BS in Business Administration from the University of California, Berkeley.

Robert G. Warden.Mr. Warden has been a director of our company since September 20, 2005. He is also currently a
Managing Director of
Cerberus Capital Management, L.P., which he joined in February 2003. Mr. Warden is also currently a director of various public and private companies, including BlueLinx Corporation,
Equable Ascent Financial, LLC and Four Points Media Group LLC. Prior to joining Cerberus, Mr. Warden was a Vice President at J.H. Whitney from May 2000 to February 2003, a
Principal at Cornerstone Equity Investors LLC from July 1998 to May 2000 and an Associate at Donaldson, Lufkin & Jenrette from July 1995 to July 1998. Mr. Warden received his AB
from Brown University.

Executive Officers

Wouter M. (Erwin) den Dikken.Mr. den Dikken was appointed as our Chief Legal Officer in 2005 and has served as the Head of
the Group Legal
Services department since 2004. In addition to his responsibilities as Chief Legal Officer, he has been appointed Chief Executive Officer of our Irish operations in 2007. He joined our legal
department in 1998. Prior to joining us, Mr. den Dikken worked for an international packaging company in Germany as Senior Legal Counsel where he focused on mergers and acquisitions.
Mr. den Dikken holds a law degree from Utrecht University.

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Soeren E. Ferré.Mr. Ferré has been the Head of Europe, Middle East, Africa & Asia/Pacific Region of
our
company since June 2006. He joined our company in September 2003 as Vice President of Marketing for the Asia/Pacific region. In July 2004, he was appointed as the Head of Sales and Marketing for the
Asia/Pacific region. In addition to his responsibilities as Head of Europe, Middle East, Africa & Asia/Pacific Region, he has been appointed Chief Executive Officer of AerCap Group
Services, B.V. in January 2008. He started his career at Airbus in 1990 and was based in Toulouse, France. In 1995, he moved to China and became the head of the marketing team covering China,
Hong Kong and Macau for Airbus prior to becoming a Sales Director in 1999 in charge of the major Chinese airlines. In 2001, Mr. Ferré moved to Sydney to become the Director of
Sales for the Pacific region for Airbus where he was in charge of the major airlines in that region. Mr. Ferré holds a Bachelor's degree in Engineering from the
ENACEcole Nationale de l'Aviation Civile.

Keith A. Helming.Mr. Helming assumed the position of Chief Financial Officer of AerCap in 2006. Prior to joining us, he
was a long standing
executive at GE Capital Corporation, including serving recently for five years as Chief Financial Officer at aircraft lessor GE Commercial Aviation Services ("GECAS"). He was with General Electric
Company for over 25 years, beginning with their Financial Management Program in 1981. In addition to the GECAS role, Mr. Helming served as the Chief Financial Officer of GE Corporate
Financial Services, GE Fleet Services and GE Consumer Finance in the United Kingdom, and also held a variety of other financial positions throughout his career at GECC. Mr. Helming holds a
Bachelor of Science degree in Finance from Indiana University.

Aengus Kelly.Mr. Kelly served as our Group Treasurer from 2005 through December 31, 2007. He has been Chief Executive
Officer of our
US operations since January 2008. He started his career in the aviation leasing and financing business with Guinness Peat Aviation in 1998 and has continued working with its successors AerFi in
Ireland and debis AirFinance and AerCap in Amsterdam. Prior to joining GPA in 1998, he spent three years with KPMG in Dublin. Mr. Kelly is a Chartered Accountant and holds a Bachelor's
degree in Commerce and a Master's degree in Accounting and Finance from University College Dublin.

Michael King.Mr. King was named Chief Executive Officer of AeroTurbine on August 15, 2008. He joined the company in
June 2006 as
Senior Vice President of Materials and was later appointed as President in October 2007. Mr. King has an extensive aviation background having previously served as Group Vice President of
Sales & Marketing for AAR Corp. where he worked for 14 years. During his tenure at AAR, he held various General Manager positions with overall responsibility for their New Parts
Distribution Group, PMA Parts Group and Engine Parts Group. His prior experience with AAR also included roles as Vice President of their Engine Sales & Leasing Group, Engine Parts Regional
Sales Manager and European Parts Regional Sales Manager (while based in their London, UK location). Mr. King is a graduate of the University of Illinois where he earned a BA in Economics and
Marketing.

Cole T. Reese.Mr. Reese has been the Chief Operating Officer of AerCap Group Services, B.V. since January 2008 and
was the Chief Tax
and Accounting Officer for AerCap Holdings N.V. between September 2002 and February 2010. Prior to joining AerCap, Mr. Reese worked for nine years for MCC Financial Corporation, a
turboprop operating lessor in Washington D.C., where he ultimately became Chief Financial Officer. Mr. Reese also worked for three years with Ernst & Young. He is a U.S. certified public
accountant and holds a Master's degree in Accountancy and a BS in Accounting from Brigham Young University.

Paul E. Rofe.Mr. Rofe was appointed the Group Treasurer of AerCap in January 2008, previously serving in the role of Vice
President Corporate
Group Treasury, since joining the company in September of 2006. He began his career in the aviation leasing and financing business with a Kleinwort Benson subsidiary in 1995, and then moved to BAE
Systems for seven years, where he held the

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positions
of Director Asset Management and General ManagerPortfolio Management. Mr. Rofe qualified as an accountant in 1986 in the United Kingdom.

Compensation of Non-Employee Directors

We currently pay each non-executive director who is not affiliated with Cerberus an annual fee of €75,000
and pay each of these directors an additional €2,000 per meeting. We pay our Chairman of our Board of Directors €150,000 per year. In addition, we pay the chairs of the
Audit Committee and Nomination and Compensation Committee an annual fee of € 18,000 and each committee member will receive an annual fee of €6,000 and a
fee of €2,000 per committee meeting. All members of the Board of Directors are reimbursed for reasonable costs and expenses incurred in attending meetings of our Board of Directors.

Executive Officer Compensation

In 2009, we paid an aggregate of approximately $6.8 million in cash and benefits as compensation to our seven executive officers
during the year. In 2009, we paid our executive officers annual target bonuses, which are based on an evaluation of individual performance and the Company's achievement of established targets.
Compensation packages, including bonuses, are determined by the Nomination and Compensation Committee upon recommendation of the Chief Executive Officer (except for the compensation package of
Mr. King, which is determined by Mr. Kelly), and the Board of Directors, upon recommendation of the Nomination and Compensation Committee, determines the compensation package, including
the bonus, for our Chief Executive Officer. In 2008, the Nomination and Compensation Committee agreed to pay two executive officers $1,000,000 each in December 2011 if they are employees in good
standing at such time. In 2009, the Nomination and Compensation Committee agreed to pay one additional executive officer $1,000,000 in December 2012 if this employee is in good standing at such time.

Equity Incentive Plans

Equity Incentives issued by the Cerberus Funds

In connection with the 2005 Acquisition and again during 2006, the Cerberus Funds, our indirect shareholders, issued restricted shares
and stock options to certain of our employees, directors and a consultant to retain such individuals and motivate them to achieve our primary long-term performance goals. Since their
issuance, restrictions on all restricted shares have lapsed and restricted shares in the Cerberus Funds have been exchanged for AerCap shares, and all vesting criteria on options issued have either
been fully satisfied or have lapsed.

The
indirect and direct ownership in our ordinary shares represented by the grants of shares and options discussed above are reflected in the table under "Share Ownership".

AerCap Holdings N.V. Equity Incentive Plan

On October 31, 2006, we implemented an equity incentive plan that is designed to promote our interests by enabling us to
attract, retain and motivate directors, employees, consultants and advisors and align their interests with ours. Our new equity incentive plan provides for the grant of nonqualified stock options,
incentive stock options, stock appreciation rights, restricted stock, restricted stock units and other stock awards ("NV Equity Grants") to participants of the plan selected by the Nomination and
Compensation Committee of our Board of Directors. Subject to certain adjustments, the maximum number of shares available to be granted under the plan is equal to 5% of our outstanding shares.

The
terms and conditions of awards, including vesting provisions for stock options, are determined by the Nomination and Compensation Committee, except that, unless otherwise determined
by the

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Nomination
and Compensation Committee, or as set forth in an award agreement: (a) each stock option is granted for ten years from the date of grant, or, in the case of certain key employees,
i.e., employees owning more than 10% of our ordinary shares, for five years from the date of grant; provided, however, no stock option period may extend beyond ten years from the date of grant;
(b) the option price per share for incentive stock options may not be less than 100% of the fair market value of the ordinary shares except that the option price per share for a key employee
may not be less than 110% of the fair market value of the ordinary shares at the time the incentive stock option is granted; and (c) incentive stock options may only be issued to the extent the
aggregate fair market value of shares with respect to the exercise of the incentive stock options for the first time by an option holder during
any calendar year is $100,000 or less, with any additional stock options being treated as nonqualified stock options.

In
September 2007 and June 2008, a total of 2.4 million and 0.1 million, respectively of non-qualified stock options were issued under the equity incentive plan
to certain employees of the Company. All options issued vest over a period of four years based on both time and performance based criteria. The September 2007 and June 2008 options are exercisable at
a strike prices of $24.63 and $15.03 per share option, respectively.

In
December 2008, a total of 0.7 million non-qualified stock options were issued under the equity incentive plan to certain employees of the Company. All options
issued vest at December 31, 2011 if the option holder is still employed full-time by the Company or any of its affiliates and all options are exercisable at a strike price of $2.95
per share option. There were no additional awards granted under the AerCap Holdings N.V. equity incentive plan during 2009.

Board Practices

General

Our Board of Directors currently consists of nine directors, eight of whom are non executive directors and are independent under the
independence definition in The Netherlands Corporate Governance Code. As a foreign private issuer, as defined by the Securities Exchange Act of 1934, as amended, we are not required to have a majority
independent board of directors under applicable New York Stock Exchange rules.

We
apply the Netherlands Corporate Governance Code independence criteria. According to these criteria, to be considered "independent", a director (and his or her spouse and immediate
relatives) may not, among other things, (i) in the five years prior to his or her appointment, have been an employee or executive director of us or any Dutch public company affiliated with us,
(ii) in the year prior to his or her appointment, have had an important business relationship with us or any Netherlands public company affiliated with us, (iii) receive any financial
compensation from us other than for the performance of his or her duties as a director or other than in the ordinary course of business, (iv) hold 10% or more of our ordinary shares (including
ordinary shares subject to any shareholder's agreement), (v) be a member of the management or supervisory board of a company owning 10% or more of our ordinary shares, and (vi) in the
year prior to his or her appointment, has
temporarily managed our day-to-day affairs while the executive director was unable to discharge his or her duties.

The
directors are appointed at the general meeting of the shareholders. Our directors may be elected by the vote of a majority of votes cast at a general meeting of shareholders provided
that our Board of Directors has proposed the election. Without a Board of Directors proposal, directors may also be elected by the vote of a majority of the votes cast at a general meeting of
shareholders if the majority represents at least one-third of our issued capital.

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Shareholders
may remove or suspend a director by the vote of a majority of the votes cast at a general meeting of shareholders provided that our Board of Directors has proposed the
removal. Our shareholders may also remove or suspend a director, without there being a proposal by the Board of Directors, by the vote of a majority of the votes cast at a general meeting of
shareholders if the majority represents at least one-third of our issued capital.

Under
our Articles of Association, the rules for the Board of Directors and the board committees and Netherlands corporate law, the members of the Board of Directors are collectively
responsible for the management, general and financial affairs and policy and strategy of our company.

The
executive director is our Chief Executive Officer, who is primarily responsible for managing our day-to-day affairs as well as other responsibilities that
have been delegated to the executive director in accordance with our Articles of Association and our internal rules for the Board of Directors. The non-executive directors supervise the
Chief Executive Officer and our general affairs and provide general advice to our Chief Executive Officer. In performing their duties, the non-executive directors are guided by the
interests of the company and shall, within the boundaries set by relevant Netherlands law, take into account the relevant interests of our shareholders. The internal affairs of the Board of Directors
are governed by our rules for the Board of Directors.

The
Chairman of the Board is obligated to ensure, among other things, that (i) each director receives all information about matters that he or she may deem useful or necessary in
connection with the proper performance of his or her duties, (ii) each director has sufficient time for consultation and decision making, and (iii) the Board of Directors and the board
committees are properly constituted and functioning.

Each
director has the right to cast one vote and may be represented at a meeting of the Board of Directors by a fellow director. The Board of Directors may pass resolutions only if a
quorum of four directors, including our Chief Executive Officer and the Chairman, or, in his absence, the Vice Chairman, are present at the meeting. All resolutions must be passed by an absolute
majority of the votes cast. If there is a tie, the matter will be decided by the Chairman of our Board of Directors, or in his absence, the Vice Chairman.

In
2009, the Board of Directors met on twelve occasions. Throughout the year, the Chairman of the Board and individual Non-Executive Directors were in close contact with our
Executive Officers. During its meetings and contacts with the Executive Officers, the Board discussed such topics as the Company's annual reports and annual accounts for the financial year 2008, the
investment by Waha in AerVenture, the acquisition of Genesis Lease Limited, the Company's hedging strategies, the long term financing of the AerVenture A320 FAM forward order, the credit crisis that
started during 2008, the downturn of the world economy that followed and the risks and impact on the Company, the liquidity position, remaining funding requirements and alternatives for funding
sources, review and discussion of reports from the various Board committees, strategic alternatives, the budget for 2010, remuneration and compensation, Board rotation schedule, governance and risk
management and control, including compliance with the Sarbanes Oxley Act.

Subject
to Netherlands law, resolutions may be passed in writing by a majority of the directors in office. Pursuant to the internal rules for our Board of Directors, a director may not
participate in discussions or the decision making process on a transaction or subject in relation to which he or she has a conflict of interest with us. Resolutions to enter into such transactions
must be approved by a majority of our Board of Directors, excluding such interested director or directors.

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Committees of the Board of Directors

The Board of Directors has established a Group Executive Committee, a Group Portfolio and Investment Committee, a Group Treasury and
Accounting Committee, an Audit Committee and a Nomination and Compensation Committee.

Our
Group Executive Committee is responsible for our operational management. It is chaired by our Chief Executive Officer and is comprised of up to ten current members of our senior
management. The current members of our Group Executive Committee are Klaus Heinemann, Keith Helming, Aengus Kelly, Paul Rofe, Erwin den Dikken, Cole Reese and Soeren Ferré.

Our
Group Portfolio and Investment Committee has authority to enter into and is responsible for transactions relating to the acquisition and disposal of aircraft, engines and financial
assets that are in excess of $100 million but less than $500 million. It is chaired by our Chief Financial Officer and is comprised of members of the Group Executive Committee and
non-executive directors or any other person appointed by the Board of Directors upon recommendation of the Nomination and Compensation Committee. The current members of our Group Portfolio
and Investment Committee
are Keith Helming, Soeren Ferré, Klaus Heinemann, Robert Warden, Cole Reese, Aengus Kelly and James Chapman.

Our
Group Treasury and Accounting Committee has authority and is responsible for committing debt funding in excess of $100 million but not exceeding $500 million per
transaction. It is chaired by our Chief Financial Officer and is comprised of certain members of the Group Executive Committee and certain non-executive directors or any other person
appointed by the Board of Directors upon recommendation of the Nomination and Compensation Committee. The current members of our Group Treasury and Accounting Committee are Keith Helming, Cole Reese,
David Teitelbaum, Klaus Heinemann, Aengus Kelly, Paul Rofe, Tom Kelly, Marius Jonkhart and Robert Warden.

Our
Audit Committee assists the Board of Directors in fulfilling its responsibilities relating to the integrity of our financial statements, our risk management and internal control
arrangements, our compliance with legal and regulatory requirements, the performance, qualifications and independence of external auditors, and the performance of the internal audit function. The
Audit Committee is chaired by a person with the necessary qualifications who is appointed by the Board of Directors and is comprised of three non-executive directors who are "independent"
as defined by Rule 10A-3 of the Securities Exchange Act of 1934, as amended, as well as under The Netherlands Corporate Governance Code. The current members of our Audit Committee
are Marius Jonkhart, James Chapman and Ronald Bolger.

Our
Nomination and Compensation Committee selects and recruits candidates for the positions of the Chief Executive Officer, non-executive director and Chairman of the Board
of Directors and recommends their remuneration, bonuses and other terms of employment to the Board of Directors. In addition our Nomination and Compensation Committee approves the remuneration,
bonuses and other terms of employment and recommends candidates for positions in the Group Portfolio and Investment Committee, the Group Treasury and Accounting Committee, the Group Executive
Committee and recommends candidates for the Audit Committee and plans the succession within the Board of Directors and committees. It is chaired by the Chairman of our Board of Directors and is
comprised of two non-executive directors appointed by the Board of Directors. The current members of our Nomination and Compensation Committee are Brett Ingersoll, Marius Jonkhart and
Pieter Korteweg.

Nomination and Compensation Committee Interlocks and Insider Participation

None of our Nomination and Compensation Committee members or our executive officers have a relationship that would constitute an
interlocking relationship with executive officers or directors of another entity or insider participation in compensation decisions.

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Employees

The table below provides the number of our employees at each of our principal geographical locations as of the dates indicated.

Location

December 31,
2007

December 31,
2008

December 31,
2009Amsterdam, The Netherlands


88


87


74Shannon, Ireland


42


44


50Fort Lauderdale, FL


16


17


18Miami, FL(1)


172


128


120Goodyear, AZ(1)


75


83


46Other(2)


9


23


37Total


402


382


345


(1)Employees
located in Miami, Florida and Goodyear, Arizona are employees of AeroTurbine which we acquired in April 2006.(2)We
also lease small offices in Shanghai (China), Irvine (TX), Finchampsted (UK) and Singapore.


None
of our employees are covered by a collective bargaining agreement and we believe that we maintain excellent employee relations. Although by law we are required to have a works
council for our operations in The Netherlands, our employees have not elected to date to organize a works council. A works council is an employee organization that is granted statutory rights to be
involved in certain of the company's decision making processes. The exercise of such rights, however, must not only promote the interests of employees, but also take into account the interests of the
company and its shareholders.

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Share ownership.

The following table sets forth beneficial ownership of our shares which are held by members of our senior management team and our
non-executive directors:

Cerberus Fund
Options(1)

AerCap
Holdings N.V.
Options/SharesOrdinary
shares
underlying
vested, but
unexercised
options(2)(3)

Ordinary
shares
underlying
options(4)

Ordinary
shares acquired
through
exercise of
Cerberus Fund
exchange right

Ordinary
shares
acquired
through
open
market
purchases

Fully
Diluted
Ownership
Percentage(5)Directors:Ronald J. Bolger


27,734












*James N. Chapman


55,300








2,000



*Pieter Korteweg


55,469












*W. Brett Ingersoll(6)














Klaus W. Heinemann(7)


1,409,926








35,000


1.7
%Marius J. L. Jonkhart


27,734








10,000



*Gerald P. Strong(6)














David J. Teitelbaum(6)














Robert G. Warden(6)














Executive Officers:Wouter M. (Erwin) den Dikken


61,005


287,500


148,565


10,000



*Soeren E. Ferré





437,500


167,366


6,000



*Keith A. Helming


452,177


375,000





25,000



*Aengus Kelly


122,015


625,000


252,791


10,000



*Michael King





262,500





Paul E. Rofe














Cole T. Reese





287,500


209,227


10,000



*All our directors and executive officers as a group (16 persons)


2,211,360


2,275,000


777,949


108,000


3.6
%


*Less
than 1.0%.(1)Shareholdings
reflect indirect beneficial ownership of AerCap Holdings N.V. held through ownership of restricted common shares or options issued by
the Cerberus Funds to acquire common shares of the Cerberus Funds or common shares of AerCap Holdings N.V. owned by the Cerberus Funds on a fully diluted basis, assuming the vesting and
exercise of all outstanding share options.(2)All
options outstanding expire on June 30, 2015.(3)The
exercise price of options held by Mr. Heinemann is $0.00. The exercise price of all other options is equivalent to $7.00 per ordinary share.(4)1,500,000
of these outstanding options expire on September 13, 2017 and carry a strike price of $24.63 per option. 75,000 of these options expire on
June 2, 2018 and carry a strike price of $15.03 per option. The remaining 700,000 options expire on December 11, 2018 and carry a strike price of $2.95 per option. None of the options
listed are exercisable within 60 days.(5)Percentage
amount assumes the exercise by such persons of all options to acquire shares exercisable within 60 days and no exercise of options by any
other person


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(6)Mssrs.
Ingersoll and Warden are each a Managing Director of Cerberus Capital Management, L.P. and Mssrs. Strong and Teitelbaum are Managing Directors
of affiliates of Cerberus Capital Management, L.P.(7)Mr. Heinemann
is both a member of our Board of Directors and our Chief Executive Officer.


All
of our ordinary shares have the same voting rights.

The
address for all our officers and directors is c/o AerCap Holdings N.V., AerCap House, Stationsplein 965, 1117 CE Schiphol, The Netherlands.

Item 7.    Major Shareholders and Related Party Transactions

The table below indicates the beneficial holders of 5% or more of our common outstanding shares as of March 12, 2010, based on
available public filings:

Ordinary shares
beneficially ownedNumber

Percent5% or Greater Beneficial Share Owner:Stephen Feinberg(1)


31,984,108


37.6
%Columbia Asset Management


9,757,084


11.5
%Wellington Management Company, LLP


7,878,408


9.3
%


(1)Cerberus
beneficially owns 37.6% of our ordinary shares on a fully diluted basis assuming the vesting and exercise of all outstanding Cerberus Fund options.
All of these shares have the same rights as our other ordinary shares. Stephen Feinberg exercises sole voting and investment authority over all of our ordinary shares owned by Cerberus. Thus, pursuant
to Rule 13d-3 under the Exchange Act, Stephen Feinberg is deemed to beneficially own 37.6% of our ordinary shares. The address for Mr. Feinberg is c/o Cerberus Capital
Management, L.P., 299 Park Avenue, New York, New York 10171.


As
of December 31, 2009, none of our ordinary shares were held by record holders in the Netherlands. All of our ordinary shares have the same voting rights.

Related Party Transactions

The following is a summary of material provisions of various transactions we have entered into with related parties since
January 1, 2005.

Related Party Transactions with Current Affiliate

AerDragon consists of two joint venture companies Dragon Aviation Leasing Company Limited, or Dragon, based in China and AerDragon
Aviation Partners Limited or AerDragon, based in Ireland. Both companies are owned 50% by China Aviation Supplies Holding Company, 25% by affiliates of Crédit Agricole and 25% by
AerCap. In 2007, AerCap assigned a purchase right it had with Airbus under AerCap's 1999 forward order agreement relating to an A320 aircraft which was then directly acquired by AerDragon. In
addition, during 2007 AerCap sold an A320 aircraft that was subject to a lease with an airline to AerDragon and guaranteed the performance of AerDragon under debt which was assumed by AerDragon from
AerCap in the transaction. Both of these transactions were executed at terms, which we believe reflected market conditions at the time. AerCap provides lease management, insurance management and
aircraft asset management services to AerDragon. AerCap charged AerDragon a total of $0.8 million as a guarantee fee and for these management services during 2009. We apply equity accounting
for our 25% investment in both joint venture companies. Accordingly, the

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income
statement effects of all transactions with either of the joint venture companies are eliminated in our financial statements.

AerCo
is an aircraft securitization vehicle from which we hold all of the most junior class of subordinated notes and some notes immediately senior to those junior notes. We do not
recognize value for the AerCo notes which we still hold on our consolidated balance sheets. Through March 2003 we consolidated AerCo, but we deconsolidated the vehicle in accordance with ASC 810 at
that time. Subsequent to the deconsolidation of AerCo, we have received interest from AerCo on its D note investment of $1.7 million, $0.8 million, $1.7 million and
$0.4 million for the six months ended June 30, 2005, the period from June 27, 2005 to December 31, 2005, the year ended December 31, 2006 and the year ended
December 31, 2007, respectively. In addition, we provide a variety of management services to AerCo for which we received fees of $2.4 million, $2.4 million, $5.2 million,
$4.8, $4.6 and $4.6 million million for the six months ended June 30, 2005, the period from June 27, 2005 to December 31, 2005, the years ended December 31, 2006,
2007, 2008 and 2009, respectively.

We
have made payments to Cerberus and third parties on behalf of Cerberus totaling $1.2 million in 2005 and 2006. The payments to Cerberus represent reimbursement of consulting
fees paid by Cerberus to individuals who have assisted us in the evaluation of portfolio or company purchases, including our AeroTurbine Acquisition. In addition, this amount also includes
$0.2 million of reimbursements for consulting services incurred by Cerberus in connection with Cerberus's evaluation of the 2005 Acquisition. If we accept services from individuals employed by
or contracted through Cerberus in the future, we will establish consulting agreements directly with such individuals instead of working with them through Cerberus. We expect these arrangements to
reflect arms' length negotiations that will not be more favorable than the terms we could negotiate with an independent party. Payments to third parties on behalf of Cerberus consist of payments to
advisors engaged by Cerberus in connection with the 2005 Acquisition.

In
February 2006, we entered into a guarantee arrangement with DvB Bank AG and Aozora Bank Limited, an entity that is majority owned by Cerberus. In addition, Pieter Korteweg, the
Chairman of our Board of Directors, and Marius Jacques Leonard Jonkhart, a non-executive director, are and or were also on the board of directors of Aozora Bank. The guarantee supports
certain of our obligations to a Japanese operating lessor of up to $13.8 million in connection with a JOL financing. The Japanese operating lessor required the guarantee as additional credit
support following the 2005 Acquisition. We leased the A320 aircraft from the Japanese operating lessor under a lease and then subleased the aircraft to an aircraft operator. In the event we fail to
make certain payments related to JOL financing, DvB Bank will make the payment on our behalf but will be reimbursed by Aozora Bank for any payments made. We have agreed to indemnify Aozora Bank for
any payments it makes under the guarantee arrangement. The guarantee expires in March 2010. Under the terms of the guarantee arrangement, we are required to provide cash collateral to Aozora Bank if
we breach certain financial covenants. Currently we are not in breach of any of these covenants and have not provided any cash collateral. In connection with the guarantee arrangement, we pay Aozora
Bank a guarantee fee of 4.1% per annum of the amount guaranteed and have provided Aozora Bank with a second priority share pledge over the shares of the entity that entered into the financing from the
Japanese operating lessor.

In
April 2006, we entered into a senior secured revolving credit facility in the aggregate amount of up to $1.0 billion with UBS Real Estate Securities Inc., UBS
Securities Inc., Deutsche Bank Trust Company Americas and certain other financial institutions. Aozora Bank is a syndicate member under the facility and participated in up to
$50.0 million of the Class A loans and up to $25.0 million of the Class B loans issued thereunder, representing 7.0% of the Class A loans and 13.9% of the
Class B loans. As of December 31, 2009, we had drawn and there remained outstanding $284.0 million of the class A loans and $59.2 million of the class B
loans.

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In
2008, we acquired one A320-200, two Boeing 737s, Boeing 757 and six MD80s from EntreCap, an entity controlled by Cerberus. The purchase price of these aircraft was
approximately $67 million.

Item 8.    Financial Information

Consolidated Statements and Other Financial Information.

Please refer to Item 18. Financial Statements and to pages F-1 through F-57 of this annual
report.

Item 9.    The Offer and Listing.

Offer and listing details.

Not applicable.

Markets.

The Company's shares are traded on the New York Stock Exchange under the symbol "AER".

