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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

|    |                                                                                         | 
|--- | --------------------------------------------------------------------------------------- | 
|[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 | 

For the quarterly period ended September 30, 2001

OR

|      |                                                                                           | 
|----- | ----------------------------------------------------------------------------------------- | 
|[   ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 | 

For the transition period from  to

Commission file number 0-11350

International Lease Finance Corporation
(Exact name of registrant as specified in its charter)

|                                                                          |  |                                                
|------------------------------------------------------------------------- |  | -----------------------------------------------
|California
(State or other jurisdiction of incorporation or organization) |  | 22-3059110
(I.R.S. Employer Identification No.)
|                                                                         
|1999 Avenue of the Stars
(Address of principal executive offices)         |  | Los Angeles, California 90067
(Zip Code)       

Registrants telephone number, including area code(310) 788-1999

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X]      No [   ]

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

|                           |  |                                
|-------------------------- |  | -------------------------------
|Class                      |  | Outstanding at October 31, 2001
|                           |  |                                
|Common Stock, no par value |  | 35,818,122                     





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TABLE OF CONTENTS



|                             |                                                                                              |                                                                      |  |  |  |  |  | 
|---------------------------- | -------------------------------------------------------------------------------------------- | -------------------------------------------------------------------- |  |  |  |  |  | 
|PART I FINANCIAL INFORMATION
|                             | ITEM 1                                                                                      
|                             |                                                                                              | CONDENSED CONSOLIDATED BALANCE SHEETS                               
|                             |                                                                                              | CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
|                             |                                                                                              | CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
|                             |                                                                                              | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                     
|                             |                                                                                              | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                
|                             |                                                                                              | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                
|                             | ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                             | ITEM 2                                                                                      
|                             | ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|PART II. OTHER INFORMATION  
|                             | ITEM 6. Exhibits and Reports on Form 8-K                                                    
|SIGNATURES                  
|INDEX TO EXHIBITS           
|Exhibit 4.1                 
|Exhibit 12.1                



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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES

INDEX

|                               |                                                                                                   |                                                                                                                     |  |          |    | 
|------------------------------ | ------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------- |  | -------- | -- | 
|                               |                                                                                                   |                                                                                                                     |  | Page No.
|                               |                                                                                                   |                                                                                                                     |  |         
|Part I. Financial Information: |                                                                                                   |                                                                                                                     |  |         
|                               | Item 1. Financial Statements (Unaudited)                                                          |                                                                                                                     |  |          |   
|                               |                                                                                                   | Condensed Consolidated Balance Sheets
September 30, 2001 and December 31, 2000                                      |  |          | 3  | 
|                               |                                                                                                   | Condensed Consolidated Statements of Income and
Comprehensive Income Three Months Ended
September 30, 2001 and 2000 |  |          | 4  | 
|                               |                                                                                                   | Condensed Consolidated Statements of
Income and Comprehensive Income
Nine Months Ended September 30, 2001 and 2000  |  |          | 5  | 
|                               |                                                                                                   | Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2001 and 2000                       |  |          | 6  | 
|                               |                                                                                                   | Notes to Condensed Consolidated Financial Statements                                                                |  |          | 8  | 
|                               | Item 2. Managements Discussion and Analysis of the Financial Condition
and Results of Operations |                                                                                                                     |  | 12       |   
|                               | Item 3. Quantitative and Qualitative Disclosures About Market Risk                                |                                                                                                                     |  | 17       |   
|Part II. Other Information     |                                                                                                   |                                                                                                                     |  |         
|                               | Item 6. Exhibits and Reports on Form 8-K                                                          |                                                                                                                     |  | 18       |   
|                               |                                                                                                   | Signatures                                                                                                          |  |          | 19 | 

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##### Table of Contents






PART I FINANCIAL INFORMATION




ITEM 1


INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES





CONDENSED CONSOLIDATED BALANCE SHEETS


(Dollars in thousands, except share and per share amounts)


