##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q/A
 (Amendment No. 1)
QUARTERLY REPORT
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from ________________________ to _________________________
 Commission file number 001-31616
 INTERNATIONAL LEASE FINANCE CORPORATION
  California
(State or other jurisdiction of
incorporation or organization)
    
    22-3059110
(I.R.S. Employer
Identification No.)
 10250 Constellation Blvd., Los Angeles, California
(Address of principal executive offices)
    
    90067
(Zip Code)
 (310) 788-1999
 þ o
 o þ




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##### Table of Contents



EXPLANATORY NOTE
   RESTATEMENT
  -1-




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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
 FORM 10-Q/A QUARTERLY REPORT
 TABLE OF CONTENTS
  
 PagePart I. Financial InformationItem 1. Financial Statements (Unaudited and Restated)Condensed Consolidated Balance Sheets March 31, 2005 and December 31, 2004
    
    
    3Condensed Consolidated Statements of Income Three months Ended March 31, 2005 and 2004
    
    
    4Condensed Consolidated Statements of Comprehensive Income Three Months Ended March 31, 2005 and 2004
    
    
    5Condensed Consolidated Statements of Cash Flows Three months Ended March 31, 2005 and 2004
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    8Cautionary Statement Regarding Forward Looking Information
    
    
    12Item 2. Managements Discussion and Analysis of the Financial Condition and Results of Operations
    
    
    13Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    23Item 4. Controls and Procedures
    
    
    24Part II. Other InformationItem 1. Legal Proceedings
    
    
    27Item 4. Submission of Matters to a Vote of Security Holders
    
    
    27Item 6. Exhibits
    
    
    27Signatures
    
    
    28EXHIBIT 12EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1
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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share amounts)
 Restated
    
    Restated
    
    RestatedMarch 31,
    
    December 31,
    
    March 31,2005
    
    2004
    
    2004(Unaudited)ASSETSCash, including interest bearing accounts
of $66,283 (March 31, 2005) $97,682 (December 31, 2004) and
$139,433 (March 31, 2004)
    
    $
    66,687
    
    
    $
    99,747
    
    
    $
    156,351Current income taxes
    
    
    57,338
    
    
    
    6,507
    
    
    
    Notes receivable and net investment in finance and sales-type leases
    
    
    515,398
    
    
    
    519,739
    
    
    
    427,405Flight equipment under operating leases
    
    
    38,665,498
    
    
    
    36,580,296
    
    
    
    33,955,679Less accumulated depreciation
    
    
    6,388,484
    
    
    
    6,074,874
    
    
    
    5,210,87232,277,014
    
    
    
    30,505,422
    
    
    
    28,744,807Deposits on flight equipment purchases
    
    
    1,383,773
    
    
    
    1,250,168
    
    
    
    1,167,437Other assets
    
    
    275,275
    
    
    
    199,653
    
    
    
    540,399Derivative assets
    
    
    976,076
    
    
    
    1,191,602
    
    
    
    675,823Investments
    
    
    25,676
    
    
    
    22,979
    
    
    
    49,204Variable interest entities assets
    
    
    148,359
    
    
    
    152,417
    
    
    
    161,352Deferred debt issue costs  less accumulated amortization of
$79,104 (March 31, 2005) $77,112 (December 31, 2004)
and $64,295 (March 31, 2004)
    
    
    65,831
    
    
    
    59,666
    
    
    
    54,497$
    35,791,427
    
    
    $
    34,007,900
    
    
    $
    31,977,275LIABILITIES AND SHAREHOLDERS EQUITYAccrued interest and other payables
    
    $
    341,510
    
    
    $
    264,276
    
    
    $
    348,156Current income taxes
    
    
    
    
    
    
    
    
    
    
    92,447Tax benefit sharing payable to AIG
    
    
    245,000
    
    
    
    245,000
    
    
    
    Debt financing, net of deferred debt discount of $37,425
(March 31, 2005), $29,502 (December 31, 2004) and $26,786
(March 31, 2004)
    
    
    24,709,139
    
    
    
    23,136,016
    
    
    
    21,766,190Foreign currency translation adjustment related to foreign
currency denominated debt
denominated debt
    
    
    932,474
    
    
    
    1,215,809
    
    
    
    786,299Derivative liabilities
    
    
    31,262
    
    
    
    38,810
    
    
    