Trading on the New York Stock Exchange

The following table shows, for the periods indicated, the high and low sales prices per ordinary share as reported on the New York
Stock Exchange Composite Tape.

Price Per
AerCap Holdings N.V.
Ordinary Share(1)High

Low($)

($)Annual highs and lows2009


9.54


1.83Quarterly highs and lowsQuarter 1 2009


6.27


1.83Quarter 2 2009


7.49


2.76Quarter 3 2009


9.54


6.36Quarter 4 2009


9.25


7.97Monthly highs and lowsJanuary


6.27


3.22February


5.34


3.23March


3.73


1.83April


4.73


2.76May


6.94


4.80June


7.49


6.26July


7.68


6.36August


9.54


8.03September


9.30


8.35October


8.88


8.29November


9.25


7.97December


9.06


8.672010January


10.88


8.75February


9.51


7.68March (through March 12, 2010)


9.67


11.17


(1)Share
prices provided are closing prices for all periods presented.


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On
March 12, 2010, the closing sales price for our ordinary shares on the New York Stock Exchange as reported on the NYSE Composite Tape was $11.17.

Item 10.    Additional Information.

Memorandum and articles of association.

Set out below is a summary description of our ordinary shares and related material provisions of our articles of association and of
Book 2 of The Netherlands Civil Code (Boek 2 van het Burgerlijk Wetboek), which governs the rights of holders of our ordinary shares.

Ordinary Share Capital

As of December 31, 2009, we had 200,000,000 authorized ordinary shares, par value €0.01 per share, of which
85,036,957 were issued and outstanding.

Pursuant
to our articles of association, our ordinary shares may only be held in registered form. All of our ordinary shares are registered in a register kept by us or on our behalf by
our transfer agent. Transfer of registered shares requires a written deed of transfer and the acknowledgment by the Company. Our ordinary shares are freely transferable.

Issuance of Ordinary Shares

A general meeting of shareholders can approve the issuance of ordinary shares or rights to subscribe for ordinary shares, but only in
response to a proposal for such issuance submitted by the Board of Directors specifying the price and further terms and conditions. In the alternative, the shareholders may designate to our Board of
Directors' authority to approve the issuance and price of issue of ordinary shares. The delegation may be for any period of up to five years and must specify the maximum number of ordinary shares that
may be issued.

At
the annual general meeting held in 2008, pursuant to our articles of association, our shareholders delegated to our Board of Directors, for a period of five years, the power to issue
and/or grant rights to subscribe for ordinary shares up to the maximum amount of our authorized share capital which, as of the date of this annual report was 200 million ordinary shares.

Preemptive Rights

Unless limited or excluded by our shareholders or Board of Directors as described below, holders of ordinary shares have a pro rata
preemptive right to subscribe for any ordinary shares that we issue, except for ordinary shares issued for non-cash consideration or ordinary shares issued to our employees.

Shareholders
may limit or exclude preemptive rights. Shareholders may also delegate the power to limit or exclude preemptive rights to our Board of Directors with respect to ordinary
shares, the issuance of which has been authorized by our shareholders. At the annual general meeting held in 2008, pursuant to our articles of association, our shareholders delegated to our Board of
Directors, for a period of five years, the power to limit or exclude preemptive rights.

Repurchase of Our Ordinary Shares

We may acquire our ordinary shares, subject to certain provisions of the laws of The Netherlands and of our articles of association, if
the following conditions are met:



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At
the annual general meeting held in 2009, pursuant to our articles of association our shareholders authorized our Board of Directors to acquire ordinary shares, which authorization is
valid for 18 months.

Mandatory Offer

Under the laws of the Netherlands any person that acquires, alone or in concert with others, directly or indirectly, the right to
exercise at least 30% of the voting rights in our general meeting of shareholders is required, subject to limited statutory exceptions, to make a mandatory offer for all of our ordinary shares in the
Company.

Capital Reduction; Cancellation

Shareholders may reduce our issued share capital either by cancelling ordinary shares held in treasury or by amending our articles of
association to reduce the par value of the ordinary shares. A resolution to reduce our capital requires the approval of at least an absolute majority of the votes cast and, if less than one half of
the share capital is represented at a meeting at which a vote is taken, the approval of at least two-thirds of the votes cast.

A
partial repayment of ordinary shares under the laws of The Netherlands is only allowed upon the adoption of a resolution to reduce the par value of the ordinary shares. The repayment
must be made pro rata on all ordinary shares. The pro rata requirement may be waived with the consent of all
affected shareholders. In some circumstances, our creditors may be able to prevent a resolution to reduce our share capital from taking effect.

Risk Management and Control Framework

Our management is responsible for designing, implementing and operating an adequate functioning internal risk management and control
framework. The purpose of this framework is to identify and manage the strategic, operational, financial and compliance risks to which we are exposed, to promote effectiveness and efficiency of our
operations, to promote reliable financial reporting and to promote compliance with laws and regulations. Our internal risk management and control framework is based on the COSO framework developed by
the Committee of Sponsoring Organizations of the Treadway Commission (1992). The COSO framework aims to provide reasonable assurance regarding effectiveness and efficiency of an entity's operations,
reliability of financial reporting, prevention of fraud and compliance with laws and regulations.

Our
internal risk management and control framework has the following key components:

Planning and control cycle

The planning and control cycle consists of an annual budget and business plan prepared by management and approved by our Board of
Directors, quarterly forecasts and operational reviews and monthly financial reporting.

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Risk Management and Internal Controls

We have developed a system of policies and procedures for all areas of our operations, both financial and non-financial,
that constitutes a broad system of
internal control. This system of internal control has been developed through a risk-based approach and enhanced with a view to achieving and maintaining full compliance with the
requirements of section 404 of the Sarbanes Oxley Act ("SOX"). Our system of internal control is embedded in our standard business practices and is validated through audits performed by our
internal auditors and through management testing of SOX controls, which is performed with the assistance of external advisors. In addition, senior management personnel and finance managers of our main
operating subsidiaries annually sign a detailed letter of representation with regard to financial reporting, internal controls and ethical principles. All of our employees working in finance or
accounting functions are subject to a separate Finance Code of Ethics.

Controls and Procedures Statement Under the Sarbanes Oxley Act

As of December 31, 2009, our management (with the participation of our Chief Executive Officer and Chief Financial Officer)
conducted an evaluation pursuant to section 302 of the US Sarbanes Oxley Act and Rule 13a-15 promulgated under the US Securities Exchange Act of 1934, as amended of the
effectiveness of the design and operation of the our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of
December 31, 2009, such disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in reports we file or submit under the
US Securities Exchange Act on 1934, as amended is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

Disclosure Controls and Procedures

The Disclosure Committee assists our Chief Executive Officer and Chief Financial Officer in overseeing our financial and
non-financial disclosure activities and to ensure compliance with applicable disclosure requirements arising under U.S. and Netherlands law and regulatory requirements. The Disclosure
Committee obtains information for its recommendations from the operational and financial reviews, letters of representation which include a risk and internal control self assessment, input from the
documentation and assessment of our internal controls over financial reporting and input from risk management activities during the year along with various business reports. The Disclosure Committee
comprises various members of senior management.

Code of Conduct and Whistleblower Policy

Our Code of Conduct is applicable to all our employees, including the Chief Executive Officer, Chief Financial Officer and controllers.
It is designed to promote honest and ethical conduct and timely and accurate disclosure in our periodic financial results. Our Whistleblower Policy provides for the reporting, if so wished on an
anonymous basis, of alleged violations of the Code of Conduct, alleged irregularities of a financial nature by our employees, Directors or other stakeholders, alleged violation of our compliance
procedures and other alleged irregularities without any fear of reprisal against the individual that reports the violation or irregularity.

Compliance Procedures

The Company has various procedures and programs in place to ensure compliance with relevant laws and regulations, including anti
insider trading procedures, anti-bribery procedures, anti-fraud procedures and export control procedures. The Company's compliance officer is responsible for the design and
effective operation of the compliance procedures and programs.

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Corporate Social Responsibility

During 2009 the Board has discussed and reviewed the Company's corporate social responsibility (CSR) objectives and activities.
Although it is acknowledged that the Company's aircraft and engines are generally used for high impact activities when it comes to the environment, we maintain a fleet of young and fuel efficient
aircraft and engines that are relatively less pollutive in comparison with other, older aircraft and engines that use more fuel and produce higher noise levels. In addition the Board has discussed and
reviewed the Company's activities and conduct as it relates to ethics, labor environment, citizenship and transparency and financial reporting.

External Auditors

Our external auditor is responsible for auditing the financial statements. Following the recommendation by the Audit Committee and upon
proposal by the Board of Directors, the General Meeting of Shareholders appoints each year the auditor to audit the financial statements of the current financial year. The external auditor reports to
our Audit Committee. The external auditor is present at the meetings of the Audit Committee when our quarterly and annual results are discussed.

At
the request of the Board of Directors and the Audit Committee, the Chief Financial Officer and the Internal Audit department review, in advance, each service to be provided by the
auditor to identify any possible breaches of the auditor's independence. The Audit Committee pre-approves every engagement of our external auditor. Our Board rules determine, in line with
Dutch laws and regulationts, that when the responsible partner of the external audit firm has been in charge of the audit activities during a continuous period of five years without rotation, he will
have a conflict of interest with the Company. The current responsible partner was appointed in the year 2006 for the first time.

Internal Auditors

We have an internal audit function in place to provide assurance, to the Audit Committee and the Company's executive officers, with
respect to the Company's key processes, to the extent not already covered by the external auditors and/or the SOX 404 auditors. The internal audit function independently and objectively carries out
audit assignments in accordance with the annual internal audit plan, as approved by the Audit Committee. The head of the internal audit function reports, in line with professional standards of the
Institute of Internal Auditors, to the Audit Committee (functional reporting line) and to our Chief Executive Officer (administrative reporting line). The work of the internal audit department is
fully endorsed by the Audit Committee and the Company's executive officers and is considered a valuable part of the Company's system of control and risk management.

Remuneration of Our Board of Directors

The general policy for the remuneration of our Board of Directors will be determined by a general shareholders meeting. The
remuneration of directors will be set by our Board of Directors in accordance with our remuneration policy and the recommendation of the Nomination and Compensation Committee. With regard to
arrangements concerning remuneration in the form of ordinary shares or share options, the Board of Directors must submit a proposal to the shareholders for approval. This proposal must, at a minimum,
state the number of ordinary shares or share options that may be granted to directors and the criteria that apply to the granting of the ordinary shares or share options or the alteration of such
arrangements. . The Directors may be granted equity based remuneration under the Company's incentive plan that is designed to promote the Company's interests by granting remuneration in the form of,
amongst others, share or share options to directors, employees, consultants and advisors with a view to align their interests with the Company's (the

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"AerCap
Holdings N.V. Equity Incentive Plan"), as approved by our shareholders on October 31, 2006, prior to the listing of the shares in our Company on the New York Stock Exchange. So
far, no equity grants have been made to our Directors under this plan.

General Meetings of Shareholders

At least one general meeting of shareholders must be held every year. The rights of shareholders may only be changed by amending our
articles of association. A resolution to amend our articles of association is valid if the Board of Directors makes a proposal amending the articles of association and such proposal is adopted by a
simple majority of votes cast.

The
following resolutions require a two thirds majority vote if less than half of the issued share capital is present or represented at the general meeting of
shareholders:



If
a proposal to amend the articles of association will be considered at the meeting, we will make available a copy of that proposal, in which the proposed amendments will be stated
verbatim.

An
agreement of the Company to enter into a (i) statutory merger whereby the Company is the acquiring entity, or (ii) a legal demerger, with certain limited exceptions,
must be approved by the shareholders.

Voting Rights

Each ordinary share represents the right to cast one vote at a general meeting of shareholders. All resolutions must be passed with an
absolute majority of the votes validly cast except as set forth above. We are not allowed to exercise voting rights for ordinary shares we hold directly or indirectly.

Any
major change in the identity or character of the Company or its business must be approved by our shareholders, including:



Adoption of Annual Accounts and Discharge of Management Liability

Each year, our Board of Directors must prepare annual accounts within four months after the end of our financial year. The annual
accounts must be made available for inspection by shareholders at our offices within the same period. The annual accounts must be accompanied by an auditor's certificate, an annual report and certain
other mandatory information. The shareholders shall appoint an accountant as referred to in Article 393 of Book 2 of The Netherlands Civil Code, to audit the annual accounts. The annual
accounts are adopted by our shareholders.

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The
adoption of the annual accounts by our shareholders does not release the members of our Board of Directors from liability for acts reflected in those documents. Any such release from
liability requires a separate shareholders' resolution.

Liquidation Rights

If we are dissolved or wound up, the assets remaining after payment of our liabilities will be first applied to pay back the amounts
paid up on the ordinary shares. Any remaining assets will be distributed among our shareholders, in proportion to the par value of their shareholdings. All distributions referred to in this paragraph
shall be made in accordance with the relevant provisions of the laws of The Netherlands.

Limitations on Non-Residents and Exchange Controls

There are no limits under the laws of The Netherlands or in our articles of association on non-residents of The Netherlands
holding or voting our ordinary shares. Currently, there are no exchange controls under the laws of The Netherlands on the conduct of our operations or affecting the remittance of dividends.

Disclosure of Insider Transactions

Members of our Board of Directors and other insiders within the meaning of Section 5:60 of The Netherlands Financial Supervision
Act must report to The Netherlands Authority for the Financial Markets if they carry out or cause to be carried out, for their own account, a transaction in our ordinary shares or in securities whose
value is at least in part determined by the value of our ordinary shares.

Netherlands Squeeze-out Proceedings

If a person or a company or two or more group companies within the meaning of Article 2:24b of The Netherlands Civil Code acting
in concert holds in total 95% of a Netherlands public limited liability company's issued share capital by par value for their own account, the laws of The Netherlands permit that person or company or
those group companies acting in concert to acquire the remaining ordinary shares in the company by initiating squeeze out proceedings against the holders of the remaining shares. The price to be paid
for such shares will be determined by the Enterprise Chamber of the Amsterdam Court of Appeal.

Choice of Law and Exclusive Jurisdiction

Under our articles of association, to the extent allowed by law, the rights and obligations among or between us, any of our current or
former directors, officers and employees and any current or former shareholder shall be governed exclusively by the laws of The Netherlands, unless such rights or obligations do not relate to or arise
out of the capacities above. Any lawsuit or other legal proceeding by and between those persons relating to or arising out of their capacities listed
above shall be exclusively submitted to the courts of The Netherlands. All of our current and former directors and officers must agree in connection with any such lawsuit or other legal proceeding to
submit to the exclusive jurisdiction of The Netherlands courts, waive objections to such lawsuit or other legal proceeding being brought in such courts, agree that a judgment in any such legal action
brought in The Netherlands courts is binding upon them and may be enforced in any other jurisdiction, and elect domicile at our offices in Amsterdam, The Netherlands for the service of any document
relating to such lawsuit of other legal proceedings.

Registrar and Transfer Agent

A register of holders of the ordinary shares will be maintained by American Stock Transfer & Trust Company in the United States
who will also serve as the transfer agent. The telephone number of American Stock Transfer & Trust Company is 1-800-937-5449.

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Material contracts

Aircraft Purchase Agreement, dated December 30, 2005, between Airbus S.A.S. and AerVenture. Pursuant to this agreement,
AerVenture placed an order with Airbus for the purchase of 70 new A320 family aircraft. As of December 31, 2009, 32 of the aircraft remained to be delivered under the agreement, consisting of
five A319 aircraft, 24 320 aircraft and three A321 aircraft.

Aircraft
Purchase Agreement, dated December 11, 2006 as amended on May 11, 2007, between Airbus S.A.S. and AerCap Ireland Limited. Pursuant to this agreement, AerCap
Ireland Limited placed an order with Airbus for the purchase of 30 new A330-200 aircraft. As of December 31, 2009, 21 of the aircraft remained to be delivered under the agreement.

Stock
Purchase Agreement, dated March 16, 2006, among AerCap, Inc. and Nicolas Finazzo, Rose Ann Finazzo and Robert B. Nichols. Pursuant to the Stock Purchase Agreement, in
April 26, 2006, we acquired all of the existing share capital of AeroTurbine. The purchase price for the AeroTurbine shares was $144.7 million.

In
addition, we have entered into several credit facilities and other financing arrangements to fund our acquisition of our aircraft. See "Item 5Indebtedness" for
more information regarding the credit facilities and financing arrangements.

Exchange Controls

Not applicable.

Taxation.

Netherlands Tax Considerations

The following is a summary of Netherlands tax consequences of the holding and disposal of ordinary shares. This summary does not
purport to describe all possible tax considerations or consequences that may be relevant to a holder or prospective holder of ordinary shares. Holders should consult with their tax advisors with
regards to the tax consequences of investing in the ordinary shares in their particular circumstances. The discussion below is included for general information purposes only.

Please
note that this summary does not describe the tax considerations for holders of ordinary shares if such holders, and in the case of individuals, his/her partner or certain of their
relatives by blood or marriage in the direct line (including foster children), have a substantial interest or deemed substantial interest in us as defined in The Netherlands Income Tax Act 2001.
Generally speaking, a holder of securities in a company is considered to hold a substantial interest in such company, if such holder alone or, in the case of individuals, together with his/her partner
(statutorily defined term), directly or indirectly, holds (i) an interest of 5% or more of the total issued and outstanding capital of that company or of 5% or more of the issued and
outstanding capital of a certain class of shares of that company; or (ii) holds rights to acquire, directly or indirectly, such interest; or (iii) holds certain profit sharing rights in
that company that relate to 5% or more of the company's annual profits and/or to 5% or more of the company's liquidation proceeds. A deemed substantial interest arises if a substantial interest (or
part thereof) in a company has been disposed of, or is deemed to have been disposed of, on a non-recognition basis. Furthermore, this summary does not describe the tax
considerations for holders of ordinary shares if the holder has an interest in us that qualifies as a "participation" for the purposes of The Netherlands Corporate Income Tax Act 1969. A participation
generally exists in case of a shareholding of at least 5% of the company's paid-up share capital.

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Except
as otherwise indicated, this summary only addresses Netherlands national tax legislation and regulations, as in effect on the date hereof and as interpreted in published case law
on the date hereof and is subject to change after such date, including changes that could have retroactive effect.

Withholding Tax

Dividends distributed by us generally are subject to Netherlands dividend withholding tax at a rate of 15%. The withholding mechanism
requires us to deduct from the dividend an amount of withholding tax to be paid to The Netherlands tax authorities. The withholding tax is therefore effectively carried by the recipient of a dividend
and not by us. The expression "dividends distributed" includes, among others:



If
a holder of ordinary shares is resident in a country other than The Netherlands and if a double taxation convention is in effect between The Netherlands and such other country, such
holder of ordinary shares may, depending on the terms of that double taxation convention, be eligible for a full or partial exemption from, or refund of, Netherlands dividend withholding tax.

A
recipient of a dividend of the shares that is a qualifying company and that satisfies the conditions of the Convention between The Netherlands and the United States for the avoidance
of double taxation of December 18, 1992 (the "Convention"), may be entitled to a reduced rate of dividend withholding tax (a "U.S. Holder"). These conditions include but are not limited to
being a resident of the U.S. for the purposes of the Convention, being the beneficial owner of such dividend and qualifying under article 26 of the Convention (the so-called
"Limitation on Benefits" article).

To
claim a reduced withholding tax rate under the Convention (both reduction and refund procedure), the U.S. Holder that is a company must file a request with The Netherlands tax
authorities for which no specific form is available.

A
recipient that is a qualifying tax-exempt pension fund, pension trust, tax-exempt company or other organization constituted and operated exclusively to
administer or provide benefits under one or more funds or plans established to provide pension, retirement or other employee benefits that satisfies the conditions of the Convention, may be entitled
to an exemption or a refund of paid dividend taxes. Qualifying tax exempt pension organizations (as referred to in Section 35 of the Convention) must file form IB 96 USA for the
application of relief at source from or refund of dividend withholding tax. Qualifying tax-exempt trusts, companies or U.S. organizations (as referred to in Section 36 of the
Convention) are not entitled under the Convention to claim benefits at source, and instead must file claims for refund by filing form IB 95 USA. Copies of the forms may be obtained from the

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"Belastingdienst/Limburg/kantoor
buitenland, Postbus 2865, 6401 DJ Heerlen, The Netherlands, or may be downloaded fromwww.belastingdienst.nl.

A
qualifying tax-exempt entity that is a resident of a Member State of the European Union, or resident of a State of the European Economic Area that has been specifically
designated in a Ministerial Regulation (currently Norway and Iceland), may be eligible for a refund of paid dividend taxes, if such entity also would not be subject to Dutch corporate income tax if it
would be tax resident in The Netherlands. This refund is not available to entities that are engaged in similar activities as investment institutions (in Dutch:
"beleggingsinstellingen") as referred to in Section 6a or 28 of The Netherlands Corporate Income Tax Act 1969.

Individuals
and corporate legal entities who are resident or deemed to be resident in The Netherlands for Netherlands tax purposes ("Netherlands resident individuals" and "Netherlands
resident entities", as the case may be) can generally credit Netherlands dividend withholding tax against their income tax or corporate income tax liability. The same generally applies to holders of
ordinary shares that are neither resident nor deemed to be resident of The Netherlands if the ordinary shares are attributable to a Netherlands permanent establishment of such non-resident
holder. Individuals who have made an election for the application of the rules of The Netherlands Income Tax Act 2001, as they apply to residents of The Netherlands, can credit Netherlands dividend
withholding tax against their Dutch income as referred to in Chapter 7 of The Netherlands Income Tax Act 2001. In this respect, it is relevant whether the dividend income also would have
qualified as Dutch taxable income without the application of this election.

In
general, we will be required to remit all amounts withheld as Netherlands dividend withholding tax to The Netherlands tax authorities. However, under certain circumstances, we are
allowed to reduce the amount to be remitted to The Netherlands tax authorities by the lesser of:



Although
this reduction reduces the amount of Netherlands dividend withholding tax that we are required to pay to The Netherlands tax authorities, it does not reduce the amount of tax
that the we are required to withhold from dividends.

Pursuant
to legislation to counteract "dividend stripping", a reduction, exemption, credit or refund of Netherlands dividend withholding tax is denied if the recipient of the dividend is
not the beneficial owner. This legislation generally targets situations in which shareholders retain their economic interest in shares but reduce the withholding tax cost on dividends by a transaction
with another party. For application of these rules it is not a requirement that the recipient of the dividends is aware that a dividend stripping transaction took place. The Netherlands State
Secretary of Finance takes the position that the definition of beneficial ownership introduced by this legislation will also be applied in the context of a double taxation convention.

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Taxes on Income and Capital Gains

Non-residents of The Netherlands.A holder of ordinary shares will not be subject to Netherlands taxes on income or on capital
gains in
respect of any payment under the ordinary shares or any gain realized on the disposal or deemed disposal of the ordinary shares, provided that:



Netherlands resident individuals.If a holder of ordinary shares is a Netherlands resident individual (including the
non-resident
individual holder who has made an election for the application of the rules of The Netherlands Income Tax Act 2001 as they apply to residents of The Netherlands), any benefit derived or deemed to be
derived from the ordinary shares is taxable at the progressive income tax rates (with a maximum of 52%), if:



If
the above mentioned conditions (a) and (b) do not apply to an individual holder of ordinary shares, the ordinary shares are recognized as investment assets and included
as such in such holder's net investment asset base (in Dutch, "rendementsgrondslag"). Such holder will be taxed annually on a deemed income of 4% of the
aggregate amount of his or her net investment assets for the year at an income tax rate of 30%. The aggregate amount of the net investment assets for the year is the average of the fair market value
of the investment assets less the allowable liabilities at the beginning of that year and the fair market value of the investment assets less the allowable liabilities at the end of that year. A tax
free allowance may be available. Actual benefits derived from the ordinary shares are as such not subject to Netherlands income tax.

Netherlands resident entities.Any benefit derived or deemed to be derived from the ordinary shares held by Netherlands resident
entities, including
any capital gains realized on the disposal thereof, will generally be subject to Netherlands corporate income tax at a rate of 25.5% (2009 and 2010 rate; in both years a reduced corporate income tax
rate of 20% applies with respect to taxable profits up to €200,000).

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A
Netherlands qualifying pension fund and a Netherlands qualifying tax exempt investment fund (in Dutch: "vrijgestelde
beleggingsinstelling") are, in principle, not subject to Netherlands corporate income tax. A qualifying Netherlands resident investment fund (in Dutch,
"fiscale beleggingsinstelling") is subject to Netherlands corporate income tax at a special rate of 0%.

Gift, Estate and Inheritance Taxes up to and including December 31, 2009

Non-residents of The Netherlands.No Netherlands gift, estate or inheritance taxes will arise on the transfer of the ordinary
shares by
way of a gift by, or on the death of, a holder of ordinary shares who is neither resident nor deemed to be resident in The Netherlands, unless:



Residents of The Netherlands.Gift, estate and inheritance taxes will arise in The Netherlands with respect to a transfer of the
ordinary shares by
way of a gift by, or, on the death of, a holder of ordinary shares who is resident or deemed to be resident in The Netherlands at the time of the gift or his/her death.

For
purposes of Netherlands gift, estate and inheritance taxes, amongst others, a person that holds The Netherlands nationality will be deemed to be resident in The Netherlands if such
person has been resident in The Netherlands at any time during the ten years preceding the date of the gift or the death of this person. Additionally, for purposes of Netherlands gift tax, a person
not holding the Netherlands nationality will be deemed to be resident in The Netherlands if such person has been resident in The Netherlands at any time during the 12 months preceding the date
of the gift. Applicable tax treaties may override deemed residency.

Gift and Inheritance Taxes as of January 1, 2010

Non-residents of The Netherlands.No Netherlands gift or inheritance taxes will arise on the transfer of the ordinary shares by
way of a
gift by, or on the death of, a holder of ordinary shares who is neither resident nor deemed to be resident in The Netherlands, unless:



Furthermore,
Netherlands inheritance tax will arise in case of a gift under a condition precedent by an individual who at the date of the gift was neither resident nor deemed to be resident of The

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Netherlands,
but at the date of his/her death was resident or deemed to be resident in The Netherlands, and the condition was fulfilled after the date of his/her death.

Residents of The Netherlands.Gift or inheritance taxes will arise in The Netherlands with respect to a transfer of the ordinary
shares by way of a
gift by, or, on the death of, a holder of ordinary shares who is resident or deemed to be resident in The Netherlands at the time of the gift or his/her death.

No
Netherlands gift tax will arise in case of a gift of the ordinary shares under a condition precedent by an individual who at the date of the gift was resident or deemed to be
resident, but at the date of the fulfillment of the condition was neither resident nor deemed to be resident in The Netherlands, unless such individual dies within 180 days after the date of
the fulfillment of the condition, while being resident or deemed to be resident in The Netherlands.

For
purposes of Netherlands gift and inheritance taxes, amongst others, a person that holds The Netherlands nationality will be deemed to be resident in The Netherlands if such person
has been resident in The Netherlands at any time during the ten years preceding the date of the gift,in case of a gift under a condition precedentthe date of the fulfillment
of the condition or the death of this person. Additionally, for purposes of Netherlands gift tax, a person not holding The Netherlands nationality will be deemed to be resident in The Netherlands if
such person has been resident in The Netherlands at any time during the 12 months preceding the date of the gift orin case of a gift under a condition precedentthe
date of the fulfillment of the condition. Applicable tax treaties may override the tax implications of deemed residency.