|                                                                                                             |                                                                                                                                                                      |   |               |           |              |   |            |           | 
|------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------- | --------- | ------------ | - | ---------- | --------- | 
|                                                                                                             |                                                                                                                                                                      |   | September 30, |           | December 31,
|                                                                                                             |                                                                                                                                                                      |   | 2001          |           | 2000        
|                                                                                                             |                                                                                                                                                                      |   |               |           |             
|                                                                                                             |                                                                                                                                                                      |   | (Unaudited)   |           |              |   |           
|ASSETS                                                                                                       |                                                                                                                                                                      |   |               |           |              |   |            |          
|Cash, including interest bearing accounts
of $141,563 (2001) and $130,576 (2000)                             |                                                                                                                                                                      | $ | 141,810       |           |              | $ | 134,653    |          
|Current income taxes receivable                                                                              |                                                                                                                                                                      |   | 155,399       |           |              |   | 58,990     |          
|Notes receivable and net investment in
finance leases                                                        |                                                                                                                                                                      |   | 419,733       |           |              |   | 410,125    |          
|Flight equipment under operating leases                                                                      |                                                                                                                                                                      |   | 23,558,509    |           |              |   | 20,534,304 |          
|                                                                                                             | Less accumulated depreciation                                                                                                                                        |   |               | 3,204,779 |              |   |            | 2,655,915 | 
|                                                                                                             |                                                                                                                                                                      |   |               |           |              |   |            |          
|                                                                                                             |                                                                                                                                                                      |   | 20,353,730    |           |              |   | 17,878,389 |          
|Deposits on flight equipment purchases                                                                       |                                                                                                                                                                      |   | 1,263,069     |           |              |   | 1,058,182  |          
|Accrued interest, other receivables
and other assets                                                         |                                                                                                                                                                      |   | 148,288       |           |              |   | 93,719     |          
|Investments                                                                                                  |                                                                                                                                                                      |   | 58,554        |           |              |   | 45,086     |          
|Deferred debt issue costs-less accumulated amortization of $70,471
(2001) and $60,613 (2000)                 |                                                                                                                                                                      |   | 23,733        |           |              |   | 22,334     |          
|                                                                                                             |                                                                                                                                                                      |   |               |           |              |   |            |          
|                                                                                                             |                                                                                                                                                                      | $ | 22,564,316    |           |              | $ | 19,701,478 |          
|                                                                                                             |                                                                                                                                                                      |   |               |           |              |   |            |          
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                         |                                                                                                                                                                      |   |               |           |              |   |            |          
|Accrued interest and other payables                                                                          |                                                                                                                                                                      | $ | 307,892       |           |              | $ | 249,179    |          
|Debt financing, net of deferred debt
discount of $11,295 (2001) and
$34,754 (2000)                           |                                                                                                                                                                      |   | 15,228,373    |           |              |   | 12,958,164 |          
|Capital lease obligations                                                                                    |                                                                                                                                                                      |   | 398,329       |           |              |   | 463,362    |          
|Security & other deposits on flight
equipment                                                                |                                                                                                                                                                      |   | 1,045,652     |           |              |   | 905,414    |          
|Rentals received in advance                                                                                  |                                                                                                                                                                      |   | 136,677       |           |              |   | 129,152    |          
|Deferred income taxes payable                                                                                |                                                                                                                                                                      |   | 1,777,759     |           |              |   | 1,532,428  |          
|SHAREHOLDERS EQUITY                                                                                         |                                                                                                                                                                      |   |               |           |              |   |            |          
|Preferred stock no par value; 20,000,000
authorized shares                                                  |                                                                                                                                                                      |   |               |           |              |   |            |          
|                                                                                                             | Market Auction Preferred Stock, $100,000 per
share liquidation value; Series A, B, C, D, E, F, G and H
(2001 and 2000) each having 500 shares issued and outstanding |   |               | 400,000   |              |   |            | 400,000   | 
|Common stock no par value; 100,000,000
authorized shares, 35,818,122 (2001
and 2000) issued and outstanding |                                                                                                                                                                      |   | 3,582         |           |              |   | 3,582      |          
|Additional paid-in capital                                                                                   |                                                                                                                                                                      |   | 579,955       |           |              |   | 579,955    |          
|Accumulated other comprehensive (loss) income                                                                |                                                                                                                                                                      |   | (66,975       | )         |              |   | 9,256      |          
|Retained earnings                                                                                            |                                                                                                                                                                      |   | 2,753,072     |           |              |   | 2,470,986  |          
|                                                                                                             |                                                                                                                                                                      |   |               |           |              |   |            |          
|                                                                                                             |                                                                                                                                                                      |   | 3,669,634     |           |              |   | 3,463,779  |          
|                                                                                                             |                                                                                                                                                                      |   |               |           |              |   |            |          
|                                                                                                             |                                                                                                                                                                      | $ | 22,564,316    |           |              | $ | 19,701,478 |          
|                                                                                                             |                                                                                                                                                                      |   |               |           |              |   |            |          

See notes to condensed consolidated financial statements.

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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES




CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME


FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(Dollars in thousands)


|                                             |                                         |   |             |         |      |   |         |         | 
|-------------------------------------------- | --------------------------------------- | - | ----------- | ------- | ---- | - | ------- | ------- | 
|                                             |                                         |   | 2001        |         | 2000
|                                             |                                         |   |             |         |     
|                                             |                                         |   | (Unaudited)
|REVENUES:                                    |                                         |   |             |         |      |   |         |        
|                                             | Rental of flight equipment              |   | $           | 633,712 |      |   | $       | 603,136 | 
|                                             | Flight equipment marketing              |   |             | 14,267  |      |   |         | 21,744  | 
|                                             | Interest and other                      |   |             | 12,826  |      |   |         | 12,761  | 
|                                             |                                         |   |             |         |      |   |         |        
|                                             |                                         |   | 660,805     |         |      |   | 637,641 |        
|                                             |                                         |   |             |         |      |   |         |        
|EXPENSES:                                    |                                         |   |             |         |      |   |         |        
|                                             | Interest                                |   |             | 188,929 |      |   |         | 206,557 | 
|                                             | Depreciation of flight equipment        |   |             | 207,891 |      |   |         | 181,377 | 
|                                             | Flight equipment rent                   |   |             | 25,585  |      |   |         | 36,009  | 
|                                             | Provision for overhauls                 |   |             | 32,144  |      |   |         | 32,492  | 
|                                             | Selling, general & administrative       |   |             | 15,623  |      |   |         | 11,404  | 
|                                             |                                         |   |             |         |      |   |         |        
|                                             |                                         |   | 470,172     |         |      |   | 467,839 |        
|                                             |                                         |   |             |         |      |   |         |        
|INCOME BEFORE INCOME TAXES                   |                                         |   | 190,633     |         |      |   | 169,802 |        
|                                             | Provision for income taxes              |   |             | 63,069  |      |   |         | 58,803  | 
|                                             |                                         |   |             |         |      |   |         |        
|NET INCOME                                   |                                         |   | 127,564     |         |      |   | 110,999 |        
|                                             |                                         |   |             |         |      |   |         |        
|COMPREHENSIVE INCOME:                        |                                         |   |             |         |      |   |         |        
|                                             | Net changes in cash flow hedges         |   |             | (28,590 | )    |   |         |        | 
|                                             | Foreign currency translation adjustment |   |             | (22,236 | )    |   |         |        | 
|                                             |                                         |   |             |         |      |   |         |        
|OTHER COMPREHENSIVE INCOME (LOSS) NET OF TAX |                                         |   | (50,826     | )       |      |   |        |        
|                                             |                                         |   |             |         |      |   |         |        
|COMPREHENSIVE INCOME                         |                                         | $ | 76,738      |         |      | $ | 110,999 |        
|                                             |                                         |   |             |         |      |   |         |        

See notes to condensed consolidated financial statements.