    40,135Capital lease obligations
    
    
    20,497
    
    
    
    39,580
    
    
    
    125,396Synthetic lease obligations
    
    
    
    
    
    
    
    
    
    
    458,727Security and other deposits on flight equipment
    
    
    1,004,941
    
    
    
    876,590
    
    
    
    825,418Rentals received in advance
    
    
    172,872
    
    
    
    160,878
    
    
    
    152,387Deferred income taxes
    
    
    2,768,110
    
    
    
    2,630,118
    
    
    
    2,334,845Variable interest entities liabilities
    
    
    67,245
    
    
    
    70,886
    
    
    
    77,781SHAREHOLDERS EQUITYMarket Auction Preferred Stock, $100,000 per share
liquidation value; Series A and B
each having 500 shares issued and outstanding
    
    
    100,000
    
    
    
    100,000
    
    
    
    100,000Common stockno par value; 100,000,000 authorized shares,
42,198,119 issued and outstanding
    
    
    653,582
    
    
    
    653,582
    
    
    
    653,582Paid-in capital
    
    
    585,416
    
    
    
    579,955
    
    
    
    579,955Accumulated other comprehensive income (loss)
    
    
    73,038
    
    
    
    22,825
    
    
    
    (35,582
    )Retained earnings
    
    
    4,086,341
    
    
    
    3,973,575
    
    
    
    3,671,539Total shareholders equity
    
    
    5,498,377
    
    
    
    5,329,937
    
    
    
    4,969,494$
    35,791,427
    
    
    $
    34,007,900
    
    
    $
    31,977,275
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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(Dollars in thousands)
 Restated
    
    Restated2005
    
    2004(Unaudited)REVENUESRental of flight equipment
    
    $
    798,101
    
    
    $
    697,960Flight equipment marketing
    
    
    15,561
    
    
    
    7,804Flight equipment marketing  securitization (Note D)
    
    
    
    
    
    
    34,117Interest and other
    
    
    15,162
    
    
    
    23,014828,824
    
    
    
    762,895EXPENSESInterest
    
    
    240,406
    
    
    
    228,509Depreciation of flight equipment
    
    
    318,891
    
    
    
    284,780Provision for overhauls
    
    
    44,143
    
    
    
    34,902Selling, general and administrative
    
    
    36,366
    
    
    
    24,960639,806
    
    
    
    573,151INCOME BEFORE INCOME TAXES
    
    
    189,018
    
    
    
    189,744Provision for income taxes
    
    
    60,096
    
    
    
    60,636NET INCOME
    
    $
    128,922
    
    
    $
    129,108
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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(Dollars in thousands)
 Restated
    
    Restated2005
    
    2004(Unaudited)NET INCOME
    
    $
    128,922
    
    
    $
    129,108OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAXNet changes in cash flow hedges
    
    
    50,358
    
    
    
    (7,655
    )Change in unrealized appreciation on securities available for sale
    
    
    (145
    )
    
    
    50,213
    
    
    
    (7,655
    )COMPREHENSIVE INCOME
    
    $
    179,135
    
    
    $
    121,453
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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(Dollars in thousands)
 Restated
    
    Restated2005
    
    2004(Unaudited)OPERATING ACTIVITIESNet income
    
    $
    128,922
    
    
    $
    129,108Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation of flight equipment
    
    
    318,891
    
    
    
    284,780Deferred income taxes
    
    
    110,954
    
    
    
    (14,492
    )Change in derivative instruments
    
    
    65,945
    
    
    
    25,421Foreign currency adjustment of non-US$ denominated debt
    
    
    (63,827
    )
    
    
    (37,477
    )Amortization of deferred debt issue costs
    
    
    8,507
    
    
    
    5,738Change in unamortized debt discount
    
    
    (7,923
    )
    
    
    (2,465
    )Changes in operating assets and liabilities:Other assets
    
    
    22,139
    
    
    
    35,188(Decrease) increase in current income taxes payable
    
    
    (50,831
    )
    
    
    74,480Increase in accrued interest and other payables
    
    
    73,594
    
    
    
    102,737Increase in rentals received in advance
    
    
    11,994
    
    
    
    5,516Other
    
    
    5,426
    
    
    
    (13,012
    )Net cash provided by operating activities
    
    
    623,791
    
    
    
    595,522INVESTING ACTIVITIESAcquisition of flight equipment for operating leases
    
    
    (2,209,516
    )
    