Other Taxes and Duties

No Netherlands registration tax, customs duty, stamp duty or any other similar documentary tax or duty will be payable by a holder of
ordinary shares in connection with holding the ordinary shares or the disposal of the ordinary shares.

U.S. Tax Considerations

Subject to the limitations and qualifications stated herein, this discussion sets forth the material U.S. federal income tax
consequences of the purchase, ownership and disposition of the ordinary shares. The discussion of the holders' tax consequences addresses only those persons that hold those ordinary shares as capital
assets and does not address the tax consequences to any special class of holder, including without limitation, holders of (directly, indirectly or constructively) 5% or more of the ordinary shares,
dealers in securities or currencies, banks, tax-exempt organizations, life insurance companies, financial institutions, broker dealers, regulated investment
companies, real estate investment trusts, traders in securities that elect the mark-to-market method of accounting for their securities holdings, persons that hold securities
that are a hedge or that are hedged against currency or interest rate risks or that are part of a straddle, conversion or "integrated" transaction, certain U.S. expatriates, partnerships or other
entities classified as partnerships for U.S. federal income tax purposes and U.S. Holders whose functional currency for U.S. federal income tax purposes is not the U.S. dollar. This discussion does
not address the effect of the U.S. federal alternative minimum tax or any state, local or foreign tax laws on a holder of ordinary shares. The discussion is based on the Internal Revenue Code of 1986,
as amended, its legislative history, existing and proposed regulations thereunder, published rulings and court decisions, all as currently in effect and all subject to change at any time, possibly
with retroactive effect.

For
purposes of this discussion, a "U.S. Holder" means a beneficial owner of ordinary shares that is for U.S. federal income tax purposes an individual citizen or resident of the U.S.; a
U.S. corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States or any political subdivision thereof; a trust if the trust (i) is
subject to the primary supervision of a U.S. court and one or more U.S. persons are able to control all substantial decisions of the trust or (ii) has

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elected
to be treated as a U.S. person; or an estate the income of which is subject to U.S. federal income tax regardless of its source. A "non-U.S. Holder" is a beneficial owner of our
ordinary shares that is not a U.S. Holder.

Cash Dividends and Other Distributions

A U.S. Holder of ordinary shares generally will be required to treat distributions received with respect to such ordinary shares
(including any amounts withheld pursuant to Netherlands tax law) as dividend income to the extent of AerCap's current or accumulated earnings and profits (computed using U.S. federal income tax
principles), with the excess treated as a non-taxable return of capital to the extent of the holder's adjusted tax basis in the ordinary shares and, thereafter, as capital gain, subject to
the passive foreign investment company ("PFIC") rules discussed below. Dividends paid to a U.S. Holder that is a corporation are not eligible for the dividends received deduction available to
corporations. Current tax law provides for a maximum 15% U.S. tax rate on the dividend income of an individual U.S. Holder with respect to dividends paid by a domestic corporation or "qualified
foreign corporation" if certain holding period requirements are met. A qualified foreign corporation generally includes a foreign corporation (other than a PFIC) if (i) its ordinary shares are
readily tradable on an established securities market in the United States or (ii) it is eligible for benefits under a comprehensive U.S. income tax treaty. The ordinary shares are expected to
be readily traded on the New York Stock Exchange. As a result, assuming we are not treated as a PFIC, we should be treated as a qualified foreign corporation with respect to dividends paid on our
ordinary shares and, therefore, dividends paid to an individual U.S. Holder with respect to ordinary shares for which the requisite holding period is satisfied should be taxed at a maximum
federal tax rate of 15%. The maximum 15% federal tax rate is scheduled to expire for taxable years commencing after December 31, 2010.

Distributions
to U.S. Holders of additional ordinary shares or preemptive rights with respect to ordinary shares that are made as part of a pro rata distribution to all of our
shareholders generally will not be subject to U.S. federal income tax, but in other circumstances may constitute a taxable dividend.

Distributions
paid in a currency other than U.S. dollars will be included in a U.S. Holder's gross income in a U.S. dollar amount based on the spot exchange rate in effect on the date of
actual or constructive receipt whether or not the payment is converted into U.S. dollars at that time. The U.S. Holder will have a tax basis in such currency equal to such U.S. dollar amount, and any
gain or loss recognized upon a subsequent sale or conversion of the foreign currency for a different U.S. dollar amount will be U.S. source ordinary income or loss. If the dividend is converted into
U.S. dollars on the date of receipt, a U.S. Holder generally should not be required to recognize foreign currency gain or loss in respect of the dividend income.

Subject
to applicable limitations that may vary depending upon the circumstances, foreign taxes withheld from dividends on ordinary shares, to the extent the taxes do not exceed those
taxes that would have been withheld had the holder been eligible for and actually claimed the benefits of any reduction in such taxes under applicable law or tax treaty, will be creditable against the
U.S. Holder's federal income tax liability. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. The rules governing foreign tax
credits are complex and, therefore, prospective purchasers of ordinary shares should consult their own tax advisors regarding the availability of foreign tax credits in their particular circumstances.
Instead of claiming a credit, a U.S. Holder may, at his election, deduct such otherwise creditable foreign taxes in computing his taxable income, subject to generally applicable limitations under U.S.
law.

A
non-U.S. Holder generally will not be subject to U.S. federal income or withholding tax on dividends paid with respect to ordinary shares unless such income is effectively
connected with the conduct by the non-U.S. Holder of a trade or business within the United States.

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Sale or Disposition of Ordinary Shares

A U.S. Holder generally will recognize gain or loss on the taxable sale or exchange of the ordinary shares in an amount equal to the
difference between the U.S. dollar amount realized on such sale or exchange (determined in the case of shares sold or exchanged for currencies other than U.S. dollars by reference to the spot exchange
rate in effect on the date of the sale or exchange or, if the ordinary shares sold or exchanged are traded on an established securities market and the U.S. Holder is a cash basis taxpayer or an
electing accrual basis taxpayer, the spot exchange rate in effect on the settlement date) and the U.S. Holder's adjusted tax basis in the ordinary shares determined in U.S. dollars. The initial tax
basis of the ordinary shares to a U.S. Holder will be the U.S. Holder's U.S. dollar purchase price for the shares (determined by reference to the spot exchange rate in effect on the date of the
purchase, or if the shares purchased are traded on an established securities market and the U.S. Holder is a cash basis taxpayer or an electing accrual basis taxpayer, the spot exchange rate in effect
on the settlement date). Assuming that the Company is not a PFIC and has not been treated as a PFIC during your holding period for our ordinary shares, such gain or loss will be capital gain or loss
and will be long-term gain or loss if the ordinary shares have been held for more than one year. With respect to sales occurring in taxable years commencing before January 1, 2011,
the maximum long-term capital gain tax rate for an individual U.S. Holder is 15%. For sales beginning in taxable years after December 31, 2010, under current law the
long-term capital gain rate for an individual U.S. Holder is 20%. The deductibility of capital losses is subject to limitations. Capital gain or loss, if any, recognized by a U.S. Holder
generally will be treated as U.S. source income or loss for U.S. foreign tax credit purposes.

A
non-U.S. Holder of ordinary shares will not be subject to United States income or withholding tax on gain from the sale or other disposition of ordinary shares unless
(i) such gain is effectively connected with the conduct of a trade or business within the United States or (ii) the non-U.S. Holder is an individual who is present in the
United States for at least 183 days during the taxable year of the disposition and certain other conditions are met.

Potential Application of Passive Foreign Investment Company Provisions

We cannot yet make a determination as to whether we will be classified as a PFIC for the current year. In general, a
non-U.S. corporation will be classified as a PFIC for U.S. federal income tax purposes in any taxable year in which, after applying certain look-through rules, either
(1) at least 75% of its gross income is "passive income" or (2) at least 50% of the average value of its gross assets is attributable to assets that produce "passive income" or are held
for the production of "passive income". Passive income for this purpose generally includes dividends, interest, royalties, rents and gains from commodities, foreign currency and securities
transactions. Certain exceptions are provided, however, for rental income derived in the active conduct of a business.

The
determination as to whether a foreign corporation is a PFIC is a complex determination that is based on all of the relevant facts and circumstances and that depends on the
classification of various assets and income under applicable rules. It is unclear how some of these rules apply to us. Further, this determination must be tested annually at the end of the taxable
year and, while we intend to conduct our affairs in a manner that will reduce the likelihood of our becoming a PFIC, our circumstances may change or our business plan may result in our engaging in
activities that could cause us to become a PFIC. Accordingly, there can be no assurance that we will not be classified as a PFIC for the current taxable year or any future taxable year.

If
we are or become a PFIC in a taxable year in which we pay a dividend or the prior taxable year, the 15% dividend rate discussed above with respect to dividends paid to
non-corporate holders would not apply. If we are a PFIC, subject to the discussion of the qualified electing fund election below, a U.S. Holder of ordinary shares will be subject to
additional tax and an interest charge on "excess

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distributions"
received with respect to the ordinary shares or gains realized on the disposition of such ordinary shares. Such a U.S. Holder will have an excess distribution if distributions during
any tax year exceed 125% of the average amount received during the three preceding tax years (or, if shorter, the U.S. Holder's holding period). A U.S. Holder may realize gain on an ordinary share not
only through a sale or other disposition, but also by pledging the ordinary share as security for a loan or entering into certain constructive disposition transactions. To compute the tax on an excess
distribution or any gain, (i) the excess distribution or gain is allocated ratably over the U.S. Holder's holding period, (ii) the amount allocated to the current tax year and amounts
allocated to any year before the first year in which we are a PFIC is taxed as ordinary income in the current tax year, and (iii) the amount allocated to each previous tax year (other than the
any year before the first year in which we are a PFIC) is taxed at the highest applicable marginal rate in effect for that year and an interest charge is imposed to recover the deemed benefit from the
deferred payment of the tax. These rules effectively prevent a U.S. Holder from treating the gain realized on the disposition of an ordinary share as capital gain.

If
we are a PFIC and our ordinary shares are "regularly traded" on a "qualified exchange," a U.S. Holder may make a mark-to-market election, which may mitigate
the adverse tax consequences resulting from the Company's PFIC status. The ordinary shares will be treated as "regularly traded" in any calendar year during which more than a de minimisquantity of
ordinary shares are traded on a qualified exchange on at least 15 days during each calendar quarter. The New York Stock
Exchange on which the ordinary shares are expected to be regularly traded is a qualified exchange for U.S. federal income tax purposes.

If
a U.S. Holder makes the mark-to-market election, for each year in which we are a PFIC the holder generally will include as ordinary income the excess, if any,
of the fair market value of the ordinary shares at the end of the taxable year over their adjusted basis, and will be permitted an ordinary loss in respect of the excess, if any, of the adjusted basis
of the ordinary shares over their fair market value at the end of the taxable year (but only to the extent of the net amount of previously included income as a result of the
mark-to-market election). If
a U.S. Holder makes the election, his basis in the ordinary shares will be adjusted to reflect any such income or loss amounts. Any gain recognized on the sale or other disposition of ordinary shares,
for which the mark-to-market election has been made, will generally be treated as ordinary income.

Alternatively,
if we become a PFIC in any year, a U.S. Holder of ordinary shares may wish to avoid the adverse tax consequences resulting from our PFIC status by making a qualified
electing fund ("QEF") election with respect to our ordinary shares in such year. If a U.S. Holder makes a QEF election, the holder will be required to include in gross income each year (i) as
ordinary income, its pro rata share of our earnings and profits in excess of net capital gains and (ii) as long-term capital gains, its pro rata share of our net
long-term capital gains, in each case, whether or not cash distributions are actually made. The amounts recognized by a U.S. Holder making a QEF election generally are treated as income
from sources outside the U.S. If, however, U.S. Holders hold at least half of the ordinary shares, a percentage of our income equal to the proportion of our income that we receive from U.S. sources
will be U.S. source income for the U.S. Holders of ordinary shares. Because a U.S. Holder of shares in a PFIC that makes a QEF election is taxed currently on its pro rata share of our income, the
amounts recognized will not be subject to tax when they are distributed to the U.S. Holder. An electing U.S. Holder's basis in the ordinary shares will be increased by any amounts included in income
currently as described above and decreased by any amounts not subjected to tax at the time of distribution. If we are or become a PFIC, a U.S. Holder would make a QEF election in respect of its
ordinary shares by attaching a properly completed IRS Form 8621 in respect of such shares to the holder's timely filed U.S. federal income tax return. For any taxable year that we determine
that we are a PFIC, we will (i) provide notice of our status as a PFIC as soon as practicable following such taxable year and (ii) comply with all reporting requirements necessary for
U.S. Holders to make QEF elections, including providing to shareholders upon request the information necessary for such an election.

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Although
a U.S. Holder normally is not permitted to make a retroactive QEF election, a retroactive election (a "retroactive QEF election") may be made for a taxable year of the U.S.
Holder (the "retroactive election year") if the U.S. Holder (i) reasonably believed that, as of the date the QEF election was due, the foreign corporation was not a PFIC for its taxable year
that ended during the retroactive election year and (ii) to the extent provided for in applicable Treasury Regulations, filed a protective statement with respect to the foreign corporation,
applicable to the retroactive election year, in which the U.S. Holder described the basis for its reasonable belief and extended the period of limitation on the assessment of taxes for all taxable
years of the shareholder to which the protective statement applies. If required to be filed to preserve the U.S. Holder's ability to make a retroactive QEF election, the protective statement must be
filed by the due date of the investor's return (including extensions) for the first taxable year to which the statement is to apply. U.S. Holders should consult their own tax advisors regarding the
advisability of filing a protective statement.

As
discussed above, if we are a PFIC, a U.S. Holder of ordinary shares that makes a QEF election (including a proper retroactive QEF election) will be required to include in income
currently its pro rata share of our earnings and profits whether or not we actually distribute earnings. The use of earnings to fund reserves or pay down debt or to fund other investments could result
in a U.S. Holder of ordinary shares recognizing income in excess of amounts it actually receives. In addition, our income from an investment for U.S federal income tax purposes may exceed the amount
we actually receive. If we are a PFIC and a U.S. Holder makes a valid QEF election in respect of their ordinary shares, such holder may be able to elect to defer payment, subject to an interest charge
for the deferral period, of the tax on income recognized on account of the QEF election. Prospective purchasers of ordinary shares should consult their tax advisors about the advisability of making a
QEF election, protective QEF election and deferred payment election.

Miscellaneous
itemized deductions of an individual U.S. person can only be deducted to the extent that all of such person's miscellaneous itemized deductions exceed 2% of their adjusted
gross income. In addition, an individual's miscellaneous itemized deductions are not deductible for purposes of computing the alternative minimum tax. Certain expenses of the Company might be a
miscellaneous itemized deduction if incurred by an individual. A U.S. person that owns an interest in a "pass-through entity" is treated as recognizing income in an amount corresponding to
its share of any item of expense that would be a miscellaneous itemized deduction and as separately deducting that item subject to the limitations described above. If it is determined that we are a
PFIC, the IRS could take the position that we are a "pass-through entity" with respect to a U.S. Holder of ordinary shares that makes a QEF election.

Special
rules apply to determine the foreign tax credit with respect to withholding taxes imposed on distributions on shares in a PFIC. If a U.S. Holder owns ordinary shares during any
year in which we are a PFIC, such Holder must file Internal Revenue Service Form 8621.

We
urge prospective purchasers of ordinary shares to consult their tax advisors concerning the tax considerations relevant to an investment in a PFIC, including the availability and
consequences of making the mark-to-market election and QEF election discussed above.

Information Reporting and Backup Withholding

Information reporting to the U.S. Internal Revenue Service generally will be required with respect to payments on the ordinary shares
and proceeds of the sale of the ordinary shares paid to holders that are U.S. taxpayers, other than corporations and other exempt recipients. A 28% "backup" withholding tax may apply to those payments
if such a holder fails to provide a taxpayer identification number to the paying agent and to certify that no loss of exemption from backup withholding has occurred. Holders that are not subject to
U.S. taxation may be required to comply with applicable certification procedures to establish that they are not U.S. taxpayers in order to avoid the application of such

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information
reporting requirements and backup withholding. The amounts withheld under the backup withholding rules are not an additional tax and may be refunded, or credited against the holder's U.S.
federal income tax liability, if any, provided the required information is furnished to the U.S. Internal Revenue Service.

THE
ABOVE DISCUSSION IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS THAT MAY BE OF IMPORTANCE TO A PARTICULAR INVESTOR. EACH PROSPECTIVE INVESTOR IS STRONGLY URGED TO CONSULT
ITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES TO IT OF AN INVESTMENT IN THE ORDINARY SHARES.

Dividends.

Dividends may in principle only be paid out of profit as shown in the adopted annual accounts. We will only have power to make
distributions to shareholders and other persons entitled to distributable profits to the extent our equity exceeds the sum of the paid and called up portion of the ordinary share capital and the
reserves that must be maintained in accordance with provisions of the laws of The Netherlands or our articles of association. The profits must first be used to set up and maintain reserves required by
law and must then be set off against certain financial losses. We may not make any distribution of profits on ordinary shares that we hold. Our Board of Directors determines whether and how much of
the remaining profit they will reserve, the manner and date of such distribution and notifies shareholders.

All
calculations to determine the amounts available for dividends will be based on our annual Netherlands GAAP statutory accounts, which may be different from our consolidated financial
statements under US GAAP, such as those included in this form 20-F. Our statutory accounts have to date been prepared, and will continue to be prepared, under Netherlands
GAAP and are deposited with the Commercial Register in Amsterdam, The Netherlands. Our net income for the 12 months ended December 31, 2009 and our equity as of December 31, 2009
as set forth in our annual statutory accounts were $148.7 million and $1,264.9 million, respectively. We are dependent on dividends or other advances from our operating subsidiaries to
fund any dividends we may pay on our ordinary shares.

Documents on display.

You may read and copy the reports and other information we file with the Securities and Exchange Commission, including this annual
report and the exhibits thereto, at the Commission's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 and at the Commission's regional offices at 175 W. Jackson Boulevard,
Suite 900, Chicago, Illinois 60604, and 3 World Financial Center, Room 4300, New York, New York 10281. You may also obtain copies of these materials by mail from the Public Reference
Room of the Commission at 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates. You may obtain information on the operation of the Commission's Public Reference Room by calling the
Commission in the United States at 1-800-SEC-0330. You may also access our annual reports and some of the other information we file with or submit to the Commission
electronically through the Commission's website atwww.sec.gov. In addition, you may inspect material we file at the offices of the New York Stock
Exchange at 20 Broad Street, New York, New York 10005.

Item 11.    Quantitative and Qualitative Disclosures About Market Risk.

Our primary market risk exposure is interest rate risk associated with short and long-term borrowings bearing variable
interest rates and lease payments under leases tied to floating interest rates. To manage this interest rate exposure, we enter into interest rate swap and cap agreements. We

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are
also exposed to foreign currency risk, which can adversely affect our operating profits. To manage this risk, we enter into forward exchange contracts.

The
following discussion should be read in conjunction with Notes 1, 2, 11 and 14 to our audited consolidated financial statements contained in this annual report, which provide
further information on our debt and derivative instruments contained in this annual report.

Interest Rate Risk

The rentals we receive under our leases are based on fixed and variable interest rates. We fund our operations with a mixture of fixed
and floating rate US dollar denominated debt and finance lease obligations. An interest rate exposure arises to the extent that the mix of these obligations are not matched with our assets. This
exposure is primarily managed through the use of interest rate caps and floors using a cash flow based risk management model. This model takes the expected cash flows generated by our assets and
liabilities and then calculates by how much the value of these cash flows will change for a given movement in interest rates

Under
our interest rate caps, we will receive the excess, if any, of LIBOR, reset monthly or quarterly on an actual/360 adjusted basis, over the strike rate of the relevant cap.

The
table below provides information as of December 31, 2009 regarding our derivative financial instruments that are sensitive to changes in interest rates on our borrowing,
including our interest rate caps and floors. The table presents the average notional amounts and weighted average interest rates which are contracted for the specified year. Notional amounts are used
to calculate the contractual payments to be exchanged under the contract. Weighted average variable rates are based on implied forward rates in the yield curve at the applicable date.

2010

2011

2012

2013

2014

2015

Thereafter

Fair
value(US Dollars in millions)Interest rate capsAverage Notional amounts

$
2,357

$
2,014

$
1,490

$
1,061

$
780

$
585

$
539

$
44,865Weighted average strike rate


4.03
%

4.06
%

4.59
%

4.79
%

4.85
%

5.10
%

5.11
%






2010

2011

2012

2013

2014

2015

Thereafter

Fair
value(US Dollars in millions)Interest rate floorsNotional amounts

$
166

$
141

$
107

$
70

$
45

$
27




$
(7,681
)Weighted average pay rate


3.00
%

3.00
%

3.00
%

3.00
%

3.00
%

3.00
%







As
of December 31, 2009, the interest rate caps had notional amounts of $2.9 billion and a fair value of $44.9 million. As of December 31, 2009, the interest
rate floors had notional amounts of $166 million and a fair value of ($7.7million). The variable benchmark interest rates associated with these instruments ranged from one to
six-month LIBOR.

Our
board of directors is responsible for reviewing and approving our overall interest rate management policies and transaction authority limits. Specific hedging contracts are approved
by the treasury committee acting within the overall policies and limits. Our counterparty risk is monitored on an ongoing basis, but is mitigated by the fact that the majority of our interest rate
derivative counterparties are required to cash collateralize in the event of their downgrade by the rating agencies below a certain level. Our counterparties are subject to the prior approval of the
treasury committee.

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Foreign Currency Risk and Foreign Operations

Our functional currency is the US dollar. As of December 31, 2009, all of our aircraft leases and all of our engine leases were
payable in US dollars. We incur Euro-denominated expenses in connection with our offices in The Netherlands and Ireland. For the year ended December 31, 2009, our aggregate expenses
denominated in currencies other than the US dollar, such as payroll and office costs and professional advisory costs, were $54.1 million in US dollar equivalents and represented 46.6% of total
selling, general and administrative expenses. We enter into foreign exchange contracts based on our projected exposure to foreign currency risks in order to protect ourselves from the effect of period
over period exchange rate fluctuations. Mark-to-market gains or losses on such contracts are recorded as part of selling, general and administrative expenses since most of our
non-US denominated payments relate to such expenses. We do not believe that a change in foreign exchange rates will have material impact on our results of operations. However, the portion
of our business conducted in foreign currencies could increase in the future, which could increase our exposure to losses arising from currency fluctuations.

Inflation

Inflation generally affects our costs, including selling, general and administrative expenses and other expenses. However, we do not
believe that our financial results have been, or will be, adversely affected by inflation in a material way.

Item 12.    Description of Securities Other than Equity Securities.

Not applicable.

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PART II

Item 13.    Defaults, Dividend Arrearages and Delinquencies.

None.

Item 14.    Material Modifications to the Rights of Security Holders and Use of Proceeds.

Not applicable.

Item 15.    Controls and Procedures.

Disclosure Controls and Procedures.

Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in this
report is recorded, processed, summarized and reported on a timely basis. Our management, with the participation of the Chairman of our Board of Directors and the members of our Disclosure Committee,
has evaluated, as of December 31, 2009, our disclosure controls and procedures, as such term is defined under Rules 13a-15(e) and Rule 15d-15(e) under the
Securities Exchange Act of 1934. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2009, our disclosure controls and
procedures are effective. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the
reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its principal executive and principal financial officers, or persons
performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management's Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is
defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions or because the degree of compliance with policies or procedures may deteriorate.

Under
the supervision and with the participation of our management, including our CEO and CFO, we conducted an assessment of the effectiveness of our internal control over financial
reporting as of December 31, 2009. The assessment was based on criteria established in the framework Internal ControlIntegrated Framework, issued by the Committee of Sponsoring
Organizations (COSO) of the Treadway Commission. Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2009.

PricewaterhouseCoopers
Accountants N.V., the independent registered public accounting firm that audited our Consolidated Financial Statements included in this
Form 20-F, audited the effectiveness of our controls over financial reporting as of December 31, 2009 under Auditing Standard No. 5 of the Public Company Accounting
Oversight Board (United States). Their audit report may be found on page F-2.

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Changes in Internal Control Over Financial Reporting

There were no changes in the Company's internal control over financial reporting that occurred during the year ended
December 31, 2009 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Item 16A.    Audit committee financial expert.

Our board of directors has determined that Ronald Bolger is an "audit committee financial expert" as that term is defined by SEC rules,
and that he is "independent" as that term is defined under applicable New York Stock Exchange listing standards.

Item 16B.    Code of Conduct.

Our board of directors has adopted our code of conduct, a code that applies to members of the board of directors including its chairman
and other senior officers, including the Chief Financial Officer and the Chief Accounting Officer. This code is publicly available on our website at www.aercap.com.

Item 16C.    Principal Accountant Fees and Services.

In January 2003, the SEC adopted rules requiring disclosure of fees billed by a public company's independent auditors in each of the
company's two most recent fiscal years. Our auditors charged the following fees for professional services rendered for the years ended December 31, 2008 and December 31, 2009:

2008

2009(U.S. dollars in thousands)Audit fees

$
2,586

$
2,633Audit-related fees





Total

$
2,586

$
2,633


Audit Feesare defined as the standard audit work that needs to be performed each year in order to issue opinions on our consolidated
financial statements and to issue reports on our local statutory financial statements. Also included are services that can only be provided by our auditor, such as auditing of nonrecurring
transactions and implementation of new accounting policies, reviews of quarterly financial results, consents and comfort letters and any other audit services required for US Securities and Exchange
Commission or other regulatory filings.

Audit Related Feesinclude those other assurance services provided by the independent auditor but not restricted to those that can only be
provided by the auditor signing the audit report. These fees comprise amounts for services for Sarbanes Oxley 404 controls design effectiveness review.

During
the 12-month periods ended December 31, 2008 and December 31, 2009, our auditors were not engaged to perform any services that are defined as tax fees or
for any other type of services.

Policy on Pre-Approval of Audit and Non-Audit Services of Independent Auditors

The Audit Committee's policy is to pre-approve all audit and non-audit services provided by our auditor. These
services may include audit services, audit related services, tax services and other services, as described above. Pre-approval is detailed as to the particular service or categories of
services, and is subject to a specific budget. Our management and our auditor report to the Audit Committee regarding the extent of services provided in accordance with this pre-approval
and the fees for the services performed to date on an annual basis. The Audit Committee may also pre-approve additional services on a case-by-case basis.

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Item 16D.    Exemptions from the Listing Standards for Audit Committees.

Not applicable.

Item 16E.    Purchases of Equity Securities by the Issuer and Affiliated Purchasers.

Not applicable.

Item 16G.    Corporate Governance

The New York Stock Exchange (NYSE) requires U.S. domestic entities with shares listed on the exchange to comply with its corporate
governance standards. However, as a foreign private issuer, the NYSE only requires us to comply with the NYSE rules relating to audit committees and periodic certifications to the NYSE as long as we
comply with home country corporate governance standardsin our case Dutch corporate governance standards. The NYSE requires that we disclose to investors any significant ways in which our
corporate governance practices differ from those followed by U.S. domestic companies under NYSE requirements.

Among
these differences, shareholder approval is required by the NYSE prior to the issuance of common stock:



Under
Dutch rules, shareholders can delegate this approval to the Board of Directors at the annual shareholders meeting. In the past, our shareholders have delegated this approval power
to our Board at our annual meeting.

