INTERNATIONAL LEASE FINANCE CORP (Form: 10-Q, Received: 10/31/2003 06:09:16)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT


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

For the quarterly period ended September 30, 2003


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 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, Los Angeles, California (Address of principal executive offices)		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 o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes o No x

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

As of October 24, 2003, there were 42,198,119 shares of Common Stock, no par value, outstanding.

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
	ITEM 1. FINANCIAL STATEMENTS
		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
		CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 4. CONTROLS AND PROCEDURES
PART II. OTHER INFORMATION
	ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
INDEX TO EXHIBITS
EXHIBIT 4
EXHIBIT 12
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32.1

INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
FORM 10-Q QUARTERLY REPORT

TABLE OF CONTENTS


				Page

Part I. Financial Information
	Item 1. Financial Statements (Unaudited)
			Condensed Consolidated Balance Sheets September 30, 2003 and December 31, 2002		3
			Condensed Consolidated Statements of Income and Comprehensive Income Three Months Ended September 30, 2003 and 2002		4
			Condensed Consolidated Statements of Income and Comprehensive Income Nine Months Ended September 30, 2003 and 2002		5
			Condensed Consolidated Statements of Cash Flows Nine Months Ended September 30, 2003 and 2002		6
			Notes to Condensed Consolidated Financial Statements		8
			Cautionary Statement Regarding Forward Looking Information		10
	Item 2. Management’s Discussion and Analysis of the Financial Condition and Results of Operations				11
	Item 3. Quantitative and Qualitative Disclosures about Market Risk				19
	Item 4. Controls and Procedures				20
Part II. Other Information
	Item 6. Exhibits and Reports on Form 8-K				21
		Signatures			22

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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)


				September 30,			December 31,
				2003			2002

				(Unaudited)
ASSETS
Cash, including interest bearing accounts of $86,312 (2003) and $65,693 (2002)				$	159,683		$	66,049
Current income taxes receivable					65,216			193,526
Notes receivable and net investment in finance leases					525,470			372,577
Flight equipment under operating leases					32,894,656			29,631,150
		Less accumulated depreciation			4,987,488			4,343,403

					27,907,168			25,287,747
Deposits on flight equipment purchases					1,187,652			1,157,864
Accrued interest, other receivables and other assets					183,141			142,817
Derivative assets					441,732			170,395
Investments					62,834			64,067
Deferred debt issue costs — less accumulated amortization of $57,470 (2003) and $68,516 (2002)					49,852			35,571

				$	30,582,748		$	27,490,613

LIABILITIES AND SHAREHOLDERS’ EQUITY
Accrued interest and other payables				$	368,318		$	235,827
Debt financing, net of deferred debt discount of $25,775 (2003) and $31,928 (2002)					20,934,942			18,716,644
Foreign currency adjustment					502,128			264,880
Derivative liabilities					79,805			135,853
Capital lease obligations					180,954			260,623
Security and other deposits on flight equipment					835,128			864,053
Rentals received in advance					141,670			129,244
Deferred income taxes					2,601,062			2,322,327
SHAREHOLDERS’ EQUITY
	Market Auction Preferred Stock, $100,000 per share liquidation value; Series A and B each having 500 shares issued and outstanding				100,000			100,000
	Common stock—no par value; 100,000,000 authorized shares, 42,198,119 issued and outstanding				653,582			653,582
	Paid-in capital				579,955			579,955
	Accumulated other comprehensive loss				(93,290	)		(138,620	)
	Retained earnings				3,698,494			3,366,245

			Total shareholders’ equity		4,938,741			4,561,162

				$	30,582,748		$	27,490,613

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, 2003 AND 2002
(Dollars in thousands)


		2003			2002

		(Unaudited)
REVENUES
	Rental of flight equipment	$	753,551		$	686,833
	Flight equipment marketing		33,437			15,256
	Interest and other		9,167			28,089

			796,155			730,178

EXPENSES
	Interest		233,041			218,410
	Depreciation of flight equipment		295,591			247,580
	Flight equipment rent		10,324			19,343
	Provision for overhauls		31,671			28,548
	Selling, general and administrative		21,032			23,562

			591,659			537,443

INCOME BEFORE INCOME TAXES			204,496			192,735
	Provision for income taxes		67,217			51,499

NET INCOME			137,279			141,236

COMPREHENSIVE INCOME (NET OF TAX)
	Net changes in cash flow hedges		45,327			(49,651	)
	Foreign currency adjustment		(30,888	)		(8,531	)

			14,439			(58,182	)

COMPREHENSIVE INCOME		$	151,718		$	83,054

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, 2003 AND 2002
(Dollars in thousands)


		2003			2002

		(Unaudited)
REVENUES
	Rental of flight equipment	$	2,196,991		$	1,976,166
	Flight equipment marketing		48,344			34,896
	Interest and other		37,573			88,132

			2,282,908			2,099,194

EXPENSES
	Interest		689,141			625,488
	Depreciation of flight equipment		841,831			700,038
	Flight equipment rent		37,108			58,097
	Provision for overhauls		86,284			68,605
	Selling, general and administrative		60,893			67,294

			1,715,257			1,519,522

INCOME BEFORE INCOME TAXES			567,651			579,672
	Provision for income taxes		192,477			190,048

NET INCOME			375,174			389,624

COMPREHENSIVE INCOME (NET OF TAX)
	Net changes in cash flow hedges		186,530			38,463
	Foreign currency adjustment		(141,200	)		(103,398	)

			45,330			(64,935	)

COMPREHENSIVE INCOME		$	420,504		$	324,689

SUPPLEMENTAL COMPREHENSIVE INCOME INFORMATION
	Cumulative foreign currency adjustment, net of tax	$	(313,371	)	$	(22,523	)
	Cumulative cash flow hedge loss adjustment, net of tax		220,081			(93,041	)

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, 2003 AND 2002
(Dollars in thousands)


			2003			2002

			(Unaudited)
OPERATING ACTIVITIES
	Net income		$	375,174		$	389,624
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation of flight equipment		841,831			700,038
		Deferred income taxes		254,326			330,809
		Foreign exchange adjustment		20,018			26,874
		Change in derivative instruments		(40,416	)		(20,719	)
		Amortization of deferred debt issue costs		30,268			13,960
		Change in unamortized debt discount		6,153			(20,891	)
		Other		598			(1,606	)
	Changes in operating assets and liabilities:
		Increase in notes receivable		(11,519	)		(40,507	)
		Increase in accrued interest, other receivables and other assets		(40,325	)		(99,899	)
		Decrease in current income taxes receivable		128,310			11,688
		Increase in accrued interest and other payables		136,086			149,234
		Increase in rentals received in advance		12,426			14,015

Net cash provided by operating activities				1,712,930			1,452,620

INVESTING ACTIVITIES
	Acquisition of flight equipment for operating leases			(4,223,607	)		(3,993,075	)
	Acquisition of flight equipment for finance leases			(165,202	)		(12,886	)
	Increase in notes receivable			(30,198	)		(28,775	)
	(Increase) decrease in deposits and progress payments			(29,788	)		38,857
	Proceeds from disposal of flight equipment — net of gain			773,431			88,281
	Collections on notes receivable and sales-type leases			38,852			56,259
	Other			1,139			873

Net cash used in investing activities				(3,635,373	)		(3,850,466	)

FINANCING ACTIVITIES
	Repurchase of preferred stock			—			(50,000	)
	Net change in commercial paper			(2,718,408	)		228,478
	Proceeds from debt financing			7,544,107			5,096,325
	Payments in reduction of debt financing and capital lease obligations			(2,693,223	)		(2,708,213	)
	Debt issue costs			(44,549	)		(21,536	)
	Decrease in customer deposits			(28,925	)		(104,902	)
	Payment of common and preferred dividends			(42,925	)		(44,635	)

Net cash provided by financing activities				2,016,077			2,395,517

Increase (decrease) in cash				93,634			(2,329	)
Cash at beginning of period				66,049			79,383

	Cash at end of period		$	159,683		$	77,054

(Table continued on following page)

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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Dollars in thousands)

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION


		2003			2002

		(Unaudited)
Cash paid (received) during the period for:
	Interest (net of amount capitalized of $36,159 (2003) and $44,968 (2002))	$	570,686		$	465,809
	Income taxes, net		(190,159	)		(152,450	)

2003

Variable interest entity assets in the amount of $13,731 were received as partial payment in exchange for flight equipment with a book value of $14,043.

