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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

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

For the quarterly period ended June 30, 2002

OR

[   ]

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

For the transition period from ________________________ to _________________________

Commission file number 0-11350

INTERNATIONAL LEASE FINANCE CORPORATION

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

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

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

As of August 2, 2002, there were 35,818,122 shares of Common Stock, no par value, outstanding.

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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      June 30, 2002 and December 31, 2001			3
		Condensed Consolidated Statements of Income and Comprehensive Income      Three Months Ended June 30, 2002 and 2001			4
		Condensed Consolidated Statements of Income and Comprehensive Income      Six Months Ended June 30, 2002 and 2001			5
		Condensed Consolidated Statements of Cash Flows      Six Months Ended June 30, 2002 and 2001			6
		Notes to Condensed Consolidated Financial Statements			8
Cautionary Statement Regarding Forward Looking Information					9
	Item 2. Management’s Discussion and Analysis of the Financial Condition and Results of Operations				10
	Item 3. Quantitative and Qualitative Disclosures about Market Risk				17
Part II. Other Information
	Item 6. Exhibits and Reports on Form 8-K				18
		Signatures			19

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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)

					June 30,				December 31,
					2002				2001
					(Unaudited)
ASSETS
Cash, including interest bearing accounts of $111,264 (2002) and $78,295 (2001)					$	113,897			$	79,383
Current income taxes receivable						101,064				173,280
Notes receivable and net investment in finance leases						395,719				394,277
Flight equipment under operating leases						27,827,549				24,400,217
		Less accumulated depreciation				3,868,402				3,417,020
						23,959,147				20,983,197
Deposits on flight equipment purchases						1,224,565				1,321,699
Accrued interest, other receivables and other assets						279,525				130,471
Investments						51,817				56,236
Deferred debt issue costs — less accumulated amortization of $67,712 (2002) and $59,056 (2001)						39,532				28,747
					$	26,165,266			$	23,167,290
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accrued interest and other payables					$	320,020			$	265,107
Debt financing, net of deferred debt discount of $36,373 (2002) and $15,157 (2001)						18,178,885				15,368,877
Capital lease obligations						313,759				365,289
Security & other deposits on flight equipment						860,692				966,213
Rentals received in advance						129,414				114,874
Deferred income taxes						2,154,249				1,937,396
Derivative instruments						82,343				185,859
SHAREHOLDERS’ EQUITY
	Preferred stock— no par value; 20,000,000 authorized shares Series A Preferred Stock; $10,000,000 per share liquidation value; 40 shares issued and outstanding					400,000				400,000
	Market Auction Preferred Stock, $100,000 per share liquidation value; Series A, B, and E (2002 and 2001) each having 500 shares issued. Series A and B each having 500 (2002 and 2001) shares outstanding and Series E having 0 (2002) and 500 (2001) shares outstanding					100,000				150,000
	Common stock— no par value; 100,000,000 authorized shares, 35,818,122 (2002 and 2001) issued and outstanding					3,582				3,582
	Additional paid-in capital					579,955				579,955
	Accumulated other comprehensive loss					(57,382	)			(50,629	)
	Retained earnings					3,099,749				2,880,767
			Total Shareholders’ Equity			4,125,904				3,963,675
					$	26,165,266			$	23,167,290

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 JUNE 30, 2002 AND 2001
(Dollars in thousands)

			2002				2001
			(Unaudited)
REVENUES
	Rental of flight equipment		$	680,324			$	623,619
	Flight equipment marketing			6,380				20,653
	Interest and other			39,778				14,043
				726,482				658,315
EXPENSES
	Interest			218,892				203,614
	Depreciation of flight equipment			235,691				201,566
	Flight equipment rent			19,354				28,396
	Provision for overhauls			18,763				21,612
	Selling, general and administrative			22,209				14,854
				514,909				470,042
INCOME BEFORE INCOME TAXES				211,573				188,273
	Provision for income taxes			76,490				66,748
NET INCOME				135,083				121,525
COMPREHENSIVE INCOME (NET OF TAX)
	Net changes in cash flow hedges			61,225				10,260
	Foreign currency translation adjustment			(102,079	)			2,556
				(40,854	)			12,816
COMPREHENSIVE INCOME			$	94,229			$	134,341