In
some situations, NYSE rules are more stringent, and in others the Dutch rules are. Other significant differences include:



128

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Table of Contents

PART III

Item 17.    Financial Statements.

Not applicable.

Item 18.    Financial Statements.

Please refer to pages F-1 through F-57 of this annual report.

Item 19.    Exhibits.

We have filed the following documents as exhibits to this annual report:

Exhibit
Number

Description of Exhibit1.1

Articles of Association(1)2.1

Aircraft Purchase Agreement, dated December 30, 2005, between Airbus S.A.S. and AerVenture Limited(1)(4)2.2

Security Trust Agreement, dated April 26, 2006, among AerFunding 1 Limited, the additional grantors referred to therein as grantors, UBS Securities LLC and Deutsche Bank Trust Company Americas(1)2.3

Guarantee and Collateral Agreement, dated April 26, 2006, among AeroTurbine, Inc., The Subsidiary Guarantors of AeroTurbine, Inc., the borrower's party thereto and Crédit Agricole New York
Branch(1)2.4

Aircraft Asset Security Agreement, dated April 26, 2006, among AeroTurbine, Inc. The Subsidiary Guarantors of AeroTurbine, Inc., the borrower's party thereto, the trusts party thereto, as trusts and
Crédit Agricole New York Branch(1)2.5

Pledge Agreement, dated April 26, 2006, between AerCap, Inc. and Crédit Agricole New York Branch(1)2.6

Joint Venture Agreement, dated December 30, 2005, among AerCap Ireland Limited, International Cargo Airlines Company KSC and AerVenture Limited(1)2.7

Stock Purchase Agreement, dated March 16, 2006, among AerCap, Inc. and Nicolas Finazzo, Rose Ann Finazzo and Robert B. Nichols(1)2.8

Facility Agreement, dated April 23, 2003, among the Banks and Financial Institutions named therein as ECA Lenders, the Banks and Financial Institutions named therein as Mismatch Lenders, Credit Lyonnais,
Kreditanstalt Für Wiederaufbau, Sunrise Leasing Limited, Sundance Leasing Limited, Sunray Leasing Limited, Sunshine Leasing Limited, Sunglow Leasing Limited, Sunflower Aircraft Leasing Limited, Debis Aircraft Leasing XXX B.V. and Debis
AirFinance B.V.(1)2.9

Sale and Purchase Agreement regarding the acquisition of all shares in and certain loans and facilities granted to debis AirFinance B.V. by and between DaimlerChrysler Services AG, DaimlerChrysler Aerospace AG,
DaimlerChrysler AG, Bayerische Hypo- und Vereinsbank AG, HVB Banque Luxembourg SA, Bayerische Landesbank, BLB Beteiligungsgesellschaft Beta mbH, Dresdner Bank AG, DZ Bank AG Deutsche Zentral-Genossenschaftsbank, DZ Beteiligungsgesellschaft mbH
Nr. 6, KfW and FERN S.a r.l. as amended by the Amendment Agreement dated June 29, 2005 by and between the DaimlerChrysler Services AG, DaimlerChrysler Aerospace AG, DaimlerChrysler AG, Bayerische Hypo- und Vereinsbank AG, HVB Banque
Luxembourg SA, Bayerische Landesbank, BLB Beteiligungsgesellschaft Beta mbH, Dresdner Bank AG, DZ Bank AG Deutsche Zentral-Genossenschaftsbank, DZ Beteiligungsgesellschaft mbH Nr. 6, KfW, FERN S.a r.l., FERN GP S.a r.l.
and AerCap Holdings C.V.(1)


129

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Table of Contents

Exhibit
Number

Description of Exhibit2.10

AerCap Holdings N.V. 2006 Equity Incentive Plan (including form of Stock Option Agreement)(1)2.11

Aircraft Purchase Agreement, dated December 11, 2006, between Airbus S.A.S. and AerCap Ireland Limited(2)(6)2.12

Amended and Restated Trust Indenture, dated as of May 8, 2007, among Aircraft Lease Securitisation Limited, Deutsche Bank Trust Company Americas, as trustee, cash manager and Operating Bank and Crédit Agricole,
 as initial primary liquidity facility provider, and MBIA Insurance Corporation, as the policy provider(3)2.13

Amendment No. 1 dated May 11, 2007 to Aircraft Purchase Agreement, dated December 11, 2006, between Airbus S.A.S. and AerCap Ireland Limited(3)(6)2.14

Amended and Restated Credit Agreement, dated May 8, 2007, among AerFunding 1 Limited, AerCap Ireland Limited, UBS Real Estate Securities Inc. and other financial institutions named as Class A Lenders and
Class B Lenders, UBS Securities LLC, the other Funding Agents named therein and Deutsche Bank Trust Company Americas(3)2.15

First Amendment Agreement, dated as of November 13, 2007, among AerFunding 1 Limited, AerCap Ireland Limited, the Other Service Providers named therein, UBS Real Estate Securities Inc. and other financial
institutions named as Class A Lenders and Class B Lenders, UBS Securities LLC, the other Funding Agents named therein and Deutsche Bank Trust Company Americas(4)2.16

Amendment, Restatement and Accession dated December 20, 2007 to Senior Loan Facility Agreement originally dated October 12, 2006 between AerCap Dutch Aircraft Leasing I B.V., as Borrower, Azzurro Aircraft
Leasing Limited, as Additional Borrower, Crédit Agricole as Senior Arranger, Senior Agent and Collateral Trustee and the financial institutions named therein(4)2.17

Amended and Restated Facility Agreement dated July 27, 2007 among AerVenture Limited, as Borrower, and Crédit Agricole S.A. and KfW, as Lenders, and Crédit Agricole S.A. as Security Trustee
and Agent(4)2.18

Second Amended and Restated Senior Credit Agreement, dated as of December 19, 2007, among AeroTurbine, Inc., as Borrower, the Several Lenders from time to time as Parties thereto, Crédit Agricole New York
Branch, as Administrative Agent, HSH Nordbank AG, as Syndication Agent and Wachovia Bank N.A., DekaBank Deutsche Girozentrale and Norddeutsche Landesbank Girozentrale, as Co-Documentation Agents(4)2.19

Amendment Agreement, dated November 2, 2007, among AerCap AerVenture Holding B.V., NLM AerVenture Holding B.V., International Cargo Airlines Company KSC and AerVenture Limited(4)2.20

Amendment Agreement, dated December 12, 2007, among AerCap AerVenture Holding B.V., NLM AerVenture Holding B.V. and AerVenture Limited(4)2.21

Trust Indenture, dated as of June 26, 2008, among Aircraft Lease Securitisation II Limited, Deutsche Bank Trust Company Americas, as the Cash Manager, Operating Bank and Trustee, Crédit Agricole, as the
Initial Primary Liquidity Facility Provider, and Crédit Agricole as the Class A-1 Funding Agent(5)


130

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Table of Contents

Exhibit
Number

Description of Exhibit2.22

Facility Agreement, dated as of December 30, 2008 among the Banks and Financial Institutions named therein as ECA Lenders, Crédit Agricole as National Agent, ECA Agent and Security Trustee, Jetstream Aircraft
Leasing Limited as Principal Borrower, AerCap Ireland Limited and AerCap A330 Holdings Limited as Principal AerCap Obligors, and AerCap Holdings, N.V.(9)2.23

Facility Agreement, dated as of March 12, 2009 among the Banks and Financial Institutions named therein as ECA Lenders, Crédit Agricole as ECA Agent and Security Trustee, Constellation Aircraft Leasing Limited
as Principal Borrower, Andromeda Aircraft Leasing Limited and Aquarius Aircraft Leasing Limited as Lessees, AerVenture Limited and AerCap Holdings, N.V.(9)2.24

Shareholders' Agreement, dated June 21, 2009, among AerCap AerVenture Holding B.V., Waha AV Participations B.V. and AerVenture Limited(7)2.25

Agreement and Plan of Amalgamation, dated as of September 17, 2009, among AerCap Holdings N.V., Genesis Lease Limited and AerCap International Bermuda Limited (8)8.1

List of Subsidiaries of AerCap Holdings N.V.12.1

Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 200212.2

Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 200212.3

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 200223.1

Consent of PricewaterhouseCoopers Accountants, N.V., an independent registered public accounting firm


(1)Previously
filed with Registration Statement on Form F-1, File No. 333-138381.(2)Previously
filed with Form 20-F for the year ended December 31, 2006.(3)Previously
filed with Registration Statement on Form F-1, File No. 333-144468.(4)Previously
filed with Form 20-F for the year ended December 31, 2007.(5)Previously
filed with Form 6-K on September 11, 2008.(6)Portions
of this exhibit have been omitted pursuant to an Order of the Securities and Exchange Commission granting confidential treatment with respect
thereto.(7)Previously
filed with Form 6-K on September 1, 2009.(8)Previously
filed with Form 6-K on September 18, 2009.(9)Previously
filed with Form 20-F for the year ended December 31, 2008.


131

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Table of Contents

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly
caused and authorized the undersigned to sign this annual report on its behalf.

AERCAP HOLDINGS N.V.By:

/s/ KLAUS HEINEMANNKlaus Heinemann Chief Executive Officer


Date:
March 15, 2010

132

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Table of Contents



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



AerCap Holdings N.V. Consolidated Financial StatementsReport of Independent Registered Public Accounting Firm

F-2Consolidated Balance Sheets As of December 31, 2008 and
2009

F-3Consolidated Income Statements For the Years Ended December 31, 2007, 2008
and 2009

F-4Consolidated Statements of Cash Flows For the Years Ended December 31, 2007,
 2008 and 2009

F-5Consolidated Statements of Equity For the Years Ended December 31, 2007,
2008 and 2009

F-6Notes to the Consolidated Financial Statements

F-7


F-1

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Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Report of Independent Registered Public Accounting Firm

To
the Board of Directors and Shareholders of AerCap Holdings N.V.

In
our opinion, the accompanying consolidated balance sheets and the related consolidated income statements, statements of equity and statements of cash flows present fairly, in all
material respects, the financial position of AerCap Holdings N.V. and its subsidiaries (the Company) at December 31, 2009 and 2008, and the results of their operations and their cash
flows for each of the three years in the period
ended December 31, 2009 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2009 based on criteria established inInternal ControlIntegrated
Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements, for
maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in 'Management's Annual Report on
Internal Control over Financial Reporting' under Item 15. Our responsibility is to express opinions on these financial statements and on the Company's internal control over financial reporting
based on our audits (which were integrated audits in 2009 and 2008). We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control
over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control
over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our
audits provide a reasonable basis for our opinions.

A
company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Rotterdam,
March 15, 2010
PricewaterhouseCoopers Accountants N.V.

/s/ DR. H.F.M. GERTSEN RA dr. H.F.M. Gertsen RA


F-2

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Table of Contents

AerCap Holdings N.V. and Subsidiaries        Consolidated Balance Sheets        As of December 31, 2008 and 2009

As of December 31,Note

2008

2009(US dollars in thousands except
share and per share amounts)AssetsCash and cash equivalents




$
193,563

$
182,617Restricted cash


3


113,397


140,746Trade receivables, net of provisions of $11,983 and $3,392


4


43,649


48,070Flight equipment held for operating leases, net


5


3,989,629


5,230,437Net investment in direct finance leases





30,571


34,532Notes receivable, net of provisions, of nil and nil


6


134,067


138,488Prepayments on flight equipment


7


448,945


527,666Investments


8


18,678


21,031Goodwill


9


6,776


6,776Intangibles


9


47,099


31,399Inventory


10


102,879


102,538Derivative assets


11


19,352


44,866Deferred income taxes


16


82,471


80,098Other assets


12


179,750


180,237Total Assets




$
5,410,826

$
6,769,501Liabilities and EquityAccounts payable




$
7,510

$
11,832Accrued expenses and other liabilities


13


104,750


80,399Accrued maintenance liability





202,834


228,006Lessee deposit liability





98,584


126,093Debt


14


3,790,487


4,846,664Accrual for onerous contracts


15


33,306


22,363Deferred revenue





34,922


33,011Derivative liabilities


11


12,378


7,801Total Liabilities





4,284,771


5,356,169Share capital


17


699


699Additional paid-in capital





609,327


593,133Retained earnings





499,011


664,177Total AerCap Holdings N.V. shareholders' equity


15


1,109,037


1,258,009Non-controlling interest





17,018


155,323Total Equity





1,126,055


1,413,332Total Liabilities and Equity




$
5,410,826

$
6,769,501


The
accompanying notes are an integral part of these consolidated financial statements.

F-3

---





Table of Contents

AerCap Holdings N.V. and Subsidiaries        Consolidated Income Statements        For the Years Ended December 31, 2007, 2008 and 2009

Year ended December 31,Note

2007

2008

2009(US dollars in thousands, except share and per share amounts)RevenuesLease revenue


19

$
554,226

$
605,253

$
650,604Sales revenue





558,263


616,554


324,781Management fee revenue





14,343


11,749


12,074Interest revenue





29,742


18,515


10,105Other revenue





19,947


4,181


5,703Total Revenues





1,176,521


1,256,252


1,003,267ExpensesDepreciation


5


141,113


169,392


220,996Asset impairment


22





18,789


32,574Cost of goods sold





432,143


506,312


248,897Interest on debt


14


234,770


219,172


92,152Operating lease-in costs


15


20,176


14,512


13,090Leasing expenses





18,825


55,569


65,164Provision for doubtful accounts receivable


4


745


3,746


963Selling, general and administrative expenses(a)


20


116,328


128,268


116,201Other expenses


21








2,965Total Expenses





964,100


1,115,760


793,002Income from continuing operations before income taxes





212,421


140,492


210,265Provision for income taxes


16


(25,123
)

431


(3,894
)Net Income




$
187,298

$
140,923

$
206,371Net loss (income) attributable to non-controlling interest





1,155


10,883


(41,205
)Net income attributable to AerCap Holdings N.V.




$
188,453

$
151,806

$
165,166Basic and diluted earnings per share


23

$
2.22

$
1.79

$
1.94Weighted average shares outstanding, basic and diluted





85,036,957


85,036,957


85,036,957


---

The
accompanying notes are an integral part of these consolidated financial statements.

F-4

---





Table of Contents

AerCap Holdings N.V. and Subsidiaries        Consolidated Statements of Cash Flows        For the Years Ended December 31, 2007, 2008 and 2009

Year ended December 31,2007

2008

2009(US dollars in thousands)Net income

$
187,298

$
140,923

$
206,371Adjustments to reconcile net income to net cash provided by operating activities:Depreciation


141,095


169,392


220,996Asset impairment





18,789


32,574Amortization of debt issuance costs


38,156


16,239


16,364Amortization of intangibles


10,800


14,615


15,701Gain on elimination of fair value guarantee


(10,736
)




Gain on discounted purchase of securitized bonds





(2,783
)

Provision for doubtful notes and accounts receivable


745


3,746


1,364Capitalized interest on pre-delivery payments


(5,968
)

(2,098
)

(1,106
)Gain on disposal of assets


(103,455
)

(80,341
)

(36,007
)Mark-to-market of non-hedged derivatives


(3,892
)

51,646


(18,929
)Deferred taxes


13,929


(642
)

2,228Share-based compensation


10,916


6,858


3,910Changes in assets and liabilities:Trade receivables and notes receivable, net


(28,647
)

(5,208
)

(6,686
)Inventories


8,460


(5,469
)

35,238Other assets and derivative assets


(16,041
)

(48,581
)

(7,236
)Other liabilities


(81,422
)

(75,823
)

(63,968
)Deferred revenue


5,182


1,348


(1,613
)Net cash provided by operating activities


166,420


202,611


399,201Purchase of flight equipment


(697,814
)

(1,286,609
)

(1,264,446
)Proceeds from sale/disposal of assets


405,057


467,539


153,481Prepayments on flight equipment


(164,074
)

(339,422
)

(453,305
)Receipt of notes receivable in defeasance structures





44,157


Purchase of investments





(17,550
)

Sale of investments





6,234


Purchase of intangibles


(18,427
)

(21,410
)

Movement in restricted cash


17,205


(18,325
)

(27,349
)Net cash used in investing activities


(458,053
)

(1,165,386
)

(1,591,619
)Issuance of debt


2,395,954


1,642,784


2,431,839Repayment of debt


(2,025,298
)

(742,258
)

(1,414,456
)Debt issuance costs paid


(49,579
)

(44,933
)

(32,723
)Maintenance payments received


106,889


98,980


99,664Maintenance payments returned


(29,276
)

(64,572
)

(46,897
)Security deposits received


21,237


43,644


42,169Security deposits returned


(17,067
)

(25,842
)

(12,840
)Capital contributions from non-controlling interests





5,000


111,700Net cash provided by financing activities


402,860


912,803


1,178,456Net increase (decrease) in cash and cash equivalents


111,227


(49,972
)

(13,962
)Effect of exchange rate changes


(692
)

1,799


3,016Cash and cash equivalents at beginning of period


131,201


241,736


193,563Cash and cash equivalents at end of period

$
241,736

$
193,563

$
182,617Supplemental cash flow information:Interest paid


167,306


141,330


100,012Taxes paid (refunded)


17,691


631


(3,446
)


The accompanying notes are an integral part of these consolidated financial statements.

F-5

---





Table of Contents

AerCap Holdings N.V. and Subsidiaries        Consolidated Statements of Equity        For the Years Ended December 31, 2007, 2008 and 2009

AerCap Holdings N.V. ShareholdersNumber of
Shares

Share
capital

Additional
paid-in
capital

Retained
(loss)
earnings

AerCap
Holdings N.V.
shareholders'
equity

Non-
controlling
interest

Total
equity(US dollars in thousands, except share amounts)Year ended December 31, 2007Balance at January 1, 2007


85,036,957

$
699

$
591,553

$
158,752

$
751,004

$
31,937

$
782,941Share-based compensation








10,916





10,916





10,916Comprehensive income:Net income for the period











188,453


188,453


(1,155
)

187,298Comprehensive income











188,453


188,453


(1,155
)

187,298Balance at December 31, 2007


85,036,957

$
699

$
602,469

$
347,205

$
950,373

$
30,782

$
981,155Year ended December 31, 2008Balance at January 1, 2008


85,036,957

$
699

$
602,469

$
347,205

$
950,373

$
30,782

$
981,155Share-based compensation








6,858





6,858





6,858Capital contributions from non-controlling interests

















5,000


5,000Purchase of non-controlling interests

















(7,881
)

(7,881
)Comprehensive income:Net income for the period











151,806


151,806


(10,883
)

140,923Comprehensive income











151,806


151,806


(10,883
)

140,923Balance at December 31, 2008


85,036,957

$
699

$
609,327

$
499,011

$
1,109,037

$
17,018

$
1,126,055Year ended December 31, 2009Balance at January 1, 2009


85,036,957

$
699

$
609,327

$
499,011

$
1,109,037

$
17,018

$
1,126,055Share-based compensation








3,910





3,910





3,910Default AerVenture partner(a)








25,078





25,078


(25,078
)

Sale to new AerVenture partner(b)








(45,182
)




(45,182
)

74,578


29,396Capital contributions from non-controlling interests

















47,600


47,600Comprehensive income:Net income for the period











165,166


165,166


41,205


206,371Comprehensive income











165,166


165,166


41,205


206,371Balance at December 31, 2009


85,036,957

$
699

$
593,133

$
664,177

$
1,258,009

$
155,323

$
1,413,332


(a)In
March 2009, the 50% joint venture partner in AerVenture, LoadAir failed to make $80.0 million in required capital contributions to AerVenture, and
as a result, LoadAir lost its voting rights and economic rights in AerVenture with the exception of certain rights to limited residual payments upon liquidation of AerVenture. As of March 31,
2009 AerVenture was a wholly owned subsidiary. The default of LoadAir increased AerCap Holdings N.V. Shareholders' Equity by $25,078, through the elimination of the related
non-controlling interest.(b)In
June 2009, we sold 50% of AerVenture to Waha Capital. The sale to Waha Capital decreased AerCap Holdings N.V. Shareholders' Equity by $45,182,
through the establishment of the related non-controlling interest in accordance with ASC 810.


The accompanying notes are an integral part of these consolidated financial statements.

F-6

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Table of Contents

AerCap Holdings N.V. and Subsidiaries        Notes to the Consolidated Financial Statements        (US dollars in thousands)

1. General

The Company

We are an integrated global aviation company, conducting aircraft and engine leasing and trading and parts sales. We also provide a
wide range of aircraft management services to other owners of aircraft. We are headquartered in The Netherlands and have offices in Ireland, the United States, Singapore, China and the United Kingdom
with a total of 345 employees, as of December 31, 2009.

These
consolidated financial statements include the accounts of AerCap Holdings N.V. and its subsidiaries. AerCap Holdings N.V. is a Netherlands public limited liability
company ("naamloze vennootschap or N.V.") formed on July 10, 2006 for the purpose of acquiring all of the assets and liabilities of AerCap
Holdings C.V. AerCap Holdings C.V. is a limited partnership ("commanditaire vennootschap") formed under the laws of The Netherlands on June 27,
2005 for the purposes of acquiring the share capital, subordinated debt and senior debt of debis AirFinance B.V. ("AerCap B.V."), which occurred on June 30, 2005 (the "2005
Acquisition"). In anticipation of our initial public offering,
we changed our corporate structure from a Netherlands partnership to a Netherlands public limited liability company. This change was effected through the acquisition of all of the assets and
liabilities of AerCap Holdings C.V. by AerCap Holdings N.V. on October 27, 2006. In accordance with ASC 805,"Business Combinations", this
acquisition was a transaction under common control and accordingly, AerCap Holdings N.V. recognized the acquisition of the assets and liabilities of AerCap Holdings C.V. at their carrying
values and no goodwill or other intangible assets were recognized. Additionally in accordance with ASC 805, these consolidated financial statements are presented as if AerCap Holdings N.V. had
been the acquiring entity of AerCap B.V. on June 30, 2005. On November 27, 2006, we completed an initial public offering of 6,800,000 of our common shares at $23 per share
(Note 17) generating net proceeds of $143,017 which we used to repay debt.

Genesis
Lease Limited, AerCap and AerCap International Bermuda Limited, a wholly-owned subsidiary of AerCap Holdings N.V., entered into an Agreement and Plan of Amalgamation dated
as of September 17, 2009 (as amended, the "Amalgamation Agreement"), pursuant to which Genesis Lease Limited will amalgamate with AerCap International Bermuda Limited in an all
share-for-share transaction (the "Amalgamation"). Under the terms of the Amalgamation Agreement, Genesis shareholders will receive one AerCap ordinary share for every Genesis
common share they own. The transaction is subject to approval by Genesis shareholders and satisfaction of customary closing conditions. All regulatory approvals have been obtained and the registration
statement was declared effective by the Securities and Exchange Commission ("SEC") on February 3, 2010. The Genesis shareholders are scheduled to vote on the Amalgamation on March 23,
2010. We expect to close the transaction on March 25, 2010.

Variable interest entities

In January 2006, we sold a 50% equity interest in AerVenture Ltd. ("AerVenture"), previously a wholly-owned entity, to LoadAir,
a subsidiary of Al Fawares, an investment and construction company based in Kuwait. AerVenture had contracted with Airbus for the delivery of up to 70 A320 family aircraft, including five aircraft
subject to reconfirmation rights, with the intent of leasing these aircraft to third parties. The joint venture agreement required us to make certain specified equity contributions and additional
equity capital available to AerVenture depending on capital needs in the future. We have entered into agreements to provide management and marketing services to AerVenture in return

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

1. General (Continued)

for
management fees. We determined that AerVenture was a variable interest entity for which we were the primary beneficiary. As such, we continued to consolidate AerVenture in our accounts since its
inception date. In March 2009, LoadAir failed to make $80.0 million in required capital contributions to AerVenture, and as a result, LoadAir lost its voting rights and economic rights in
AerVenture. In addition, all of the directors appointed by LoadAir were automatically removed. In June 2009, the 50% investment of LoadAir was redeemed by AerVenture in conjunction with the sale of a
50% equity interest in AerVenture to a new joint venture partner, Waha Capital PJSC ("Waha Capital").

AerVenture
also holds an equity and subordinated debt investments in ALS II. ALS II is a variable interest entity and AerVenture, as the primary beneficiary under ASC 810, consolidates
the accounts of ALS II in its accounts. We have determined that AerVenture continues to be a variable interest entity for which we are the primary beneficiary. As such, we continue to consolidate
AerVenture, including ALS II, in our accounts.

As
further discussed in Note 14, we hold equity and subordinated debt investments in ALS I and AerFunding. ALS I and AerFunding are variable interest entities and we, as their
primary beneficiaries under ASC 810, consolidate the accounts of ALS I and AerFunding in our accounts since their inception dates.

In
May 2006, we signed a joint venture agreement with China Aviation Supplies Holding Company ("China Aviation") and affiliates of Crédit Agricole establishing AerDragon.
AerDragon is 50% owned by China Aviation and 25% owned by each of us and Crédit Agricole. The joint venture owned nine aircraft at December 31, 2009, one of which it purchased
from Airbus through an assignment of our purchase right under our 1999 Forward Order and one which it purchased directly from us. We act as guarantor to the lenders of AerDragon related to debt
secured by the aircraft which AerDragon purchased directly from us. We provide certain aircraft and accounting related services to the joint venture. We have determined that AerDragon is a variable
interest entity. AerCap further determined that we are not the primary beneficiary of AerDragon and accordingly, we account for our investment in AerDragon according to the equity method. With the
exception of debt for which we act as guarantor, the obligations of AerDragon are non-recourse to us. At December 31, 2009, our maximum exposure to losses incurred by AerDragon
consists of the carrying amount of our equity investment of $20.0 million and the face value of the debt guaranteed of $28.0 million, totaling $48.0 million.

In
June 2008, AerCap Partners I Holding Limited, or AerCap Partners, a 50% joint venture entered into between us and Deucalion Aviation Funds, acquired a portfolio of 19 aircraft from
TUI Travel. The aircraft acquired are leased back to TUI Travel for varying terms. The aircraft portfolio was financed through a $425.7 million senior debt facility and $125.6 million of
subordinated debt consisting of $62.8 million from us and $62.8 million from our joint venture partner. Under certain circumstances and at certain times, if the joint venture cannot meet
its obligations under the senior debt facility, and the joint venture partners do not make additional subordinated capital available to the joint venture, AerCap can be required to purchase the
aircraft from the joint venture for a price equal to the outstanding senior debt facility balance plus certain expenses and taxes in connection with the purchase. We have also entered into agreements
to provide management and marketing services to AerCap Partners. We have determined that AerCap Partners is a variable interest entity for which we are the primary beneficiary. As such, we have
consolidated AerCap Partners in our accounts.

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

1. General (Continued)

Risks and uncertainties

Aircraft and engine leasing is a capital intensive business and we have significant capital requirements. In order to meet our
commitments under our forward order contracts, we will need to (i) access committed debt facilities and/or; (ii) secure additional financing for pre-delivery payment
obligations and/or (iii) use our existing available cash balances, cash generated from aircraft leasing and sales, and, if necessary, the proceeds from potential capital market transactions.
There has been a significant decrease in the amount of capital available to finance the purchase of aviation assets, including pre-delivery payments on forward order commitments, which has
made it more challenging and expensive for us to obtain new credit. In addition, for part of our funding sources, we have traditionally also relied on sales of aircraft to generate cash to fund our
operations and committed capital expenditures. However, as a consequence of the current global recession and financial crisis and the corresponding decrease in capital available to finance the
purchase price of aviation assets, we have experienced a decrease in demand and offer prices from third-party investors interested in buying our aircraft. If we cannot meet our obligations under our
forward purchase commitment, we will not recover the value of prepayments on flight equipment on our balance sheets and may be subject to other contract breach damages.