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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(Dollars in thousands)

|                                                                      |                                         |   |             |           |      |   |           |           | 
|--------------------------------------------------------------------- | --------------------------------------- | - | ----------- | --------- | ---- | - | --------- | --------- | 
|                                                                      |                                         |   | 2001        |           | 2000
|                                                                      |                                         |   |             |           |     
|                                                                      |                                         |   | (Unaudited)
|REVENUES:                                                             |                                         |   |             |           |      |   |           |          
|                                                                      | Rental of flight equipment              |   | $           | 1,836,915 |      |   | $         | 1,715,973 | 
|                                                                      | Flight equipment marketing              |   |             | 53,183    |      |   |           | 43,319    | 
|                                                                      | Interest and other                      |   |             | 50,685    |      |   |           | 37,909    | 
|                                                                      |                                         |   |             |           |      |   |           |          
|                                                                      |                                         |   | 1,940,783   |           |      |   | 1,797,201 |          
|                                                                      |                                         |   |             |           |      |   |           |          
|EXPENSES:                                                             |                                         |   |             |           |      |   |           |          
|                                                                      | Interest                                |   |             | 594,567   |      |   |           | 565,880   | 
|                                                                      | Depreciation of flight equipment        |   |             | 590,610   |      |   |           | 522,466   | 
|                                                                      | Flight equipment rent                   |   |             | 86,513    |      |   |           | 105,341   | 
|                                                                      | Provision for overhauls                 |   |             | 78,233    |      |   |           | 80,235    | 
|                                                                      | Selling, general & administrative       |   |             | 50,419    |      |   |           | 35,198    | 
|                                                                      |                                         |   |             |           |      |   |           |          
|                                                                      |                                         |   | 1,400,342   |           |      |   | 1,309,120 |          
|                                                                      |                                         |   |             |           |      |   |           |          
|INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT
OF ACCOUNTING CHANGE |                                         |   | 540,441     |           |      |   | 488,081   |          
|                                                                      | Provision for income taxes              |   |             | 187,409   |      |   |           | 171,060   | 
|                                                                      |                                         |   |             |           |      |   |           |          
|INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING
CHANGE NET OF TAXES     |                                         |   | 353,032     |           |      |   | 317,021   |          
|Cumulative effect of accounting change (net of tax)                   |                                         |   | 15,191      |           |      |   |          |          
|                                                                      |                                         |   |             |           |      |   |           |          
|NET INCOME                                                            |                                         |   | 368,223     |           |      |   | 317,021   |          
|                                                                      |                                         |   |             |           |      |   |           |          
|COMPREHENSIVE INCOME:                                                 |                                         |   |             |           |      |   |           |          
|                                                                      | Net changes in cash flow hedges         |   |             | (48,590   | )    |   |           |          | 
|                                                                      | Foreign currency translation adjustment |   |             | (7,169    | )    |   |           |          | 
|                                                                      | Cumulative effect of accounting change  |   |             | (20,473   | )    |   |           |          | 
|                                                                      |                                         |   |             |           |      |   |           |          
|OTHER COMPREHENSIVE INCOME (LOSS) NET OF TAX                          |                                         |   | (76,232     | )         |      |   |          |          
|                                                                      |                                         |   |             |           |      |   |           |          
|COMPREHENSIVE INCOME                                                  |                                         | $ | 291,991     |           |      | $ | 317,201   |          
|                                                                      |                                         |   |             |           |      |   |           |          
|SUPPLEMENTAL COMPREHENSIVE INCOME INFORMATION                         |                                         |   |             |           |      |   |           |          
|Cumulative foreign currency translation gain
adjustment, net of tax   |                                         | $ | 3,458       |           |      |   |           |          
|                                                                      |                                         |   |             |           |      |   |           |          
|Cumulative cash flow hedge loss adjustment
net of tax                 |                                         | $ | (70,432     | )         |      |   |           |          
|                                                                      |                                         |   |             |           |      |   |           |          

See notes to condensed consolidated financial statements.

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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES




CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(Dollars in thousands)