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 SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(Dollars in thousands)

			2002				2001
			(Unaudited)
REVENUES
	Rental of flight equipment		$	1,289,333			$	1,203,203
	Flight equipment marketing			19,640				38,916
	Interest and other			60,043				37,859
				1,369,016				1,279,978
EXPENSES
	Interest			407,078				405,638
	Depreciation of flight equipment			452,458				382,718
	Flight equipment rent			38,754				60,928
	Provision for overhauls			40,057				46,090
	Selling, general and administrative			43,732				34,796
				982,079				930,170
INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE				386,937				349,808
	Provision for income taxes			138,549				124,340
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE				248,388				225,468
Cumulative effect of accounting change (net of taxes)				—				15,191
NET INCOME				248,388				240,659
COMPREHENSIVE INCOME (NET OF TAX)
	Cumulative effect of accounting change			—				(20,473	)
	Net changes in cash flow hedges			88,114				(20,000	)
	Foreign currency translation adjustment			(94,867	)			15,068
				(6,753	)			(25,405	)
COMPREHENSIVE INCOME			$	241,635			$	215,254
SUPPLEMENTAL COMPREHENSIVE INCOME INFORMATION
	Cumulative foreign currency translation gain adjustment, net of tax		$	(84,510	)		$	25,695
	Cumulative cash flow hedge loss adjustment, net of tax			27,128				(41,843	)

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 SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(Dollars in thousands)

				2002				2001
				(Unaudited)
OPERATING ACTIVITIES
	Net income			$	248,388			$	240,659
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation of flight equipment			452,458				382,718
		Deferred income taxes			220,489				191,901
		Foreign exchange adjustment of Euro denominated debt			20,627				(83,069	)
		Change in derivative instruments			(20,020	)			95,449
		Amortization of deferred debt issue costs			3,726				6,175
		Equity in net income of affiliates			3,837				(1,425	)
		Change in unamortized debt discount			(21,216	)			19,250
	Changes in operating assets and liabilities:
		Increase in notes receivable			(18,208	)			(21,297	)
		Increase in accrued interest, other receivables and other assets			(47,670	)			(10,853	)
		Decrease (increase) in current income taxes receivable			72,216				(65,546	)
		Increase (decrease) in accrued interest and other payables			54,913				(9,386	)
		Increase in rentals received in advance			14,540				5,387
Net cash provided by operating activities					984,080				749,963
INVESTING ACTIVITIES
	Acquisition of flight equipment for operating leases				(3,464,404	)			(2,653,168	)
	Acquisition of flight equipment for finance leases				—				(39,207	)
	Decrease (increase) in deposits and progress payments				97,134				(93,247	)
	Proceeds from disposal of flight equipment — net of gain				36,215				48,602
	Collections on notes receivable and sales-type leases				16,766				24,732
	Other				364				26
Net cash used in investing activities					(3,313,925	)			(2,712,262	)
FINANCING ACTIVITIES
	Repurchase of preferred stock				(50,000	)			—
	Proceeds from debt financing				9,685,739				6,271,292
	Payments in reduction of debt financing				(7,121,942	)			(4,351,950	)
	Debt issue costs				(14,511	)			(9,102	)
	(Decrease) increase in customer deposits				(105,521	)			124,149
	Payment of common and preferred dividends				(29,406	)			(74,441	)
Net cash provided by financing activities					2,364,359				1,959,948
Increase (decrease) in cash					34,514				(2,351	)
Cash at beginning of period					79,383				134,653
	Cash at end of period			$	113,897			$	132,302

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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(Dollars in thousands)

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

			2002				2001
			(Unaudited)
Cash paid during the period for:
	Interest (net of amount capitalized of $30,446 (2002) and $28,373 (2001))		$	379,869			$	384,395
	Income taxes (net of refunds)			(154,157	)			6,165

2001:
			One aircraft was received in exchange for notes receivable in the amount of $18,136 and one aircraft with net book value of $11,372 was contributed to a joint venture.