We
are dependent upon the viability of the commercial aviation industry, which determines our ability to service existing and future operating leases of our aircraft and engines. As a
result of the global recession and financial crisis, passenger traffic has decreased in many aviation markets worldwide. The resulting strain on our lessees could cause them to default under their
leases with us, which could negatively impact our cash flows and results of operations. Furthermore, the value of the largest asset on our balance sheetflight equipment held for operating
leasesis subject to fluctuations in the values of commercial aircraft and engines worldwide. A material decrease in aircraft or engine values could have a downward effect on lease rentals
and residual values and may require that the carrying value of our flight equipment be materially reduced. In addition, if we are not able to sell our existing parts and engine inventory, we may be
required to reduce the carrying value of such inventory through impairment charges.

The
values of trade receivables, notes receivable, intangible lease premium assets and the accrual for onerous contracts are dependent upon the financial viability of related lessees,
which is directly tied to the health of the commercial aviation market worldwide.

We
have significant tax losses carried forward in some of our subsidiaries, which are recognized as tax assets on our balance sheets. The recoverability of these assets is dependent upon
the ability of the related entities to generate a certain level of taxable income in the future. If those entities cannot generate such taxable income, we will not realize the value of those tax
assets and a corresponding valuation allowance and tax charge will be required.

We
periodically perform reviews of the carrying values of our aircraft and customer receivables, inventory, the recoverable value of deferred tax assets and the sufficiency of accruals
and provisions, substantially all of which are sensitive to the above risks and uncertainties.

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

2. Summary of significant accounting policies

Basis for presentation

Our financial statements are presented in accordance with accounting principles generally accepted in the United States of America.

We
consolidate all companies in which we have a direct and indirect legal or effective control and all variable interest entities for which we are deemed the primary beneficiary under
ASC 810. All intercompany balances and transactions with consolidated subsidiaries have been eliminated. The results of consolidated entities are included from the effective date of control or, in the
case of variable interest entities, from the date that we are or become the primary beneficiary. The results of subsidiaries sold or otherwise deconsolidated are excluded from the date that we cease
to control the subsidiary or, in the case of variable interest entities, when we cease to be the primary beneficiary.

Other
investments in which we have the ability to exercise significant influence and joint ventures are accounted for under the equity method of accounting.

As
a result of the recent discussion held with the SEC in relation to the Amalgamation with Genesis, certain reclassifications have been made to prior years cash flows statements to
reflect the current years presentation. Amounts related to maintenance payments and security deposits have been reclassified from operating cash flows to investing and financing cash flows, as we
expect these items to become more significant in future periods, and are of the opinion that such classifications are more appropriate based on the nature of the cash flows in current and the expected
future periods.

The
consolidated financial statements are stated in United States dollars, which is our functional currency.

Use of estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. For us, the use of estimates is or could be a significant factor
affecting the reported carrying values of flight equipment, inventory, intangibles, goodwill, investments, trade and notes receivable, deferred tax assets and accruals and reserves. Management
considers information available from professional appraisers, where possible, to support estimates, particularly with respect to flight equipment. Despite management's best efforts to accurately
estimate such amounts, actual results could materially differ from those estimates.

In
the year ended December 31, 2009, we changed our estimates of useful lives and residual values of certain older aircraft which are designated for part-out during
the next three years. The change in estimates is a result of the current market conditions that have negatively affected the useful lives and residual values for older fuel-inefficient
aircraft. In the year ended December 31, 2009, an additional charge of $14.9 million was recorded as depreciation as a result of the change in estimate. The effect on net income from
continuing operations was to reduce net income by $12.1 million, or $0.14 basic and diluted per share.

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

2. Summary of significant accounting policies (Continued)

Cash and cash equivalents

Cash and cash equivalents include cash and highly liquid investments with an original maturity of three months or less. A portion of
our cash and cash equivalents is held by subsidiaries and access to such cash by us for group purposes is limited. The most significant cash balances to which we have limited access for group purposes
are with the our wholly-owned subsidiary AeroTurbine and our joint venture, AerVenture. The cash and cash equivalents are however freely usable by AerVenture and AeroTurbine for their respective
operations and are not restricted as to withdrawal or usage at the respective subsidiary levels.

The
access to AeroTurbine's cash and cash equivalents for group purposes is limited by its revolving credit facility, which limits dividend payments to us to a maximum of
$10.0 million per year. However, under limited circumstances, we are able to receive cash from AeroTurbine through the sale to it of assets at arms-length prices. These assets are
typically older generation aircraft which are scheduled to be disassembled by AeroTurbine. AeroTurbine generally funds these purchases by drawing on its revolving credit facility. AeroTurbine's cash
and cash equivalents were $46.9 million as of December 31, 2009.

The
access to AerVenture's cash and cash equivalents for group purposes is limited by the joint venture agreement. AerVenture's cash can only be used for it's own operations unless
dividends are jointly approved by us and our joint venture partner. AerVenture's cash and cash equivalents were $31.3 million as of December 31, 2009.

Restricted cash

Restricted cash includes cash held by banks that is subject to withdrawal restrictions.

Trade receivables

Trade receivables represent unpaid, current lease obligations of lessees under existing lease contracts. Allowances are made for
doubtful accounts where it is considered that there is a significant risk of non-recovery. The assessment of risk of non-recovery is primarily based on the extent to which
amounts outstanding exceed the
value of security held, together with an assessment of the financial strength and condition of a debtor and the economic conditions persisting in the debtor's operating environment.

Flight equipment held for operating leases, net

Flight equipment held for operating leases, including aircraft, is stated at cost less accumulated depreciation and impairment. Costs
incurred in the acquisition of aircraft or related leases are included in the cost of the flight equipment and depreciated over the useful life of the equipment or term of the related lease. In
instances where the purchase price includes additional consideration which can be allocated to the value of an acquired lease containing above market terms, such allocated cost is recognized as an
intangible lease premium which is amortized over the term of the related lease. The cost of improvements to flight equipment are normally expensed unless the improvement materially increases the
long-term value of the flight equipment or extends the useful life of the flight equipment. In instances where the increased value benefits the existing lease, such capitalized cost is
depreciated

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

2. Summary of significant accounting policies (Continued)

over
the life of the lease. Otherwise, the capitalized cost is depreciated over the remaining useful life of the aircraft. Flight equipment acquired is depreciated over the assets' useful life, based
on 25 years from the date of manufacture, using the straight-line method to the estimated residual value. The current estimates for residual (salvage) values for most aircraft types
are 15% of original manufacture cost. For older engines purchased primarily for short-term leasing through our AeroTurbine operations, we depreciate current production model engines on a
straight-line basis over a 15-year period from the acquisition date to an estimated residual value of approximately 60% of cost, if the intention is to keep the engine in the
lease pool. Out-of-production engines are depreciated on a straight-line basis over an estimated useful life ranging from five to seven years to an estimated
residual value of approximately 54% of cost. For newer engines purchased primarily for longer-term leases, we depreciate over a 30-year period to a residual of 15% of cost. The
carrying value of flight equipment that is designated for part-out is transferred to the inventory pool. We discontinue the depreciation of our flight equipment when it is held as
inventory. Differences between our estimates of useful lives and residual values and actual experience may result in future impairments of aircraft or engines and/or additional gains or losses upon
disposal. We review residual values of aircraft and engines periodically based on our knowledge of current residual values and residual value trends to determine if they are appropriate and record
adjustments as necessary.

We
apply ASC 360, which addresses financial accounting and reporting for the impairment of long-lived assets and for long-lived assets to be disposed of and
requires that all long-lived assets be evaluated for impairment where circumstances indicate that the carrying amounts of such assets may not be recoverable. We normally evaluate these
events and circumstances on an annual basis. However, given current market conditions the evaluation is performed on a quarterly basis. The review for recoverability includes an assessment of the
estimated
future cash flows associated with the use of an asset and its eventual disposition. The assets are grouped at the lowest level for which identifiable cash flows are largely independent of other groups
of assets. In relation to flight equipment on operating lease, the impairment assessment is performed on each individual aircraft. If the sum of the expected future cash flows (undiscounted and
without interest charges) is less than the carrying amount of the asset, an impairment loss is recognized. The loss is measured as the excess of the carrying amount of the impaired asset over its fair
value.

Fair
value reflects the present value of cash expected to be received from the aircraft in the future, including its expected residual value discounted at a rate commensurate with the
associated risk. Future cash flows are assumed to occur under then current market conditions and assume adequate time for a sale between a willing buyer and a willing seller. Expected future lease
rates are based on all relevant information available, including current contracted rates for similar aircraft, appraisal data and industry trends. Residual (salvage) value assumptions generally
reflect an aircraft's booked residual, except where more recent industry information indicates a different value is appropriate. We generally focus our impairment assessment on older aircraft and
engines as the cash flows supporting the carrying value of such older aircraft and engines are more dependent upon current lease contracts, which leases are more sensitive to weaknesses in the global
economic environment. We review and stress test our key assumptions to reflect any observed weakness in the global economic environment. Further deterioration of the global economic environment and a
further decrease of aircraft values might have a negative effect on the undiscounted cash flows of older aircraft and might triggering further impairments.

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

2. Summary of significant accounting policies (Continued)

Flight equipment held for sale

We classify flight equipment which is subject to an executed sales agreement or an exercised purchase option as flight equipment held
for sale and cease recognizing depreciation expense on such flight equipment at the time the sale contract is signed. We carry equipment held for sale at the lower of its carrying amount or fair value
less cost to sell. Subsequent changes to the asset's fair value, either increases or decreases, are recorded as adjustments to the carrying value of the flight equipment; however, any such adjustment
would not exceed the original carrying value of the flight equipment held for sale.

Notes receivable

Notes receivable arise primarily from (i) the restructuring and deferring of trade receivables from lessees experiencing
financial difficulties and (ii) the sale of aircraft to lessees where we finance a portion of the aircraft purchase price through an interest bearing note secured by a security interest in the
aircraft sold. Allowances are made for doubtful accounts where there is a significant risk of non-recovery of the note receivable. The assessment of the risk of non-recovery is
primarily based on the extent to which amounts outstanding exceed the value of security held, together with an assessment of the financial strength and condition of a debtor and the economic
conditions persisting in the debtor's operating environment.

Capitalization of interest

We capitalize interest related to progress payments made in respect of flight equipment on forward order and add such amount to
prepayments on flight equipment. The amount of interest capitalized is the actual interest costs incurred on funding specific to the progress payments or the amount of interest costs which could have
been avoided in the absence of such progress payments.

Investments

We may hold debt and equity interests in third parties, including interests in asset securitization vehicles. In instances where those
interests are in the form of debt securities or equity securities that have readily determinable fair values, we apply the provisions of ASC 320 and designate each security as either held to maturity
or available for sale securities.

We
report equity investments where the fair value is not readily determinable at cost, reduced for any other than temporary impairment.

We
evaluate our investments in all debt and equity instruments regularly for other than temporary impairments in their carrying value and record a write-down to estimated
fair market value as appropriate.

Goodwill

Goodwill represents the excess of the cost of acquisition of subsidiaries over the fair value of identifiable net assets at the dates
of acquisition. Goodwill is not amortized, but is tested for

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

2. Summary of significant accounting policies (Continued)

impairment
annually or more often when events or circumstances indicate that there may have been impairment.

Definite-lived intangible assets

We recognize intangible assets acquired in a business combination in accordance with the principles of ASC 810. The identified
intangible assets are recorded at fair value on the date of acquisition. The rate of amortization of definite-lived intangible assets is calculated with reference to the period over which we expect to
derive economic benefits from such assets. In instances where the purchase of flight equipment or the allocated fair value in a business combination includes consideration which can be allocated to
the value of an acquired lease containing above market terms, such allocated costs is recognized as an intangible lease premium asset and amortized on a straight-line basis over the term
of the related lease as a reduction of lease revenue. Similarly, we recognize a lease deficiency liability as part of accrued expenses and other liabilities for lease contracts where the terms of the
lease contract are unfavorable to market terms and amortize the liability over the term of the related lease as an addition to lease revenue. We consider lease renewals on a lease by lease basis. We
generally do not assume lease renewals in the determination of the lease premiums or deficiencies given a market participant would expect the lessee to renegotiate the lease on then market terms. We
evaluate all definite-lived intangible assets for impairment in accordance with ASC 360.

Intangibles
assets related to customer relationships are amortized over ten years, which is the length of time that we expect to benefit from existing customer relationships. The
amortization in each year is based on the anticipated sales in each year which benefit from such relationships. Our FAA certificate is amortized straight-line over 15 years, the
remaining estimated useful life of the engine type to which the repair station certificate relates.

Inventory

Inventory, which consists primarily of engine parts, is valued at the lower of cost or market value. For purchases of individual parts
and whole engines, the cost is the total cost paid to acquire an engine or aircraft as a whole and is then primarily determined using the specific identification method. For purchases of dismantled
engines, aircraft and bulk inventory, cost is determined using a ratio calculated based on the relationship of the cost of the dismantled engine, aircraft or bulk inventory at the time of purchase to
the total estimated sales value of the dismantled engine, aircraft or bulk inventory at the time of purchase. At the time of sale, this ratio is applied to the sale price of each individual part to
determine its cost. We evaluate this ratio on a quarterly basis and if necessary we update sales estimates and make prospective adjustments to this ratio. Any inventory identified with an estimated
sales value lower than the carrying value is reduced to the estimated sales value at the time of the review.

Inventories
are comprised primarily of engines, aircraft and engine parts, rotables and expendables. Expenditures required for the recertification or betterment of flight equipment are
capitalized in inventory and are expensed as the parts associated with such costs are sold.

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

2. Summary of significant accounting policies (Continued)

Derivative financial instruments

We use derivative financial instruments to manage our exposure to interest rate risks and foreign currency risks. Derivatives are
accounted for in accordance with ASC 815.

All
derivatives are recognized on the balance sheet at their fair value. Changes in fair values between periods are recognized as a reduction or increase of interest expense on the
income statement, as we do not currently apply hedge accounting to our derivatives. Net cash received or paid under derivative contracts where material in any reporting period is classified as
operating cash flow in our consolidated cash flow statements.

Deferred income taxes (assets and liabilities)

We report deferred taxes of our taxable subsidiaries resulting from the temporary differences between the book values and the tax
values of assets and liabilities using the liability method. The differences are calculated at nominal value using the enacted tax rate applicable at the time the temporary difference is expected to
reverse. Deferred tax assets attributable to unutilized losses carried forward or other timing differences are reduced by a valuation allowance if it is more likely than not that such losses will not
be utilized to offset future taxable income.

Other assets

Other assets consist of receivables from aircraft manufacturers, prepayments, debt issuance costs, interest and other receivables and
other tangible fixed assets. Other tangible fixed assets consist of computer equipment, motor vehicles and office furniture and are valued at acquisition cost and depreciated at various rates between
16% to 33% per annum over the assets' useful lives using the straight-line method. We capitalize costs incurred in arranging financing as debt issuance costs. Debt issuance costs are
amortized to interest expense over the term of the related financing.

Accrued maintenance liability

In all of our aircraft leases, the lessees are responsible for maintenance and repairs of our flight equipment and related expenses
during the term of the lease. In some instances, we may incur maintenance and repair expenses for off-lease aircraft. We recognize leasing expenses in our income statement for all such
expenditures. In many operating lease and finance lease contracts, the lessee has the obligation to make a periodic payment of supplemental maintenance rent which is calculated with reference to the
utilization of airframes, engines and other major life-limited components during the lease. Up to July 2008 we did not recognize such supplemental rent received as revenue, but as an
accrued maintenance liability. From July 1, 2008 forward the Company changed the estimate of the amount of maintenance rent expected to be reimbursed to lessees. The change in estimate arose
from the implementation of an improved model used to forecast future maintenance reimbursements. AerCap records as revenue all maintenance rent receipts not expected to be repaid to lessees. In these
leases, upon lessee presentation of invoices evidencing the completion of qualifying maintenance on the aircraft or engine, we make a payment to the lessee to compensate for the cost of the
maintenance, up to the maximum of the supplemental maintenance rental payments made with respect to the lease contract. In shorter-term lease contracts (primarily engine lease contracts)
where the terms of the lease

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

2. Summary of significant accounting policies (Continued)

are
designed specifically to allow us to directly manage the occurrence, timing and associated cost of qualifying maintenance work on the flight equipment, supplemental rents collected during the
lease are recognized as lease revenue. For flight equipment subject to these shorter-term contracts, we record a charge to leasing expenses at the time maintenance work is performed on the
flight equipment.

In
most lease contracts not requiring the payment of supplemental rents, the lessee is required to re-deliver the aircraft in a similar maintenance condition (normal wear and
tear excepted) as when accepted under the lease, with reference to major life-limited components of the aircraft. To the extent that such components are redelivered in a different
condition than at acceptance, there is an end-of-lease compensation adjustment for the difference at redelivery. We recognize receipts of end-of-lease
compensation adjustments as lease revenue when received and payments of end-of-lease adjustments as leasing expenses when paid.

In
addition, we may be obligated to make additional payments to the lessee for maintenance related expenses (lessor maintenance contributions or top-ups) primarily related to
usage of major life-limited components occurring prior to the lease. We account for planned major maintenance activities such as lessor contributions and top-ups based on the
expense as incurred method in accordance with the Airline Audit and Accounting Guide. We record a charge to leasing expenses at the time of the occurrence of a lessor contribution or
top-up payment, except in instances where we have established an accrual as an assumed
liability for such payment in connection with the purchase of an aircraft with a lease attached, in which case such payments are charged against the existing accrual.

For
all of our lease contracts, any amounts of accrued maintenance liability existing at the end of a lease are released and recognized as lease revenue at lease termination. When flight
equipment is sold, the portion of the accrued maintenance liability which is not specifically assigned to the buyer is released from the balance sheet and recognized as sales revenue as part of the
sale of the flight equipment.

Accrual for onerous contracts

We make an accrual for onerous contracts where the undiscounted costs of performing under a contract or series of related contracts
exceed the undiscounted benefits expected to be derived from such contracts. In connection with a purchase business combination, accruals are recorded at the present value of such differences.

Revenue recognition

As lessor, we lease flight equipment principally under operating leases and report rental income ratably over the life of the lease as
it is earned. We account for lease agreements that include step rent clauses on a straight line basis. Lease agreements for which base rent is based on floating interest rates are included in minimum
lease payments based on the floating interest rate existing at the inception of the lease; any increases or decreases in lease payments that result from subsequent changes in the floating interest
rate are contingent rentals and are recorded as increases or decreases in lease revenue in the period of the interest rate change. In certain cases, leases provide for rentals based on usage. The
usage may be calculated based on hourly usage or on the number of cycles operated, depending on the lease contract. We cease revenue recognition on a lease contract when the collectibility of such

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

2. Summary of significant accounting policies (Continued)

rentals
is no longer reasonably assured. For past-due rentals which have been recognized as revenue, provisions are established on the basis of management's assessment of collectibility
and to the extent such rentals exceed related security deposits held, and are recorded as expenses on the income statement.

Most
of our lease contracts require payment in advance. Rentals received, but unearned under these lease agreements are recorded as deferred revenue on the balance sheet.

Sales
revenues originate from the sale of aircraft, engines and parts and are recognized when the delivery of the relevant asset is complete and the risk of loss has transferred to the
buyer.

Revenues
from direct finance leases are recognized on the interest method to produce a level yield over the life of the finance lease. Expected unguaranteed residual values of leased
assets are based on our assessment of residual values and independent appraisals of the values of leased assets remaining at expiration of the lease terms.

Revenue
from secured loans, notes receivables and other interest bearing instruments is recognized on an effective yield basis as interest accrues under the associated contracts. Revenue
from lease management fees is recognized as income as it accrues over the life of the contract. Revenue from the receipt of lease termination penalties is recorded at the time cash is received or when
the lease is terminated, if collection is reasonably assured. Other revenue includes any net gains we generate from the sale of aircraft related investments, such as our subordinated interests in
securitization vehicles and notes, warrants or convertible securities issued by our lessees, which we receive from lessees as compensation for amounts owed to us in connection with lease
restructurings.

Share-based compensation

We account for share-based compensation in accordance with ASC 718. Accordingly, we recognize compensation expense when it becomes
probable that participants in share-based incentive plans, who hold direct or indirect equity interests in our shares or options to acquire such shares, will be able to achieve fair value. The amount
of such expense is determined by reference to the fair value of the share or share option on the date of grant. The timing of expense recognition is determined with reference to the timing of lapsing
of restrictions on restricted shares and vesting on share options, including the lapsing of repurchase rights which allow other parties to repurchase participants' shares at less than fair market
value.

Foreign currencies

Foreign currency transactions are translated into U.S. dollars at the exchange rate prevailing at the time the transaction took place
or at the rates of exchange under related forward contracts where such contracts exist. Subsequent receivables or payables resulting from
such foreign currency transactions are translated into U.S. dollars at the exchange rate prevailing at each balance sheet date. All resulting exchange gains and losses are taken to the income
statement.

Variable interest entities

We account for investment in variable interest entities in accordance with ASC 810, Consolidation.

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

2. Summary of significant accounting policies (Continued)

Earnings Per Share

Earnings per share is presented in accordance with ASC 260 which requires the presentation of "basic" earnings per share and "diluted"
earnings per share. Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average shares of common stock outstanding during the period. For the
purposes of calculating diluted earnings per share, the denominator includes both the weighted average number of shares of common stock outstanding during the period and the weighted average number of
potentially dilutive common stock, such as stock options.

3. Restricted cash

Restricted cash consists of the following at December 31:

2008

2009Cash securing our obligations under ALS I debt

$
33,244

$
38,861Cash securing our obligations under ALS II debt


6,032


11,925Cash securing our obligations under AerFunding debt


41,987


44,447Cash securing our obligations under Crédit Agricole debt


3,632


1,815Cash securing our obligations under TUI debt


8,555


10,692Cash securing our obligations under other debt


10,144


15,874Cash securing our obligations under the LILO head leases (Note 15) and cash securing the guarantee of lease obligations/indebtedness of a LILO
sublessee (Note 13)


6,837


6,837Cash securing our obligations under derivative instruments


1,530


5,880Other


1,436


4,415$
113,397

$
140,746


The
cash securing our obligations under all our debt facilities is restricted and can only be used to pay for operating expenses incurred by the respective financing vehicle and to pay
for interest and debt amortization of the respective debt. The majority of the restricted cash represents collections of these structures in the previous period, which will be paid as interest and
debt amortization at the next payment date. The cash securing our obligations under derivative instruments relates to interest rate caps for which we had to pay cash into restricted cash accounts for
the benefit of our counterparties.

4. Trade receivables, net of provisions

Trade receivables consist of the following at December 31:

2008

2009Trade receivables

$
55,632

$
51,462Allowance for doubtful accounts


(11,983
)

(3,392
)$
43,649

$
48,070


F-18

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

4. Trade receivables, net of provisions (Continued)

Trade receivables include amounts invoiced to lessees in respect of lease rentals and maintenance
reserves. As of December 31, 2009, we did not have any trades receivables recorded in relation to lessee defaults.

The
change in the allowance for doubtful trade receivable is set forth below:

Year ended December 31,2007

2008

2009Provision at beginning of period

$
2,496

$
4,088

$
11,983(Recoveries) Expense for doubtful accounts receivable


745


3,746


963Other(a)


847


4,149


(9,554
)Provision at the end of period

$
4,088

$
11,983

$
3,392


---

5. Flight equipment held for operating leases, net

Movements in flight equipment held for operating leases during the periods presented were as follows:

Year ended December 31,2007

2008

2009Net book value at beginning of period

$
2,966,779

$
3,050,160

$
3,989,629Additions


813,549


1,445,321


1,649,520Depreciation


(137,014
)

(164,249
)

(215,574
)Impairment (See note 22)





(7,278
)

(32,378
)Disposals


(341,599
)

(319,793
)

(119,349
)Transfers to direct finance leases/flight equipment held for sale


(136,135
)

3,480


Transfer to inventory


(25,966
)

(14,867
)

(41,411
)Transfer to equity accounted joint venture(a)


(73,421
)




Other(b)


(16,033
)

(3,145
)

Net book value at end of period

$
3,050,160

$
3,989,629

$
5,230,437Accumulated depreciation/impairment at December 31, 2007, 2008 and 2009

$
(225,678
)
$
(361,676
)
$
(542,309
)


(a)During
2007 we sold two aircraft to our joint venture AerDragon. The investment in AerDragon is accounted for according to the equity method. The gain
relating to the sale of these aircraft has been credited to the investment in AerDragon (see Note 8).(b)As
discussed further in Note 15, we settled onerous contract accruals at a discount of $16,033 and $3,145 in 2007 and 2008, respectively. These
discounts were applied to reduce the net book value of the related aircraft.


At
December 31, 2009 we owned 180 aircraft, which we leased under operating leases to 56 lessees in 34 countries and we owned 85 engines, which we leased under
operating leases to 34 lessees in 20 countries. The geographic concentrations of leasing revenues are set out in Note 19.

F-19

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

5. Flight equipment held for operating leases, net (Continued)

Prepayments
on flight equipment (including related capitalized interest) of $93,213, $140,414 and $375,690 have been applied against the purchase of aircraft during the years ended
December 31, 2007, 2008 and 2009, respectively.

The
following table indicates our contractual commitments for the prepayment and purchase of flight equipment in the periods indicated as of December 31, 2009:

2010

2011

2012

ThereafterCapital expenditures

$
1,409,981

$
625,048

$
435,676

$
138,429Pre-delivery payments


125,861


44,050


34,227


2,203$
1,535,842

$
669,098

$
469,903

$
140,632


Our
current operating lease agreements expire over the next twelve years. The contracted minimum future lease payments receivable from lessees for equipment on non-cancelable
operating leases at December 31, 2009 are as follows:

Contracted minimum
future lease
receivables2010

$
593,6272011


561,7942012


484,6642013


403,6132014


320,960Thereafter


849,251$
3,213,909


The
titles to certain aircraft leased in the United States are held by a U.S. trust company as required by U.S. law. We are the beneficial owner of these aircraft and the aircraft are
recorded under flight equipment held for operating lease on the consolidated balance sheets. The trust company is administered by a bank. The aircraft are segregated from the bank's assets and will
not be considered part of the bank's bankruptcy estate in the event of a trustee bankruptcy.

6. Notes receivable

Notes receivable consist of the following at December 31:

2008

2009Secured notes receivable

$
6,439

$
5,763Notes receivable in defeasance structures


126,301


130,663Notes receivable from lessee restructurings


1,327


2,062$
134,067

$
138,488


F-20

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

6. Notes receivable (Continued)

The
minimum future receipts under notes receivable at December 31, 2009 are as follows:

Minimum future
notes receivable2010

$
133,9692011


5862012


3,4682013


4652014


Thereafter


$
138,488


7. Prepayments on flight equipment

In 1999, we signed a forward order contract with Airbus for the acquisition of up to 32 new aircraft between 2004 and 2009 ("1999 Forward Order"). Of that original order, seven aircraft
deliveries were cancelled pursuant to cancellation rights granted by Airbus and the remaining aircraft have all been delivered as of December 31, 2007.