One aircraft was received in exchange for notes receivable in the amount of $28,715 and preferred stock in the amount of $2,202.

2002

Notes in the amount of $28,775 were received as partial payment in exchange for flight equipment sold with a net book value of $46,242.

One aircraft was received in exchange for notes receivable in the amount of $10,968.

Pursuant to an agreement with the holder, the Company cancelled the outstanding shares of Series A Preferred Stock and issued 3,951,398 shares of common stock.

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, 2003
(Dollars in thousands)
(Unaudited)

A. Basis of Preparation

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 2002 unaudited condensed consolidated financial statements to conform to the 2003 presentation. Operating results for the nine months ended September 30, 2003 are not necessarily indicative of the results that may be expected for the year ended December 31, 2003. 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, 2002.

B. Hedging Activities

The Company uses derivatives to manage exposures to interest rate and foreign currency risks. During the nine months ended September 30, 2003, the Company recorded the following in earnings.


Income (loss) related to derivative instruments:
	Fair value of non-hedging instruments	$	4,695
	Fair value of hedging instruments		(32,657	)
	Offsetting changes in fair value of hedged items		32,590
	Ineffectiveness related to cash flow hedges		(297	)

		$	4,331

During the nine months ended September 30, 2003, $16,480 (net) was reclassified from accumulated other comprehensive income to interest expense when interest was paid or received on the Company’s cash flow hedges. The Company estimates that within the next twelve months it will amortize into earnings approximately $59.3 million of the pre-tax balance in other comprehensive income under cash flow hedge accounting in connection with the Company’s program to convert debt from floating to fixed rates.

C. Variable Interest Entities

In January 2003, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 46, “Consolidation of Variable Interest Entities” (“VIE”) (“FIN 46”). FIN 46’s consolidation criteria are based on analysis of risk and rewards, not on ownership, and represent a significant and complex modification of previous accounting principles. FIN 46 represents a change in the method by which these entities are accounted for, not a change in the underlying economics of transactions entered into by the Company. An entity is subject to FIN 46 and is called a VIE if it has (i) equity that is insufficient to permit the entity to finance its activities without additional subordinated financial support from other parties or (ii) equity investors that cannot make significant decisions about the entity’s operations or that do not absorb the expected losses or receive the expected returns of the entity. A VIE is consolidated by its primary beneficiary, which is the party that has a majority of the expected losses or a majority of the expected residual returns of the VIE, or both. All other entities not considered VIEs are evaluated for consolidation under existing guidance.

The provisions of FIN 46 apply at inception for any entity created after January 31, 2003. For a VIE created before February 1, 2003, the provisions of FIN 46 were to be applied at the beginning of the first interim or annual period beginning after June 15, 2003. However, the FASB, at its meeting on October 8, 2003, issued FASB staff position 46-6, “Effective Date of FASB Interpretation No. 46, Consolidation of VIEs” (“FSP 46-6”). FSP 46-6 delayed implementation of provisions of FIN 46 for entities created before February 1, 2003 to the first interim or annual period ending after December 15, 2003. The Company therefore delayed implementation of provisions of FIN 46 relating to entities created before February 1, 2003 from July 1, 2003 to December 31, 2003.

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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2003 (CONTINUED)
(Dollars in thousands)
(Unaudited)

Beginning December 31, 2003, the Company will be required to consolidate certain off balance sheet arrangements and other VIEs for which the Company has determined it is the primary beneficiary, as defined by FIN 46. The Company is not acquiring the assets of these entities, nor do its legal rights or obligations change related to these entities.

Off Balance Sheet Arrangements

The Company’s off balance sheet arrangements in the form of sale lease-back transactions entered into in 1997 exist to facilitate financing of aircraft at favorable rates. As a result of the adoption of FIN 46 at December 31, 2003, the Company expects to increase both assets and liabilities by approximately $464.2 million and expects to record an after-tax gain of approximately $1.0 million as a cumulative effect of a change in accounting principle.

Other Variable Interest Entities

The Company has provided financing or guaranteed third party financing to entities owned by independent third parties and existing for the purpose of owning and leasing one aircraft each. The financing agreements are collateralized by the aircraft. The Company’s maximum exposure to loss as a result of its involvement with these entities is the difference between the market value of the aircraft and the remaining principal amount of the debt at any given time. As a result of the adoption of FIN 46 at December 31, 2003, the Company expects to increase both assets and liabilities by approximately $80.0 million and expects to record an after-tax charge of approximately $9.0 million as a cumulative effect of a change in accounting principle.

The Company sold an aircraft to a company owned by a non-related party in the second quarter of 2003 in exchange for cash and a note receivable. The Company determined after evaluating the entity, that the Company was the primary beneficiary, as defined by FIN 46. The Company consolidated the entity that bought the aircraft in accordance with FIN 46 and eliminated the notes receivable starting June 30, 2003.

D. Related Party Transactions

The Company contracted to sell 37 aircraft to a trust during the third quarter of 2003 for approximately $1.0 billion. The first 28 aircraft were transferred as of September 30, 2003 , with the remaining nine expected to be transferred by December 31, 2003. The trust is consolidated by another subsidiary of the Company’s parent. Neither the trust nor the subsidiary is consolidated by the Company. The transaction was a securitization, in which the trust acquired the aircraft based on values assigned by independent appraisers. Further, an unaffiliated third party acted as capital markets advisor and initial purchaser of the notes of the securitization. Gains in the amount of $18.5 million, net of fees and expenses, related to the transaction are included in Flight Equipment Marketing for the periods ended September 30, 2003. The Company will continue to manage the aircraft sold to the trust for a fee.

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CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

Forward Looking Statements

Certain of the statements in this document contain estimates and assumptions regarding cash flows and debt financing to support future capital requirements. While these 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 statements. The Company undertakes no obligation to release publicly any revisions to these statements to reflect events or circumstances after the date hereof or to reflect the occurrence of anticipated or unanticipated events.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Financial Condition

The Company borrows funds to purchase new and used flight equipment, including funds for progress payments during the construction phase, and to pay off maturing debt obligations. These funds are borrowed principally on an unsecured basis from various sources. During the nine months ended September 30, 2003, the Company borrowed $7.5 billion (excluding commercial paper) and $1.7 billion was provided by operating activities. As of September 30, 2003, the Company has committed to purchase 470 aircraft from Airbus and Boeing at an estimated aggregate purchase price of $27.0 billion for delivery through 2010 and holds options to purchase 12 additional aircraft at an estimated aggregate purchase price of approximately $776.4 million. The Company currently expects to fund expenditures for aircraft, and to meet its liquidity needs, from a combination of available cash balances, internally generated funds and financing arrangements. The Company continues to explore new funding sources and ways to diversify its investor base. The Company’s debt financing and capital lease obligations were comprised of the following at the following dates:


		September 30,			December 31,
		2003			2002

		(Dollars in thousands)
Public term debt with single maturities		$	10,328,375		$	7,475,775
Public medium-term notes with varying maturities			6,025,006			4,969,500
Capital lease obligations			180,954			260,623
Bank and other term debt			3,107,240			2,084,793

	Total term debt, bank debt, and capital lease obligations		19,641,575			14,790,691
Commercial paper			1,500,096			4,218,504
Deferred debt discount			(25,775	)		(31,928	)

	Total debt financing and capital lease obligations	$	21,115,896		$	18,977,267

Selected interest rates and ratio:
	Composite interest rate		4.63	%		4.73	%
	Percentage of total debt at fixed rates		77.79	%		76.67	%
	Composite interest rate on fixed rate debt		5.38	%		5.69	%
	Bank prime rate		4.00	%		4.25	%

The above amounts represent the Company’s anticipated settlement of its currently outstanding debt obligations. Certain adjustments required to present currently outstanding debt obligations have been recorded and presented separately on the balance sheet, including adjustments related to foreign currency and interest rate hedging activities. The Company has eliminated the currency exposure arising from foreign currency denominated notes by either hedging the notes through swaps or through the offset provided by operating lease payments. The Company translates foreign currency denominated debt into US dollars using current exchange rates as of each balance sheet date. The foreign exchange adjustment for the foreign currency denominated debt was $502.1 million (2003) and $264.8 million (2002). Composite interest rates and percentages of total debt at fixed rates reflect the effect of derivative instruments.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Public Debt ( Exclusive of the Commercial Paper Program )

The interest on most of the public debt is effectively fixed for the terms of the notes. The Company has the ability to borrow under various public debt financing arrangements as follows:


	Maximum			Sold as of		Sold as of		Sold as of
	Offering			December 31, 2002		September 30, 2003		October 21, 2003

				(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)	$	—	$	4,962	$	5,187
Registration statement dated July 1, 2003		5,000			—		650		650
Euro Medium-Term Note Programme dated May 2003 (b)(c)		5,000			2,106		2,808		3,393

(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)		The Company has hedged the foreign currency risk of the notes through operating lease payments or derivatives.