See notes to condensed consolidated financial statements.

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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2002
(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 2001 unaudited condensed consolidated financial statements to conform to the 2002 presentation. Operating results for the six months ended June 30, 2002 are not necessarily indicative of the results that may be expected for the year ended December 31, 2002. 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, 2001.

B. Hedging Activities

     The Company uses derivatives to manage exposures to interest rate and foreign currency risks. During the six months ended June 30, 2002, the Company recorded the following in earnings in accordance with Statement of Financial Accounting Standards No. 133 — Accounting for Certain Derivative Instruments and Certain Hedging Activities, as amended by Statement of Financial Accounting Standards No. 138 and related implementation guidance.

     During the six months ended June 30, 2002, $50,438 (net) was reclassified from accumulated other comprehensive income to interest expense under cash flow hedge accounting in connection with the Company’s program to convert debt from floating to fixed rates. The Company expects that within the next twelve months it will reclassify as earnings approximately $100,000 of the balance recorded plus quarterly cash flow hedge adjustments to accumulated other comprehensive income.

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CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

Forward Looking Statements

     Certain of the statements in this discussion, as well as other statements within 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 for the purchase of flight equipment, including funds for progress payments during the construction phase, principally on an unsecured basis from various sources. As of June 30, 2002, the Company had committed to purchase 510 aircraft from Airbus and Boeing at an estimated aggregated purchase price of $29.9 billion for delivery through 2010 and options to purchase 49 additional aircraft at an estimated aggregate purchase price of approximately $3.0 billion. The Company currently expects to fund expenditures for capital requirements as well as liquidity needs from a combination of available cash balances, internally generated funds and proceeds from financing arrangements. The Company’s debt financing and capital lease obligations were comprised of the following at the following dates:

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ITEM 2.

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

Public Debt

     The interest on substantially all of the public debt (exclusive of the Commercial Paper Program) is fixed for the terms of the notes. The Company has the ability to borrow under various public debt financing arrangements as follows (d):

		Maximum				Sold as of				Sold as of				Sold as of
		Offering				December 31, 2001 (a)				June 30, 2002 (a)				July 31, 2002 (a)
		(Dollars in millions)
Registration statement dated May 10, 2001 (including $2.350 billion Medium-Term Note program)		$	4,000			$	3,100			$	4,000			$	4,000
Registration statement dated January 28, 2002 (including $1.0 billion Medium-Term Note program)			4,000				—				2,745				2,770
Euro Medium-Term Note Programme dated June 2001			4,000	(b)			771	(c)			2,314	(c)			2,314	(c)

Capital Lease Obligations

     The Company has Export Credit Lease financings which provide 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 provides for LIBOR based pricing. This 15% tranche was prepaid in 2000. The remaining obligations mature through 2005.

Bank Term Debt

     In January 1999, the Company entered into an Export Credit Facility, up to a maximum of $4.3 billion, for approximately 75 aircraft to be delivered from 1999 through 2001. The Company had the right, but was not required, to use the facility to fund 85% of each aircraft’s purchase price. This facility is guaranteed by various European Export Credit Agencies. The interest rate varies from 5.753% to 5.898% on the 75 aircraft depending on the delivery date of the aircraft. The Company financed 62 aircraft with $2.8 billion under this facility. The debt is collaterized by a pledge of the shares of a subsidiary of the Company which holds title to the aircraft financed under the facility.

Commercial Paper

     The Company 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. It is the Company’s intention to sell commercial paper not to exceed one and one half times the aggregate amount of the backup facilities available (see Bank Commitments). The weighted average interest rate of the Company’s Commercial Paper Program was 1.86% for the six months ended June 30, 2002 and 4.10% for the year ended December 31, 2001. The composite commercial paper interest rate was 1.84% and 2.24% at June 30, 2002 and December 31, 2001, respectively.

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ITEM 2.