    
    (1,911,934
    )(Increase) decrease in deposits and progress payments
    
    
    (133,605
    )
    
    
    87,637Proceeds from disposal of flight equipment  net of gain
    
    
    20,975
    
    
    
    805,921Advances on notes receivable
    
    
    (6,500
    )
    
    
    Collections on notes receivable and finance leases
    
    
    11,874
    
    
    
    15,312Other
    
    
    (2,557
    )
    
    
    (6,653
    )Net cash used in investing activities
    
    
    (2,319,329
    )
    
    
    (1,009,717
    )FINANCING ACTIVITIESNet change in commercial paper
    
    
    1,785,319
    
    
    
    280,613Proceeds from debt financing
    
    
    973,146
    
    
    
    862,741Payments in reduction of debt financing, capital lease
obligations
    
    
    (1,196,501
    )
    
    
    (643,321
    )Debt issue costs
    
    
    (14,672
    )
    
    
    (8,370
    )Increase (decrease) in customer deposits
    
    
    128,351
    
    
    
    (18,496
    )Payment of common and preferred dividends
    
    
    (10,976
    )
    
    
    (8,464
    )Net cash provided by financing activities
    
    
    1,664,667
    
    
    
    464,703Effect of exchange rate changes on cash
    
    
    (2,189
    )
    
    
    3,602Net (decrease) increase in cash
    
    
    (33,060
    )
    
    
    54,110Cash at beginning of period
    
    
    99,747
    
    
    
    102,241Cash at end of period
    
    $
    66,687
    
    
    $
    156,351
 (Table continued on following page)
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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(Dollars in thousands)
 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
 Restated
    
    Restated2005
    
    2004(Unaudited)Cash paid (received) during the period for:Interest (net of amount capitalized of
$14,507 (2005) and $12,712 (2004))
    
    $
    167,645
    
    
    $
    141,825Income taxes, net
    
    
    (28
    )
    
    
    647
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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005
(Unaudited)
 Basis of Preparation
  Restatement
  Derivative Instruments
 Accounting for Derivative Instruments and Hedging Activities
 
    
    Documentation deficiencies related to portions of Euro denominated debt that ILFC had
designated as a hedge against future operating lease payments receivable denominated in
Euros. The review revealed that the documentation related to these hedges was
insufficient to meet the documentation criteria under SFAS 133 and it was concluded that
ILFC could not apply hedge accounting to the transactions. The economics of the
transactions are not affected.
    
    Certain Euro denominated cash accounts associated with the aforementioned operating
lease payments and certain foreign currency denominated debt required mark-to-spot treatment under Statement of Financial
Accounting Standards No. 52, Foreign Currency Translation, which were not properly
accounted for at the end of each quarter during the years 2004, 2003, 2002 and 2001.
    
    Documentation deficiencies related to four commercial paper swaps where portions of
ILFCs commercial paper program were swapped from floating into fixed interest rates.
The review revealed that the documentation related to these hedges was insufficient to
meet the documentation criteria under SFAS 133 and it was concluded that ILFC could not
apply hedge accounting to the transactions. The economics of the transactions are not
affected.
    
    Minor errors under SFAS 133 with respect to derivative instruments related to the
reclassification to income from Accumulated other comprehensive income. The corrections will also affect
derivative assets and liabilities and accrued interest.
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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2005
(Unaudited)
  Certain Payments from Aircraft and Engine Manufacturers
    March 31, 2005
    
    December 31, 2004
    
    March 31, 2004As
    
    As
    
    As
    
    As
    
    As
    
    AsReported
    
    Restated
    
    Reported
    
    Restated
    
    Reported
    
    RestatedConsolidated balance sheets:Cash
    
    $
    66,738
    
    
    $
    66,687
    
    
    $
    101,653
    
    
    $
    99,747
    
    
    $
    153,338
    
    
    $
    156,351Current income taxes receivable
    
    
    70,500
    
    
    
    57,338
    
    
    
    19,522
    
    
    
    6,507Flight equipment under operating leases
    
    
    39,557,429
    
    
    
    38,665,498
    
    
    
    37,380,712
    
    
    
    36,580,296
    
    
    
    34,648,226
    
    
    
    33,955,679Accumulated depreciation
    
    
    (6,626,015
    )
    
    
    (6,388,484
    )
    