(c)		This is a perpetual program. As a bond issue matures, the amount becomes available again under the program.

Capital Lease Obligations

The Company has Export Credit Lease financings which provided ten-year amortizing loans in the form of capital lease obligations. The interest rate on 62.5% of the original financed amount is 6.55% and the interest rate on 22.5% of the original financed amount is fixed at rates varying between 6.18% and 6.89%. These two tranches are guaranteed by various European Export Credit Agencies. The remaining 15% of the original financed amount was prepaid by the Company.

Bank Term Debt

In January 1999, the Company entered into an Export Credit Facility, up to a maximum of $4.3 billion, for aircraft delivered through 2001. The Company used the facility to fund 85% of each aircraft’s purchase price. This facility is guaranteed by various European Export Credit Agencies. The Company financed 62 aircraft using $2.8 billion under this facility over ten years with interest rates from 5.753% to 5.898%. The debt is collateralized by a pledge of the shares of a subsidiary of the Company which holds title to the aircraft financed under the facility. At September 30, 2003, $1.9 billion was outstanding under the facility.

During the nine months ended September 30, 2003, the Company entered into various bank financings for a total funded amount of $1.2 billion. The financings mature through 2009. One tranche of one of the loans totaling $410 million was funded in Japanese yen and swapped to US dollars. The interest rates are LIBOR based and ranged from 2.063% to 2.745% at September 30, 2003.

Commercial Paper

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. Notwithstanding the program’s size, it is the Company’s intention to sell commercial paper to a maximum amount that is no more than 75% of the aggregate amount of the backup facilities available (see Bank Commitments ). The weighted average interest rate of the Company’s commercial paper outstanding was 1.07% at September 30, 2003 and 1.46% at December 31, 2002.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Bank Commitments

As of September 30, 2003, the Company had committed revolving loans and lines of credit with 20 commercial banks aggregating $3.15 billion. These revolving loans and lines of credit 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 .25% to .50% 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 .10% of amounts available. This financing is used as backup for the Company’s maturing debt and other obligations. The Company had not drawn on its revolving loans and lines of credit as of September 30, 2003. On October 17, 2003, the Company replaced its $3.15 billion loan facilities with new facilities totaling $4.2 billion with primarily the same terms and conditions as the previous facilities.

Off Balance Sheet Arrangements

In 1995, 1996 and 1997, the Company, through subsidiaries, entered into sale-leaseback transactions providing proceeds to the Company in the amounts of $413.0 million, $507.6 million and $601.9 million, respectively, each relating to seven aircraft. The transactions resulted in the sale and leaseback of these aircraft under one-year operating leases, each with six one-year extension options for a total of seven years for each aircraft. The Company has not recorded any gains related to the transactions. The Company has the option to either buy back the aircraft or redeliver the aircraft for a fee to the lessor at the end of any lease period. The lease rates equate to fixed principal amortization and floating interest payments based on LIBOR or commercial paper pricing. The Company repurchased three aircraft before the lease termination, which were sold to third parties, and repurchased the remaining eleven aircraft from the 1995 and 1996 sale-leaseback transactions when the leases expired in December 2002 and September 2003, respectively. If the Company does not negotiate extensions of the one-year operating lease terms as they expire in September 2004, the Company will be required to borrow additional funds to terminate the transactions and reacquire the assets. The estimated remaining minimum lease payments (exclusive of the interest component of rent), assuming the current contractual end of the transactions, are $5.5 million (2003). The Company’s implementation of FASB Interpretation No. 46 (“FIN 46”) will require the Company to consolidate the sale-leaseback entity, beginning at December 31, 2003. The Company expects to record assets and liabilities, each of approximately $462.4 million and expects to record an after-tax gain of approximately $1.0 million as a cumulative change in accounting principle related to these entities and will then cease to record rent expense for the operating leases. See Note C at Notes to Condensed Consolidated Financial Statements .

Other Variable Interest Entities

The Company has sold aircraft to entities owned by third parties and has from time to time issued asset value guarantees or loan guarantees related to the aircraft sold. The Company is a variable interest holder in some of those entities under the provisions of FIN 46. The Company has determined that it is the primary beneficiary, as defined by FIN 46, of certain of those entities. As a result, effective December 31, 2003, the Company will be required to consolidate those entities. The Company expects to record assets and liabilities , each of approximately $80.0 million related to these entities and expects to record an after tax charge of approximately $9.0 million as a cumulative effect of a change in accounting principle as a result of the adoption of FIN 46. See Note C at Notes to Condensed Consolidated Financial Statements .

The Company has not established any other unconsolidated entities for the purpose of facilitating off-balance sheet arrangements or for other contractually narrow or limited purposes. The Company has, however, from time to time established subsidiaries, entered into joint ventures or created other partnership arrangements with the limited purpose of leasing aircraft or facilitating borrowing arrangements.

Derivatives

In the normal course of business, the Company employs a variety of derivative products to manage its foreign currency exposure and its exposure to interest rates and the resulting impact of changes in interest rates and exchange rates on earnings, with the objective of lowering its overall borrowing cost and maintaining an optimal mix of variable and fixed rate interest obligations. The Company only enters into derivative transactions to hedge interest rate risk and currency risk and not to speculate on interest rates or currency

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

fluctuations. These derivative products include interest rate swap agreements, currency swap agreements, and interest rate floor agreements.

The counterparty to the Company’s derivative instruments is AIG Financial Products Corp., a related party with the highest ratings available from the credit rating agencies, which then enters into transactions with independent third parties. The derivatives are subject to a bilateral security agreement, which, in certain circumstances, may allow one party to the agreement to require the second party to the agreement to provide collateral. Failure of the counterparty to perform under the derivative contracts could have a material impact on the Company’s results of operations.

Market Liquidity Risk

The Company is in compliance with all covenants and other requirements set forth in its credit agreements. Further, the Company does not have any rating downgrade triggers that would automatically accelerate the maturity dates of its debt. However, a downgrade in the Company’s credit rating could adversely affect the Company’s ability to renew existing, or obtain access to new financing arrangements and could increase the cost of financing arrangements. For example, a downgrade in credit rating could preclude the Company from issuing commercial paper under its current program.

Turmoil in the airline industry, continued global political unrest, and worldwide health issues have led to increased uncertainty in the debt markets in which the Company borrows funds. While the Company has been able to borrow the funds necessary to finance operations in the current market environment, additional turmoil in the airline industry or political environment could limit the Company’s ability to borrow funds from its current funding sources. Should this occur the Company would seek alternative sources of funding, including securitizations, manufacturers’ financings, secured financings, drawings upon its revolving loans and lines of credit or additional short-term borrowings. If the Company were unable to obtain sufficient funding, it would negotiate with manufacturers to defer deliveries of aircraft.

The following summarizes the Company’s contractual obligations at September 30, 2003.