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

Bank Commitments

     As of June 30, 2002, the Company had committed revolving loans and lines of credit with 20 commercial banks aggregating $2.85 billion. These revolving loans and lines of credit principally provide for interest rates that vary according to the pricing option in effect at the time of borrowing. Pricing options include prime, a range from .25% over LIBOR to .35% over LIBOR based upon utilization, or a rate determined by a competitive bid process with the banks. The revolving loans and lines of credit are subject to facility fees of up to .10% of amounts available. This financing is used primarily as backup for the Company’s Commercial Paper Program.

Other

     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. As of June 30, 2002, the Company had repurchased three aircraft which were sold to third parties. If the Company decides not to negotiate extensions of the one year operating lease options as they terminate in December 2002 and September 2003 and 2004, it will be required to borrow additional funds to reacquire the assets. The estimated remaining minimum lease payments (exclusive of the interest component of rent) and buy-back amounts, assuming the transactions mature as scheduled, are $279.6 million (2002), $390.8 million (2003) and $462.4 million (2004).

     The Company does not have any other relationships with unconsolidated entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or for other contractually narrow or limited purposes. The Company may, however, from time to time enter into joint ventures or other partnership arrangements with the limited purpose to lease aircraft.

     In the normal course of business, the Company employs a variety of derivative products to manage its exposure to interest rates and the resulting impact of changes in interest rates on earnings, with the objective to lower its overall borrowing cost and to maintain 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 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, who enters into identical 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. It is management’s belief that any failure of the instruments or counterparty to perform under the derivative contracts would have an immaterial impact on the Company’s financial condition and results of operations.

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ITEM 2.

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

     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 borrow on, renew existing, or obtain access to new financing arrangements and would increase the cost of such financing arrangements. For example, a downgrade in credit rating could preclude the Company from issuing commercial paper under its current program. Should this occur the Company would seek alternative sources of funding, including issuance of bonds under its existing shelf registrations. In addition, the Company has the ability, at its option, to draw upon its revolving loans and lines of credit. The Company may also, from time to time, enter into additional short term borrowings.

     The Company repurchased $50.0 million of its Market Auction Preferred Stock during the six months ended June 30, 2002.

     The following summarizes the Company’s contractual obligations at June 30, 2002, and the possible effect of such obligations on the Company’s liquidity and cash flows in future periods.

Existing Commitments (Exclusive of Interest)

		Commitments Due by Fiscal Year
		Total				2002				2003				2004				2005				2006				Thereafter
		(Dollars in thousands)
Public Debt		$	14,838,136			$	1,033,068			$	3,505,674			$	3,200,623			$	1,790,549			$	1,234,174			$	4,074,048
Capital Lease Obligations			313,759				53,137				111,745				105,194				43,683				—				—
Commercial Paper			3,253,354				3,234,854				18,500				—				—				—				—
Operating Leases			129,456				1,582				3,276				11,257				11,404				8,491				93,446
Operating Leases under Sales-Lease-Back Transactions			1,132,831				279,630				390,810				462,391				—				—				—
Purchase Commitments			29,325,200				1,657,000				3,900,400				3,878,000				4,984,900				4,792,900				10,112,000
Total		$	48,992,736			$	6,259,271			$	7,930,405			$	7,657,465			$	6,830,536			$	6,035,565			$	14,279,494

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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				2002				2003				2004				2005				2006				Thereafter
		(Dollars in thousands)
Purchase Options on New Aircraft		$	2,956,400				—			$	187,800			$	697,300			$	621,600			$	555,900			$	893,800
Put Options(a)			679,110				—				231,614				67,422				256,658				—				123,416
Asset Value Guarantees(a)			205,299			$	69,296				63,000				4,726				11,041				14,492				42,744
Loan Guarantees(a)			53,179				471				26,562				12,193				3,000				6,000				4,953
Lines of Credit			10,000				10,000				—				—				—				—				—
Total		$	3,903,988			$	79,767			$	508,976			$	781,641			$	892,299			$	576,392			$	1,064,913

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ITEM 2.