    
    (6,300,071
    )
    
    
    (6,074,874
    )
    
    
    (5,402,502
    )
    
    
    (5,210,872
    )Other assets
    
    
    134,958
    
    
    
    275,275
    
    
    
    119,415
    
    
    
    199,653
    
    
    
    464,259
    
    
    
    540,399Derivative assets
    
    
    988,748
    
    
    
    976,076
    
    
    
    1,210,908
    
    
    
    1,191,602
    
    
    
    707,446
    
    
    
    675,823Total assets
    
    
    36,331,395
    
    
    
    35,791,427
    
    
    
    34,537,108
    
    
    
    34,007,900
    
    
    
    32,430,662
    
    
    
    31,977,275Current income taxes payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    79,501
    
    
    
    92,447Foreign currency adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    823,451
    
    
    
    786,299Deferred income taxes
    
    
    2,967,526
    
    
    
    2,768,110
    
    
    
    2,825,661
    
    
    
    2,630,118
    
    
    
    2,495,128
    
    
    
    2,334,845Accumulated other comprehensive income
(loss)
    
    
    44,852
    
    
    
    73,038
    
    
    
    (9,650
    )
    
    
    22,825
    
    
    
    (93,020
    )
    
    
    (35,582
    )Retained earnings
    
    
    4,455,077
    
    
    
    4,086,341
    
    
    
    4,339,715
    
    
    
    3,973,575
    
    
    
    3,997,877
    
    
    
    3,671,539Total shareholders equity
    
    
    5,838,927
    
    
    
    5,498,377
    
    
    
    5,663,602
    
    
    
    5,329,937
    
    
    
    5,238,394
    
    
    
    4,969,494
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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2005
(Unaudited)
  March 31, 2005
    
    March 31, 2004As
    
    As
    
    As
    
    AsReported
    
    Restated
    
    Reported
    
    RestatedConsolidated statements of income:Rental of flight equipment
    
    $
    829,101
    
    
    $
    798,101
    
    
    $
    722,938
    
    
    $
    697,960Flight equipment marketing
    
    
    16,411
    
    
    
    15,561
    
    
    
    9,742
    
    
    
    7,804Flight equipment marketing 
securitization
    
    
    
    
    
    
    
    
    
    
    25,610
    
    
    
    34,117Interest and other
    
    
    12,892
    
    
    
    15,162
    
    
    
    21,538
    
    
    
    23,014Total revenues
    
    
    858,404
    
    
    
    828,824
    
    
    
    779,828
    
    
    
    762,895Interest expense
    
    
    253,640
    
    
    
    240,406
    
    
    
    233,801
    
    
    
    228,509Depreciation
    
    
    331,225
    
    
    
    318,891
    
    
    
    295,609
    
    
    
    284,780Selling, general and
administrative
    
    
    
    
    
    
    
    
    
    
    25,624
    
    
    
    24,960Total expenses
    
    
    665,374
    
    
    
    639,806
    
    
    
    589,936
    
    
    
    573,151Income before income taxes
    
    
    193,030
    
    
    
    189,018
    
    
    
    189,892
    
    
    
    189,744Provision for income taxes
    
    
    61,513
    
    
    
    60,096
    
    
    
    60,688
    
    
    
    60,636Net income (a)
    
    
    131,517
    
    
    
    128,922
    
    
    
    129,204
    
    
    
    129,108
 
 (a)
    
    The increase (decrease) in net income for the quarters ended March 31, 2005
and 2004 as a result of the restatement for the derivative instruments was $9,758 and
$4,773, respectively, and for the manufacturers payments was $(12,352) and $(4,869),
respectively. C. Hedging Activities (Restated)
  (Dollars in thousands)(Income) loss related to derivative instruments:Changes in fair value of non-hedging instruments
    
    $
    (15,558
    )Changes in fair value of hedging instruments
    
    
    62,179Offsetting changes in fair value of hedged items
    
    
    (61,134
    )Ineffectiveness related to cash flow hedges
    
    
    (361
    )$
    (14,874
    )
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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2005
(Unaudited)
  Flight Equipment Marketing  Securitization
 Flight Equipment Marketing  Securitization
 Related Party Transactions
 Compensation to Certain ILFC Employees From Starr International Company, Inc. (SICO)
   Subsequent Event
  11




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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
 Forward-Looking Statements
 Managements Discussion and Analysis of Financial Condition
and Results of Operations  Recent Developments Risk Factors Affecting International
Lease Finance
 12




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   Overview
  Restatement
  Managements Discussion and Analysis  Non-GAAP
Financial Measures
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  Recent Developments
   Risk Factors Affecting International Lease Finance Corporation
 Quantitative and Qualitative Disclosures about Market Risk.
  