Existing Commitments (Exclusive of Interest)


	Commitments Due by Fiscal Year

	Total		2003		2004		2005		2006		2007		Thereafter

	(Dollars in thousands)
Public and Bank Term Debt	$	19,460,622	$	877,620	$	3,709,624	$	3,543,226	$	3,648,641	$	2,981,736	$	4,699,775
Capital Lease Obligations		180,954		37,700		101,508		41,746		—		—		—
Commercial Paper		1,500,096		1,432,769		67,327		—		—		—		—
Operating Leases		124,184		2,962		10,653		10,755		8,575		8,918		82,321
Operating Leases under Sale-Lease-Back Transactions (a)		467,886		5,495		462,391		—		—		—		—
Purchase Commitments		27,049,400		888,700		4,765,600		5,389,800		4,611,600		4,740,100		6,653,600

Total	$	48,783,142	$	3,245,246	$	9,117,103	$	8,985,527	$	8,268,816	$	7,730,754	$	11,435,696

(a)

Includes the repurchase of seven aircraft in 2004.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Contingent Commitments


	Contingency Expiration by Fiscal Year

	Total		2003		2004		2005		2006		2007		Thereafter

	(Dollars in thousands)
Purchase Options on New Aircraft	$	776,400	$	—	$	—	$	37,700	$	342,600	$	256,000	$	140,100
Put Options (a)		781,695		—		98,616		457,078		—		—		226,001
Asset Value Guarantees (a)		79,939		—		17,976		11,041		8,178		—		42,744
Loan Guarantees (a)		102,826		—		19,362		—		31,234		—		52,230
Lines of Credit		56,000		—		6,000		—		—		—		50,000

Total	$	1,796,860	$	—	$	141,954	$	505,819	$	382,012	$	256,000	$	511,075

(a)

From time to time, the Company participates 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 the Company be called upon to fulfill its obligations, the Company would have recourse to the value of the underlying aircraft.

Industry Condition

The Company’s sources of revenue are principally from scheduled and charter airlines and companies associated with the airline industry. The Company’s revenues and results of operation are therefore affected by how its customers cope with the economic environment in which airlines operate. In the past two years, the airline industry has been negatively affected by a number of factors, including acts of terrorism and related lingering fears, the war in Iraq, a sluggish worldwide economy, the cost of fuel, the cost of insurance and the outbreak of Severe Acute Respiratory Syndrome (“SARS”). The Company’s revenues and results of operations have been negatively affected in 2002 and 2003 by participation in customer restructurings and requirements to re-lease aircraft repossessed from airlines which have ceased operations. During the nine months ended September 30, 2003, two of the Company’s customers, Avianca (one owned aircraft) and Hawaiian Airlines (four owned aircraft), filed for protection under Chapter 11 of the United States Bankruptcy Code and three of the Company’s customers, Air Canada (eleven owned and one managed aircraft), Aero Lloyd Flugreisen (eight owned aircraft), and Aeris (three owned and one managed aircraft) filed for protection under their respective country’s bankruptcy code. At September 30, 2003, the Company had re-leased the aircraft previously leased to Avianca. The Company has reached agreement for the continuation of the Hawaiian and Air Canada leases, and the airlines are in compliance with the terms of the new agreements. The Company will either renegotiate the leases with Aero Lloyd Flugreisen and Aeris or terminate the leases and market the aircraft to other airlines.

The Company generates approximately 20% of its revenues from customers based in Asia and the Pacific region, and has numerous other customers who operate flights to and from those areas. Travel between Asia and the rest of the world was negatively impacted by the outbreak of SARS. Many airlines in Asia and those traveling to Asia curtailed flights in response to the reluctance of people to travel to Asia during the first six months of 2003. Travel to Asia has, however, picked up sharply since the World Health Organization lifted the warnings against visits to SARS affected countries in the second quarter of 2003.

On October 16, 2003, Boeing announced that it had decided to complete production of the 757 jetliner in late 2004. At September 30, 2003, the Company owned 59 757s, all of which were on lease to airlines. The Company is evaluating the impact the Boeing decision will have on the future financial viability of the Company’s fleet of 757 aircraft. As a result, the Company is reviewing its depreciation policies related to the fleet of 757s or the economic value at the end of its useful life.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Non-GAAP Financial Measures

Lease Margin

Lease Margin is defined as Rental of flight equipment less total expenses, divided by Rental of flight equipment. The most directly comparable GAAP financial measure is Profit Margin, which is defined as Income before income taxes, divided by Total revenues. The difference between Lease Margin and Profit Margin is the exclusion of Revenues from both Flight equipment marketing and Interest and other. Lease Margin is a measure by which the Company isolates and evaluates the overall profitability of its contractual leasing operations, which constitute the Company’s primary revenue generating activity.

Results of Operations - Three months ended September 30, 2003 versus 2002.

Revenues from the rental of flight equipment increased 9.7% to $753.6 million in 2003 compared to $686.8 million in 2002, due to an increase in the number of aircraft available for operating lease, partially offset by a number of aircraft being reconfigured and redelivered and therefore not earning revenue for the entire period. The Company did not have any aircraft off-lease (not subject to a signed lease agreement or a signed letter of intent) at September 30, 2003. Revenues were negatively impacted by lower lease rates and restructured rents as a result of the slowdown and turmoil of the airline industry.

The Company’s Lease Margin for the period stayed relatively flat at 21.5% in 2003 compared to 21.8% for the same period in 2002. The Company’s Profit Margin decreased to 25.7% compared to 26.4% for the same periods. The Company expects factors described in Industry Conditions to further negatively impact revenues in the fourth quarter of 2003 and beyond, as some airlines continue to experience financial difficulties. At September 30, 2003, the Company’s fleet, on which it earns rental revenue, consisted of 599 aircraft compared to a fleet of 542 aircraft at September 30, 2002. The cost of the leased fleet, which includes aircraft subject to sale-lease back transactions from which rental income is earned, increased to $33.5 billion at September 30, 2003 compared to $29.7 billion at September 30, 2002.

In addition to its leasing operations, the Company engages in the marketing of flight equipment throughout the lease term, as well as the sale of third party owned flight equipment on a principal and commission basis. Revenues from flight equipment marketing increased to $33.4 million in 2003 compared to $15.3 million in 2002. The Company sold 29 aircraft and two engines during the third quarter of 2003, compared to two aircraft and one engine during the third quarter of 2002. Flight equipment marketing includes gains of $18.5 million from sales to a related party (see Note D of Notes to Condensed Consolidated Financial Statements ).

Interest and other revenue decreased to $9.2 million in 2003 compared to $28.1 million in 2002 primarily due to a decrease in forfeitures of security and other deposits and contract termination fees resulting from nonperformance by customers and manufacturers which totaled $0.8 million in 2003 as compared to $20.0 million in 2002.

Interest expense increased to $233.0 million in 2003 compared to $218.4 million in 2002 as a result of an increase in average debt outstanding, which is borrowed to finance aircraft acquisitions (excluding the effect of debt discount and foreign exchange adjustments), to $21.4 billion in 2003 compared to $18.4 billion in 2002. This increase was partially offset by a decrease in the average composite borrowing rate to 4.57% in 2003 compared to 4.99% in 2002. The Company’s composite borrowing rate decreased as follows:


	2003			2002			Decrease

Beginning of Quarter		4.50	%		5.03	%		0.53	%
End of Quarter		4.63	%		4.95	%		0.32	%
Average		4.57	%		4.99	%		0.42	%

Interest expense for the three months ended September 30, 2003 includes a $1.7 million benefit related to derivative activities.

Depreciation of flight equipment increased 19.4% to $295.6 million in 2003 compared to $247.6 million in 2002 due to the increased cost of the fleet.

The Company, in prior periods, had entered into sale-leaseback transactions. Currently seven aircraft are accounted for under these transactions. Flight equipment rent decreased to $10.3 million in 2003 compared to $19.3 million in 2002 due to the repurchase of eleven aircraft in connection with the terminations of the leases in December 2002 and September 2003 and principal amortization. Furthermore, there was a decrease in the 2003 lease rates compared to 2002, resulting from a decrease in interest rates, affecting the floating rate component of the lease rates.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Provision for overhauls increased to $31.7 million in 2003 compared to $28.5 million in 2002 due to an increase in the aggregate number of hours flown on which the Company collects overhaul revenue and against which the provision is computed.

The provision for income taxes increased to $67.2 million in 2003 compared to $51.5 million in 2002. The effective tax rate increased to 32.9% from 26.7% for the third quarter 2003 compared to the same period in 2002. The reduced rate in 2002 was the result of the Company reevaluating state deferred taxes in the third quarter of 2002. The reevaluation was the result of a reduction in the Company’s state apportionment factor used in the filing of the state unitary return.