In
2005, through a wholly-owned special purpose company ("AerVenture"), we signed a letter of intent with Airbus for the forward purchase of 70 aircraft, including five aircraft subject
to reconfirmation
rights. ("2005 Forward Order"). During 2008 and the first two months of 2009, AerVenture notified Airbus that AerVenture will not take delivery of the five aircraft subject to reconfirmation rights.
In 2009 AerVenture added four additional aircraft to it's forward order. As of December 31, 2009, 28 aircraft had been delivered, three aircraft were transferred to AerCap, six aircraft were
sold and 32 aircraft remain to be delivered under the agreement. As of December 31, 2009, the 32 remaining aircraft consist of five A319 aircraft, 24 A320 aircraft and three A321 aircraft. The
remaining 32 aircraft are scheduled to be delivered between 2010 through 2013. Included in the 32 aircraft are two delivery positions which have been sold to a third party. As discussed above, we
consolidate the accounts of AerVenture as it is a variable interest entity for which we are the primary beneficiary.

In
December 2006, we placed an order with Airbus to acquire 20 new A330-200 wide-body aircraft ("A330 Forward Order"). In May 2007, we added an additional ten
A330-200 aircraft to this order. The original delivery schedule for the 30 A330-200 aircraft order included delivery of two aircraft in 2008, delivery of eight aircraft in
2009, ten in 2010, four in 2011 and six in 2012. In 2008 two A330 aircraft were delivered of which one was subsequently sold. In 2009 nine A330 aircraft were delivered and two additional A330 aircraft
were added to the forward order. As of December 31, 2009, 21 of the aircraft remained to be delivered pursuant to the agreement. Included in the 21 aircraft are three forward order aircraft
which have been sold to a third party.

In
connection with the current forward order contracts, we are required to make scheduled prepayments toward these future deliveries (see table in Note 5). A total amount of
interest of $10,348, $13,582 and $23,001 was capitalized with respect to these payments for the years ended December 31, 2007, 2008 and 2009, respectively. As described in Note 15,
because the contracted purchase prices of the aircraft at delivery under the 1999 Forward Order were in excess of the anticipated fair market

F-21

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

7. Prepayments on flight equipment (Continued)

value
of the aircraft at delivery, we recognized an accrual for onerous contracts with respect to this forward order at the 2005 Acquisition.

Following
is a summary of the movements in prepayments on flight equipment during the years ended December 31, 2007, 2008 and 2009:

Year ended December 31,2007

2008

2009Net book value at beginning of period

$
166,630

$
247,839

$
448,945Prepayments made


164,074


327,938


431,410Prepayments applied against the purchase of flight equipment


(93,213
)

(140,414
)

(375,690
)Interest capitalized


10,348


13,582


23,001Net book value at end of period

$
247,839

$
448,945

$
527,666


8. Investments

Investments consist of the following at December 31:

2008

200925% equity investment in unconsolidated joint venture (AerDragon)

$
18,678

$
19,98649% equity investment in unconsolidated joint venture (AerData)





1,045$
18,678

$
21,031


Our
equity investment in our unconsolidated joint ventures, AerDragon and AerData, are accounted for under the equity method. During 2007, we sold two aircraft to our
joint venture AerDragon. The gain relating to the sale of these aircraft has been credited to the investment in AerDragon in 2007. In 2008 we invested an additional $10,000 in our joint venture
AerDragon. As of December 31, 2009 we still hold a 25% equity investment.

9. Intangible assets

The following table presents details of amortizable intangible assets and related accumulated amortization:

As of December 31, 2008Gross

Accumulated
amortization

Other

NetLease premiums

$
96,347

$
(37,910
)
$
(29,064
)(a)
$
29,373Customer relationshipsparts


19,800


(4,534
)




15,266Customer relationshipsengines


3,600


(2,183
)




1,417FAA certificate


1,100


(197
)




903Non-compete agreement


1,100


(960
)




140Net book value at end of period

$
121,947

$
(45,784
)
$
(29,064
)
$
47,099


F-22

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

9. Intangible assets (Continued)



As of December 31, 2009Gross

Accumulated
amortization

Other

NetLease premiums

$
96,347

$
(50,854
)
$
(29,064
)(a)
$
16,429Customer relationshipsparts


19,800


(6,829
)




12,971Customer relationshipsengines


3,600


(2,431
)




1,169FAA certificate


1,100


(270
)




830Non-compete agreement


1,100


(1,100
)




Net book value at end of period

$
121,947

$
(61,484
)
$
(29,064
)
$
31,399


(a)Reduction
in the year ended December 31, 2006 of $17,431 and $5,386 inclusive of deferred tax effect determined through the iterative calculation due
to elimination of valuation allowances in Ireland and the U.S., respectively existing at the date of the 2005 acquisition.


The
following table presents the changes to amortizable intangible assets during the periods indicated:

Year ending December 31,2008

2009Net carrying value at beginning of period

$
41,855

$
47,099Purchases of intangible lease premiums


21,410


Amortization


(14,615
)

(15,700
)Disposals


(1,551
)

Net carrying value at end of period

$
47,099

$
31,399


Future
amortization of the intangible assets over the terms of their useful lives is as follows:

Amortization
of intangible
assets2010

$
10,4492011


6,4062012


4,7132013


3,7342014


2,942Thereafter


3,155$
31,399


The
remaining weighted average amortization period for the amortizable intangible assets is 56 months. Please refer to Note 22 for the impairment analysis of intangible
assets.

We
recognized goodwill of $38,199 in the acquisition of AeroTurbine on April 26, 2006. As a result of the AeroTurbine acquisition, we reduced goodwill by $31,423 in connection
with the reduction of a valuation allowance against our US tax assets.

F-23

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

9. Intangible assets (Continued)

Goodwill
is tested for impairment on an annual basis, and more frequently if indicators of potential impairment exist, such as a decline in company's stock price, using a
fair-value based approach. The valuation for impairment is generally based on valuation models that incorporate
internal projections of expected future cash flows and operating plans. The annual impairment tests are performed as of December 31.

ASC
350 requires that the impairment test be performed through the application of a two-step fair value test. The first step of the test compares the book value of our
reporting unit, to its estimated fair value at the respective test dates. The estimated fair values of the reporting unit is computed using the present value of estimated future cash flows. If fair
value is less than carrying value, a second step must be performed to quantify the amount of the impairment, if any. The second step of the impairment test compares the fair value of these assets to
their book values. The implied fair value of goodwill is calculated as the excess of the estimated fair value of the reporting unit being tested over the fair value of the tangible assets and
liabilities as well as existing recorded and unrecorded identifiable intangible assets. The estimated implied fair value of goodwill is compared to its respective carrying value and any excess
carrying value is recorded as an impairment charge.

AeroTurbine
was tested for impairment due to adverse conditions in the aviation industry. Based on our outlook, the fair value of the AeroTurbine, as determined using the estimated
present value of future cash flows, supported the recorded goodwill of $6,776.

10. Inventory

Following are the major classes of inventory at December 31,

2008

2009Engine and airframe parts

$
69,966

$
98,060Work-in-process


13,218


2,323Airframes


5,404


Engines


14,291


2,155$
102,879

$
102,538


11. Derivative assets and liabilities

We use a variety of derivative instruments to manage exposure to interest rate and foreign currency risk. These derivative products can include interest rate caps, floors, options and
forward contracts.

As
of December 31, 2009, we had interest rate caps and floors and several foreign currency forward contracts with combined notional amounts of $3.1 billion and a fair value
of $37,065. The variable benchmark interest rates associated with these instruments ranged from one to six-month LIBOR.

F-24

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

11. Derivative assets and liabilities (Continued)

We
have not applied hedge accounting under ASC 815 to any of the above derivatives. The change in fair value of the derivatives, therefore, is recorded in the income statement as an
increase in interest expense as specified below:

Year ended December 31,2007

2008

2009Change in fair value of derivatives

$
(14,592
)
$
(58,153
)
$
23,692


Some
of our agreements with derivative counterparties require a two-way cash collateralization of derivative fair values. Cash under such arrangements is
included in restricted cash (Note 3).

The
maximum length of time over which we are hedging our exposure to the variability in future cash flows for forecasted transactions, excluding those forecasted transactions related to
the payment of variable interest on existing financial instruments, is 12 years.

12. Other assets

Other assets consist of the following at December 31:

2008

2009Debt issuance costs

$
99,486

$
114,910Other tangible fixed assets


16,313


11,242Receivables from aircraft manufacturer


25,912


22,250Prepaid expenses


7,428


7,532Current tax receivable


5,356


Other receivables


25,255


24,303$
179,750

$
180,237


The
increase in debt issuance costs is mainly caused by the delivery and associated debt funding of nine A330 aircraft during the year ended December 31, 2009.

Amortization
of debt issuance costs was $38,156, $16,239 and $16,364 for the years ended December 31, 2007, 2008 and 2009 respectively. The unamortized debt issuance costs at
December 31, 2009 amortize annually from 2010 through 2038.

13. Accrued expenses and other liabilities

Accrued expenses and other liabilities consist of the following at December 31:

2008

2009Guarantee liability

$
3,219

$
2,342Accrued expenses


57,851


52,265Accrued interest


13,608


9,515Lease deficiency


12,574


13,009Deposits under forward sale agreements


17,498


3,268$
104,750

$
80,399


F-25

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

13. Accrued expenses and other liabilities (Continued)

Guarantee liabilityIn 1996, we terminated lease agreements with two head lessors covering 12 A320 aircraft under which we were obligated as
head-lessee. In connection with this early termination, we assigned our rights as sublessor under sublease agreements covering the 12 aircraft to the respective head lessors.

In
addition to the sublease assignments, we also issued guarantees to the head lessors covering the sublessee's obligations to the head lessors under the assigned subleases. We would be
required to make payments under the guarantees if the sublessee were to default under the lease agreements with the head lessors. At December 31, 2009, the maximum amount which we could be
required to pay is estimated at $6,837. The subleases and our obligations under the guarantees expire between the years 2010 and 2013. As referenced in Note 3, our potential obligations under
the guarantees are secured by cash held in restricted bank accounts. This restricted cash is released back to us according to a set schedule as the sublessee fulfills its obligations under the leases.

We
have recognized a liability equal to the estimated fair value of the guarantee since the time we became obligated for the guarantee as a result of a previous company acquisition. At
the date of the 2005 Acquisition, we adjusted the fair value of the guarantee obligation in connection with the purchase accounting.

Lease deficiencyLease deficiency represents lease rates for current lease contracts which are below current market rentals for the applicable
aircraft at the time of purchase. The lease deficiency amortizes over the remaining term of the related lease agreements as a non-cash increase in lease revenue. The remaining weighted
average amortization period for the lease deficiency is 77 months.

Deposits under forward sale agreementsIn 2007, AerVenture entered into an amendment under its Airbus contract pursuant to which delivery positions
for seven aircraft under the contract were effectively transferred to a third party buyer. Because retention of the total economic benefit of the transaction to AerVenture is subject to performance
criteria by AerVenture and the third party buyer and subject to ultimate delivery of the aircraft to the third-party buyer, sales recognition has been deferred until delivery of each aircraft. Under
the contract, AerVenture will receive some payments that will ultimately be re-paid and some payments which it will permanently retain. Amounts collected by AerVenture which will be
re-paid are recognized as deposits under forward sales agreements and recognized as sales revenue upon delivery. As of December 31, 2009, five of the seven aircraft were delivered
to the third-party buyer. The remaining two aircraft are scheduled to be delivered in February 2010.

F-26

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

14. Debt

Debt consists of the following as of December 31:

2008

2009(1)

Weighted average
interest rate
December 31,
2009(2)

MaturityExport credit facilitiesA320 financings

$
636,813

$
537,733


0.59
%

2020Export credit facilitiesA330 financings





642,908


2.83
%

2021Export credit facilitiesAerVenture A320 financings





35,221


4.55
%

2023UBS revolving credit facility


477,277


343,196


2.00
%

2014A320 and A330 Pre-delivery payment facility


285,568


404,562


2.14
%

2012ALS I debt


1,120,516


973,513


0.49
%

2032ALS II debt





634,059


2.08
%

2038AeroTurbine revolving credit facility


194,188


311,497


1.75
%

2012Crédit Agricole Aircraft Acquisition facility


211,346


122,475


1.98
%

2013TUI Portfolio Acquisition facility


407,804


370,383


1.81
%

2015TUI Portfolio Subordinated debt


61,921


63,317


20.00
%

2015Engine Acquisition facility


53,300


52,762


1.98
%

2013Japanese operating lease financings


91,095


86,059


0.90
%

2015Commercial bank debt


124,358


132,426


2.97
%

2019Natixis Bond Facility





5,890


0.49
%

2011Capital lease obligations under defeasance structures


126,301


130,663


5.38
%

2010$
3,790,487

$
4,846,664


(1)As
of December 31, 2009, we remain in compliance with the respective financial covenants across the Company's various debt obligations.(2)The
weighted average interest rate in the table above includes the impact of derivative instruments which we hold to hedge our exposure to interest rates.


Aggregate
maturities of debt and capital lease obligations during the next five years and thereafter are as follows:

Debt
maturing2010

$
1,014,1152011


528,1052012


897,0482013


431,9322014


690,354Thereafter


1,285,110$
4,846,664


F-27

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

14. Debt (Continued)

ECA credit facilitiesA320 financingsIn April 2003, we entered into an $840,000 export credit facility ("ECA Facility") for the financing
of up to 20 A320 Airbus Family aircraft up to December 31, 2005. Funding under the facility is provided by commercial banks, but the
repayment is guaranteed by the ECA. In January 2006, the ECA Facility was amended and extended to cover an additional nine aircraft and its size increased to a maximum of $1,215,000 for a further
three years. In December 2008, the export credit facility was further amended to cover an additional one aircraft and the maximum amount of the facility remained unchanged. The terms of the lending
commitment in the ECA Facility are such that the ECA only approve funding for aircraft that are due for delivery on a six-month rolling basis and have no obligation to fund deliveries
beyond that time frame. The margin over three-month LIBOR ranges from 0.12% to 0.90%. We are obligated to repay principal on ECA loans over a 10 or 12-year term. The ECA Facility contains
certain net worth financial covenants, a breach of which would cause us to lose some of our operational flexibility under our leases, such as a requirement to grant pledges over certain bank accounts
to the respective lenders. In addition, all loans under the ECA Facility contain change of control provisions that grant the lenders the right to prepayment of their loans in the event of a change of
control, unless the lenders consent to the change of control.

The
security structures of the ECA-guaranteed debt require that legal title to the aircraft be transferred to and held by a special purpose company controlled by the lenders.
We have entered into head lease agreements on the subject aircraft which transfer the risk and rewards of ownership of the aircraft to us. Aircraft subject to these structures are recorded as flight
equipment held for operating lease on our balance sheets. The obligations outstanding under the ECA financings are secured by a pledge of our shares to the lenders which hold legal title to the
aircraft financed under the respective financing. The obligations of each of our aircraft-owning subsidiaries under the ECA Facility are guaranteed by us.

At
December 31, 2009, we had financed 18 aircraft under the ECA Facility. The net book value of aircraft pledged to the ECA under the ECA Facility and the previous ECA loans was
$623,918 at December 31, 2009.

ECA credit facilitiesA330 financingsIn December 2008, we entered into a $1.41 billion export credit facility for the financing of
up to 15 Airbus A330 aircraft. Funding under the facility is provided by commercial banks, but the repayment is guaranteed by the ECA. The margin over three-month LIBOR ranges from 0.35% to 0.80% for
the first four export credit facilities. The interest rates for the remaining loans will be agreed on a rolling basis. We are obligated to repay principal on ECA loans over a 10 or 12-year
term. The export credit facilities contain affirmative covenants customary for secured financings. The facilities also contain net worth financial covenants. In addition, loans under the 2008 export
credit facilities contain change of control provisions that grant the lenders the right to prepayment of their loans in the event of a change of control, unless the lenders consent to the change of
control.

The
export credit facilities require legal title to the aircraft be transferred to and held by a special purpose company controlled by the respective lenders. We will enter into lease
agreements on these aircraft which transfer the risk and rewards of ownership of the aircraft to AerCap. The obligations outstanding under the export credit facilities are secured by, among other
things, a pledge of the shares of the company which holds legal title to the aircraft financed under the facility. Each subsidiary's obligations under the financings are guaranteed by us.

F-28

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

14. Debt (Continued)

At
December 31, 2009, we had financed nine aircraft under the ECA Facility. The net book value of aircraft pledged to the ECA under the A330 ECA Facility was $741,077 at
December 31, 2009.

ECA credit facilitiesAerVenture A320 financingsIn December 2008, we entered into a $846.0 million export credit facility for the
financing of up to 20 Airbus A320 aircraft. Funding under the facility is provided by commercial banks, but the repayment is guaranteed by the ECA. The interest rate for the aircraft financed as of
December 31, 2009, is 4.55%. We are obligated to repay principal on ECA loans over a 10 or 12-year term. The export credit facilities contain affirmative covenants customary for
secured financings. The facilities also contain net worth financial covenants. In addition, loans under the 2009 export credit facilities contain change of control provisions that grant the lenders
the right to prepayment of their loans in the event of a change of control, unless the lenders consent to the change of control.

The
export credit facilities require legal title to the aircraft be transferred to and held by a special purpose company controlled by the respective lenders. We will enter into lease
agreements on these aircraft which transfer the risk and rewards of ownership of the aircraft to AerCap. The obligations outstanding under the export credit facilities are secured by, among other
things, a pledge of the shares of the company which holds legal title to the aircraft financed under the facility. Each subsidiary's obligations under the financings are guaranteed by us.

At
December 31, 2009, we had financed one aircraft under the ECA Facility.

UBS Revolving Credit FacilityAerFunding 1 Limited ("AerFunding") is a special purpose company incorporated with limited liability in Bermuda. The
share capital of AerFunding is owned 95% by a charitable trust and 5% by AerCap Ireland and is a consolidated subsidiary. AerFunding was formed for the purpose of acquiring used aircraft assets which
we acquire in the market. AerFunding entered into a non recourse senior secured revolving credit facility during 2006 in the aggregate amount of up to $1,000,000 with a syndicate of financial
institutions led by UBS.

The
revolving loans under the credit facility are divided into two classes: class A loans, which have a maximum advance limit of $830,000 and class B loans, which have a
maximum advance limit of
$170,000. In addition to borrowings under the revolving credit facilities, AerFunding has also issued subordinated notes to us at each aircraft purchase. Borrowings under the revolving credit facility
can be used to finance between 66% and 79% of the appraised value of the acquired aircraft or, in the case of Boeing 737NG and Airbus A320 family aircraft, between 74% and 80% of the lower of the
purchase price and the appraised value of the acquired aircraft. In addition, value enhancing expenditures and required liquidity reserves are also funded by the lenders. All borrowings under the
revolving credit facility are subject to the satisfaction of customary conditions and restrictions on the purchase of aircraft that would result in our portfolio becoming too highly concentrated, with
regard to both aircraft type and geographical location. Borrowings under the revolving credit facility are secured by, among other things, security interests in and pledges or assignments of equity
ownership and beneficial interests in all of the subsidiaries of AerFunding, as well as by AerFunding's interests in the leases of its assets. Creditors of AerFunding may only look to the assets of
AerFunding and its subsidiaries for repaymentthe obligations of AerFunding 1 Limited are non-recourse to us.

F-29

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

14. Debt (Continued)

The
UBS revolving credit facility includes general and operating covenants that restrict additional indebtedness in the AerFunding subsidiaries owning the related aircraft, the payment
of dividends and other limitations which are customary for such credit facilities.

At
December 31, 2009, we had financed 11 aircraft under the UBS revolving credit facility. The net book value of aircraft pledged to lenders under the credit facility was $418,894
at December 31, 2009.

JOL FinancingsIn 2004 we entered into several Japanese operating lease ("JOL") finance structures to finance aircraft acquisitions.
Funding under these structures is provided through a combination of senior commercial bank debt and subordinated loans from Japanese investors. The interest rate on the subordinated loans is fixed and
the interest rate on the senior loans are variable based on three- and six-month LIBOR with spreads ranging from 0.25% to 1.35%. The security structures of the JOL financings require that
legal title to the aircraft be transferred to and held by a special purpose company controlled by the respective lenders. We have entered into head lease agreements on the subject aircraft which
transfer the risk and rewards of ownership of the aircraft to us. Aircraft subject to these structures are recorded as flight equipment held for operating lease on our balance sheets. The obligations
outstanding under the JOL financings are secured by a pledge of our shares to the lenders which hold legal title to the aircraft financed under the respective financing. The obligations of each of our
aircraft-owning subsidiaries under the JOL financings are guaranteed by us. All loans under the JOL financings contain change of control provisions that grant the lenders the right to prepayment of
their loans in the event of a change of control, unless the lenders consent to the change of control. At December 31, 2009, we had financed three aircraft under JOL structures. The net book
value of aircraft pledged to JOL financings was $79,450 at December 31, 2009.

A320 and A330 Pre-delivery Payment FacilityIn January 2006, AerVenture signed a purchase agreement for the purchase of up to 70 aircraft
from Airbus. As of December 31, 2009, there are 30 aircraft remaining to be delivered to AerVenture and are scheduled for delivery up to November 2013. In December 2006, we signed a purchase
agreement to purchase up to 20 Airbus A330 aircraft. In May 2007, the purchase agreement was amended to add ten additional aircraft. As of December 31, 2009, 11 of the aircraft had been
delivered and the remaining aircraft are scheduled to be delivered prior to the end of 2012. In connection with the scheduled delivery of these A320 and A330 aircraft, the following facilities have
been entered into to finance a portion of these required payments to Airbus:



F-30

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

14. Debt (Continued)



Borrowings
under each of the facilities bear floating rate interest and margins as set out in the table below. The aggregate principal amount of the loans outstanding under the
Pre-delivery payment facilities was $404.6 million as of December 31, 2009.

Number of
aircraft

Amount
outstanding at
December 31,
2009

Interest rates(US dollars in
thousands)AerVenture A320 HSH Nordbank AG Facility


26

$
173,564

One month LIBOR plus 1.20%AerCap Ireland A330 Citigroup Facility


2


45,629

One month LIBOR plus 1.00%AerCap Ireland A330 European financial institution facility


3


83,459

One month LIBOR plus 1.20%AerCap Ireland A330 US Dollar facility


1


15,131

One month LIBOR plus 4.00%AerCap Ireland A330 Euro facility


5


30,797

One month EURIBOR plus 5.50%AerCap Ireland A330 China Development Bank Facility


4


55,982

Three month LIBOR plus 3.30%Total




$
404,562


Borrowings
under each of the pre-delivery payment facilities may be prepaid (subject to minimum payment and notice provisions) without penalty, except for break funding costs
if payment is made on a day other than an interest payment date. The maturity date of the each Pre-delivery payment facility will be the earlier of (a) the delivery date for the
final aircraft to be delivered and (b) the Maturity Date. Borrowings under the pre-delivery payment facilities are secured by, among other things, the partial assignment of the
airframe and engine purchase agreements in respect of the A320 and A330

F-31

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

14. Debt (Continued)

aircraft
covered by each facility, including the right to take delivery of the aircraft where the lenders have provided the pre-delivery payments and the aircraft remains undelivered. The
facilities contain customary covenants for secured pre-delivery payment financings.

In
connection with the Euro facility entered into with HSH Nordbank AG, the continued availability of this financing under the Facility Agreement dated June 30, 2009, between
AerCap as Borrower and HSH as Lender, Agent and Security Trustee was contractually conditioned on AerCap Ireland Limited or an affiliate acquiring one Boeing 747-400 ERF aircraft or
another solution acceptable to HSH on or before March 31, 2010. Under this agreement, the failure to make such a purchase or reach another acceptable solution, accelerates the final repayment
date to May 31, 2010. AerCap did not and does not expect to purchase the aircraft. AerCap does not, however, expect to be obliged to repay all amounts outstanding on May 31, 2010. AerCap
expects the repayment of the debt will follow the original anticipated repayment schedule which is at the time of each aircraft delivery.

ALS Securitisation I DebtAircraft Lease Securitisation Limited ("ALS I") is a special purpose company incorporated with limited liability in
Jersey,
Channel Islands, on August 10, 2005. The share capital of ALS I is owned 95.1% by Jersey charitable trusts and 4.9% by AerCap Ireland and is a consolidated subsidiary. ALS I was formed for the
purpose of raising securitized debt financing on 42 of our aircraft which were not then subject to other secured financings. On May 8, 2007, we completed a refinancing of ALS I with the
issuance of $1.66 billion of securitized notes in one class of AAA-rated class G-3 floating rate notes. The proceeds from the refinancing were used to redeem all
outstanding ALS I debt, other than the most junior class of notes, to refinance the indebtedness that had been incurred to purchase 24 previously acquired aircraft, and to finance the purchase of four
additional new aircraft, increasing ALS I's aircraft portfolio size to 70 aircraft. As a result of the refinancing, in 2007, we recorded additional interest expense of $27,402 related to the
write-off of unamortized debt issuance costs. Since the refinancing, ALS I has sold 8 aircraft, resulting in an aircraft portfolio size of 62 aircraft at December 31, 2009.

The
primary source of payments on the notes is lease payments on the aircraft owned by the subsidiaries of ALS I. We retained the most junior class of notes in the securitization, as a
result of which we still consolidate ALS I's results in our financial statements. The net book value of the remaining 62 aircraft pledged as collateral for the securitization debt was $1,282,684 at
December 31, 2009.

ALS
I is bankruptcy-remote from us and the lenders to ALS I may only look to proceeds derived from the 62 ALS I aircraft for repayment. The indenture agreement, which governs the
securitized notes, require that ALS I hold a designated amount of cash aside in restricted accounts for future cash flow requirements of ALS I. All cash held by ALS I is recorded as restricted cash on
our balance sheets. The indenture also requires ALS I to comply with a number of general and operating covenants including, but not limited to the following:

Limitations
on aircraft modifications, acquisition and disposals.

Limitation
on transactions with us and our affiliates.

Maintenance
of separate existence.

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

14. Debt (Continued)



Aircraft Lease Securitisation II DebtOn June 26, 2008, we completed a securitization in which Aircraft Lease Securitisation II Limited ("ALS
II") issued securitized class A-1 notes and class A-2 notes, rated A+ by Standard & Poor's and A1 by Moody's. The class A-1 notes each
had an outstanding principal balance of zero, and were issued to commitment holders. The commitment holders have committed to advance funds, subject to certain conditions, up to an aggregate amount of
$1 billion in connection with the purchase of aircraft by ALS II. The principal balance of the class A-1 notes will increase in an amount equal to the amount advanced by each
commitment holder. Funded class A-1 notes may be exchanged for class A-2 notes subject to certain conditions. The aggregate principal balance of the
class A-1 notes together with the class A-2 notes will not exceed $1 billion. The class A-1 notes are ranked pari passu with the
class A-2 notes.

The
advances made by the commitment holders will be applied to purchase 30 aircraft from AerVenture Leasing 1 Limited, a subsidiary of AerVenture Limited (our consolidated joint
venture). The first aircraft delivery to ALS II occured in May 2009. The 30 aircraft are among the 70 aircraft being delivered by Airbus to AerVenture Limited between 2007 and 2011. The primary source
of payments on the notes will be lease payments on the aircraft owned by subsidiaries of ALS II. The final maturity date of the notes will be June 26, 2032.

The
notes are secured by security interests in and pledges or assignments of equity ownership and beneficial interests in the subsidiaries of ALS II as well as by ALS II's subsidiaries'
interests in leases of the aircraft they own, by cash held by or for them and by their rights under agreements with the service providers. Rentals and reserves paid under leases of the ALS II aircraft
will be placed in a collection account and paid out according to a priority of payments.