|                                                                                  |                                                                             |   |             |         |      |   |            |         |  
|--------------------------------------------------------------------------------- | --------------------------------------------------------------------------- | - | ----------- | ------- | ---- | - | ---------- | ------- | -
|                                                                                  |                                                                             |   | 2001        |         | 2000
|                                                                                  |                                                                             |   |             |         |     
|                                                                                  |                                                                             |   | (Unaudited)
|OPERATING ACTIVITIES:                                                             |                                                                             |   |             |         |      |   |            |        
|Net income                                                                        |                                                                             | $ | 368,223     |         |      | $ | 317,021    |        
|Adjustments to reconcile net income
to net cash provided by operating activities: |                                                                             |   |             |         |      |   |            |        
|                                                                                  | Depreciation of flight equipment                                            |   |             | 590,610 |      |   |            | 522,466 |  
|                                                                                  | Deferred income taxes                                                       |   |             | 286,793 |      |   |            | 218,218 |  
|                                                                                  | Foreign exchange adjustment of Euro denominated
debt                        |   |             | (75,739 | )    |   |            |        |  
|                                                                                  | Change in derivative instruments                                            |   |             | 68,659  |      |   |            |        |  
|                                                                                  | Amortization of deferred debt issue costs                                   |   |             | 9,858   |      |   |            | 8,873   |  
|                                                                                  | Gain on sale of flight equipment included in
amount financed                |   |             | (5,405  | )    |   |            |        |  
|                                                                                  | Equity in net income of affiliates                                          |   |             | (1,634  | )    |   |            | (1,329  | )
|                                                                                  | Change in unamortized debt discount                                         |   |             | 23,459  |      |   |            | (30,240 | )
|Changes in operating assets and liabilities:                                      |                                                                             |   |             |         |      |   |            |        
|                                                                                  | Increase in notes receivable & finance
leases (net)                         |   |             | (22,768 | )    |   |            | (47,737 | )
|                                                                                  | Decrease/(increase) in accrued interest,
other receivables and other assets |   |             | 1,700   |      |   |            | (10,145 | )
|                                                                                  | Change in current income taxes                                              |   |             | (96,409 | )    |   |            | (55,679 | )
|                                                                                  | Increase in accrued interest and
other payables                             |   |             | 58,713  |      |   |            | 15,690  |  
|                                                                                  | Increase in rentals received in advance                                     |   |             | 7,525   |      |   |            | 15,446  |  
|                                                                                  |                                                                             |   |             |         |      |   |            |        
|Net cash provided by operating activities                                         |                                                                             |   | 1,213,585   |         |      |   | 952,584    |        
|                                                                                  |                                                                             |   |             |         |      |   |            |        
|INVESTING ACTIVITIES:                                                             |                                                                             |   |             |         |      |   |            |        
|Acquisition of flight equipment for
operating leases                              |                                                                             |   | (3,268,104  | )       |      |   | (2,551,133 | )      
|Acquisition of flight equipment for finance leases                                |                                                                             |   | (39,207     | )       |      |   | (44,051    | )      
|Increase in deposits and progress payments                                        |                                                                             |   | (204,887    | )       |      |   | (25,563    | )      
|Proceeds from disposal of flight equipment -
net of gain                          |                                                                             |   | 181,022     |         |      |   | 118,199    |        
|Increase in notes receivable                                                      |                                                                             |   |            |         |      |   | (20,703    | )      
|Collections on notes receivable and finance
leases                                |                                                                             |   | 34,231      |         |      |   | 39,889     |        
|Increase in investment                                                            |                                                                             |   | (1,000      | )       |      |   | (41,231    | )      
|Dividends from unconsolidated subsidiary                                          |                                                                             |   | 538         |         |      |   |           |        
|                                                                                  |                                                                             |   |             |         |      |   |            |        
|Net cash used in investing activities                                             |                                                                             |   | (3,297,407  | )       |      |   | (2,524,593 | )      
|                                                                                  |                                                                             |   |             |         |      |   |            |        
|FINANCING ACTIVITIES:                                                             |                                                                             |   |             |         |      |   |            |        
|Proceeds from debt financing                                                      |                                                                             |   | 7,981,760   |         |      |   | 7,110,535  |        
|Payments in reduction of debt financing                                           |                                                                             |   | (5,933,625  | )       |      |   | (5,414,640 | )      
|Debt issue costs                                                                  |                                                                             |   | (11,257     | )       |      |   | (3,909     | )      
|Increase in customer deposits                                                     |                                                                             |   | 140,238     |         |      |   | 64,120     |        
|Payment of common and preferred dividends                                         |                                                                             |   | (86,137     | )       |      |   | (211,096   | )      
|                                                                                  |                                                                             |   |             |         |      |   |            |        
|Net cash provided by financing activities                                         |                                                                             |   | 2,090,979   |         |      |   | 1,545,010  |        
|                                                                                  |                                                                             |   |             |         |      |   |            |        
|Increase/(decrease) in cash                                                       |                                                                             |   | 7,157       |         |      |   | (26,999    | )      
|Cash at beginning of period                                                       |                                                                             |   | 134,653     |         |      |   | 123,109    |        
|                                                                                  |                                                                             |   |             |         |      |   |            |        
|Cash at end of period                                                             |                                                                             | $ | 141,810     |         |      | $ | 96,110     |        
|                                                                                  |                                                                             |   |             |         |      |   |            |        

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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(Dollars in thousands)

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

|                                 |                                                                        |  |             |         |      |  |   |         | 
|-------------------------------- | ---------------------------------------------------------------------- |  | ----------- | ------- | ---- |  | - | ------- | 
|                                 |                                                                        |  | 2001        |         | 2000
|                                 |                                                                        |  |             |         |     
|                                 |                                                                        |  | (Unaudited)
|Cash paid during the period for: |                                                                        |  |             |         |      |  |   |        
|                                 | Interest (net of amount capitalized $44,220 (2001) and $35,583 (2000)) |  | $           | 499,725 |      |  | $ | 494,736 | 
|                                 | Income taxes (net of refunds)                                          |  |             | 5,204   |      |  |   | 8,521   | 

2001:

One aircraft was received in exchange for notes receivable in the amount
of $18,136 and one aircraft with a net book value of $11,372 was contributed to
a joint venture.

2000:

Two aircraft were received in exchange for notes receivable and other
assets in the amount of $41,429.

See notes to condensed consolidated financial statements.