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

Results of Operations - Three months ended June 30, 2002 versus 2001.

     Revenues from the rentals of flight equipment increased 9.1% to $680.3 million in 2002 compared to $623.6 million in 2001, due to an increase in the number of aircraft available for operating lease, partially offset by an increase in the number of aircraft being reconfigured and redelivered and therefore not earning revenue for the entire period. Revenues were also negatively impacted by lower lease rates and restructured rents, as a result of a slowdown of the airline industry that was exacerbated after the September 11, 2001 terrorist attacks. The Company expects these factors to further negatively impact revenues in the third and fourth quarters of 2002. At June 30, 2002 the Company’s leased fleet consisted of 532 aircraft compared to a fleet of 448 aircraft at June 30, 2001. The cost of the leased fleet, which includes aircraft subject to sale-lease back transactions from which rental income is earned, increased to $29.1 billion in 2002 compared to $24.5 billion in 2001.

     In addition to its leasing operations, the Company engages in the marketing of flight equipment throughout the lease term, as well as the sales of flight equipment on a principal and commission basis. Revenues from flight equipment marketing decreased to $6.4 million in 2002 compared to $20.7 million in 2001 as a result of a decrease in sales of company owned equipment. The Company did not sell any equipment during the second quarter of 2002, and sold two engines and two aircraft during the second quarter of 2001.

     Interest and other revenue increased to $39.8 million in 2002 compared to $14.0 million in 2001 primarily due to forfeitures of security and other deposits resulting from nonperformance by customers and manufacturers.

     Interest expense increased to $218.9 million in 2002 compared to $203.6 million in 2001 as a result of an increase in average debt outstanding, to finance aircraft acquisitions (excluding the effect of debt discount), to $17.7 billion in 2002 compared to $14.8 billion in 2001. This increase was partially offset by a decrease in the average composite borrowing rate to 4.98% in 2002 compared to 5.71% in 2001. The Company’s composite borrowing rate fluctuated as follows:

Interest expense for the three months ended June 30, 2002 includes a $1.6 million charge related to hedging activities.

     Depreciation of flight equipment increased to $235.7 million in 2002 compared to $201.6 million in 2001 due to the increased cost of the fleet.

     The Company, in prior periods, has entered into sale-leaseback transactions. Currently 18 aircraft are accounted for under these transactions. Rent expense decreased to $19.4 million in 2002 compared to $28.4 million in 2001 due to a decrease in the lease rates resulting from a decrease in interest rates affecting the floating rate component of the lease rates, principal amortization, and the repurchase of one aircraft.

     Provision for overhauls decreased to $18.8 million in 2002 compared to $21.6 million in 2001. The cumulative effect of favorable payout factors realized in the second quarter resulted in a reduction in the reserve rate used in calculating the provision for overhauls. Further, the Company experienced lower overhaul revenue collections as a result of an increase in restructured overhaul payments, a slowdown in the economy and the September 11, 2001 terrorist attacks.

     Selling, general and administrative expenses increased to $22.2 million in 2002 compared to $14.9 million in 2001 primarily due to an increase in costs related to the reconfiguration and re-delivery of aircraft from one lessee to another.

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ITEM 2.

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

Results of Operations - Six months ended June 30, 2002 versus 2001.

     Revenues from the rentals of flight equipment increased 7.2% to $1,289.3 million in 2002 compared to $1,203.2 million in 2001, due to an increase in the number of aircraft available for operating lease, partially offset by an increase in the number of aircraft being reconfigured and redelivered and therefore not earning revenue for the entire period. Revenues were also negatively impacted by lower lease rates and restructured rents, as a result of a slowdown of the airline industry that was exacerbated after the September 11, 2001 terrorist attacks. The Company expects these factors to further negatively impact revenues in the third and fourth quarters of 2002. At June 30, 2002 the Company’s leased fleet consisted of 532 aircraft compared to a fleet of 448 aircraft at June 30, 2001. The cost of the leased fleet, which includes aircraft subject to sale-lease back transactions from which rental income is earned, increased to $29.1 billion in 2002 compared to $24.5 billion in 2001.

     In addition to its leasing operations, the Company engages in the marketing of flight equipment throughout the lease term, as well as the sales of flight equipment on a principal and commission basis. Revenues from flight equipment marketing decreased to $19.6 million in 2002 compared to $38.9 million in 2001 as a result of a decrease in sales of company owned equipment. The Company sold two aircraft during the six months ended June 30, 2002, and sold two aircraft and two engines during the six months ended June 30, 2001.

     Interest and other income increased to $60.0 million in 2002 compared to $37.9 million in 2001 primarily due to forfeitures of security deposits because of nonperformance by customers and manufacturers.

     Interest expense increased to $407.1 million in 2002 compared to $405.6 million in 2001 as a result of an increase in average debt outstanding, to finance aircraft acquisitions (excluding the effect of debt discount), to $17.7 billion in 2002 compared to $14.8 billion in 2001. This increase was partially offset by a decrease in the average composite borrowing rate to 5.05% in 2002 compared to 5.93% in 2001. The Company’s composite borrowing rate fluctuated as follows:

Interest expense for the six months ended June 30, 2002 includes a $2.6 million charge related to hedging activities.

     Depreciation of flight equipment increased to $452.5 million in 2002 compared to $382.7 million in 2001 due to the increased cost of the fleet.

     The Company, in prior periods, has entered into sale-leaseback transactions. Currently 18 aircraft are accounted for under these transactions. Rent expense decreased to $38.8 million in 2002 compared to $60.9 million in 2001 due to a decrease in the lease rates resulting from a decrease in interest rates affecting the floating rate component of the lease rates, principal amortization, and the repurchase of one aircraft.

     Provision for overhauls decreased to $40.1 million in 2002 compared to $46.1 million in 2001. The cumulative effect of favorable payout factors realized in the second quarter resulted in a reduction in the reserve rate used in calculating the provision for overhauls. Further, the Company experienced lower overhaul revenue collections as a result of an increase in restructured overhaul payments, a slowdown in the economy and the September 11, 2001 terrorist attacks.

     Selling, general and administrative expenses increased to $43.7 million in 2002 compared to $34.8 million in 2001 primarily due to an increase in costs related to the reconfiguration and re-delivery of aircraft from one lessee to another.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Value at Risk

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

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

     The Company is exposed to market risk and the risk of loss of fair value 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, aircraft residual values at maturity of the lease contracts 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 December 31, 2001 and June 30, 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 by these scenarios with 95% confidence (i.e. only 5% of historical scenarios show losses greater than the VaR figure). A one month holding period is assumed in computing the VaR figure. The following table presents the average, high and low VaRs for the Company with respect to its fair value as of June 30, 2002 and December 31, 2001:

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PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a)

Exhibits

	1		Amended and Restated Programme Agreement, dated May 15, 2002, between the Company and the Dealers named therein.
	4		Amended and Restated Agency Agreement, dated May 15, 2002, between the Company, Citibank, N.A. and Dexia Banque Internationale a Luxembourg S.A.
	12		Computation of Ratios of Earnings to Fixed Charges and Preferred Stock Dividends.

	b)		Reports on Form 8-K:
			Form 8-K, event date May 21, 2002 (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

August 8, 2002		/S/   Steven F. Udvar-Hazy
		STEVEN F. UDVAR-HAZY Chairman of the Board and Chief Executive Officer
August 8, 2002		/S/   Alan H. Lund
		ALAN H. LUND Vice Chairman-Finance, Chief Financial Officer and Chief Accounting Officer

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INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES

INDEX TO EXHIBITS

Exhibit No.
1		Amended and Restated Programme Agreement, dated May 15, 2002, between the Company and the Dealers named therein.
4		Amended and Restated Agency Agreement, dated May 15, 2002, between the Company, Citibank, N.A. and Dexia Banque Internationale a Luxembourg S.A.
12		Computation of Ratios of Earnings to Fixed Charges and Preferred Stock Dividends

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