The Company typically contracts to re-lease aircraft before the end of the existing lease term. For aircraft returned before the end of the lease term, the Company has generally been able to re-lease aircraft within two to six months of its return. The Company has not recognized any impairment related to its fleet, as the existing service potential of the aircraft in the Company’s portfolio has not been diminished. Further, the Company has been able to re-lease aircraft without diminution in lease rates to an extent that would warrant an impairment write down.

Results of Operations - Nine months ended September 30, 2003 versus 2002.

Revenue from the rentals of flight equipment increased 11.2% to $2,197.0 million in 2003 compared to $1,976.2 million in 2002, due to an increase in the number of aircraft available for operating lease, partially offset by a number of aircraft being reconfigured and redelivered and therefore not earning revenue for the entire period. The Company did not have any aircraft off-lease (not subject to a signed lease agreement or a signed letter of intent) at September 30, 2003. Revenues were negatively impacted by lower lease rates and restructured rents as a result of the slowdown and turmoil of the airline industry. The 2002 revenue from rental of flight equipment included approximately $26.3 million from a settlement related to a lessee in bankruptcy.

The Company’s Lease Margin for the period decreased to 21.9% in 2003 compared to 23.1% for the same period in 2002. The Company’s Profit Margin decreased to 24.9% compared to 27.6% for the same periods. The Company expects factors described in Industry Conditions to further negatively impact revenues in 2003 and beyond as airlines continue to experience financial difficulties. At September 30, 2003, the Company’s fleet, on which it earns rental revenue, consisted of 599 aircraft compared to a fleet of 542 aircraft at September 30, 2002. The cost of the leased fleet, which includes aircraft subject to sale-lease back transactions from which rental income is earned, increased to $33.5 billion at September 30, 2003 compared to $29.7 billion at September 30, 2002.

In addition to its leasing operations, the Company engages in the marketing of flight equipment throughout the lease term, as well as the sale of third party owned flight equipment on a principal and commission basis. Revenues from flight equipment marketing increased to $48.3 million in 2003 compared to $34.9 million in 2002. The Company sold 30 aircraft and two engines during the nine months ended September 30, 2003, and sold four aircraft and two engines during the same period in 2002. Flight equipment marketing includes gains of $18.5 million from sales to a related party (see Note D of Notes to Condensed Consolidated Financial Statements ).

Interest and other revenue decreased to $37.5 million in 2003 compared to $88.1 million in 2002 primarily due to a decrease in forfeitures of security and other deposits and contract termination fees resulting from nonperformance by customers and manufacturers which totaled $5.8 million in 2003 as compared to $62.8 million in 2002.

Interest expense increased to $689.1 million in 2003 compared to $625.5 million in 2002 as a result of an increase in average debt outstanding, which is borrowed to finance aircraft acquisitions (excluding the effect of debt discount and foreign exchange adjustments), to $20.1 billion in 2003 compared to $17.1 billion in 2002. This increase was partially offset by a decrease in the average composite borrowing rate to 4.68% in 2003 compared to 5.01% in 2002. The Company’s composite borrowing rate decreased as follows:


	2003			2002			Decrease

Beginning of nine months		4.73	%		5.07	%		0.34	%
End of nine months		4.63	%		4.95	%		0.32	%
Average		4.68	%		5.01	%		0.33	%

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Interest expense for the nine months ended September 30, 2003 includes a $4.3 million benefit related to derivative activities.

Depreciation of flight equipment increased 20.3% to $841.8 million in 2003 compared to $700.0 million in 2002 due to the increased cost of the fleet.

The Company, in prior periods, had entered into sale-leaseback transactions. Currently seven aircraft are accounted for under these transactions. Flight equipment rent decreased to $37.1 million in 2003 compared to $58.1 million in 2002 due to the repurchase of eleven aircraft in connection with the terminations of the leases in December 2002 and September 2003 and principal amortization. Furthermore, there was a decrease in the 2003 lease rates compared to 2002, resulting from a decrease in interest rates, affecting the floating rate component of the lease rates.

Provision for overhauls increased to $86.3 million in 2003 compared to $68.6 million in 2002 due to an increase in the aggregate number of hours flown on which the Company collects overhaul revenue and against which the provision is computed

The provision for income taxes increased to $192.5 million in 2003 compared to $190.0 million in 2002. The effective tax rate increased to 33.9% from 32.8% for the nine months ended September 30, 2003 compared to 2002. The reduced rate in 2002 was the result of the Company reevaluating state deferred taxes in the third quarter of 2002. The reevaluation was the result of a reduction in the Company’s state apportionment factor used in the filing of the state unitary return.

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ITEM 3. 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 and 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 and possible liquidity strain 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 and other assets. This includes tax adjusted future flight equipment lease revenues, and financial instrument liabilities, which includes future servicing of current debt. The estimated 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 three years of historical information for interest rates and foreign exchange rates were used to construct the historical scenarios at September 30, 2003 and December 31, 2002, 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 under 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. The following table presents the average, high and low VaRs for the Company with respect to its fair value for the periods ended September 30, 2003 and December 31, 2002:


	ILFC Market Risk

	Nine Months Ended						Year Ended
	September 30, 2003						December 31, 2002

	(Dollars in millions)

	Average		High		Low		Average		High		Low

Combined	$	27.6	$	67.8	$	7.8	$	20.1	$	42.8	$	7.8
Interest Rate		27.7		67.9		7.8		20.0		42.8		7.8
Currency		0.9		1.3		0.2		0.5		1.2		0.0

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ITEM 4. CONTROLS AND PROCEDURES

As of September 30, 2003, the Chairman of the Board and Chief Executive Officer and the Vice Chairman, Chief Financial Officer and Chief Accounting Officer of the Company (collectively, the “Certifying Officers”) have evaluated the effectiveness of the Company’s disclosure controls and procedures. These disclosure controls and procedures are those controls and procedures which are designed to insure that all of the information required to be disclosed by the Company in its periodic reports filed with the Securities and Exchange Commission (the “Commission”) is recorded, processed, summarized and reported within the time periods specified by the Commission’s rules and forms, and that the information is communicated to the Certifying Officers on a timely basis. The Certifying Officers concluded, based on their evaluation, that the Company’s disclosure controls and procedures are effective for the Company, taking into consideration the size and nature of the Company’s business and operations. There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a) 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 Registration Statement No. 33-37600 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)

4.		Sixth Supplemental Indenture, dated as of June 2, 2003, to the indenture between the Company and U.S. Bank National Association.

12.		Computation of Ratios of Earnings to Fixed Charges and Preferred Stock Dividends

31.1		Certification of Chairman of the Board and Chief Executive Officer

31.2		Certification of Vice Chairman, Chief Financial Officer and Chief Accounting Officer

32.1		Certification under 18 U.S.C., Section 1350

b) Reports on Form 8-K:

Form 8-K, event date July 11, 2003 (Item 7)
Form 8-K, event date July 29, 2003 (Item 7)
Form 8-K, event date September 4, 2003 (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

October 30, 2003		/S/ Steven F. Udvar-Hazy

		STEVEN F. UDVAR-HAZY
		Chairman of the Board and
		Chief Executive Officer

October 30, 2003		/S/ Alan H. Lund

		ALAN H. LUND
		Vice Chairman,
		Chief Financial Officer
		and Chief Accounting Officer

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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES

INDEX TO EXHIBITS


Exhibit No.

4.		Sixth Supplemental Indenture, dated as of June 2, 2003, to the indenture between the Company and U.S. Bank National Association.

12.		Computation of Ratios of Earnings to Fixed Charges and Preferred Stock Dividends

31.1		Certification of Chairman of the Board and Chief Executive Officer

31.2		Certification of Vice Chairman, Chief Financial Officer and Chief Accounting Officer

32.1		Certification under 18 U.S.C., Section 1350

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Exhibit 4

SIXTH SUPPLEMENTAL INDENTURE

SIXTH SUPPLEMENTAL INDENTURE, dated as of June 2, 2003 (this "Supplement"), between International Lease Finance Corporation, a corporation duly organized and existing under the laws of the State of California (hereinafter called the "Company"), and U.S. Bank National Association, as Trustee (hereinafter called the "Trustee").