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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES





NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  SEPTEMBER 30, 2001
(UNAUDITED)




|A. |  | The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and in accordance with the
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) considered necessary for
a fair presentation have been included. Certain reclassifications have
been made to the 2000 unaudited condensed consolidated financial
statements to conform to the 2001 presentation. Operating results for
the nine months ended September 30, 2001 are not necessarily indicative
of the results that may be expected for the year ended December 31,
2001. These statements should be read in conjunction with the
consolidated financial statements and footnotes thereto included in the
Companys annual report on Form 10-K for the year ended December 31,
2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|B. |  | Accounting for Derivatives and Hedging Activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|   |  | All derivatives are recognized on the balance sheet at their fair value. On
the date that the Company enters into a derivative contract, it designates the
derivative as (1) a hedge of (a) the fair value of a recognized asset or
liability or (b) an unrecognized firm commitment
(a fair value hedge); (2) a hedge of (a) a forecasted transaction or (b) the
variability of cash flows that are to be received or paid in connection with a
recognized asset or liability (a cash flow hedge); or (3) a foreign-currency
fair value or cash flow hedge (a foreign currency hedge). Changes in the
fair value of a derivative that is highly effective as and that is designated
and qualifies as a fair-value hedge, along with changes in the fair value of
the hedged asset or liability that are attributable to the hedged risk
(including changes that reflect losses or gains on firm commitments), are
recorded in current-period earnings. Changes in the fair value of a derivative
that is highly effective as and that is designated and qualifies as a cash flow
hedge, to the extent that the hedge is effective, are recorded in accumulated
other comprehensive income, until earnings are affected by the variability of
cash flows of the hedged transaction (e.g. until periodic settlements of the
variable-rate asset or liability are recorded in earnings). Any hedge
ineffectiveness (which represents the amount by which the changes in the fair
value of the derivative exceed the variability in the cash flows of the
forecasted transaction) is recorded in current-period earnings. Changes in the
fair value of a derivative that is highly effective as and that is designated
and qualifies as a foreign currency hedge are recorded in either current-period
earnings or other accumulated comprehensive income, depending on whether the
hedging relationship satisfies the criteria for a fair value or cash flow
hedge. Changes in the fair value of derivative trading and non-hedging
instruments are reported in current-period earnings.

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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
(UNAUDITED)



| |  | The Company formally documents all relationships between hedging instruments
and hedged items, as well as risk management objectives and strategies for
undertaking various hedge transactions. This includes linking all derivatives
that are designated as fair value, cash flow, or foreign currency hedges to (1)
specific assets or liabilities on the balance sheet, or (2) specific firm
commitments or forecasted transactions. The Company also formally assesses
(both at the hedges inception and on an ongoing basis) whether the derivatives
that are used in hedging transactions have been highly effective in offsetting
changes in the fair value or cash flows of hedged items and whether those
derivatives may be expected to remain highly effective in future periods. When
it is determined that a derivative is not (or has ceased to be) highly
effective as a hedge, the Company will discontinue hedge accounting
prospectively, as discussed below.                                                                                                                                                                                                                                                             
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The Company will discontinue hedge accounting prospectively when (1) it
determines that the derivative is no longer effective in offsetting changes in
the fair value or cash flows of a hedged item; (2) the derivative expires or is
sold, terminated, or exercised; (3) it is no longer probable that the
forecasted transaction will occur; (4) a hedged firm commitment no longer meets
the definition of a firm commitment; or (5) management determines that
designating the derivative as a hedging instrument is no longer appropriate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | When hedge accounting is discontinued due to the Companys determination that
the derivative no longer qualifies as an effective fair value hedge, the
Company will continue to carry the derivative on the balance sheet at its fair
value, but cease to adjust the hedged asset or liability for changes in fair
value. When the Company discontinues hedge accounting because it is no longer
probable that the forecasted transaction will occur in the originally expected
period, the gain or loss on the derivative remains in accumulated other
comprehensive income and is reclassified into earnings when the forecasted
transaction affects earnings. However, if it is probable that a forecasted
transaction will not occur by the end of the originally specified time period
or within an additional two-month period of time thereafter, the gains and
losses that were accumulated in accumulated other comprehensive income will be
recognized immediately in earnings. In all situations in which hedge
accounting is discontinued and the derivative remains outstanding, the Company
will carry the derivative at its fair value on the balance sheet, recognizing
changes in the fair value in current-period earnings.

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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
(DOLLARS IN THOUSANDS)
(UNAUDITED)



|C. |  | Adoption of SFAS 133                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The Company adopted Statement of Financial Accounting Standards No.133 -
Accounting for Certain Derivative Instruments and Certain Hedging Activities,
as amended by Statement of Financial Accounting Standards No. 138 and related
implementation guidance (SFAS 133) on January 1, 2001. The Company uses
derivatives to manage exposures to interest rate and foreign currency risks.
The Company recorded $1.4 million of hedge ineffectiveness in interest expense
related to cross currency fair value hedges, for the nine months ended
September 30, 2001. Hedge ineffectiveness related to cash flow hedges for the
period was immaterial to the Company. In accordance with the transition
provision of SFAS 133, the Company recorded the following cumulative effect
adjustments in earnings as of January 1, 2001, net of taxes:

|                                                                                                                                              |                                                   |   |         |         |  
|--------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------- | - | ------- | ------- | -
|Related to non-hedging instruments:                                                                                                           |                                                   |   |         |        
|                                                                                                                                              | Fair value of hedging instruments                 |   | $       | 2,805   |  
|Related to previous designated fair value hedging relationships                                                                               |                                                   |   |         |        
|                                                                                                                                              | Fair value of hedging instruments                 |   |         | (13,954 | )
|                                                                                                                                              | Offsetting changes in fair value of hedged items  |   |         | 13,954  |  
|                                                                                                                                              | Previously deferred hedging gains and losses, net |   |         | 12,386  |  
|                                                                                                                                              |                                                   |   |         |        
|Total cumulative effect on earnings, net of tax                                                                                               |                                                   | $ | 15,191  |        
|                                                                                                                                              |                                                   |   |         |        
|In addition, the Company recorded the following net-of-tax
cumulative effect adjustments in other comprehensive income as of
January 1, 2001: |                                                   |   |         |        
|Related to previously designated cash flow hedging relationships:                                                                             |                                                   |   |         |        
|                                                                                                                                              | Fair value of hedging instruments                 |   | $       | (45,927 | )
|                                                                                                                                              | Previously defined hedging gains and losses       |   |         | 25,454  |  
|                                                                                                                                              |                                                   |   |         |        
|Total cumulative effect on other comprehensive (loss)
income, net of tax                                                                      |                                                   | $ | (20,473 | )      
|                                                                                                                                              |                                                   |   |         |        
|During the nine months ended September 30, 2001, the Company recorded the
following in earnings in accordance with SFAS 133:                  |                                                   |   |         |        
|Related to non-hedging instruments:                                                                                                           |                                                   |   |         |        
|                                                                                                                                              | Fair value of hedging instruments                 |   | $       | 3,929   |  
|Related to previous designated fair value hedging relationships                                                                               |                                                   |   |         |        
|                                                                                                                                              | Fair value of hedging instruments                 |   |         | (6,325  | )
|                                                                                                                                              | Offsetting changes in fair value of hedged items  |   |         | 4,951   |  
|                                                                                                                                              |                                                   |   |         |        
|Total cumulative effect on earnings                                                                                                           |                                                   | $ | 2,555   |        
|                                                                                                                                              |                                                   |   |         |        