At
December 31, 2009 22 aircraft were financed in ALS II. The net book value of 22 aircraft pledged as collateral for the securitization debt was $820,555 at December 31,
2009.

AeroTurbine Revolving Loan FacilityIn connection with the prepayment of the existing senior and subordinated debt with Crédit Agricole
with the proceeds of our initial public offering, we amended and restated our AeroTurbine credit facilities and increased the capacity under the revolving loan facility to $220,000. On
December 19, 2007, the facility size was increased to $328,000 including the addition of a letter of credit facility in the amount of $10,000 (which amount is included in the total commitment
of $328,000). Borrowings under the revolving loan facility are secured by security interests in and pledges or assignments of all the shares and other ownership interests in AeroTurbine and its
subsidiaries, as well as by all assets of AeroTurbine and its subsidiaries. The revolving loan facility contains a number of covenants that, among other things, restrict, subject to certain
exceptions, the ability of AeroTurbine to incur additional indebtedness; create liens on assets, including assets financed with proceeds from the revolving loan facility; make advances, loans,
extensions of credit, guarantees, capital contributions or other investments; engage in mergers or consolidations; engage in certain sale-leaseback transactions; change the business
conducted by AeroTurbine and its subsidiaries; and make certain capital expenditures. Additionally, the revolving loan facility includes a restriction in AeroTurbine's ability to declare or pay
dividends or other asset distributions to other group companies above a certain defined threshold. The revolving loan facility also requires AeroTurbine to maintain

F-33

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

14. Debt (Continued)

certain
minimum debt-to-earnings and earnings-to-expenses ratios. All of AeroTurbine's tangible assets of approximately $590,772 at December 31,
2009 are pledged as collateral for the revolving loan facility.

Crédit Agricole Aircraft Acquisition FacilityIn connection with the purchase of a portfolio of up to 25 aircraft from GATX, our
consolidated subsidiary entered into a senior secured loan facility in the aggregate amount of up to $248,000 with Crédit Agricole and certain other financial institutions. On
December 20, 2007, the original facility was amended and supplemented to allow for an additional senior facility in an aggregate amount of up to $150,000 to be provided by Crédit
Agricole and certain other financial institutions. This additional facility is available to finance a percentage (calculated by reference to relevant aircraft types and lease status) of the purchase
price of a variety of specified aircraft makes and models. Borrowings under the additional facility can be used to finance the lesser of 85% of the purchase price and up to 72.5% of the appraised
value of the aircraft. Borrowings under the senior facility are secured by mortgages on the aircraft and security interests in and pledges or assignments of all the shares and other ownership
interests in the borrower and its subsidiaries, as well as their bank accounts and lease interests. The loans include general and operating covenants that restrict the borrower from incurring
additional indebtedness and other limitations which are customary for such credit facilities. At December 31, 2009, we had financed 19 aircraft under the original loan facility. The net book
value of the aircraft pledged to lenders under the loan facility was $185,177 at December 31, 2009.

TUI Portfolio Acquisition FacilityIn June 2008, AerCap Partners I Holding Limited, or AerCap Partners, a 50% joint venture established between us
and
Deucalion Aviation Funds, entered into a sale and leaseback transaction pursuant to which it agreed to purchase 11 Boeing B737-800, six Boeing B757-200 and two Boeing
B767-300 aircraft from the TUI Travel Group, or TUI, and lease the aircraft back to TUI. To finance the purchase of the 19 aircraft, a subsidiary of AerCap Partners entered into a senior
facility in an amount of up to $448.6 million with Crédit Agricole, KfW IPEX-Bank GmbH, Deutsche Bank AG London Branch and HSH Nordbank AG which was arranged
by Crédit Agricole and KfW IPEX-Bank GmbH. The senior facility is divided into two tranches, the first being used to finance the purchase of the 11 Boeing
B737-800 aircraft and the second to finance the purchase of the other eight aircraft. AerCap Partners must repay the lenders for the amounts drawn on the senior facility in monthly
installments starting on July 1, 2008 and the first day of each month thereafter (each a repayment date). The principal amount outstanding under the loan in relation to the first tranche must
be repaid in full on April 1, 2015 and the principal amount outstanding under the loan in relation to the second tranche on April 1, 2012. The aggregate principal amount of the loans
outstanding under the senior facility as of December 31, 2009 was $370.4million. Following drawdown of the amounts in relation to the 19 aircraft, the remaining commitment under the facility
was cancelled subsequent to June 30, 2008.

Borrowings
under the first tranche of the senior facility bear interest at a floating interest rate of one month LIBOR plus a margin of 1.575% until April 1, 2013 and a margin of
1.75% thereafter. Borrowings under the second tranche of the senior facility bear interest at a floating interest rate of one month LIBOR plus a margin of 1.575% until April 1, 2010 and 2.00%
thereafter. Interest under the senior facility is payable monthly in arrears on each repayment date. Borrowings under the AerCap Partners facilities may be prepaid without penalty, except for break
funding costs if payment is made on

F-34

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

14. Debt (Continued)

a
day other than a repayment date. The maturity date of the senior facility will be, in respect of the first tranche, April 1, 2015, and, in respect of the second tranche, April 1, 2012.
If AerCap Partners 1 Limited is the owner of the aircraft on the relevant put option date relating to one of the 19 aircraft (April 1, 2015 in respect of the B737-800 aircraft and
April 1, 2012 in respect of each other aircraft) and amounts under the facility remain outstanding with respect to that aircraft on that put option date, Crédit Agricole can
require AerCap Holdings N.V. (i) to purchase that aircraft, (ii) to purchase that aircraft and the shares of the relevant lessor of that aircraft or (iii) to purchase the
beneficial interest that AerCap Partners 1 Limited has in that aircraft. Crédit Agricole can, subject to certain provisions including cure rights of Deucalion Aviation Funds, also
exercise the put option on an AerCap Holdings N.V. insolvency event.

Borrowings
under the senior facility are secured by, among other things, charges over the shares in AerCap Partners, AerCap Partners I Holding Limited and Lantana Aircraft Leasing
Limited, charges over various bank accounts, mortgages over the financed aircraft and security assignments of, inter alia, the lease agreements and letters of credit provided to AerCap Partners by
Royal Bank of Scotland plc. The senior facility contains customary covenants for secured financings through special purpose companies. AerCap Partners also covenants in the senior facility
(a) to provide loan-to-value ratio appraisals to the agent on agreed dates and (b) that the ratio of tranche 1 aircraft to all financed aircraft must be at
least 43%. The net book value of aircraft pledged to lenders under the credit facility was $484,226 at December 31, 2009.

TUI Portfolio Subordinated DebtOn June 20, 2008, AerCap and our joint venture partner in the TUI portfolio acquisition each subscribed
$62.8 million of 20% fixed rate subordinated loan notes, or subordinated loan notes, issued by AerCap Partners. The subordinated debt held by AerCap is eliminated in consolidation of the joint
venture, AerCap Partners, a consolidated subsidiary. The subordinated loan notes are fully subordinated in all respects including in priority of payment to, amongst other debts of AerCap Partners, the
senior facility. As is the case in respect of the senior facility, the obligation of AerCap Partners to make payments in respect of the subordinated loan notes is limited in recourse to certain
amounts actually received by AerCap Partners.

Interest
accrues on the subordinated loan notes at a rate of 20% per annum. Subject to certain exceptions, interest is payable quarterly in arrears on the tenth business day after
March 31, June 30, September 30 and December 31. Where (i) the amount which, pursuant to the terms of the senior facility, is available to AerCap Partners to make
payments in respect of, amongst other things, the subordinated loan notes is insufficient to meet the interest payments or (ii) the terms of the senior facility prohibit the payment in full of
interest on the relevant payment date, then AerCap Partners must pay the maximum amount of interest that can properly be paid to the noteholder on the relevant interest payment date and the unpaid
interest carries interest at a rate of 20% per annum until paid. Outstanding subordinated loan notes must be redeemed by the later of December 31, 2015 and the date falling six months after the
later of the senior facility tranche 1 maturity date and the senior facility tranche 2 maturity date. Subject to certain conditions, including (while the senior facility security remains
outstanding) the consent of the collateral trustee, AerCap Partners may at any time redeem all or any of the outstanding subordinated loan notes. The collateral granted in respect of the senior
facility also secures the debt constituted by the subordinated loan notes. However, the rights of the

F-35

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

14. Debt (Continued)

holders
of subordinated loan notes in respect of this security are subordinated to the rights of the senior facility lenders, amongst others.

AerCap Engine Leasing Limited Credit AgreementOn June 25, 2008, AerCap Engine Leasing Limited, a wholly owned subsidiary, entered into a
credit agreement with Citibank, N.A. and certain other financial institutions to finance the acquisition of aircraft engines. Pursuant to this agreement, the total commitment of the credit agreement
was $100.0 million. The borrowing period is two years from June 25, 2008 after which the loan converts to a term loan. The aggregate principal amount of the loans outstanding under
AerCap Engine Leasing Limited was $52.8 million as of December 31, 2009. Under the Citibank credit agreement, AerCap Engines can borrow loans based on LIBOR plus 1.725% up to the total
commitment. The maturity date of the Citibank credit agreement is June 25, 2010. AerCap Engine Leasing Limited has elected to extend the maturity date by an additional three years (the
"Extension Term") to June 25, 2013, subject to certain conditions, including but not limited to AerCap Engine Leasing Limited posting cash collateral in an amount equal to 2.5% of the then
aggregate outstanding principal amount of the loans. Borrowings under the Citibank credit agreement are secured by security interests in and pledges or assignments of all the shares and other
ownership interests in AerCap Engine Leasing Limited and its subsidiaries, as well as by all assets of AerCap Engine Leasing Limited and its subsidiaries.

Commercial Bank DebtWe have entered into various commercial bank financings to fund the purchase of individual or small groups of aircraft. The
financings mature at various dates through 2019. The interest rates are a mix of one-, three- and six-month LIBOR-based with spreads ranging from 0.95% to 1.50%. The financings
are secured by a pledge of the shares of the subsidiaries owning the related aircraft and a guarantee from us. Most of our commercial bank debt contain affirmative covenants customary for secured
financings, such as the regular provision of financial information and disclosure of material events affecting us, among others.
At December 31, 2009, we had financed 5 aircraft under commercial bank financings. The net book value of the aircraft pledged to commercial bank financings was $166,885 at December 31,
2009.

Capital Lease ObligationsWe are obligated under capital lease agreements involving three aircraft that originated from sale-leaseback
transactions. Our obligations under these capital leases are defeased through interest bearing receivables held by the lenders to the sale-leaseback structures. We have also placed
additional commercial debt financing of $58,819 at December 31, 2009 on these three aircraft. The net book value at December 31, 2009 of the three aircraft securing the capital lease
obligations was $104,885, which is also included in the net book value of aircraft securing commercial bank debt above. Depreciation of $5,198, $5,198 and $5,246 have been charged on these assets
during the years ended December 31, 2007, 2008 and 2009. The future minimum lease payments under the capital leases, together with the scheduled return of principal amounts in related defeased
structures will expire in 2010.

At
December 31, 2009, we had available collateralized credit facilities of $3.1 billion and an on-demand overdraft facility of $10 million, which were
undrawn.

A
total amount of capitalized interest of $10,348, $13,582 and $23,001 reduced interest expense in respect of the prepayments on flight equipment (Note 7) for the years ended
December 31, 2007, 2008 and 2009, respectively.

F-36

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

15. Accrual for onerous contracts

Accrual for onerous contracts relates to lease-in, lease-out transactions. At December 31, 2009, we leased-in four aircraft from two different
lessors under operating head leases that mature between 2010 and 2013. At December 31, 2009, we had entered into sublease agreements with several different customers covering these same
aircraft. For all four aircraft, the lease termination dates of the subleases are matched to the lease termination dates under the head leases. The contracted sublease receipts are insufficient to
cover our monthly obligations under the head leases. These transactions are recorded at their net present value as a result of purchase accounting.

We
have established a liability equal to the difference between the present value of head lease expenses and the present value of sublease revenue, discounted at appropriate discount
rates. The amount of this liability amortizes to income monthly on a constant yield basis as we meet our obligations under the head leases.

Following
is a summary of the undiscounted contracted minimum lease payments under the respective head leases and subleases at December 31, 2009:

Head lease
payments

Sublease
receipts2010

$
21,767

$
12,6602011


21,026


12,6602012


10,641


7,8602013





555Thereafter





$
53,434

$
33,735


As
referenced in Note 3, we are required, in some instances, to maintain deposits in restricted accounts or to cash-back letters of credit which are security to the
respective headlessors for our obligations under the LILO transactions.

During
2007, we purchased five aircraft and in 2008 we purchased another two aircraft, which were all previously subject to head leases, and terminated the related head leases. The
purchase consideration represented a discount of $16,033 and $3,145 in 2007 and 2008, respectively, to the carrying value of the related onerous contract accrual. In accordance with ASC 840, the
amount of the discount has been applied to reduce the net book value of the related aircraft.

F-37

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

16. Income taxes

We have subsidiaries in a number of tax jurisdictions, principally, The Netherlands, Ireland, the United States of America and Sweden. Income tax expense by tax jurisdiction is
summarized below for the periods indicated.

Year ended December 31,2007

2008

2009Deferred tax expense (benefit)The Netherlands

$
1,903

$
1,995

$
(15,959
)Ireland


9,824


7,113


20,711United States of America


(3,832
)

(10,121
)

(2,503
)Sweden


(463
)

370


171Other








(47
)7,432


(643
)

2,373Current tax expense (benefit)United States of America


9,191


212


1,521The Netherlands


8,500





17,691


212


1,521Income tax expense (benefit)

$
25,123

$
(431
)
$
3,894


Reconciliation
of statutory income tax expense to actual income tax expense is as follows:

Year ended December 31,2007

2008

2009Income tax expense at statutory income tax rate

$
54,167

$
35,825

$
53,618Valuation allowance


2,550





14,746Income arising from non taxable items (permanent differences)








(14,112
)Tax on global activities


(31,594
)

(36,256
)

(50,358
)(29,044
)

(36,256
)

(49,724
)Actual income tax expense (benefit)

$
25,123

$
(431
)
$
3,894


F-38

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

16. Income taxes (Continued)

The
following table summarizes our global tax activities into each specific tax jurisdiction for the year ended December 31, 2009:

Year ended
December 31,2009

Tax rate

Variance to
25.5% statutory
tax rate

Tax variance as
a result of
global activitiesTax jurisdictionThe Netherlands

$
(119,080
)

25.5
%

0.0
%
$
Ireland


162,520


12.5
%

(13.0
)%

(21,129
)United States of America


(2,612
)

37.3
%

11.8
%

(308
)Sweden


912


19.0
%

(6.5
)%

(59
)Isle of Man


113,185


0.0
%

(25.5
)%

(28,862
)$
154,925







$
(50,358
)


The
calculation of income for tax purposes differs significantly from book income. Deferred income tax is provided to reflect the impact of temporary differences between the amounts of
assets and liabilities for financial reporting purposes and such amounts as measured under tax law in the various jurisdictions. Tax loss carryforwards and accelerated tax depreciation on flight
equipment held for operating leases give rise to the most significant timing differences. In addition, the U.S. subsidiaries have significant timing difference in respect of payments and receipts
under the lease-in, lease-out transactions described in Note 15 and timing differences with respect to capitalized expenses.

The
following tables describe the principal components of our deferred tax assets and liabilities by jurisdiction at December 31, 2008 and 2009.

December 31, 2008The
Netherlands

Ireland

U.S.

SwedenDepreciation/Impairment

$
(14,777
)
$
9,462

$
27,512

$
Share-based compensation


1,412








Inventory








(3,770
)

Intangibles


(370
)




6,666


Lessee receivables








(3,406
)

Loss-making contracts








(9,122
)

Interest expense








(8,808
)

Accrued maintenance liability


1,826


7,278


(2,945
)

Obligations under capital leases and debt obligations





(7,230
)




Investments





(2,500
)




Losses and credits forward


(19,931
)

(44,030
)

(8,925
)

(8,224
)Other


(1,356
)

(976
)

(2,807
)

Valuation allowance on tax assets


2,550








Net deferred tax (asset) liability

$
(30,646
)
$
(37,996
)
$
(5,605
)
$
(8,224
)


F-39

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

16. Income taxes (Continued)



December 31, 2009The Netherlands

Ireland

U.S.

SwedenDepreciation/Impairment

$
(14,943
)
$
23,169

$
24,561

$
Share-based compensation


651





(1,041
)

Inventory








(3,106
)

Intangibles








5,532


Lessee receivables








(1,001
)

Loss-making contracts








(3,958
)

Interest expense








(8,843
)

Accrued maintenance liability


(3,892
)

12,405


(2,705
)

Obligations under capital leases and debt obligations





(6,869
)




Investments





(2,500
)




Losses and credits forward


(42,049
)

(44,070
)

(14,813
)

(7,745
)Other


(3,668
)

580


(3,089
)

Valuation allowance on tax assets


17,296








Net deferred tax (asset) liability

$
(46,605
)
$
(17,285
)
$
(8,463
)
$
(7,745
)


The
change in the valuation allowance for the deferred tax asset has been as follows:

Year ended December 31,2007

2008

2009Valuation allowance at beginning of period

$


$
2,550

$
2,550Increase of allowance to income tax provision


2,550





14,746Valuation allowance at end of period

$
2,550

$
2,550

$
17,296


We
adopted ASC 740 on January 1, 2007. ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements and provides guidance on the
recognition, de-recognition and measurement of benefits related to an entity's uncertain income tax positions. The adoption of ASC 740 did not have a material impact on our consolidated
financial statements. Following is a roll forward of unrecognized tax benefits during the year ended December 31, 2007:

Unrecognized
Tax BenefitsAt January 1, 2007

$
7,063Tax benefits recognized in settlement agreement


(7,063
)At December 31, 2007

$



We
did not have any unrecognized tax benefits at December 31, 2008 and December 31, 2009.

Our
primary tax jurisdictions are the Netherlands, United States, Ireland and Sweden. Our tax returns in The Netherlands are open for examination from 2006 forward, in Ireland from 2005
forward,

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

16. Income taxes (Continued)

in
Sweden from 2004 forward and in the United States from 2006 forward. None of our tax returns are currently subject to examination.

Our
policy is that we recognize accrued interest on the underpayment of income taxes as a component of interest expense and penalties associated with tax liabilities as a component of
income tax expense. During 2009, we did not incur any interest on tax payments. There was no accrued interest or accrued penalties on tax payments at either January 1, 2009 or
December 31, 2009.

The Netherlands

The majority of our Netherlands subsidiaries are part of a single Netherlands fiscal unity and are included in a consolidated tax
filing. The losses and credits forward expire with time. In 2007, a payment of current tax was made in relation to the settlement of prior year tax returns which were closed in the settlement.
Deferred income tax is calculated using the Netherlands corporate income tax rate legislated to be in effect when the temporary differences reverse of 25.5%.

Ireland

Our aircraft owning and principal operating Irish resident subsidiaries enjoyed the benefit of a 10% rate of corporate tax on
qualifying trading activities until December 31, 2005. After December 2005, the enacted tax rate is 12.5%. Our principal Irish tax-resident operating subsidiary has significant
losses carryforward at December 31, 2009 which give rise to deferred tax assets. The availability of these losses does not expire with time. In addition, the vast majority of all of our Irish
tax-resident subsidiaries are able to deduct accelerated aircraft depreciation for tax purposes and offset net taxable income and loss within our Irish tax group of companies within a
given tax year. Accordingly, no Irish tax charge arose during the year. Based on projected taxable profits in our Irish subsidiaries, including our principal Irish tax-resident operating
subsidiary where we hold significant Irish tax losses, we expect to recover the full value of our Irish tax assets and have not recognized a valuation allowance against such assets at
December 31, 2009.

United States of America

Our U.S. subsidiaries are assessable to federal and state U.S. taxes. Prior to our acquisition of AeroTurbine, our U.S. subsidiaries
had significant timing differences available to offset future federal taxable profits and no current tax charge arose in periods prior to the AeroTurbine acquisition. The losses and credits forward
expire with time. Following a change of ownership of the U.S. Company in November 2000, and the change of control at the 2005 Acquisition, certain restrictions, under Section 382 of the IRS tax
code, were imposed on the utilization of the net losses in existence at those dates and no tax asset had been recognized for these losses occurring prior to these changes of control.

Beginning
with the tax year ending December 31, 2006, we file a consolidated federal income tax return in the U.S. which includes the accounts of AeroTurbine. The blended
federal and state tax rate applicable to our consolidated U.S. group is 37.3% for the year ended December 31, 2009.

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

16. Income taxes (Continued)

Sweden

The Swedish entities have significant losses carryforward at December 31, 2009, which give rise to deferred tax assets. The
availability of these losses does not expire with time. Accordingly, no Swedish current tax charge arose during the year. Based on projected taxable profits in our Swedish subsidiaries we expect to
recover the full value of our Swedish tax assets and have not recognized a valuation allowance at December 31, 2009.

17. Share capital

From the date of our acquisition of AerCap B.V. to just prior to our initial public offering, we were a Netherlands limited partnership under the name of AerCap Holdings C.V. with
$370,000 of partnership capital held by four limited partners and one general partner, all located in Luxemburg. In anticipation of our public offering, AerCap Holdings N.V. was formed with
45,000 shares held by the same Luxemburg entities. AerCap Holdings N.V. issued one additional share to acquire all of the assets and liabilities of AerCap Holdings C.V. in a common control
transaction after which, AerCap Holdings C.V. was put in liquidation. On November 10, 2006, we effected a 1,738.6 for one stock split resulting in total shares issued and outstanding of
78,236,957 and reduced the par value of each common share from €1.00 to €0.01. Because our conversion from a Netherlands limited partnership to a Netherlands public
limited liability company was accomplished in a common control transaction, we have retroactively reflected our capital structure during the period when our group was owned by AerCap Holdings C.V.
(limited partnership) as if it were owned by AerCap Holdings N.V. based on 78,236,957 shares outstanding.

On
November 27, 2006, we sold 6.8 million shares at $23 per share in an initial public offering. We received net proceeds of $143,017 after deducting underwriting discounts
and commissions and offering expenses payable by us. We used the net proceeds from the initial public offering plus existing cash to retire $168,600 of senior and subordinated debt of AeroTurbine. In
connection with the early retirement of this debt, we wrote off $3,300 of debt issuance costs and paid prepayment penalties of $1,686.

On
November 27, 2006, we completed the initial public offering of 26.1 million (including the above mentioned 6.8 million shares) of our ordinary shares on The New
York Stock Exchange and on August 6, 2007 we completed the secondary offering of 20 million additional ordinary shares on The New York Stock Exchange.

As
of December 31, 2009, our authorized share capital consists of 200,000,000 common shares with a par value of €0.01 with 85,036,957 issued and outstanding.

18. Share-based compensation

Cerberus Funds Equity Grants

Effective June 30, 2005, companies controlled by Cerberus ("Cerberus Funds") which indirectly owned 100% of our equity interests
put into place an Equity Incentive Plan ("Cerberus Funds Equity Plan") under which members of our senior management, Board of Directors and an employee of Cerberus (the "participants") were granted
either restricted shares or share options ("Cerberus Funds

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AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

18. Share-based compensation (Continued)

Equity
Grants") in such companies. The value of the Cerberus Funds Equity Grants is derived exclusively with reference to the value of our shares.

We
apply the provisions of ASC 718 in accounting for the Cerberus Funds Equity Grants. In addition to formal vesting restrictions, the terms of the Cerberus Funds Equity Grants contained
provisions which allowed the Cerberus Funds to repurchase any restricted shares or shares obtained through the exercise of options upon the occurrence of certain employment termination events or
cessation of service on the board of directors for share options issued to our independent directors. All holders of Cerberus Fund Equity Grants signed a Share Agreement in connection with our initial
public offering which gives each of them the right to exchange their Cerberus Fund shares or share options for our shares or options on our shares directly with the Cerberus Funds and which limited
the repurchase right of the Cerberus Funds to the period prior to November 27, 2008. The exchange right is exercisable as of November 27, 2008 and is valid for a period of three years
from that date. As of November 27, 2008, the participants are no longer restricted from selling their vested interests in our shares and the Cerberus Funds' rights to repurchase restricted
shares or shares obtained through the exercise of options upon certain employment termination rights has lapsed. All share options granted under the Cerberus Funds Equity Plan are exercisable for a
period of ten years from the date of issuance.

Since
all of the Cerberus Fund Equity Grants issued are shares or share options in the Cerberus Funds and since the right of the holders of the Cerberus Funds Equity Grants to exchange
their shares in the Cerberus Funds for our shares starting November 27, 2008 is not directly with us, the existence of the restricted share and share options is not dilutive to our share
ownership.

The
fair values of all shares and share options issued with a zero strike price (all of which were issued prior to our initial public offering in 2006), were calculated on their
respective grant dates based on the value of our underlying shares at the time of our initial public offering. To this value, a discount for lack of marketability was applied to reflect the fact that
(i) the shares being valued represent an illiquid minority interest in a closely-held indirect holding company without access to a recognized market and (ii) the shares are
subject to significant restrictions which prevent their transfer or pledge. In accordance with ASC 718, the amount of compensation expense recognized for restricted shares is derived with reference to
the excess of fair market value of the shares at the date of grant over the price paid, if any. The restricted shares granted to the Cerberus employee are subject to
mark-to-market valuations at each reporting period.

The
amount of expense recognized with respect to share options with a strike price is based on the fair value of the option using a Black-Scholes option pricing model. The value of each
of the Cerberus Funds Equity Grants is recognized on a straight-line basis over the applicable vesting periods.

For
options valued with a Black-Scholes option pricing model, we have used the following assumptions:

Volatility


38.25%-39.90%Expected life


5.00-5.93 yearsRisk-free interest rate


4.67%-4.72%Dividend yield rate


0.00%


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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

18. Share-based compensation (Continued)

Since
our shares had not traded in the public market at the time of the valuations, we derived our volatility assumptions by comparison to peer group companies. The expected life
represents the period of time the options are expected to be outstanding. The risk free rate is based on the U.S. Treasury yield curve in effect at the time of grant and which has a term equal to the
expected life of the options. The expected dividend yield is based on our history of not paying regular dividends in the past and our current intention not to pay regular dividends in the foreseeable
future. The differing assumptions used result from the differences in expected life among the different tranches of stock options valued.

A
summary of activity during the years ended December 31, 2007, 2008 and 2009 for all issuances under the Cerberus Funds Equity Plan is set forth below. Because the number of
shares and share options under the Cerberus Funds Equity Plan are shares and share options of the Cerberus Funds, ownership interests in the table below have been stated as the equivalent number of
our shares which are represented by the Cerberus Funds shares.

Number of
Restricted
Shares/OptionsBeginning outstanding January 1, 2007


10,424,652Shares/options redeemed


(3,226,064
)Ending outstanding December 31, 2007


7,198,588Beginning outstanding January 1, 2008


7,198,588Exercises and exchanges of Cerberus Funds shares/options for direct holdings of AerCap shares


(4,741,490
)Ending outstanding December 31, 2008


2,457,098Beginning outstanding January 1, 2009


2,457,098Forfeitures


(245,738
)Ending outstanding December 31, 2009


2,211,360Exercisable, December 31, 2009


2,211,360Share-based compensation expense for the year ended December 31, 2009

$
347


There
are no remaining share options which are still subject to future vesting criteria.