RECITALS OF THE COMPANY

The Company has heretofore executed and delivered an Indenture, dated as of November 1, 1991 (hereinafter called the "Indenture") with the Trustee, as successor to Continental Bank, National Association, providing, among other things, for the issuance from time to time of the Company's unsecured debentures, notes or other evidences of indebtedness in one or more series.

Pursuant to the terms of the Indenture, an Officers' Certificate dated May 21, 1997 and instructions from a Designated Person of the Company in connection with the 1997A Notes (as defined below), Medium-Term Notes, Series I, due November 15, 2005 in the aggregate principal amount of $50,000,000 (the "1997A Notes") were issued on May 30, 1997.

Pursuant to terms of the First Supplemental Indenture, dated as of November 1, 2000, and the Fourth Supplemental Indenture, dated as of November 6, 2002, the terms of the 1997A Notes were amended in certain respects.

Pursuant to the terms of the Indenture, and an Officers' Certificate dated May 21, 1997 and instructions from a Designated Person of the Company in connection with the 1997B Notes (as defined below), Medium-Term Notes, Series I, due March 1, 2006 in the aggregate principal amount of $50,000,000 (the "1997B Notes") were issued May 30, 1997.

Pursuant to the terms of the Second Supplemental Indenture, dated as of February 28, 2001 and the Fifth Supplemental Indenture, dated as of December 27, 2002, the terms of the 1997B Notes were amended in certain respects.

Pursuant to the terms of the Indenture, an Officers' Certificate dated March 10, 1998 and instructions from a Designated Person of the Company in connection with the 1998 Notes (as defined below), Medium-Term Notes, Series I, due October 16, 2006 in the aggregate principal amount of $100,000,000 (the "1998 Notes') were issued on September 11, 1998.

Pursuant the terms of the Third Supplemental Indenture, dated as of September 26, 2001, between the Company and the Trustee, the terms of the 1998 Notes were amended in certain respects.

Pursuant to Section 902 of the Indenture, the Holders of each of the 1997A Notes, 1997B Notes and 1998 Notes have consented and agreed to certain additional changes to the terms of the 1997A Notes, 1997B Notes and 1998 Notes, respectively.

It is deemed advisable and appropriate that the terms of the 1997A Notes, 1997B Notes and 1998 Notes be further amended to reflect the changes consented and agreed to by the Holders of the 1997A Notes, 1997B Notes and 1998 Notes, respectively.

All things necessary to make this Supplement a valid agreement of the Company, in accordance with its terms, have been done.

NOW, THEREFORE, THIS SUPPLEMENT WITNESSETH:

For and in consideration of the premises, it is mutually covenanted and agreed, for the equal and proportionate benefit of the Holders of the 1997A Notes, 1997B Notes and 1998 Notes only, as indicated below, as follows:

1. The terms of the 1997A Notes, as amended, are hereby further amended as follows:

(i) The Stated Maturity shall be October 15, 2014.

(ii) Interest on the 1997A Notes from and including November 15, 2002 to but excluding October 15, 2003, shall accrue at the fixed rate of 6.99% per annum, and Interest on the 1997A Notes from and including October 15, 2003 to but excluding October 15, 2004, shall accrue at the fixed rate of 6.128% per annum, in each case payable semi-annually on each April 15 and October 15, on the basis of a 360-day year of twelve 30-day months, without adjustment for Interest Payment Dates that are not Business Days. Interest on the 1997A Notes will be payable to the persons in whose names the 1997A Notes are registered on the April 1 or October 1 (whether or not a Business Day) immediately preceding the Applicable Interest Payment Date.

(iii) The Additional Terms of the 1997A Notes shall be amended in their entirety to read as set forth in Annex A hereto, with references in Annex A to "Notes" being deemed to refer to the 1997A Notes.

2. The terms of the 1997B Notes, as amended, are hereby further amended as follows:

(i) The Stated Maturity shall be October 15, 2014.

(ii) Interest on the 1997B Notes from and including October 15, 2002 to but excluding October 15, 2003, shall accrue at the fixed rate of 6.85% per annum, and Interest on the 1997B Notes from and including October 15, 2003 to but excluding October 15, 2004 shall accrue at the fixed rate of 6.128% per annum, in each case payable semi-annually on each April 15 and October 15, on the basis of a 360-day year of twelve 30-day months, without adjustment for Interest Payment Dates that are not Business Days. Interest on the 1997B Notes will be payable to the persons in whose names the 1997B Notes are registered on the April 1 or October 1 (whether or not a Business Day) immediately preceding the Applicable Interest Payment Date.

-2-

(iii) The Additional Terms of the 1997B Notes shall be amended in their entirety to read as set forth in Annex A hereto, with references in Annex A to "Notes" being deemed to refer to the 1997B Notes.

3. The terms of the 1998 Notes, as amended, are hereby further amended as follows:

(i) The Stated Maturity shall be October 15, 2014.

(ii) The Additional Terms of the 1998 Notes shall be amended in their entirety to read as set forth in Annex B hereto, with references in Annex B to "Notes" being deemed to refer to the 1998 Notes.

4. The Trustee assumes no duties, responsibilities or liabilities by reason of this Supplement other than as set forth in the Indenture, and this Supplement is executed and accepted by the Trustee subject to all terms and conditions of its acceptance of the Trust under the Indenture, as fully as if said conditions were hereby set forth at length. The Trustee assumes no responsibility or liability for the recitals of the Company set forth in this Supplement.

5. As amended and modified by this Supplement, the Indenture, the supplements thereto and the officers' certificate and instructions from a Designated Person of the Company relating to the 1997A Notes, 1997B Notes and 1998 Notes, respectively, are in all respects ratified and confirmed.

6. This Supplement may be executed in any number of counterparts, each one of which shall be an original, and all of which together constitute but one and the same instrument.

7. Trustee hereby accepts the modification of the 1997A Notes, 1997B Notes and 1998 Notes hereby effected and the trust in this Supplement declared and provided, upon the terms and conditions hereinabove set forth.

-3-

IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written.

INTERNATIONAL LEASE
FINANCE CORPORATION

                                                By:  /s/ Pamela S. Hendry
                                                   -----------------------------



Attest:


  /s/ Julie I. Sackman
------------------------------------

U.S. BANK NATIONAL
ASSOCIATION

                                                By:  /s/ P.J. Crowley
                                                   -----------------------------
                                                         P.J. Crowley
                                                         Vice President

Attest:


  /s/ Janet P. O'Hara
------------------------------------
         Janet P. O'Hara
         Assistant Vice President

-4-

ANNEX A

ADDITIONAL TERMS

INTEREST RATES

If the Calculation Agent has not given the Put Notice (as defined below), then during the period from and including October 15, 2004 to the Maturity Date (the "Fixed Rate Period"), the Notes will bear interest at a fixed rate calculated as described below (see "Reset of Interest Rate for Fixed Rate Period" below). Interest during the Fixed Rate Period will be payable semi-annually in arrears on each April 15 and October 15, commencing April 15, 2005 (each a "Fixed Rate Interest Payment Date"), to the person in whose name a Note is registered on the April 1 or October 1 (whether or not a Business Day) immediately preceding the applicable Fixed Rate Interest Payment Date. However, interest payable on the Maturity Date will be paid to the person to whom principal on the Note is paid. The amount of interest payable during the Fixed Rate Period will be computed and paid on the basis of a 360-day year of twelve 30-day months.

PUT OPTION

The Calculation Agent has the right to require the Company to repurchase all (but not less than all) of the Notes on October 15, 2004 at a purchase price equal to 100% of the principal amount thereof, plus accrued but unpaid interest to but excluding October 15, 2004 (the "Redemption Price"), by delivering written notice thereof to the Company on behalf of all (but not fewer than all) holders of the Notes (the "Put Notice"). Such Put Notice shall be given no later than 9:00 a.m. (New York time) on October 8, 2004. The Calculation Agent shall give the Put Notice if the holders of a majority in principal amount of the Notes request the Calculation Agent to give the Put Notice, in which event the Put Notice shall be binding on all Noteholders; the Calculation Agent shall not give the Put Notice absent such request of the holders of a majority in principal amount of the Notes. In the event the Put Notice is timely given, the Company shall repurchase the Notes at the Redemption Price on October 15, 2004.