    
    Overall Airline Industry Risk
 Ø
    
    Demand for air travelØ
    
    Competition between carriersØ
    
    Fuel prices and availabilityØ
    
    Labor costs and stoppagesØ
    
    Maintenance costsØ
    
    Employee labor contractsØ
    
    Air traffic control infrastructure
constraintsØ
    
    Insurance costsØ
    
    Security, terrorism and warØ
    
    Health concernsØ
    
    Equity and borrowing capacityØ
    
    Environmental concernsØ
    
    Government regulationØ
    
    Interest rates
 
    
    Manufacturer Risk
    
    Borrowing Risks
 Ø
    
    LiquidityØ
    
    Interest rates
 14




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
 
    
    Other Risks
 Ø
    
    Residual valueØ
    
    ObsolescenceØ
    
    Key personnelØ
    
    Foreign currency exchange rate risk
 Item 7, Managements
Discussion and Analysis of Financial Condition and Results of Operations
 Critical Accounting Policies and Estimates
   
    
    Lease Revenue
    
    Flight Equipment Marketing
    
    Flight Equipment
    
    Capitalized Interest
    
    Provision for Overhauls
 Item 7,
Managements Discussion and Analysis of Financial Condition and Results of Operations
 Financial Condition
  15




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  March 31,
    
    December 31,2005
    
    2004(Dollars in thousands)Public term debt with single maturities
    
    $
    11,419,575
    
    
    $
    11,544,575Public medium-term notes with varying maturities
    
    
    5,502,867
    
    
    
    5,972,171Capital lease obligations
    
    
    20,497
    
    
    
    39,580Bank and other term debt
    
    
    3,363,557
    
    
    
    2,973,525Total term debt, bank debt, and capital lease obligations
    
    
    20,306,496
    
    
    
    20,529,851Commercial paper
    
    
    4,460,566
    
    
    
    2,675,247Deferred debt discount
    
    
    (37,425
    )
    
    
    (29,502
    )Total debt financing and capital lease obligations
    
    $
    24,729,637
    
    
    $
    23,175,596Selected interest rates and ratio:Composite interest rate
    
    
    4.49
    %
    
    
    4.34
    %Percentage of total debt at fixed rates
    
    
    70.16
    %
    
    
    66.21
    %Composite interest rate on fixed rate debt
    
    
    4.99
    %
    
    
    5.07
    %Bank prime rate
    
    
    5.75
    %
    
    
    5.25
    %
  16




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
 Public Debt ( Exclusive of the Commercial Paper Program )
  Maximum
    
    Sold as of
    
    Sold as of
    
    Sold as ofOffering
    
    December 31, 2004
    
    March 31, 2005
    
    May 12, 2005(Dollars in millions)Registration statement dated
December 20, 2002 (including
$2.88 billion Medium-Term
Note Program and $1.0
billion Retail Medium-Term
Note Program)
    
    $
    6,080
    (a)
    
    $
    5,593
    
    
    $
    5,609
    
    
    $
    5,609Registration statement dated
December 28, 2004 (including
$2.0 billion Medium Term
Note Program)
    
    
    7,045
    (b)
    
    
    
    
    
    
    500
    
    
    
    1,300Euro Medium-Term Note
Programme dated
    
    
    7,000
    
    
    
    4,475
    
    
    
    4,475
    
    
    
    4,475May 2004 (c)(d)
 
 (a)
    
    Includes $1.08 billion, which was incorporated into the registration statement from
a prior registration statement, increasing the maximum offering from $5.0 billion to
$6.08 billion.(b)
    
    Includes $2.045 billion, which was incorporated into the registration statement
from a prior registration statement, increasing the maximum offering from $5.0 billion to
$7.045 billion.(c)
    
    We have hedged the foreign currency risk of the notes through operating lease
payments or derivatives.(d)
    
    This is a perpetual program. As a bond issue matures, the amount becomes available
again under the program. Capital Lease Obligations
  Bank Term Debt
    17