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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
(DOLLARS IN THOUSANDS)
(UNAUDITED)

During the nine months ended September 30, 2001, $17,142 (net) was reclassified
from accumulated other comprehensive income to interest expense under cash flow
hedge accounting in connection with the Companys program to convert debt from
floating to fixed rates. The Company expects that within the next twelve
months it will reclassify as earnings $57,720 of the balance recorded in
accumulated other comprehensive income.

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|       |  |                                                          |  | 
|------ |  | -------------------------------------------------------- |  | 
|ITEM 2 |  | INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES |  | 

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


FORWARD LOOKING STATEMENTS

Certain of the statements in this discussion, as well as other
forward-looking statements within this document, contain estimates and
projections of cash flows and debt financing to support future capital
requirements. While these forward-looking statements are made in good faith,
future operating, market, competitive, economic and other conditions and events
could cause actual results to differ materially from those in the
forward-looking statements. The Company undertakes no obligation to release
publicly any revisions to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of anticipated
or unanticipated events.

RECENT DEVELOPMENTS

As a result of the September 11, 2001 terrorist attacks on the United
States and the general slowdown of the United States economy both before and
after the attacks, many United States and international commercial air carriers
are experiencing a reduction in passenger traffic and an actual or potential
increase in costs, including insurance premiums and security costs. In
addition, many United States and international commercial air carriers have
announced reductions in their long-term schedules. We can give no assurance
that these and other factors affecting the airline industry will not adversely
affect our business.

FINANCIAL CONDITION

The Company borrows funds for the purchase of flight equipment, including
funds for progress payments during the construction phase, from various
sources, principally on an unsecured basis. The Companys debt financing and
capital lease obligations were comprised of the following at the following
dates:

|                                                   |  |                        |            |              |  |   |            |  
|-------------------------------------------------- |  | ---------------------- | ---------- | ------------ |  | - | ---------- | -
|                                                   |  | September 30,          |            | December 31,
|                                                   |  | 2001                   |            | 2000        
|                                                   |  |                        |            |             
|                                                   |  | (Dollars in thousands)
|Public term debt with single
maturities            |  | $                      | 3,965,270  |              |  | $ | 3,456,675  |  
|Public medium-term notes with
varying maturities   |  |                        | 4,291,000  |              |  |   | 3,175,000  |  
|Capital lease obligations                          |  |                        | 398,329    |              |  |   | 463,362    |  
|Bank and other term debt                           |  |                        | 2,452,588  |              |  |   | 2,072,562  |  
|                                                   |  |                        |            |              |  |   |            |  
|Total term debt and capital lease
obligations      |  |                        | 11,107,187 |              |  |   | 9,167,599  |  
|Derivatives                                        |  |                        | 199,986    |              |  |   |           |  
|Commercial paper                                   |  |                        | 4,330,824  |              |  |   | 4,288,681  |  
|Deferred debt discount                             |  |                        | (11,295    | )            |  |   | (34,754    | )
|                                                   |  |                        |            |              |  |   |            |  
|Total debt financing and capital lease
obligations |  | $                      | 15,626,702 |              |  | $ | 13,421,526 |  
|                                                   |  |                        |            |              |  |   |            |  
|Composite interest rate                            |  |                        | 5.21       | %            |  |   | 6.37       | %
|Percentage of total debt at fixed rates            |  |                        | 72.84      | %            |  |   | 68.65      | %
|Composite interest rate on fixed rate debt         |  |                        | 5.88       | %            |  |   | 6.20       | %
|Bank prime rate                                    |  |                        | 6.00       | %            |  |   | 9.50       | %

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|       |  |                                                          |  | 
|------ |  | -------------------------------------------------------- |  | 
|ITEM 2 |  | INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES |  | 

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


The interest on substantially all of the public debt (exclusive of the
Commercial Paper) is fixed for the terms of the notes. The Company has
committed revolving loans and lines of credit with 48 commercial banks
aggregating $3.2 billion and an uncommitted line of credit with one bank for
$30.0 million. These revolving loans and lines of credit principally provide
for interest rates that vary according to the pricing option in effect at the
time of borrowing. Pricing options include prime, a range from .20% over LIBOR
to .35% over LIBOR based upon utilization, or a rate determined by a
competitive bid process with the banks. The revolving loans and lines of credit
are subject to facility fees of up to .08% of amounts available. Such financing
is used primarily as backup for the Companys Commercial Paper Program.

The Company has an effective shelf registration with respect to $4.0
billion of debt securities, under which $300.0 million of notes were sold
through September 30, 2001. Additionally, a $2.0 billion Medium-Term Note
Program has been designated under the shelf registration, under which $1.2
billion of notes were sold through September 30, 2001.