IF REQUIRED BY THE CALCULATION AGENT, EACH HOLDER SHALL INDICATE ITS ELECTION TO HAVE THE CALCULATION AGENT DELIVER THE PUT NOTICE TO THE COMPANY BY DELIVERING WRITTEN NOTICE OF SUCH ELECTION TO THE CALCULATION AGENT BY NO LATER THAN 12:00 NOON (NEW YORK TIME) ON OCTOBER 6, 2004.

RESET OF INTEREST RATE FOR FIXED RATE PERIOD

If the Calculation Agent has not delivered the Put Notice to the Company in accordance with the terms set forth under "Put Option" above, the Company and the Calculation Agent, on October 8, 2004, shall undertake the following actions to calculate the fixed rate of interest to be paid on the Notes during the Fixed Rate Period. All references to specific hours are references to prevailing New York time. Each notice, bid or offer (including those given by the Reference Dealers [as defined below]) shall be given telephonically and shall be confirmed as soon as possible by facsimile to each of the Calculation Agent and the Company. The times set forth below are guidelines for action by the Company and the Calculation Agent, and each shall use its

best efforts to adhere to such times. The Company shall use its best efforts to cause the Reference Dealers to take all actions contemplated below in as timely a manner as possible.

A HOLDER SHALL INDICATE ITS ELECTION TO SELL ITS NOTE TO, AND PURCHASE DESIGNATED TREASURY BONDS FROM, THE FINAL DEALER OR FINAL DEALERS (AS DEFINED BELOW) IN ACCORDANCE WITH THE TERMS SET FORTH IN PARAGRAPH (E) BELOW BY NOTIFYING THE CALCULATION AGENT OF SUCH ELECTION BY NO LATER THAN 9:35 A.M. (NEW YORK TIME) ON OCTOBER 8, 2004. IF THE CALCULATION AGENT HAS NOT RECEIVED WRITTEN ELECTION FOR THE SALE OF AT LEAST $25,000,000 AGGREGATE PRINCIPAL AMOUNT OF THE NOTES TO THE FINAL DEALER OR FINAL DEALERS, THE CALCULATION AGENT SHALL SELECT PRO RATA FROM ALL HOLDERS NOTES IN A PRINCIPAL AMOUNT THAT, WHEN AGGREGATED WITH THE PRINCIPAL AMOUNT OF NOTES FOR WHICH THE CALCULATION AGENT HAS RECEIVED A WRITTEN ELECTION TO SELL, WILL TOTAL $25,000,000, AND SHALL IMMEDIATELY NOTIFY SUCH HOLDERS OF SUCH SELECTION. THE HOLDERS OF SUCH RANDOMLY SELECTED NOTES SHALL SELL THEIR NOTES TO, AND PURCHASE DESIGNATED TREASURY BONDS FROM, THE FINAL DEALER OR FINAL DEALERS IN ACCORDANCE WITH THE TERMS SET FORTH IN PARAGRAPH (E) BELOW.

(a) At 9:00 a.m., the Company shall provide to the Calculation Agent the names of four financial institutions that deal in the Company's debt securities and have agreed to participate as reference dealers in accordance with the terms set forth below (the "Reference Dealers") and, for each Reference Dealer, the name of and telephone and facsimile numbers for one individual who will represent such Reference Dealer.

(b) At 9:15 a.m., the Calculation Agent shall:

(i) determine and provide to the Company the 10-year Treasury bond yield determined at or about such time (the "Designated Treasury Yield") based on an issue of 10-year Treasury bonds chosen by the Calculation Agent (the "Designated Treasury Bonds");

(ii) calculate and provide to the Company the "Premium", which shall equal the present value (expressed as a percentage rounded to four decimal places) of the Treasury Rate Difference applied over the 20 semi-annual periods from October 15, 2004 to the Maturity Date, discounted at the Discount Rate divided by two, where:

"Treasury Rate Difference" means the difference between 5.89% (the "Initial Treasury Yield") minus the Designated Treasury Yield; and

"Discount Rate" means the sum of the Designated Treasury Yield plus 0.50%; and

(iii) provide to the Company the aggregate principal amount of the Designated Treasury Bonds that the Holders will purchase (the "Hedge Amount") in the event that all of the Notes are sold to one or more of the Reference Dealers in accordance with paragraph (e) below.

(c) The Calculation Agent immediately thereafter shall contact each of the Reference Dealers and request that each Reference Dealer provide to the Calculation Agent the

following firm bid and firm offer for the benefit of the Holders (which bid and offer shall remain firm for 15 minutes):

(i) a firm bid (on an all-in basis), expressed as a spread to the Designated Treasury Bonds (using, for such purposes, the Designated Treasury Yield), at which such Reference Dealer would purchase any Notes offered (up to Notes in a principal amount equal to $50,000,000, provided that such Reference Dealer shall not be obligated to purchase Notes in a principal amount less that $25,000,000) at a price equal to 100% plus the Premium for settlement on the Redemption Date (the lowest of such spreads, the "Spread"); and

(ii) a firm offer (on an all-in basis) to sell Designated Treasury Bonds in a principal amount equal to the Hedge Amount at a yield equal to the Designated Treasury Yield for settlement on the Redemption Date.

(d) At 9:30 a.m., the following shall occur following receipt of the bids and offers requested in paragraph (c) above:

(i) the Calculation Agent shall calculate and provide to the Company the "Adjusted Coupon", which shall be the fixed rate of interest on the Notes required to produce a yield on the Notes equal to the sum of the Designated Treasury Yield and the Spread given a purchase price of 100% plus the Premium;

(ii) the Interest Rate on the Notes shall be adjusted and shall equal, effective from and including October 15, 2004 to the Maturity Date, the Adjusted Coupon; and

(iii) the Reference Dealer providing the Spread shall be deemed the "Final Dealer"; provided that if two or more Reference Dealers shall have quoted such Spread, the Company shall determine which of such Reference Dealers shall be the Final Dealer or the Final Dealers (and, in the latter case, the allocation to be made between them).

(e) The Holders:

(i) shall sell Notes to the Final Dealer or Final Dealers in a principal amount which shall be not less than $25,000,000 nor more than $50,000,000 at a price equal to 100% plus the Premium; and

(ii) shall purchase Designated Treasury Bonds from the Final Dealer or Final Dealers in a principal amount equal to the Hedge Amount (adjusted pro rata based on the amount of Notes sold in the event that less than $50,000,000 principal amount is sold), at a price based on the Designated Treasury Yield, in each case for settlement on the Redemption Date and, in the case of more than one Final Dealer, according to the allocation designated by the Company under paragraph (d)(iii) above.

If the Calculation Agent determines that (i) a Market Disruption Event (as defined below) has occurred or (ii) two or more of the Reference Dealers have failed to provide indicative or firm bids or offers in a timely manner substantially as provided above, the steps contemplated above shall be delayed until the next trading day on which there is no Market Disruption Event and no such failure by two or more Reference Dealers. "Market Disruption Event" shall mean any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange or the establishment of minimum prices on such exchange: (ii) a general moratorium on commercial banking activities declared by either federal or New York State authorities; (iii) any material adverse change in the existing financial, political or economic conditions in the United States or America or elsewhere; (iv) an outbreak or escalation of major hostilities involving the United States of America or the declaration of a national emergency or war by the United States of America; or
(v) any material disruption of the U.S. government securities market, U.S. corporate bond market and/or U.S. federal wire system.

ANNEX B

ADDITIONAL TERMS

INTEREST RATES

During the period commencing with the Original Issue Date to but excluding October 15, 2003, the Notes will bear interest at a rate of 5.335% per annum. During the period commencing with October 15, 2003 to but excluding October 15, 2004, the Notes will bear interest at a rate of 6.128% per annum. Interest will be computed and paid on the basis of a 360-day year of twelve 30-day months.

If the Calculation Agent has not given the Put Notice (as defined below) or the Company has not repurchased the Notes (see "Reset of Interest Rate for Third Fixed Rate Period" below), then during the period from and including October 15, 2004 to the Maturity Date, the Notes will bear interest at a fixed rate calculated as described below (see "Reset of Interest Rate for Third Fixed Rate Period" below).