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  Commercial Paper
 Bank Commitments
 Bank Commitments
   Other Variable Interest Entities
    Derivatives
  -18-




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  Note B  Restatement
  Note B  Restatement
  Market Liquidity Risk
   -19-




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  Existing Commitments (Exclusive of Interest)
 Commitments Due by Fiscal YearTotal
    
    2005
    
    2006
    
    2007
    
    2008
    
    2009
    
    Thereafter(Dollars in thousands)Public and Bank
Term Debt
    
    $
    20,285,999
    
    
    $
    2,626,257
    
    
    $
    3,721,292
    
    
    $
    3,626,137
    
    
    $
    3,809,580
    
    
    $
    3,710,022
    
    
    $
    2,792,711Capital Lease
Obligations
    
    
    20,497
    
    
    
    20,497
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Commercial Paper
    
    
    4,460,566
    
    
    
    4,460,566
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Leases
    
    
    100,253
    
    
    
    6,233
    
    
    
    8,629
    
    
    
    8,951
    
    
    
    9,303
    
    
    
    9,594
    
    
    
    57,543Purchase
Commitments (b)
    
    
    19,552,000
    
    
    
    3,803,800
    
    
    
    5,487,200
    
    
    
    4,645,000
    
    
    
    3,696,100
    
    
    
    1,552,700
    
    
    
    367,200Total
    
    $
    44,419,315
    
    
    $
    10,917,353
    
    
    $
    9,217,121
    
    
    $
    8,280,088
    
    
    $
    7,514,983
    
    
    $
    5,272,316
    
    
    $
    3,217,454
 Contingent Commitments
 Contingency Expiration by Fiscal YearTotal
    
    2005
    
    2006
    
    2007
    
    2008
    
    2009
    
    Thereafter(Dollars in thousands)Purchase Options
on New Aircraft (b)
    
    $
    361,400
    
    
    $
    
    
    
    $
    81,400
    
    
    $
    280,000
    
    
    $
    
    
    
    $
    
    
    
    $
    Put Options (a)
    
    
    327,350
    
    
    
    23,300
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    304,050Asset Value Guarantees (a)
    
    
    65,689
    
    
    
    2,500
    
    
    
    5,452
    
    
    
    6,815
    
    
    
    8,178
    
    
    
    
    
    
    
    42,744Loan Guarantees (a)
    
    
    143,915
    
    
    
    
    
    
    
    97,677
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46,238Lines of Credit
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,000Total
    
    $
    948,354
    
    
    $
    25,800
    
    
    $
    184,529
    
    
    $
    286,815
    
    
    $
    8,178
    
    
    $
    
    
    
    $
    443,032
 
 (a)
    
    From time to time, we participate with airlines, banks and other financial
institutions to assist in financing aircraft by providing asset guarantees, put options,
or loan guarantees collateralized by aircraft. As a result, should we be called upon to
fulfill our obligations, we would have recourse to the value of the underlying aircraft.(b)
    
    The recorded basis of aircraft may be adjusted to reflect notional credits given by
the manufacturers in connection with the leasing of aircraft. Non-GAAP Financial Measures
 Lease Margin
 Other Variable Interest Entities
 -20-




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  Three Months EndedMarch 31, 2005(Dollars in millions)Restated
    
    Restated2005
    
    2004Total revenues (A)
    
    $
    828.8
    
    
    $
    762.9Flight equipment marketing
    
    
    (15.6
    )
    
    
    (41.9
    )Interest and other
    
    
    (15.2
    )
    
    
    (23.0
    )Rental of flight equipment (B)
    
    
    798.0
    
    
    
    698.0Total expenses (C)
    
    
    639.8
    
    
    
    573.2VIE expenses
    
    
    (5.2
    )
    
    
    (3.7
    )Adjusted total expenses (D)
    
    
    634.6
    
    
    
    569.5Profit margin (A)  (C) = (E)
    
    $
    189.0
    
    
    $
    189.7Lease margin (B)  (D) = (F)
    
    $
    163.4
    
    
    $
    128.5Profit margin % (E) divided by
(A)
    
    
    22.8
    %
    
    
    24.9
    %Lease margin % (F) divided by
(B)
    
    
    20.5
    %
    
    
    18.4
    %
 Results of Operations
  Overview
  Notes to
Condensed Consolidated Financial Statements Flight Equipment Marketing  Securitization
   -21-