The Company has a Euro Medium-Term Note Program for $2.0 billion, under
which $771.0 million
(750.0 million) in notes were sold as of September 30,
2001. The Company has hedged the foreign currency risk of the notes through
operating lease payments or through currency swaps.

The Company has an Export Credit Facility, for up to a maximum of $4.3
billion, for approximately 75 aircraft to be delivered through 2001. The
Company has the right, but is not required, to use the facility to fund 85% of
each aircrafts purchase price. This facility is guaranteed by various
European Export Credit Agencies. The interest rate varies from 5.753% to
5.898% depending on the delivery date of the aircraft. Through September 30,
2001, the Company had borrowed $2.8 billion under this facility to finance 62
aircraft.

The Company currently has a $4.8 billion Commercial Paper Program. Under
this program, the Company may borrow in minimum increments of $100,000 for a
period from one day to 270 days. The weighted average interest rate of the
Companys Commercial Paper Program was 3.26% and 6.63% at September 30, 2001
and 2000, respectively.

The Company believes that the combination of internally generated funds
and debt financing available to the Company will allow the
Company to meet its capital requirements for at least the next 12 months.

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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations- Three months ended September 30, 2001 versus 2000.

The 5.1% increase in revenues from the rentals of flight equipment from
$603.1 million in 2000 to $633.7 million in 2001, is due to an increase in the
number of aircraft available for operating lease. At September 30, 2001 the
Companys leased fleet consisted of 455 aircraft compared to a fleet of 408
aircraft at September 30, 2000. The cost of the leased fleet,
which includes aircraft subject to sale-lease back transactions from which
rental income is earned, increased 12.7% from $22.1 billion in 2000 to $24.9
billion in 2001.

In addition to its leasing operations, the Company engages in the
marketing of flight equipment at the end of, or during, the lease term, as well
as the sales of flight equipment on a principal and commission basis.
Revenues
from flight equipment marketing decreased from $21.7 million in 2000 to $14.3
million in 2001 as a result of the type and the number of flight equipment
marketed in each period. The Company sold five aircraft in the third quarter
of 2001 compared to three aircraft and two engines in the third quarter of
2000.

Interest expense decreased from $206.6 million in 2000 to $188.9 million
in 2001 as a result of a decrease in the average composite borrowing rate from
6.36% in 2000 to 5.35% in 2001. The Companys composite borrowing rate
fluctuated as follows:

|                     |  |      |      |      |  |          |      |   |  |  |       |   
|-------------------- |  | ---- | ---- | ---- |  | -------- | ---- | - |  |  | ----- | --
|                     |  | 2001 |      | 2000 |  | Decrease
|                     |  |      |      |      |  |         
|Beginning of Quarter |  |      | 5.49 | %    |  |          | 6.33 | % |  |  | (0.84 | )%
|End of Quarter       |  |      | 5.21 | %    |  |          | 6.38 | % |  |  | (1.17 | )%
|Average              |  |      | 5.35 | %    |  |          | 6.36 | % |  |  | (1.01 | )%

The Company adopted SFAS 133 on January 1, 2001 (see notes to the unaudited
condensed consolidated financial statements). Interest expense for the three
months ended September 30, 2001 includes a $7.5 million credit related to the
application of SFAS 133.

Depreciation of flight equipment increased from $181.4 million in 2000 to
$207.9 million in 2001 due to the increased cost of the fleet.

The Company, in prior periods, has entered into sale-leaseback
transactions relating to 18 aircraft. Rent expense decreased from $36.0
million in 2000 to $25.6 million in 2001 due to a decrease in the lease rates
resulting from decrease in interest rates affecting the floating rate component
of the lease rates and principal amortization.

Provision for overhauls remained relatively constant compared to the prior
year.

Selling, general and administrative expenses increased from $11.4 million
in 2000 to $15.6 million in 2001 primarily due to an increase in costs related
to the reconfiguration and re-delivery of aircraft from one lessee to another.

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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations- Nine months ended September 30, 2001 versus 2000.

The 7.0% increase in revenues from the rentals of flight equipment from
$1,716.0 million in 2000 to $1,836.9 million in 2001, is due to an increase in
the number of aircraft available for operating lease. At September 30, 2001
the Companys leased fleet consisted of 455 aircraft compared to a fleet of 408
aircraft at September 30, 2000. The cost of the leased fleet,
which includes aircraft subject to sale-lease back transactions from which
rental income is earned, increased 12.7% from $22.1 billion in 2000 to $24.9
billion in 2001.

In addition to its leasing operations, the Company engages in the
marketing of flight equipment at the end of, or during, the lease term, as well
as the sales of flight equipment on a principal and commission basis.
Revenues
from flight equipment marketing increased from $43.3 million in 2000 to $53.2
million in 2001 primarily due to an increase in third party flight equipment
marketing commissions. The Company sold seven aircraft and three engines in
the nine months ended September 30, 2001 and five aircraft and six engines in
the nine months ended September 30, 2000.

Interest expense increased from $565.9 million in 2000 to $594.6 million
in 2001 as a result of an increase in debt outstanding, excluding the effect of
debt discount and excluding market values of derivatives, from $13.6 billion in
2000 to $15.4 billion in 2001, partially offset by a decrease in the average
composite borrowing rate from 6.26% in 2000 to 5.79% in 2001. The Companys
composite borrowing rate fluctuated as follows:

|                         |  |      |      |      |  |            |      |   |  |          |       |   
|------------------------ |  | ---- | ---- | ---- |  | ---------- | ---- | - |  | -------- | ----- | --
|                         |  |      |      |      |  |            |      |   |  | Increase
|                         |  | 2001 |      | 2000 |  | (Decrease)
|                         |  |      |      |      |  |           
|Beginning of Nine Months |  |      | 6.37 | %    |  |            | 6.14 | % |  |          | 0.23  | % 
|End of Nine Months       |  |      | 5.21 | %    |  |            | 6.38 | % |  |          | (1.17 | )%
|Average                  |  |      | 5.79 | %    |  |            | 6.26 | % |  |          | (0.47 | )%

The Company adopted SFAS 133 on January 1, 2001 (see notes to the
financial statements). The transition adjustment in the amount of $15.2
million is accounted for as the cumulative effect of an accounting change.
Interest expense for the nine months ended September 30, 2001 includes a $2.7
million credit related to the application of SFAS 133.

Depreciation of flight equipment increased from $522.5 million in 2000 to
$590.6 million in 2001 due to the increased cost of the fleet.

The Company, in prior periods, has entered into sale-leaseback
transactions relating to 18 aircraft. Rent expense decreased from $105.3
million in 2000 to $86.5 million in 2001 due to a decrease in the lease rates
resulting from a decrease in interest rates affecting the floating rate
component of the lease rates and principal amortization.

Provision for overhauls decreased from $80.2 million in 2000 to $78.2
million in 2001 due to the effect of favorable payout factors realized in the
second quarter. The number of aircraft and aggregate number of hours flown on
which the Company collects overhaul reserves remained relatively constant
compared to the prior year. An increase or decrease in the number of aircraft
on which the Company collects overhaul revenue may result in a corresponding
change in the aggregate number of hours flown, for which overhaul reserves are
provided.

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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Selling, general and administrative expenses increased from $35.2 million in
2000 to $50.4 million in 2001 primarily due to an increase in costs related to
the reconfiguration and re-delivery of aircraft from one lessee to another.

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|       |  |                                                          |  | 
|------ |  | -------------------------------------------------------- |  | 
|ITEM 3 |  | INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES |  | 

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


VALUE AT RISK

Measuring potential losses in fair values has recently become the focus of
risk management efforts by many companies. Such measurements are performed
through the application of various statistical techniques. One such technique
is Value at Risk (VaR), a summary statistical measure that uses historical
interest rates, foreign currency exchange rates and equity prices which
estimates the volatility and correlation of these rates and prices to calculate
the maximum loss that could occur over a defined period of time given a certain
probability.

The Company believes that statistical models alone do not provide a
reliable method of monitoring and controlling market risk. While VaR models
are relatively sophisticated, the quantitative market risk information
generated is limited by the assumptions and parameters established in creating
the related models. Therefore, such models are tools and do not substitute for
the experience or judgment of senior management.

The Company is exposed to market risk and the risk of loss of fair value
resulting from adverse fluctuations in interest rates and foreign exchange
prices. The Company statistically measures the loss of fair value through the
application of a VaR model on a quarterly basis. In this analysis the net fair
value of the Company is determined using the financial instrument assets. This
includes tax adjusted future flight equipment lease revenues, aircraft residual
values at maturity of the lease contracts and financial instrument liabilities,
which includes future servicing of current debt. The impact of current
derivative positions is also taken into account.

The Company calculates the VaR with respect to the net fair value by using
historical scenarios. This methodology entails re-pricing all assets and
liabilities under explicit changes in market rates within a specific historical
time period. In this case, the most recent two and three years of historical
information for interest rates and foreign exchange rates were used to
construct the historical scenarios at December 31, 2000 and September 30, 2001
respectively. For each scenario, each financial instrument is re-priced.
Scenario values for the Company are then calculated by netting the values of
all the underlying assets and liabilities. The final VaR number represents the
maximum adverse deviation in fair market value incurred by these scenarios with
95% confidence (i.e. only 5% of historical scenarios show losses greater than
the VaR figure). A one month holding period is assumed in computing the VaR
figure. As of December 31, 2000 and September 30, 2001, the VaR for the Company
with respect to its fair value was $11 million and $7 million, respectively.

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PART II. OTHER INFORMATION

INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES





ITEM 6. Exhibits and Reports on Form 8-K



| | a) |  | Exhibits:
| | -- |  | ---------

| |  |  |      |  |  |                                                                                                                                         
| |  |  | ---- |  |  | ----------------------------------------------------------------------------------------------------------------------------------------
| |  |  | 4.1  |  |  | Third
supplemental indenture, dated as of September 26, 2001,
to the indenture between the Company and U. S. Trust
National Association.
| |  |  | 12.1 |  |  | Computation of Ratios of Earnings to Fixed Charges and
Preferred Stock Dividends                                                        



| | b) |  | Reports on Form 8-K:                       
| | -- |  | -------------------------------------------
|
| |    |  | Form 8-K, event date July 17, 2001 (Item 7)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

INTERNATIONAL LEASE FINANCE CORPORATION

|                 |  |                                                                                                                
|---------------- |  | ---------------------------------------------------------------------------------------------------------------
|November 6, 2001 |  | /S/   Leslie L. Gonda
LESLIE L. GONDA
Chairman of the Board                                                    
|                
|November 6, 2001 |  | /S/   Alan H. Lund
ALAN H. LUND
Executive Vice President
Co-Chief Operating Officer and Chief Financial Officer

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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES




INDEX TO EXHIBITS

Exhibit No.

| |  |  |      |  |  |                                                                                                                                         
| |  |  | ---- |  |  | ----------------------------------------------------------------------------------------------------------------------------------------
| |  |  | 4.1  |  |  | Third supplemental indenture, dated as of September 26, 2001, to the
indenture between the Company and U. S. Trust National Association.
| |  |  | 12.1 |  |  | Computation of Ratios of Earnings to Fixed Charges and Preferred Stock Dividends                                                        

-20-