AerCap Holdings NV Equity Grants

On October 31, 2006, we implemented an equity incentive plan that is designed to promote our interests by enabling us to
attract, retain and motivate directors, employees, consultants and advisors and align their interests with ours ("NV Equity Plan"). The NV Equity Plan provides for the grant of nonqualified
stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units and other stock awards ("NV Equity Grants") to participants of the plan selected by the
Nomination and Compensation Committee of our Board of Directors. Subject to certain adjustments, the maximum number of shares available to be granted under the plan is equal to 5% of our outstanding
shares.

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

18. Share-based compensation (Continued)

The
terms and conditions of NV Equity Grants, including vesting provisions for stock options, are determined by the Nomination and Compensation Committee, except that, unless
otherwise determined by the Nomination and Compensation Committee, or as set forth in an award agreement: (a) each NV Equity Grant is granted for ten years from the date of grant, or, in
the case of certain key employees, (i.e., employees owning more than 10% of our ordinary shares), for five years from the date of grant; provided, however, no stock option period may extend
beyond ten years from the date of grant; (b) the option price per share for incentive stock options may not be less than 100% of the fair market value of the ordinary shares except that the
option price per share for a key employee may not be less than 110% of the fair market value of the ordinary shares at the time the incentive stock option is granted; and (c) incentive stock
options may only be issued to the extent the aggregate fair market value of shares with respect to the exercise of the incentive stock options for the first time by an option holder during any
calendar year is $100,000 or less, with any additional stock options being treated as nonqualified stock options. To date we have granted 3,200,000 share options under the NV Equity Plan to
certain of our employees. Note that so far no NV Equity Grants have been granted to Directors or other participants under the NV Equity Plan.

Following
is a summary of issuances to-date under the NV Equity Plan:

Number of Options

Weighted Average
Exercise PriceOptions outstanding at January 1, 2007




Options issued during year


2,400,000

$24.63Options outstanding at December 31, 2007


2,400,000

$24.63Options exercisable at December 31, 2007




NAOptions outstanding at January 1, 2008


2,400,000

$24.63Forfeitures


(312,500
)
NAOptions issued during year


800,000

$4.46Options outstanding at December 31, 2008


2,887,500

NAOptions outstanding at January 1, 2009


2,887,500

NAForfeitures


(312,500
)
NAOptions outstanding at December 31, 2009


2,575,000

NA


The
weighted average remaining contractual term of the 2.6 million options outstanding at December 31, 2009 is 8.1 years. The weighted average grant date fair value
for options issued in 2007 is $7.19 per option and is $1.52 per option for options issued in 2008. Total stock-based compensation recognized for the above options was $960, $3,284 and $3,563 for the
years ending December 31, 2007, 2008 and 2009, respectively. In light of the difficult economic environment prevailing at the end of 2008, the Nomination and Compensation Committee adjusted the
performance criteria for the performance tranches relating to fiscal years 2009, 2010 and 2011. This change has been accounted for as a modification to the NV Equity Plan with respect to the
performance-based options for those years and the weighted average fair values above for issuances which include the tranches subject to the modification include the fair values as of the date of
modification. For both the original and modified award, vesting criteria were not probable of being met at the time of the modification, therefore in accordance with ASC 718, no additional expense was
recognized as a result of the modification.

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

18. Share-based compensation (Continued)

Assuming
that established performance criteria are met and that no forfeitures occur, we expect to recognize share-based compensation related to NV Equity Grants of approximately
$3.6 million during 2010 and $2.7 million during 2011.

The
value of the options issued under the NV Equity Plan was calculated by a Black-Scholes option pricing model using the following assumptions:

Volatility


33.92%-38.42%Expected life


5.33-6.53 yearsRisk-free interest rate


1.89%-4.20%Dividend yield rate


0.00%


Volatility
assumptions were derived by comparison to peer group companies due to the lack of significant trading history in our shares. The expected life represents the period of time
the options are expected to be outstanding. The risk free rate is based on the U.S. Treasury yield curve in effect at the time of grant and which has a term equal to the expected life of the options.
The expected dividend yield is based on our history of not paying regular dividends in the past and our current intention not to pay regular dividends in the foreseeable future. The differing
assumptions used result from the differing fair value dates among the different tranches (time-based vs. performance-based).

19. Segment information

Reportable Segments

From the date of the acquisition of AT, we manage our business, analyze and report our results of operations on the basis of two
business segmentsleasing, financing, sales and management of commercial aircraft ("Aircraft") and leasing, financing and sales of engines and parts ("Engine and parts").

The
following sets forth significant information from our reportable segments:

Year ended December 31, 2007Aircraft

Engines and parts

TotalRevenues from external customers

$
979,998

$
196,523

$
1,176,521Segment profit (loss)


177,760


10,693


188,453Segment assets


3,970,348


423,879


4,394,227Depreciation


130,534


10,579


141,113




Year ended December 31, 2008Aircraft

Engines and parts

TotalRevenues from external customers

$
1,069,836

$
186,416

$
1,256,252Segment profit (loss)


154,316


(2,510
)

151,806Segment assets


4,915,549


495,277


5,410,826Depreciation


155,919


13,473


169,392


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AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

19. Segment information (Continued)



Year ended December 31, 2009Aircraft

Engines and parts

TotalRevenues from external customers

$
780,353

$
222,914

$
1,003,267Segment profit (loss)


158,394


6,772


165,166Segment assets


6,271,216


498,285


6,769,501Depreciation


205,048


15,948


220,996


Geographical Information

The distribution of our lease revenue by geographic regions is as follows for the periods indicated:

Year ended December 31,2007

2008

2009Europe


39
%

42
%

50
%Asia/Pacific


33
%

28
%

25
%Latin America


10
%

10
%

6
%North America and Caribbean


17
%

18
%

14
%Africa/Middle East


1
%

2
%

5
%100
%

100
%

100
%


One
lessee accounted for more than 10% of lease revenue in the year ended December 31, 2009. Sales revenue is comprised of 46% from our aircraft segment and 54% from our engine
and parts segment. We have not provided a geographical breakdown of sales revenue because a material percentage of our sales are of movable flight equipment and are to buyers that have multiple
locations. In addition, we have not provided a breakdown of management fee revenue, interest revenue or other revenue because amounts are less material than lease and sales revenue and we do not
believe a geographical breakdown of such revenues is helpful in identifying geographical concentration risks to our business.

The
following table indicates the percentage of long-lived assets (flight equipment and intangible assets) that are leased to or associated with customers in the indicated
regions as of December 31, 2008 and December 31, 2009:

2008

2009Europe


56
%

55
%Asia/Pacific


23
%

24
%Latin America


8
%

5
%North America and Caribbean


11
%

9
%Africa/Middle East


2
%

7
%100
%

100
%


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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

20. Selling, general and administrative expenses

We had 402, 382 and 345 persons in employment as at December 31, 2007, 2008 and 2009, respectively. Selling, general and administrative expenses include the following expenses:

Year ended December 31,2007

2008

2009Personnel expenses(a)

$
65,210
(a)
$
73,493
(a)(b)
$
64,201
(a)Travel expenses


6,551


9,059


7,090Professional services


23,454


21,588


15,808Office expenses


8,716


9,911


9,243Directors expenses


2,956


3,473


3,382Other expenses


9,441


10,744


16,477$
116,328

$
128,268

$
116,201


(a)Includes
share-based compensation of $10,916, $7,538 and $3,910 in the years ended December 31, 2007, 2008 and 2009, respectively(b)Personnel
expenses includes severance payments of $2.9 million


21. Other expenses

Our other expenses of $3.0 million in the year ended December 31, 2009, reflect an accrual for the costs incurred by the Company in connection with the proposed all share
Amalgamation between AerCap Holdings N.V. and Genesis Lease Limited.

22. Asset impairment

Asset impairment include the following expenses:

2008

2009Flight equipment

$
7,278

$
32,574Inventory parts


11,511


$
18,789

$
32,574


Our
long-lived assets, excluding goodwill, include: flight equipment, inventory and finite-lived intangible assets. We test long-lived assets for impairment
whenever events or changes in circumstances indicate that the assets' carrying amount is not recoverable from its undiscounted cash flows.

As
a result of the global recession and financial crisis, we performed impairment analysis of our long-lived assets during the year 2009 and as of December 31, 2009.
In this impairment analysis, we focused on aircraft older than 15 years, since the cash flows supporting our carrying values of those aircraft are more dependent upon current lease contracts,
which leases are more sensitive to the current global recession and financial crisis. In addition, we believe that residual values of older aircraft are more exposed to non-recoverable
declines in value in the current economic environment.

In
the year ended December 31, 2009, we recognized an impairment of $32.6 million. The impairment primarily related to ten older A320 aircraft and for six of the ten
aircraft the impairment was triggered by the receipt of $21.0 million of end-of-lease payments from the previous lessees. These

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Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

22. Asset impairment (Continued)

end-of-lease
payments were recorded as lease revenue during 2009. The impairment on the remaining four A320 aircraft was triggered, as described above, by our impairment
assessment as of December 31, 2009. Our impairment analysis did not reveal impairments on our finite-lived intangible assets.

As
of December 31, 2009 we owned 180 aircraft of which 53 were older than 15 years. The 53 aircraft had a net book value of $452.4 million which represented 8.6% of
our total flight equipment held for operating lease. The undiscounted cash flows of the 53 aircraft older than 15 years were estimated at $562.4 million, which represents 24% excess
above net carrying value. As of December 31, 2009 four of the 53 aircraft did not pass the recoverability test, and a corresponding impairment of $9.2 million was recognized for these
four aircraft. The remaining 49 aircraft passed the recoverability test with undiscounted cash flows exceeding the carrying value of aircraft between 6% and 126%. The following assumptions drive the
undiscounted cash flows: contracted lease rents per aircraft through current lease expiry, subsequent re-lease rates based on current marketing information and residual values based on
current market transactions. For the impairment assessment performed as of December 31, 2009, the key assumptions were reduced as compared to our historical results in order to stress test our
impairment assessment and reflect the observed weakness in the current global economic environment.

Given
the current macro economic environment and the uncertainties regarding the potential impact on the Company's business, there can be no assurance that the Company's estimates and
assumptions regarding the duration of the ongoing economic downturn, or the period or strength of recovery, made for purposes of the long-lived asset impairment tests will prove to be
accurate predictions of the future. A further deterioration in the global economic environment and a further decrease of appraised values will have a negative effect on the undiscounted cash flow,
which might then trigger impairment on some of the 53 aircraft which are older than 15 years.

23. Earnings per common share

Basic and diluted earnings per share (EPS) is calculated by dividing net income by the weighted average of our common shares outstanding. As disclosed in Note 18, there are
2.6 million share options outstanding under the NV Equity Plan, however the diluted earnings per common share is not different from the basic earnings per common share. The computations
of basic and diluted earnings per common share for the periods indicated below are shown in the following table:

Year ended
December 31, 2007

Year ended
December 31, 2008

Year ended
December 31, 2009Net income for the computation of basic and diluted earnings per share

$
188,453

$
151,806

$
165,166Weighted average common shares outstanding


85,036,957


85,036,957


85,036,957Basic and diluted earnings per common share

$
2.22

$
1.79

$
1.94


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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

24. Related party transactions

AerDragon consists of two joint venture companies Dragon Aviation Leasing Company Limited, or
Dragon, based in China and AerDragon Aviation Partners Limited or AerDragon, based in Ireland. Both companies are owned 50% by China Aviation Supplies Holding Company, 25% by affiliates of
Crédit Agricole and 25% by AerCap. In 2007, AerCap assigned a purchase right it had with Airbus under AerCap's 1999 forward order agreement relating to an A320 aircraft which was then
directly acquired by AerDragon. In addition, during 2007 AerCap sold an A320 aircraft that was subject to a lease with an airline to AerDragon and guaranteed AerDragon's performance under the debt
which was assumed by AerDragon from AerCap in the transaction. Both of these transactions were executed at terms, which we believe reflected market conditions at the time. AerCap provides lease
management, insurance management and aircraft asset management services to AerDragon. AerCap charged AerDragon a total of $0.8 million as a guarantee fee and for these management services
during 2009. We apply equity accounting for our 25% investment in both joint venture companies. Accordingly, the income statement effects of all transactions with either of the joint venture companies
are eliminated in our financial statements.

AerCo
is an aircraft securitization vehicle from which we hold all of the most junior class of subordinated notes and some notes immediately senior to those junior notes. We do not
recognize value for the AerCo notes which we still hold on our consolidated balance sheets. Through March 2003 we consolidated AerCo, but we deconsolidated the vehicle in accordance with
ASC 810 at that time. Subsequent to the deconsolidation of AerCo, we have received interest from AerCo on its D note investment of $1.7 million, $0.8 million, $1.7 million
and $0.4 million for the six months ended June 30, 2005, the period from June 27, 2005 to December 31, 2005, the year ended December 31, 2006 and the year ended
December 31, 2007, respectively. In addition, we provide a variety of management services to AerCo for which we received fees of $2.4 million, $2.4 million, $5.2 million,
$4.8 million, $4.6 million and $4.6 million for the six months ended June 30, 2005, the period from June 27, 2005 to December 31, 2005, the years ended
December 31, 2006, 2007, 2008 and 2009, respectively.

We
have made payments to Cerberus and third parties on behalf of Cerberus totaling $1.2 million in 2005 and 2006. The payments to Cerberus represent reimbursement of consulting
fees paid by Cerberus to individuals who have assisted us in the evaluation of portfolio or company purchases, including our AeroTurbine Acquisition. In addition, this amount also includes
$0.2 million of reimbursements for consulting services incurred by Cerberus in connection with Cerberus's evaluation of the 2005 Acquisition. If we accept services from individuals employed by
or contracted through Cerberus in the future, we will establish consulting agreements directly with such individuals instead of working with them through Cerberus. We expect these arrangements to
reflect arms' length negotiations that will not be more favorable than the terms we could negotiate with an independent party. Payments to third parties on behalf of Cerberus consist of payments to
advisors engaged by Cerberus in connection with the 2005 Acquisition.

In
February 2006, we entered into a guarantee arrangement with DvB Bank AG and Aozora Bank Limited, an entity that is majority owned by Cerberus. In addition, Pieter Korteweg, the
Chairman of our Board of Directors, and Marius Jacques Leonard Jonkhart, a non-executive director, are and or were also on the board of directors of Aozora Bank. The guarantee supports
certain of our obligations to a Japanese operating lessor of up to $13.8 million in connection with a JOL financing. The Japanese operating lessor required the guarantee as additional credit
support following the 2005 Acquisition. We

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

24. Related party transactions (Continued)

leased
the A320 aircraft from the Japanese operating lessor under a lease and then subleased the aircraft to an aircraft operator. In the event we fail to make certain payments related to JOL
financing, DvB Bank will make the payment on our behalf but will be reimbursed by Aozora Bank for any payments made. We have agreed to indemnify Aozora Bank for any payments it makes under the
guarantee arrangement. The guarantee expires in March 2010. Under the terms of the guarantee arrangement, we are required to provide cash collateral to Aozora Bank if we breach certain financial
covenants. Currently we are not in breach of any of these covenants and have not provided any cash collateral. In connection with the guarantee arrangement, we pay Aozora Bank a guarantee fee of 4.1%
per annum of the amount guaranteed and have provided Aozora Bank with a second priority share pledge over the shares of the entity that entered into the financing from the Japanese operating lessor.

In
April 2006, we entered into a senior secured revolving credit facility in the aggregate amount of up to $1.0 billion with UBS Real Estate Securities Inc., UBS
Securities Inc., Deutsche Bank Trust Company Americas and certain other financial institutions. Aozora Bank is a syndicate member under the facility and participated in up to
$50.0 million of the Class A loans and up to $25.0 million of the Class B loans issued thereunder, representing 7.0% of the Class A loans and 13.9% of the
Class B loans. As of December 31, 2009, we had drawn and there remained outstanding $284.0 million of the class A loans and $59.2 million of the class B
loans.

In
2008, we acquired one A320-200, two Boeing 737s, Boeing 757 and six MD80s from EntreCap, an entity controlled by Cerberus. The purchase price of these aircraft was
approximately $67 million.

25. Commitments and contingencies

Property and other rental commitments

We have entered into property rental commitments with third parties and have lease arrangements with respect to company cars and office
equipment. Minimum payments under the property rental agreements are as follows:

2010

$
5,1622011


4,6172012


3,8292013


2,9332014


801Thereafter


9,207$
26,549


Legal proceedings



We leased 13 aircraft and three spare engines to Viação Aerea de São Paulo, or VASP, a
Brazilian airline. In 1992, VASP defaulted on its lease obligations and we commenced litigation against VASP to repossess our aircraft. In 1992, we obtained a preliminary injunction for the
repossession and export of 13 aircraft and three spare engines from VASP. We repossessed and exported the aircraft and engines

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

25. Commitments and contingencies (Continued)

in
1992. VASP appealed this decision. In 1996, the High Court of the State of Sao Paulo ruled in favor of VASP on its appeal. We were instructed to return the aircraft and engines to VASP for lease
under the terms of the original lease agreements. The High Court also granted VASP the right to seek damages in lieu of the return of the aircraft and engines. Since 1996 we have pursued this case in
the Brazilian courts through various motions and appeals. On March 1, 2006, the Superior Court of Justice dismissed our most recent appeal and on April 5, 2006 a special panel of the
Superior Court of Justice confirmed the Superior Court of Justice decision. On May 15, 2006 we appealed this decision to the Federal Supreme Court. In September 2009 the Federal Supreme Court
of Justice presiding over the case ordered an opinion on our appeal from the office of the Attorney General. This opinion was provided in October 2009. The Attorney General recommends that the
extraordinary appeal should be accepted for trial and that the case would be subjected to a new judgment, before the Superior Court of Justice. The Federal Supreme Court is not bound by the opinion of
the Attorney General. However, our external legal counsel informed us that it would be normal practice to take this opinion into consideration. There are no assurances though whether the Federal
Supreme court would rule in accordance with the Attorney General opinion or, if it did, what the outcome of the judgment of the Superior Court of Justice would be.

On
February 23, 2006, VASP commenced a procedure for the calculation of the award for damages and since then both we and VASP have appointed experts to assist the court in
calculating damages. Our external legal counsel has advised us that even if we lose on the merits, they do not believe that VASP will be able to demonstrate any damages. We continue to actively pursue
all courses of action that may be available to us and intend to defend our position vigorously.

In
July 2006, we commenced a claim for damages in the English courts against VASP based on the damages we incurred as a result of the default by VASP under seven lease obligations where
the leases were governed by English law. VASP was served process in Brazil in October 2007 and in response has filed an application to challenge the jurisdiction of the English court which we will
oppose. VASP has applied to the Court to adjourn the date for the hearing of its application to challenge the jurisdiction of the English Court pending the sale of some of it's assets in Brazil. We
have opposed this application and by an order dated March 6, 2008 the English court dismissed VASP's applications. In September 2008 the bankruptcy court in Brazil ordered the bankruptcy of
VASP. VASP has appealed this decision. In December 2008, we filed with the English court an application for default judgment for loss of profits plus accrued interest under seven lease agreements. On
March 16, 2009 we obtained a default judgment in which we have been awarded a claim of approximately $40.0 million for loss of profit plus
accrued interest under seven lease agreements. In order to obtain this award, we will need to begin enforcement proceedings in Brazil against VASP, which is currently in bankruptcy. We cannot assure
you as to the outcome of this claim.

In
addition to the claim in the English courts we have also commenced proceedings in the Irish courts against VASP based on the damages we incurred as a result of the default of VASP
under nine lease obligations where the leases were governed by Irish law. The Irish courts have granted an order for service of process, however VASP is currently opposing this service of process in
Brazil.

Our
management, based on the advice of external legal counsel, has determined that it is not necessary to make any provision for this litigation.

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

26. Fair value measurements

In September 2006, the FASB issued ASC 820, which is effective for fiscal years beginning after November 15, 2007. We adopted the standard on January 1, 2008.

Under
ASC 820, the Company determines fair value based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. It is the Company's policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements, in
accordance with the fair value hierarchy as described below. Where limited or no observable market data exists, fair value measurements for assets and liabilities are based primarily on management's
own estimates and are
calculated based upon the Company's pricing policy, the economic and competitive environment, the characteristics of the asset or liability and other such factors. Therefore, the results may not be
realized in actual sale or immediate settlement of the asset or liability.

The
Company adopted ASC 820 for all financial assets and liabilities and non-financial assets required to be measured at fair value on a recurring basis, prospectively from
January 1, 2008. The application of ASC 820 for financial instruments which are periodically measured at fair value did not have a material effect on the Company's results of operations
or financial position.

Under
ASC 820, there is a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring assets and liabilities at fair value.

The
three broad levels defined by the ASC 820 hierarchy are as follows:

Level 1Quoted
prices available in active markets for identical assets or liabilities as of the reported date.

Level 2Observable
market data. Inputs include quoted prices for similar assets, liabilities (risk adjusted) and market-corroborated inputs, such as market
comparables, interest rates, yield curves and other items that allow value to be determined.

Level 3Unobservable
inputs from the Company's own assumptions about market risk developed based on the best information available, subject to cost benefit analysis.
Inputs may include the Company's own data.

When
there are no observable comparables, inputs used to determine value are derived through extrapolation and interpolation and other Company-specific inputs such as projected financial
data and the Company's own views about the assumptions that market participants would use.

The
following table summarizes our financial assets and liabilities as of December 31, 2009 that we measured at fair value on a recurring basis by level within the fair value
hierarchy. As required by

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

26. Fair value measurements (Continued)

ASC 820,
assets and liabilities are classified in their entirety based on the lowest level of input that is significant to their fair value measurement.

December 31,
2009

Level 1

Level 2

Level 3Cash and cash equivalents

$
182,617

$
182,617

$


$
Restricted cash


140,746


140,746





Derivative assets


44,866





44,866


Derivative liabilities


(7,801
)




(7,801
)

$
360,428

$
323,363

$
37,065

$



Our
cash and cash equivalents, along with our restricted cash and cash equivalents balances, consists largely of money market securities that are considered to be highly liquid and
easily tradable. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as level 1 within our fair value hierarchy. Our
derivative assets and liabilities included in level 2 consist of United States dollar denominated interest rate caps and foreign currency forward contracts swaps. Their fair values are
determined by applying standard modeling techniques under the income approach to relevant market interest rates (cash rates, futures rates, swap rates) in effect at the period close to determine
appropriate reset and discount rates. Changes in fair value are recognized immediately in income.

We
also measure the fair value of certain assets and liabilities on a non-recurring basis, when GAAP requires the application of fair value, including events or changes in
circumstances that indicate that the carrying amounts of assets may not be recoverable. Assets subject to these measurements include aircraft. We record aircraft at fair value when we determine the
carrying value may not be recoverable, in accordance with ASC 360 and other accounting pronouncements requiring remeasurements at fair value. Fair value measurements for aircraft in impairment tests
are based on level 3 inputs, which include the Company's assumptions as to future cash proceeds from leasing and selling aircraft. In the year ended December 31, 2009, we recognized an
impairment of $32.6 million. The impairment primarily related to ten older A320 aircraft and for six of the ten aircraft the impairment was triggered by the receipt of $21.0 million of
end-of-lease payments from the previous lessees. These end-of-lease payments were recorded as lease revenue during 2009.

Our
financial instruments consist principally of investments, notes receivable, restricted cash, derivative assets and cash equivalents. The fair value of notes receivable, restricted
cash and cash and cash equivalents approximates the carrying value of these financial instruments because of their short term nature. The fair values of our debt are estimated using a discounted cash
flow analysis, based on our current incremental borrowing rates for similar types of borrowing arrangements.

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

26. Fair value measurements (Continued)

The
carrying amounts and fair values of our financial instruments at December 31, 2008 and 2009 are as follows:

December 31, 2008

December 31, 2009Book value

Fair value

Book value

Fair valueAssetsNotes receivable

$
134,067

$
134,067

$
138,488

$
138,488Restricted cash


113,397


113,397


140,746


140,746Derivative assets


19,352


19,352


44,866


44,866Cash and cash equivalents


193,563


193,563


182,617


182,617$
460,379

$
460,379

$
506,717

$
506,717LiabilitiesDebt

$
3,790,487

$
3,272,865

$
4,846,664

$
4,360,128Derivative liabilities


12,378


12,378


7,801


7,801Guarantees


3,219


3,219


2,342


2,342$
3,806,084

$
3,288,462

$
4,856,807

$
4,370,271


27. Recent Accounting Pronouncements

ASC 105

In June 2009, the FASB issued ASC 105Generally Accepted Accounting Principles. The
FASB Accounting Standards Codification ("ASC") is the source of authoritative U.S. GAAP recognized by the FASB to be applied by non-governmental entities. The ASC is effective for
interim and annual periods ending after September 15, 2009. ASC 105 brings together in one place all authoritative GAAP previously held at different levels of GAAP. Rules and interpretive
releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The Company adopted the ASC during the
third quarter of 2009. As a result, all references to prior accounting and reporting standards which have been superseded by the ASC have been changed to reflect the new reference within the ASC. The
ASC does not replace or alter guidance issued by the SEC or its staff for public companies in their filings with the SEC. The adoption of ASC 105 did not have a significant impact on our financial
position or result of operations.

ASC 320

In April 2009, the Financial Accounting Standards Board ("FASB") issued an amendment to ASC 320 Investments-Debt and Equity Securities,which provides additional guidance for the other-than-temporary impairment
for debt securities and expands the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. The effective
date is for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted. The adoption of this ASC did not have an impact on our financial position or results
of operation.

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Table of Contents

AerCap Holdings N.V. and Subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(US dollars in thousands)

27. Recent Accounting Pronouncements (Continued)

ASC 820 and 825

In April 2009, the FASB provided new guidance in ASC 820Fair Value Measurements and
Disclosuresfor estimating fair value, when the volume and level of activity for an asset or liability have significantly decreased and for identifying circumstances that
indicate a
transaction is not orderly. In August 2009, the FASB issued an amendment ASU 2009-05 to ASC 820 for estimating fair value of liabilities in the circumstances where a quoted price in an
active market for the identical liability is not available. ASC 825Financial Instruments,also effective starting from the second quarter of 2009,
requires extensive additional fair value disclosures for interim and annual reports. The adoption of these ASCs did not have an impact on our consolidated financial statements.

ASC 855

In May 2009, the FASB issued ASC 855Subsequent Events. ASC 855 addresses accounting
and disclosure requirements related to subsequent events. ASC 855 requires management to evaluate subsequent events through the date the financial statements are either issued or available to be
issued, depending on the company's expectation of whether it will widely distribute its financial statements to its shareholders and other financial statement users. ASC 855 is effective for interim
or annual financial periods ending after June 15, 2009 and should be applied prospectively. The adoption of ASC 855 did not have a significant impact on our financial position or results
of operation.

ASC 810

In June 2009, the FASB issued an amendment to consolidation standards ASC 810. It amends the consolidation analysis with an approach
focused on identifying which enterprise has the power to direct the activities of a VIE that most significantly affect the entity's economic performance and (i)the obligation to absorb losses of the
entity or(ii)the right to receive benefits from the entity,
and improves financial reporting by enterprises involved with VIEs. This standard is effective for interim and annual periods beginning on January 1, 2010 for us. Earlier application is
prohibited. We are assessing the effect the adoption of this standard will have on our financial position or results of operation.

28. Subsequent events

No subsequent events have occurred as of March 15, 2010.

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