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  Increase2005
    
    2004
    
    (decrease)Beginning of Quarter
    
    
    4.34
    %
    
    
    4.53
    %
    
    
    (0.19
    )%End of Quarter
    
    
    4.49
    %
    
    
    4.34
    %
    
    
    0.15
    %Average
    
    
    4.42
    %
    
    
    4.43
    %
    
    
    (0.01
    )%
       -22-




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Value at Risk
     ILFC Market RiskThree Months Ended
    
    Year EndedMarch 31, 2005
    
    December 31, 2004(Dollars in millions)Average
    
    High
    
    Low
    
    Average
    
    High
    
    LowCombined
    
    
    76.4
    
    
    
    111.7
    
    
    
    34.6
    
    
    $
    69.6
    
    
    $
    86.3
    
    
    $
    34.6Interest Rate
    
    
    76.5
    
    
    
    112.4
    
    
    
    35.0
    
    
    
    69.7
    
    
    
    86.4
    
    
    
    35.0Currency
    
    
    0.7
    
    
    
    2.0
    
    
    
    0.3
    
    
    
    0.3
    
    
    
    0.5
    
    
    
    0.2
 -23-




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
  Derivative Instruments
 Accounting for Derivative Instruments and
Hedging Activities Foreign Currency Translation
 
    
    Documentation deficiencies related to portions of Euro denominated debt that
ILFC had designated as a hedge against future operating lease payments
receivable denominated in Euros. The review revealed that the documentation
related to these hedges was insufficient to meet the documentation criteria
under SFAS 133 and it was concluded that ILFC could not apply hedge accounting
to the transactions. The economics of the transactions are not affected.
    
    Certain Euro denominated cash accounts associated with the aforementioned
operating lease payments and certain foreign denominated debt required mark-to-spot treatment under SFAS
52, which were not properly accounted for at the end of each quarter during the
years 2004, 2003, 2002 and 2001.
    
    Documentation deficiencies related to four commercial paper swaps where
portions of ILFCs commercial paper program were swapped from floating into
fixed interest rates. The review revealed that the documentation related to
these hedges was insufficient to meet the documentation criteria under SFAS 133
and it was concluded that ILFC could not apply hedge accounting to the
transactions. The economics of the transactions are not affected.
    
    Minor errors under SFAS 133 with respect to derivative instruments related
to the reclassification to income from Accumulated other comprehensive income. The corrections
will also affect derivative assets and liabilities and accrued interest.
 Certain Payments from Aircraft and Engine from Manufacturers
   -24-




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES (CONTINUED)
    
    
    The Company did not maintain effective controls over the valuation and
presentation and disclosure of derivative transactions entered into prior to
the existence of SFAS 133. Specifically, we did not maintain adequate
documentation regarding the effectiveness of certain derivative transactions
used to hedge interest rate and foreign currency exchange rate risk. This
control deficiency resulted in the restatement of our consolidated financial
statements for the years 2004, 2003, 2002, 2001 and 2000 and the quarters of
2004 and 2003, as well as the quarter ended March 31, 2005. Additionally, this
control deficiency could result in a misstatement to the financial statement
line items (Derivative assets, Derivative liabilities, Accumulated other
comprehensive income, and Interest expense) that would cause a material
misstatement to the annual or interim financial statements. Accordingly,
management concluded this control deficiency constitutes a material weakness.
    
    The Company did not maintain effective controls over the valuation and
presentation and disclosure of certain payments received from manufacturers.
This control deficiency resulted in the restatement of our consolidated
financial statements for the years 2004, 2003, 2002, 2001 and 2000 and the
quarters of 2004 and 2003, as well as the quarter ended March 31, 2005.
Additionally, this control deficiency could result in a misstatement to the
revenue accounts that would cause a material misstatement to the annual or
interim financial statements. Accordingly, management concluded this control
deficiency constitutes a material weakness.
  Variable Interest Entities
 -25-




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES (CONTINUED)
     
    
    Improving training, education, accounting reviews and adding additional
staff as necessary, all designed to ensure that all relevant personnel involved
in derivatives transactions understand and apply hedge accounting in compliance
with SFAS 133.
    
    Improving training, education, accounting reviews and adding additional
staff as necessary, all designed to ensure that all relevant personnel involved
in the purchase of aircraft from the manufacturers understand the appropriate
accounting treatment for the funds received from the manufacturers, for the
related purchase of aircraft and engines and the subsequent lease of the
manufacturers aircraft.
    -26-




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##### Table of Contents



PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
    
    Steven F. Udvar-Hazy
    
    Leslie L. Gonda
    
    John L. Plueger
    
    Louis L. Gonda
    
    Martin J. Sullivan
    
    Donald Kanak
    
    William N. Dooley
    
    Steven J. Bensinger
    
    Alan H. Lund
 
 ITEM 6. EXHIBITS
  3.1
    
    Restated Articles of Incorporation of the Company, as
amended through December 9, 1992, filed November 3, 1993 (filed as an
exhibit to Registration Statement No. 33-50913 and incorporated herein by
reference).3.2
    
    Certificate of Determination of Preferences of
Series A Market Auction Preferred Stock (filed December 9, 1992 as an
exhibit to Registration Statement No. 33-54294 and incorporated herein by
reference).3.3
    
    Certificate of Determination of Preferences of
Series B Market Auction Preferred Stock (filed December 9, 1992 as an
exhibit to Registration Statement 33-54294 and incorporated herein by
reference).3.4
    
    Certificate of Determination of Preferences of
Series C Market Auction Preferred Stock (filed as an exhibit to Form 10-K
for the year ended December 31, 1994 and incorporated herein by
reference).3.5
    
    Certificate of Determination of Preferences of
Series D Market Auction Preferred Stock (filed as an exhibit to Form 10-K
for the year ended December 31, 1994 and incorporated herein by
reference).3.6
    
    Certificate of Determination of Preferences of
Series E Market Auction Preferred Stock (filed as an exhibit to Form 10-K
for the year ended December 31, 1994 and incorporated herein by
reference).3.7
    
    Certificate of Determination of Preferences of
Series F Market Auction Preferred Stock (filed as an exhibit to Form 10-K
for the year ended December 31, 1994 and incorporated herein by
reference).3.8
    
    Certificate of Determination of Preferences of
Series G Market Auction Preferred Stock (filed as an exhibit to Form 10-K
for the year ended December 31, 1995 and incorporated herein by
reference).3.9
    
    Certificate of Determination of Preferences of
Series H Market Auction Preferred Stock (filed as an exhibit to Form 10-K
for the year ended December 31, 1995 and incorporated herein by
reference).3.10
    
    Certificate of Determination of Preferences of
Preferred Stock of the Company (filed as an exhibit to Form 10-K for the
year ended December 31, 2001 and incorporated herein by reference).3.11
    
    By-Laws of the Company, including amendment thereto
dated August 31, 1990 (filed as an exhibit to Form 10-K for the year
ended December 31, 2003 and incorporated herein by reference).3.12
    
    Unanimous Written Consent of Sole Stockholder of
the Company, dated January 2, 2002, amending the Bylaws of the Company
(filed as an exhibit to Form 10-Q for the quarter ended June 30, 2003 and
incorporated herein by reference).10.1
    
    Agreement, dated as of October 28, 2004 among the
Company, Barclays Bank PLC and Export-Import Bank of the United States
(filed as an exhibit to the original Form 10-Q for the quarter ended
March 31, 2005 and incorporated herein by reference).12.
    
    Computation of Ratios of Earnings to Fixed Charges
and Preferred Stock Dividends31.1
    
    Certification of Chairman of the Board and Chief
Executive Officer31.2
    
    Certification of Vice Chairman, Chief Financial
Officer and Chief Accounting Officer32.1
    
    Certification under 18 U.S.C., Section 1350
 -27-




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SIGNATURES
   August 15, 2005
    
    /S/ Steven F. Udvar-HazySTEVEN F. UDVAR-HAZYChairman of the Board andChief Executive OfficerAugust 15, 2005
    
    /S/ Alan H. LundALAN H. LUNDVice Chairman,Chief Financial Officerand Chief Accounting Officer
 -28-




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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
  Exhibit No.12.
    
    Computation of Ratios of Earnings to Fixed Charges
and Preferred Stock Dividends31.1
    
    Certification of Chairman of the Board and Chief
Executive Officer31.2
    
    Certification of Vice Chairman, Chief Financial
Officer and Chief Accounting Officer32.1
    
    Certification under 18 U.S.C., Section 1350
 -29-