PUT OPTION

RESET OF INTEREST RATE FOR THIRD FIXED RATE PERIOD

If the Calculation Agent has not delivered the Put Notice to the Company in accordance with the terms set forth under "Put Option" above, the Company and the Calculation Agent, on October 8, 2004, shall undertake the following actions to calculate the fixed rate of interest to be paid on the Notes during the period from and including October 15, 2004 to the Maturity Date. All references to specific hours are references to prevailing New York time. Each notice, bid or offer (including those given by the Reference Dealers
[as defined below]) shall be given telephonically and shall be confirmed as soon as possible by facsimile to each of

the Calculation Agent and the Company. The times set forth below are guidelines for action by the Company and the Calculation Agent, and each shall use its best efforts to adhere to such times. The Company shall use its best efforts to cause the Reference Dealers to take all actions contemplated below in as timely a manner as possible.

A HOLDER SHALL INDICATE ITS ELECTION TO SELL ITS NOTE TO, AND PURCHASE DESIGNATED TREASURY BONDS FROM, THE FINAL DEALER OR FINAL DEALERS (AS DEFINED BELOW) IN ACCORDANCE WITH THE TERMS SET FORTH IN PARAGRAPH (E) BELOW BY NOTIFYING THE CALCULATION AGENT OF SUCH ELECTION BY NO LATER THAN 9:15 A.M. (NEW YORK TIME) ON OCTOBER 8, 2004. IF THE CALCULATION AGENT HAS NOT RECEIVED WRITTEN ELECTION FOR THE SALE OF AT LEAST $25,000,000 AGGREGATE PRINCIPAL AMOUNT OF THE NOTES TO THE FINAL DEALER OR FINAL DEALERS, THE CALCULATION AGENT SHALL SELECT PRO RATA FROM ALL HOLDERS NOTES IN A PRINCIPAL AMOUNT THAT, WHEN AGGREGATED WITH THE PRINCIPAL AMOUNT OF NOTES FOR WHICH THE CALCULATION AGENT HAS RECEIVED A WRITTEN ELECTION TO SELL, WILL TOTAL $25,000,000, AND SHALL IMMEDIATELY NOTIFY SUCH HOLDERS OF SUCH SELECTION. THE HOLDERS OF SUCH RANDOMLY SELECTED NOTES SHALL SELL THEIR NOTES TO, AND PURCHASE DESIGNATED TREASURY BONDS FROM, THE FINAL DEALER OR FINAL DEALERS IN ACCORDANCE WITH THE TERMS SET FORTH IN PARAGRAPH (E) BELOW.

(b) At 9:15 a.m., the Calculation Agent shall:

"Treasury Rate Difference" means the difference between 5.89% (the "Initial Treasury Yield") minus the Designated Treasury Yield; and

"Discount Rate" means the sum of the Designated Treasury Yield plus 0.50%; and

(c) The Calculation Agent immediately thereafter shall contact each of the Reference Dealers and request that each Reference Dealer provide to the Calculation Agent the following firm bid and firm offer for the benefit of the Holders (which bid and offer shall remain firm for 15 minutes):

(i) a firm bid (on an all-in basis), expressed as a spread to the Designated Treasury Bonds (using, for such purposes, the Designated Treasury Yield), at which such Reference Dealer would purchase any Notes offered (up to Notes in a principal amount equal to $100,000,000, provided that such Reference Dealer shall not be obligated to purchase Notes in a principal amount less that $25,000,000) at a price equal to 100% plus the Premium for settlement on the Redemption Date (the lowest of such spreads, the "Spread"); and

(d) At 9:30 a.m., the following shall occur following receipt of the bids and offers requested in paragraph (c) above:

(ii) the Interest Rate on the Notes shall be adjusted and shall equal, effective from and including October 15, 2004 to the Maturity Date, the Adjusted Coupon; and

(e) The Holders:

(i) shall sell Notes to the Final Dealer or Final Dealers in a principal amount which shall be not less than $25,000,000 nor more than $100,000,000 at a price equal to 100% plus the Premium; and

(ii) shall purchase Designated Treasury Bonds from the Final Dealer or Final Dealers in a principal amount equal to the Hedge Amount (adjusted pro rata based on the amount of Notes sold in the event that less than $100,000,000 principal amount is sold), at a price based on the Designated Treasury Yield, in each case for settlement on the Redemption Date and, in the case of more than one Final Dealer, according to the allocation designated by the Company under paragraph (d)(iii) above.

If the Calculation Agent determines that (i) a Market Disruption Event (as defined below) has occurred or (ii) two or more of the Reference Dealers have failed to provide indicative or firm bids or offers in a timely manner substantially as provided above, the steps contemplated above shall be delayed until the next trading day on which there is no Market Disruption Event and no such failure by two or more Reference Dealers. "Market Disruption Event" shall mean any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange or the establishment of minimum prices on such exchange: (ii) a general moratorium on commercial banking activities declared by either federal or New York State authorities; (iii) any material adverse change in the existing financial, political or economic conditions in the United States or America or elsewhere;
(iv) an outbreak or escalation of major hostilities involving the United States of America or the declaration of a national emergency or war by the United States of America; or (v) any material disruption of the U.S. government securities market, U.S. corporate bond market and/or U.S. federal wire system.

BUSINESS DAY

If any action is required or permitted to be taken pursuant to these Additional Terms on a day that is not a Business Day, such action shall be required or permitted to be taken on the next succeeding day that is a Business Day.

EXHIBIT 12

INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(Dollars in thousands)


		2003			2002

		(Unaudited)
Earnings:
Net Income		$	375,174		$	389,624
Add: Add:
	Provision for income taxes		192,477			190,048
	Fixed charges		735,246			689,830
Less: Less:
	Capitalized interest		36,159			44,968

	Earnings as adjusted (A)	$	1,266,738		$	1,224,534

Preferred dividend requirements		$	2,925		$	18,635
Ratio of income before provision for income taxes to net income			151	%		149	%

	Preferred dividend factor on pretax basis	$	4,417		$	27,766
Fixed Charges:
	Interest expense		689,141			625,488
	Capitalized interest		36,159			44,968
	Interest factor of rents		9,946			19,374

	Fixed charges as adjusted (B)		735,246			689,830

Fixed charges and preferred stock dividends (C)		$	739,663		$	717,596

Ratio of earnings to fixed charges (A) divided by (B)			1.72x			1.78x

Ratio of earnings to fixed charges and preferred stock dividends (A) divided by (C)			1.71x			1.71x

EXHIBIT 31.1

CERTIFICATIONS

I, Steven F. Udvar-Hazy, certify that:

1. I have reviewed this quarterly report on Form 10-Q of International Lease Finance Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 30, 2003

/S/ Steven F. Udvar-Hazy
STEVEN F. UDVAR-HAZY
Chairman of the Board and Chief Executive Officer

EXHIBIT 31.2

CERTIFICATIONS

I, Alan H. Lund, certify that:

1. I have reviewed this quarterly report on Form 10-Q of International Lease Finance Corporation;

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 30, 2003

/S/ Alan H. Lund
ALAN H. LUND
Vice Chairman, Chief Financial Officer and Chief Accounting Officer

EXHIBIT 32.1

WRITTEN STATEMENT
PURSUANT TO
18 U.S.C. SECTION 1350

Each of the undersigned, STEVEN F. UDVAR-HAZY, the CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER, and ALAN H. LUND, the VICE CHAIRMAN-FINANCE, CHIEF FINANCIAL OFFICER AND CHIEF ACCOUNTING OFFICER of INTERNATIONAL LEASE FINANCE CORPORATION (the “Company”), pursuant to 18 U.S.C. §1350, hereby certifies that to the best of their knowledge:

(i) the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 (the “Report”) fully complies with the requirements of section 13(a) and 15(d) of the Securities Exchange Act of 1934; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated: October 30, 2003		/S/ Steven F. Udvar-Hazy

		STEVEN F. UDVAR-HAZY

Dated: October 30, 2003		/S/ Alan H. Lund

		ALAN H. LUND

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ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK