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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 1 - us-gaap:OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-->
<!-- xbrl,ns -->
<!-- xbrl,nx -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt"><b></b>
</div>
<div align="left">
</div>
<div align="center" style="font-size: 10pt; margin-top: 0pt"><b></b>
</div>
<div align="center" style="font-size: 10pt; margin-top: 0pt"><b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>A. Basis of Preparation</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     ILFC is an indirect wholly-owned subsidiary of AIG. AIG is a holding company, which,
through its subsidiaries, is primarily engaged in a broad range of insurance and
insurance-related activities in the United States and abroad. The accompanying unaudited,
condensed, consolidated financial statements have been prepared in accordance with GAAP 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 GAAP for complete financial statements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The accompanying unaudited, condensed, consolidated financial statements include our
accounts and accounts of all other entities in which we have a controlling financial interest.
See Note N — <i>Variable Interest Entities </i>for further discussions on VIEs. All material
intercompany accounts have been eliminated in consolidation.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     Results for the three and six
month periods ended June 30, 2011 include an out of period adjustment related to prior quarters
and years which increased pre-tax income by $8.1 million and $8.3 million, respectively. The
out of period adjustment relates principally to the forfeiture of share-based deferred
compensation awards for certain employees who terminated their employment with us in 2010.
Management has determined, after evaluating the quantitative and qualitative aspects of this
out of period adjustment, that our current and prior period financial statements are not
materially misstated and will not be material to our estimated results of operations for the
year ended December 31, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     In the opinion of management, all adjustments considered
necessary for a fair statement of the results for the interim periods presented have been
included. Certain reclassifications have been made to the 2010 unaudited, condensed,
consolidated financial statements to conform to the 2011 presentation. Operating results for
the six months ended June 30, 2011, are not necessarily indicative of the results that may be
expected for the year ending December 31, 2011. These statements should be read in conjunction
with the consolidated financial statements and footnotes thereto included in our Annual Report
on Form 10-K for the year ended December 31, 2010.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 2 - ilfc:NewAccountingPronouncementsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>B. Recent Accounting Pronouncements</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We did not adopt any new accounting standards during the first six months of 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><i>Future Application of Accounting Standards:</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><i>A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     In April 2011, the FASB issued an accounting standard update that amends the guidance for
a creditor’s evaluation of whether a restructuring is a troubled debt restructuring and
requires additional disclosures about a creditor’s troubled debt restructuring activities. The
new standard clarifies the existing guidance on the two criteria used by creditors to determine
whether a modification or restructuring is a troubled debt restructuring: <i>(i) </i>whether the
creditor has granted a concession and <i>(ii) </i>whether the debtor is experiencing financial
difficulties. The new standard is effective for interim and annual periods beginning on July 1,
2011, with early adoption permitted. We are required to apply the guidance in the accounting
standard retrospectively for all modifications and restructuring activities that have occurred
since January 1, 2011. For receivables that are considered newly impaired under the guidance,
we are required to measure the impairment of those receivables prospectively in the first
period of adoption. In addition, we must begin providing the disclosures about troubled debt
restructuring activities in the period of adoption. We are currently assessing the effect of
adoption of this new standard on our consolidated financial position, results of operations and
cash flows.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><i>Common Fair Value Measurements and Disclosure Requirements in GAAP and IFRS</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     In May 2011, the FASB issued an accounting standard update that amends certain aspects of
the fair value measurement guidance in GAAP, primarily to achieve the FASB’s objective of a
converged definition of fair value and substantially converged measurement and disclosure
guidance with IFRS. Consequently, when the new standard becomes effective on January 1, 2012,
GAAP and IFRS will be consistent, with certain exceptions including the accounting for day one
gains and losses, measuring the fair value of alternative investments measured on a net asset
value basis and certain disclosure requirements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The new standard’s fair value guidance applies to all companies that measure assets,
liabilities, or instruments classified in shareholders’ equity at fair value or provide fair
value disclosures for items not recorded at fair value. While many of the amendments to GAAP
are not expected to significantly affect current practice, the guidance clarifies how a
principal market is determined, addresses the fair value measurement of financial instruments
with offsetting market or counterparty credit risks and the concept of valuation premise (i.e.,
in-use or in exchange) and highest and best use, extends the prohibition on blockage factors to
all three levels of the fair value hierarchy, and requires additional disclosures.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The new standard is effective for us for interim and annual periods beginning on January
1, 2012. If different fair value measurements result from applying the new standard, we will
recognize the difference in the period of adoption as a change in estimate. The new disclosure
requirements must be applied prospectively. In the period of adoption, we will disclose any
changes in valuation techniques and related inputs resulting from application of the amendments
and quantify the total effect, if material. We are assessing the effect of the new standard on
our consolidated statements of financial position, results of operations and cash flows.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><i>Presentation of Comprehensive Income</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     In June 2011, the FASB issued an accounting standard update that requires the presentation
of comprehensive income either in a single continuous statement of comprehensive income or in
two separate but consecutive statements. In the two-statement approach, the first statement
should present total net income and its components, followed consecutively by a second
statement that presents total other comprehensive income and its components. This presentation
is effective January 1, 2012, and is required to be applied retrospectively. Early adoption is
permitted. Adoption of the new standard will have no effect on our consolidated financial
statements because we already use the two-statement approach to present comprehensive income.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 3 - ilfc:RestrictedCashTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>C. Restricted Cash</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We entered into ECA facility agreements in 1999 and 2004 through subsidiaries. See Note G
— <i>Debt Financings. </i>We had no loans outstanding under the 1999 ECA facility as of June 30, 2011.
Because of our current long-term debt ratings, the 2004 ECA facility requires us to segregate
security deposits, overhaul rentals and rental payments received under the leases of the
aircraft funded under the 2004 ECA facility (segregated rental payments are used to make
scheduled principal and interest payments on the outstanding debt). The segregated funds are
deposited into separate accounts pledged to and controlled by the security trustee of the 2004
ECA facility. At June 30, 2011, we had segregated security deposits, overhaul rentals and
rental payments aggregating approximately $397 million related to aircraft funded under the
2004 ECA facility. The segregated amounts fluctuate with changes in security deposits, overhaul
rentals, rental payments and debt maturities related to the aircraft funded under the 2004 ECA
facility. In addition, if a default resulting in an acceleration of the obligations under the
2004 ECA facility were to occur, pursuant to a cross-
collateralization agreement, we would have to segregate lease payments, overhaul rentals
and security deposits received after such acceleration event occurred relating to all the
aircraft funded under the 1999 ECA facility, even though those aircraft are no longer subject
to a loan at June 30, 2011.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     In March 2010, we entered into a $550 million secured term loan through a newly formed
subsidiary. The proceeds from this transaction are restricted until the collateral is
transferred to certain of our subsidiaries that guarantee the debt on a secured basis and whose
equity were pledged to secure the term loan and at June 30, 2011, approximately $24 million of
the proceeds remained restricted.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The subsidiaries described above meet the definition of a VIE and have been designated as
non-restricted subsidiaries, under our indentures. See Note G — <i>Debt Financings </i>and Note N -
<i>Variable Interest Entities.</i>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 4 - us-gaap:AllowanceForCreditLossesTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>D. Allowance for Credit Losses</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     On occasion we enter into finance or sales type leases, or in limited circumstances we
will advance cash, or accept a note receivable, in conjunction with the sale of an aircraft. At
June 30, 2011, we had four aircraft under finance and sales type leases with aggregate
principal balance of $65.7 million and notes receivable with aggregate principal balance, net
of allowance, of $20.6 million. At December 31, 2010, the principal related to the four
aircraft under finance leases aggregated $67.6 million and we had notes
receivable with aggregate principal balance, net of allowance, of $65.1 million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We had the following activity in our allowance for credit losses on notes receivable for
the following period:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td align="center" colspan="2">(Dollars in thousands)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Allowance for credit losses:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at December 31, 2010
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">21,042</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Provision
</div></td>
<td> </td>
<td> </td>
<td align="right">12,163</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Write-offs
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Recoveries
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,531</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at June 30, 2011
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">31,674</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 5 - ilfc:AircraftImpairmentChargesAndFairValueAdjustmentsOnFlightEquipmentSoldOrToBeDisposedOfTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>E. Aircraft Impairment Charges and Fair Value Adjustments on Flight Equipment Sold or to be Disposed</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We reported the following impairment charges and fair value adjustments on flight
equipment during the three and six months ended June 30, 2011 and 2010, respectively:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="20%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">Three Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">Six Months Ended</td>
<td style="border-bottom: 1px solid #000000"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">June 30, 2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">June 30, 2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">June 30, 2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">June 30, 2010</td>
<td style="border-bottom: 1px solid #000000"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Aircraft</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Impairment</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Aircraft</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Impairment</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Aircraft</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Impairment</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Aircraft</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Impairment</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Impaired</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Charges and</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Impaired</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Charges and</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Impaired</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Charges and</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Impaired</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Charges and</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">or</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">or</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">or</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">or</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair Value</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Adjusted</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Adjustments</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Adjusted</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Adjustments</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Adjusted</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Adjustments</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Adjusted</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Adjustments</td>
<td style="border-bottom: 1px solid #000000"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">Loss/(Gain)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(Dollars in millions)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Impairment
charges and fair
value adjustments
on aircraft likely
to be sold or sold
</div></td>
<td> </td>
<td> </td>
<td align="right">5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">41.1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">—</td>
<td nowrap="nowrap">(b)</td>
<td> </td>
<td align="left">$</td>
<td align="right">0.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">148.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">32.7</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Fair value
adjustments on held
for sale aircraft
sold or transferred
from held for sale
back to flight
equipment under
operating leases
(a)
</div></td>
<td> </td>
<td> </td>
<td align="right">2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">40.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3.5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">56</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">361.3</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Impairment
charges on aircraft
designated for
part-out
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td colspan="7" align="left" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td colspan="7" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
Impairment charges
and fair value
adjustments on
flight equipment
</div></td>
<td> </td>
<td> </td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">43.8</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">53.0</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">25</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">147.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">59</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">406.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 3px double #000000"> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td colspan="7" align="left" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td colspan="7" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>Included in these amounts are net fair value credit adjustments related to aircraft
previously held for sale, but which no longer met such criteria and were subsequently
reclassified to Flight equipment under operating leases. Also included in these amounts are
fair value credit adjustments related to sales price adjustments related to aircraft that were
previously held for sale and sold during periods presented.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(b)</td>
<td> </td>
<td>Amounts relate to two aircraft that were previously impaired, but additional fair value
adjustments were recorded in the current period.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><i>Three months ended June 30, 2011</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     Aircraft impairment charges and fair value adjustments on flight equipment totaled $43.8
million for the three months ended June 30, 2011, due to the following factors:
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="6%" style="background: transparent"> </td>
<td width="2%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>$41.1 million of impairment charges and fair value adjustments were recorded on five aircraft.
This amount was the result of <i>(i) </i>$41.9 million of impairment charges on aircraft that we were in
negotiations with third parties to sell and we deemed more likely than not to be sold, but did not
meet the criteria required to be classified as Flight equipment held for sale; and <i>(ii) </i>fair value
adjustments on aircraft sold to third parties from our fleet held for use aggregating a net credit
of $0.8 million.</td>
</tr>
<tr>
<td style="font-size: 6pt"> </td>
</tr>
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="6%" style="background: transparent"> </td>
<td width="2%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>$2.7 million of fair value adjustments were recorded on aircraft reclassified
to or from Flight equipment held for sale. During the three months ended June
30, 2011, we had one aircraft that
met the criteria for and was classified as
Flight equipment held for sale. In addition, we determined that one aircraft we had previously classified as Flight equipment
held for sale no longer met the criteria and reclassified that aircraft to Flight
equipment under operating lease during the three months ended June 30, 2011. In
accordance with GAAP, we recorded the aircraft at the lower of depreciated cost,
had the aircraft never been classified as Flight equipment held for sale, or its
fair value at the date of the reclassification of the aircraft.</td>
</tr>
</table>
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="6%" style="background: transparent"> </td>
<td width="2%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>We did not have any impairment charges on aircraft designated for part-out
for the three months ended June 30, 2011.</td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><i>Three months ended June 30, 2010</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     Aircraft impairment charges and fair value adjustments on flight equipment totaled $53.0
million for the three months ended June 30, 2010, due to the following factors:
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="6%" style="background: transparent"> </td>
<td width="2%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>$0.5 million of fair value adjustments were recorded on two aircraft we deemed
more likely than not to be sold.</td>
</tr>
<tr>
<td style="font-size: 6pt"> </td>
</tr>
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="6%" style="background: transparent"> </td>
<td width="2%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>$40.1 million of impairment charges were recorded on six aircraft that met
the criteria for and were classified as Flight equipment held for sale.</td>
</tr>
<tr>
<td style="font-size: 6pt"> </td>
</tr>
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="6%" style="background: transparent"> </td>
<td width="2%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>$12.4 million of impairment charges were recorded due to the designation of
one aircraft for part-out to record the parts at their fair value. The fair
value of the parts is included in Lease receivables and other assets on our
Condensed, Consolidated Balance Sheet.</td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><i>Six months ended June 30, 2011</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     Aircraft impairment charges and fair value adjustments on flight equipment totaled $147.1
million for the six months ended June 30, 2011, due to the following factors:
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="6%" style="background: transparent"> </td>
<td width="2%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>$148.1 million of impairment charges and fair value adjustments were recorded
relating to <i>(i) </i>fair value adjustments aggregating $17.3 million on five
aircraft sold to third parties from our fleet held for use; and <i>(ii) </i>impairment
charges of $130.8 million on nine aircraft that we were in negotiations with
third parties to sell and we deemed more likely than not to be sold, but did not
meet the criteria required to be classified as Flight equipment held for sale.</td>
</tr>
<tr>
<td style="font-size: 6pt"> </td>
</tr>
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="6%" style="background: transparent"> </td>
<td width="2%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>$3.5 million of fair value credit adjustments were recorded on aircraft
reclassified to or from Flight equipment held for sale. During the six months
ended June 30, 2011, we had one aircraft that met the criteria for and was
classified as Flight equipment held for sale. In addition, we determined that
three aircraft that we had previously classified as Flight equipment held for
sale no longer met the criteria and reclassified those aircraft to Flight
equipment under operating lease. In accordance with GAAP, we recorded the three
aircraft at the lower of depreciated cost, had the aircraft never been
classified as Flight equipment held for sale, or its fair value at the date of
the reclassification of the aircraft. We recorded fair value credit adjustments
of $0.3 million related to these aircraft. We also sold six aircraft that were
classified as Flight equipment held for sale, and recorded fair value
adjustments related to those aircraft aggregating a net credit of $3.2 million.</td>
</tr>
<tr>
<td style="font-size: 6pt"> </td>
</tr>
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="6%" style="background: transparent"> </td>
<td width="2%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>$2.5 million of impairment charges were recorded due to the designation of
one aircraft for part-out to record the parts at their fair value. The fair
value of the parts is included in Lease receivables and other assets on our
Condensed, Consolidated Balance Sheet.</td>
</tr>
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div style="margin-top: 0pt">
</div>
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><i>Six months ended June 30, 2010</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     Aircraft impairment charges and fair value adjustments on flight equipment totaled $406.4
million for the six months ended June 30, 2010, due to the following factors:
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="6%" style="background: transparent"> </td>
<td width="2%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>$32.7 million of impairment charges were recorded on two aircraft that we
were in negotiations with third parties to sell and we deemed more likely than
not to be sold, but did not meet the criteria required to be classified as
Flight equipment held for sale.</td>
</tr>
<tr>
<td style="font-size: 6pt"> </td>
</tr>
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="6%" style="background: transparent"> </td>
<td width="2%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>$361.3 million of impairment charges were recorded on 56 aircraft
reclassified to Flight equipment held for sale. On April 13, 2010, to generate
liquidity to repay maturing debt obligations, we signed an agreement to sell 53
aircraft from our existing fleet to a third party for an aggregate purchase
price of approximately $2.0 billion. On July 6, 2010, we signed an agreement to
sell an additional six aircraft to another third party. As of June 30, 2010, 56
of the 59 aircraft met the criteria to be recorded as Flight equipment held for
sale.</td>
</tr>
<tr>
<td style="font-size: 6pt"> </td>
</tr>
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="6%" style="background: transparent"> </td>
<td width="2%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>$12.4 million of impairment charges were recorded due to the designation of
one aircraft for part-out to record the parts at their fair value. The fair
value of the parts is included in Lease receivables and other assets on our
Condensed, Consolidated Balance Sheet.</td>
</tr>
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 6 - ilfc:FlightEquipmentHeldForSaleTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>F. Flight Equipment Held for Sale</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     We had the following activity in Flight equipment held for sale for the six months ended
June 30, 2011:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Aircraft</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Carrying Value</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td align="left"><i>Flight Equipment Held for Sale</i></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(Dollars in thousands)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at December 31, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">9</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">255,178</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Transferred from Flight equipment held for
sale to Flight equipment under operating
leases
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(76,438</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Transferred from Flight equipment under
operating leases to Flight equipment held for
sale
</div></td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,220</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Flight equipment sold
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(178,740</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Flight equipment held for sale at June 30, 2011
</div></td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,220</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     At June 30, 2011 and December 31, 2010, we had one and nine aircraft, respectively, that
met the criteria for, and were classified as, Flight equipment held for sale. The balance in
Flight equipment held for sale of $5.2 million and $255.2 million at June 30, 2011 and December
31, 2010, respectively, represents the estimated fair value of such
aircraft less cost to sell. We cease
recognition of depreciation expense on aircraft subsequent to transferring them from Flight
equipment under operating leases. During the six months ended June 30, 2011, we transferred
three aircraft that no longer met the criteria for Flight equipment held for sale to Flight
equipment under operating leases.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     In addition, we sold six aircraft that were classified as Flight equipment held for sale
and recorded fair value adjustments related to those aircraft aggregating net credits of $0.3
million and $3.2 million for the three and six months ended June 30, 2011, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     Net cash proceeds from sales of flight equipment classified as held for sale is received
as each individual aircraft sale is consummated. The actual purchase price may differ from the
recorded estimated fair
value of the aircraft when classified as held for sale, depending on
the timing of the completion of a sale and, in some cases, whether an aircraft classified as
held for sale is subsequently substituted with different aircraft.
</div>
</div>
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<!-- Begin Block Tagged Note 7 - us-gaap:DebtDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>G. Debt Financings</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     Our debt financing was comprised of the following at the following dates:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">June 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">December 31,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(Dollars in thousands)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Secured
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Senior secured bonds
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3,900,000</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,900,000</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">ECA financings
</div></td>
<td> </td>
<td> </td>
<td align="right">2,549,627</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,777,285</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Bank debt (a)
</div></td>
<td> </td>
<td> </td>
<td align="right">1,601,973</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,601,658</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Other secured financings
</div></td>
<td> </td>
<td> </td>
<td align="right">1,300,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,300,000</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Less: Deferred debt discount
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(19,901</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(22,309</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right">9,331,699</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,556,634</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Unsecured
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Bonds and Medium-Term Notes
</div></td>
<td> </td>
<td> </td>
<td align="right">14,870,562</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,810,843</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Bank debt
</div></td>
<td> </td>
<td> </td>
<td align="right">207,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">234,600</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Less: Deferred debt discount
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(42,977</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(47,977</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right">15,034,585</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,997,466</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total Senior Debt Financings
</div></td>
<td> </td>
<td> </td>
<td align="right">24,366,284</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,554,100</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Subordinated Debt
</div></td>
<td> </td>
<td> </td>
<td align="right">1,000,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,000,000</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">25,366,284</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">27,554,100</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>Of this amount, $105.4 million (2011) and $113.7 million (2010) is non-recourse to ILFC.
These secured financings were incurred by VIEs and consolidated into
our condensed,
consolidated financial statements.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The above amounts represent the anticipated settlement of our outstanding debt obligations
as of June 30, 2011 and December 31, 2010. Certain adjustments required to present currently
outstanding hedged debt obligations have been recorded and presented separately on our
Condensed, Consolidated Balance Sheets, including adjustments related to foreign currency
hedging and interest rate hedging activities.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     For some of our secured debt financings, we created direct and indirect wholly-owned
subsidiaries for the purpose of purchasing and holding title to aircraft, and we then pledged
the equity of those subsidiaries as collateral. These subsidiaries have been designated as
non-restricted subsidiaries under our indentures and meet the definition of a VIE. We have
determined that we are the primary beneficiary of such VIEs and, accordingly, we consolidate
such entities into our condensed, consolidated financial statements. See Note N — <i>Variable
Interest Entities </i>for more information on VIEs<i>.</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     At June 30, 2011, approximately $21 billion of our flight equipment was pledged as
collateral for the $9.3 billion of secured debt outstanding.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><i>Senior Secured Bonds</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     On August 20, 2010, we issued $3.9 billion of senior secured notes, with $1.35 billion
maturing in September 2014 and bearing interest of 6.5%, $1.275 billion maturing in September
2016 and bearing interest
of 6.75%, and $1.275 billion maturing in September 2018 and bearing
interest of 7.125%. The notes are secured by a designated pool of aircraft, initially
consisting of 174 aircraft and their related leases. In addition, two of ILFC’s subsidiaries,
which either own or hold leases of aircraft included in the pool securing the notes, have
guaranteed the notes. We can redeem the notes at any time prior to their maturity, provided we
give notification between 30 to 60 days prior to the intended redemption date and subject to a
penalty of the greater of 1% of the outstanding principal amount and a “make-whole” premium.
There is no sinking fund for the notes.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The indenture governing the senior secured notes contains customary covenants that, among
other things, restrict our and our restricted subsidiaries’ ability to: <i>(i) </i>create liens; <i>(ii)</i>
sell, transfer or otherwise
dispose of assets; <i>(iii) </i>declare or pay dividends or acquire or retire shares of our
capital stock; <i>(iv) </i>designate restricted subsidiaries as non-restricted subsidiaries or
designate non-restricted subsidiaries; <i>(v) </i>make investments in or transfer assets to
non-restricted subsidiaries; and <i>(vi) </i>consolidate, merge, sell or otherwise dispose of all, or
substantially all, of our assets.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The indenture also provides for customary events of default, including but not limited to,
the failure to pay scheduled principal and interest payments on the notes, the failure to
comply with covenants and agreements specified in the indenture, the acceleration of certain
other indebtedness resulting from non-payment of that indebtedness, and certain events of
insolvency. If any event of default occurs, any amount then outstanding under the senior
secured notes may immediately become due and payable.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><i>Export Credit Facilities</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We entered into ECA facility agreements in 1999 and 2004 through certain direct and
indirect wholly-owned subsidiaries that have been designated as non-restricted subsidiaries
under our indentures. The 1999 and 2004 ECA facilities were used to fund purchases of Airbus
aircraft through 2001 and June 2010, respectively. New financings are no longer available to us
under either ECA facility and we had no loans outstanding under the 1999 ECA facility as of
June 30, 2011. The loans made under the ECA facilities were used to fund a portion of each
aircraft’s net purchase price. The loans are guaranteed by various European ECAs. We have
collateralized the debt with pledges of the shares of wholly-owned subsidiaries that hold title
to the aircraft financed under the facilities.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     In January 1999, we entered into the 1999 ECA facility and used amounts borrowed under
this facility to finance purchases of 62 Airbus aircraft through 2001. At June 30, 2011, all
loans under the facility had been paid in full. The facility is, however, party to a
cross-collateralization agreement relating to the 2004 ECA facility, as further discussed
below. The net book value of the aircraft used as collateral under this facility was $1.5
billion at June 30, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     In May 2004, we entered into the 2004 ECA facility, which was amended in May 2009 to allow
us to borrow up to $4.6 billion for the purchase of Airbus aircraft delivered through June 30,
2010. We used $4.3 billion of the available amount to finance purchases of 76 aircraft. Each
aircraft purchased was financed by a ten-year fully amortizing loan. As of June 30, 2011,
approximately $2.5 billion was outstanding under this facility. The interest rates on the loans
outstanding under the facility are either fixed or based on LIBOR and ranged from 0.37% to
4.71% at June 30, 2011. The net book value of the aircraft purchased under this facility was
$4.4 billion at June 30, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     Because of our current long-term debt ratings, the 2004 ECA facility requires us to
segregate security deposits, overhaul rentals and rental payments received for aircraft with
loan balances outstanding under the 2004 ECA facility (segregated rental payments are used to
make scheduled principal and interest payments on the outstanding debt under the 2004 ECA
facility). The segregated funds are deposited into separate accounts pledged to and controlled
by the security trustee of the facility. In addition, we must register the existing
individual
mortgages on certain aircraft funded under both the 1999 and 2004 ECA facilities in the local
jurisdictions in which the respective aircraft are registered (mortgages are only required to
be filed on aircraft with loan balances outstanding or otherwise as agreed in connection with
the cross-collateralization agreement as described below). At June 30, 2011, we had segregated
security deposits, overhaul rentals and rental payments aggregating approximately $397 million
related to aircraft funded under the 2004 ECA facility. The segregated amounts will fluctuate
with changes in security deposits, overhaul rentals, rental payments and debt maturities
related to the aircraft funded under the 2004 ECA facility.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     During the first quarter of 2010, we entered into agreements to cross-collateralize the
1999 ECA facility with the 2004 ECA facility. As part of such cross-collateralization we <i>(i)</i>
guaranteed the obligations under the 2004 ECA facility through our subsidiary established to
finance Airbus aircraft under our 1999 ECA facility; <i>(ii) </i>agreed to grant mortgages over
certain aircraft financed under the 1999 ECA facility and security interests over other
collateral related to the aircraft financed under the 1999 ECA facility to secure the guaranty
obligation; <i>(iii) </i>accepted a loan-to-value ratio (aggregating the loans and aircraft from
the 1999 ECA facility and the 2004 ECA facility) of no more than 50%, in order to release liens
(including the liens incurred under the cross-collateralization agreement) on any aircraft
financed under the 1999 or 2004 ECA facilities or other assets related to the aircraft; and
<i>(iv) </i>agreed to allow proceeds generated from certain disposals of aircraft to be applied to
obligations under the 2004 ECA facility. As of June 30, 2011, there were no outstanding
obligations under the 1999 ECA facility.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We also agreed to additional restrictive covenants relating to the 2004 ECA facility,
restricting us from <i>(i) </i>paying dividends on our capital stock with the proceeds of asset sales
and <i>(ii) </i>selling or transferring aircraft with an aggregate net book value exceeding a certain
disposition amount, which is currently approximately $10.3 billion. The disposition amount will
be reduced by approximately $91.4 million at the end of each calendar quarter during the
effective period. The covenants are in effect from the date of the agreement until December 31,
2012. A breach of these restrictive covenants would result in a termination event for the ten
loans funded subsequent to the date of the agreement and would make those loans, which
aggregated $285.2 million at June 30, 2011, due in full at the time of such a termination
event.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     In addition, if a termination event resulting in an acceleration of the obligations under
the 2004 ECA facility were to occur, pursuant to the cross-collateralization agreement, we
would have to segregate lease payments, overhaul rentals and security deposits received after
such acceleration event occurred relating to all the aircraft funded under the 1999 ECA
facility, even though those aircraft are no longer subject to a loan at June 30, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><i>Secured Bank Debt</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We have a credit facility, dated October 13, 2006, as amended, under which the original
maximum amount available was $2.5 billion. We repaid aggregate principal amounts of loans
outstanding under this facility of $800 million and $200 million in the fourth quarter of 2010
and in June 2011, respectively. The amended facility prohibits us from re-borrowing amounts
repaid under this facility. Therefore, the current size of the facility is $1.5 billion. As of
June 30, 2011, we had secured loans of $1.29 billion outstanding under the facility, all of
which will mature in October 2012. The interest on $1.25 billion of the secured loans is based
on LIBOR plus a margin of 2.15%, plus facility fees of 0.2% on the outstanding principal
balance and the remaining $43.0 million had an interest rate of 4.75% at June 30, 2011. The
remaining $207 million outstanding under the facility consists of unsecured loans that will
mature on their originally scheduled maturity date of October 13, 2011, with a LIBOR based
interest rate plus a margin of 0.65% plus facility fees of 0.2% of the outstanding balance.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The collateralization requirement under the amended facility provides that the $1.29
billion of secured loans must be secured by a lien on the equity interests of certain of ILFC’s
non-restricted subsidiaries that own
aircraft with aggregate appraised values of originally not
less than 133% of the outstanding principal amount (the “Required Collateral Amount”). The
credit facility includes an ongoing requirement, tested periodically, that the appraised value
of the eligible aircraft owned by the pledged subsidiaries must be equal to or greater than
100% of the Required Collateral Amount. This ongoing requirement is subject to the right to
transfer additional eligible aircraft to the pledged subsidiaries or ratably prepay the loans.
We also guarantee the secured loans through certain other subsidiaries.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The credit facility also contains financial and restrictive covenants that <i>(i) </i>limit our
ability to incur indebtedness; <i>(ii) </i>restrict certain payments,
liens and sales of assets by us;
and <i>(iii) </i>require us to maintain a fixed charge coverage ratio and consolidated tangible net
worth in excess of certain minimum levels.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     On March 30, 2011, one of our non-restricted subsidiaries entered into a secured term loan
agreement with lender commitments in the amount of approximately $1.3 billion, which was
subsequently increased to approximately $1.5 billion. The loan matures on March 30, 2018, with
scheduled principal payments commencing in June 2012, and bears interest at LIBOR plus a margin
of 2.75%, or, if applicable, a base rate plus a margin of 1.75%. The obligations of the
subsidiary borrower are guaranteed on an unsecured basis by
ILFC and on a secured basis by certain wholly-owned subsidiaries of the subsidiary
borrower. The security granted initially includes a portfolio of 54 aircraft, together with
attached leases and all related equipment, with an average appraised base market value of
approximately $2.4 billion as of January 1, 2011. The $2.4 billion equals an initial
loan-to-value ratio of approximately 65% and the equity interests in certain SPEs that will own
the aircraft and related equipment and leases that are pledged as security for the loans. The
proceeds of the loan will be made available to the subsidiary borrower as aircraft are
transferred to the SPEs, at an advance rate equal to 65% of the initial appraised value of the
aircraft transferred to the SPEs. At June 30, 2011 and August 5, 2011, respectively,
approximately $181 million and $696 million had been advanced to the subsidiary borrower under
the agreement.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The subsidiary borrower will be required to maintain compliance with a maximum
loan-to-value ratio, which varies over time, as set forth in the term loan agreement. If the
subsidiary borrower does not maintain compliance with the maximum loan-to-value ratio, it will
be required to either prepay portions of the outstanding loans or transfer additional aircraft
to SPEs, subject to certain concentration criteria, so that the ratio is equal to or less than
the maximum loan-to-value ratio.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We can voluntarily prepay the loan at any time, subject to a 2% prepayment penalty prior
to March 30, 2012, and a 1% prepayment penalty between March 30, 2012 and March 30, 2013. The
loan facility contains customary covenants and events of default, including covenants that
limit the ability of the subsidiary borrower and its subsidiaries to <i>(i) </i>incur additional
indebtedness; <i>(ii) </i>create liens; <i>(iii) </i>consolidate, merge or dispose of all or substantially
all of their assets; and <i>(iv) </i>enter into transactions with affiliates.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     In May 2009, ILFC provided $39.0 million of subordinated financing to a non-restricted
subsidiary. The entity used these funds and an additional $106.0 million borrowed from third
parties to purchase an aircraft, which it leases to an airline. ILFC acts as servicer of the
lease for the entity. The $106.0 million loan has two tranches. The first tranche is $82.0
million, fully amortizes over the lease term, and is non-recourse to ILFC. The second tranche
is $24.0 million, partially amortizes over the lease term, and is guaranteed by ILFC. Both
tranches of the loan are secured by the aircraft and the lease receivables. Both tranches
mature in May 2018 with interest rates based on LIBOR. At June 30, 2011, the interest rates on
the $82.0 million and $24.0 million tranches were 3.34% and 5.04%, respectively. The entity
entered into two interest rate cap agreements to economically hedge the related LIBOR interest
rate risk in excess of 4.00%. At June 30, 2011, $83.8 million was outstanding under the two
tranches and the net book value of the aircraft was $134.7 million.
</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">  In June 2009, we borrowed $55.4 million through a non-restricted subsidiary, which owns
one aircraft leased to an airline. Half of the original loan amortizes over five years and the
remaining $27.7 million is due in 2014. The loan is non-recourse to ILFC and is secured by the
aircraft and the lease receivables. The interest rate on the loan is fixed at 6.58%. At June
30, 2011, $43.7 million was outstanding and the net book value of the aircraft was $89.8
million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><i>Other Secured Financing Arrangements</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     On March 17, 2010, we entered into a $750 million term loan agreement secured by 43
aircraft and all related equipment and leases. The aircraft had an average appraised base
market value of approximately $1.3 billion, for an initial loan-to-value ratio of approximately
56%. The loan matures on March 17, 2015, and bears interest at LIBOR plus a margin of 4.75%
with a LIBOR floor of 2.0%. The principal of the loan is payable in full at maturity with no
scheduled amortization, but we can voluntarily prepay the loan at any time. On March 17, 2010,
we also entered into an additional term loan agreement of $550 million through a newly formed
non-restricted subsidiary. The obligations of the subsidiary borrower are guaranteed on an
unsecured basis by ILFC and on a secured basis by certain non-restricted subsidiaries of ILFC
that hold title to 37 aircraft. The aircraft had an average appraised base market value of
approximately $969 million, for an initial loan-to-value ratio of approximately 57%. The loan
matures on March 17, 2016, and bears interest at LIBOR plus a margin of 5.0% with a LIBOR floor
of 2.0%. The principal of the loan is payable in full at maturity with no scheduled
amortization. The proceeds from this loan are restricted from use in our operations until we
transfer the related collateral to the non-restricted subsidiaries. At June 30, 2011,
approximately $24 million of the proceeds
remained restricted. We can voluntarily prepay the loan at any time, subject to a 1%
prepayment penalty prior to March 17, 2012. Both loans require a loan-to-value ratio of no more
than 63%. The loans also contain customary covenants and events of default, including
limitations on the ability of us and our subsidiaries, as applicable, to create liens; incur
additional indebtedness; consolidate, merge, sell or otherwise dispose of all or substantially
all of our assets; and enter into transactions with affiliates.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The subsidiary borrower will be required to maintain compliance with a maximum
loan-to-value ratio, which varies over time, as set forth in the term loan agreement. If the
subsidiary borrower does not maintain compliance with the maximum loan-to-value ratio, it will
be required to either prepay portions of the outstanding loans or transfer additional aircraft
to SPEs, subject to certain concentration criteria, so that the ratio is equal to or less than
the maximum loan-to-value ratio.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><i>Unsecured Bonds and Medium-Term Notes</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     <i>Shelf Registration Statement</i>: We have an effective shelf registration statement filed with
the SEC. As a result of our WKSI status, we have an unlimited amount of debt securities
registered for sale under the shelf registration statement.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     Under our shelf registration statement, we issued: <i>(i) </i>$1.0 billion of 5.75% notes due
2016 and $1.25 billion of 6.25% notes due 2019 on May 24, 2011; <i>(ii) </i>$1.0 billion of 8.25%
notes due 2020 on December 7, 2010; and <i>(iii) </i>$500 million of 8.875% notes due 2017 on August
20, 2010. At June 30, 2011, after the completion of tender offers to purchase certain notes on
June 17, 2011, as further discussed below, we also had $7.2 billion of public bonds and
medium-term notes outstanding, with interest rates ranging from 0.60% to 7.95%, which we had
issued in prior years under previous registration statements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The aggregate net proceeds from the sale of the notes issued on May 24, 2011, were
approximately $2.22 billion after deducting underwriting discounts and commissions, fees and
estimated offering expenses. The net proceeds from the sale of the notes were primarily used to
purchase notes validly tendered and accepted in our tender offers that we announced during the
second quarter of 2011 to purchase various series of our outstanding debt securities for up to
$1.75 billion cash consideration.
</div>
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</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     <i>Tender Offers to Purchase Notes</i>: On June 17, 2011, we completed the above mentioned tender
offers and accepted for purchase previously issued notes with an aggregate principal amount of
approximately $1.67 billion, resulting in total cash consideration, including accrued and
unpaid interest, of approximately $1.75 billion. In connection with the cancellation of the
notes, we recognized losses aggregating approximately $61.1 million, which included the cost of
repurchasing the notes and the write off of the remaining unamortized deferred financing costs.
The following notes were accepted for purchase by us in the tender offers:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Aggregate</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Aggregate</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Principal Amount</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Principal Amount</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Outstanding</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Total Principal</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Outstanding upon</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">before Tender</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amount Accepted</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Completion of</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Offers (a)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">for Purchase (b)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Tender Offers</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td align="left">Title of Security</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10">(Dollars in thousands)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">4.750% Medium-Term
Notes, Series Q,
due January 13,
2012
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">500,000</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">293,496</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">206,504</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">5.400% Medium-Term
Notes, Series R,
due February 15,
2012
</div></td>
<td> </td>
<td> </td>
<td align="right">750,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">386,623</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">363,377</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">5.350% Medium-Term
Notes, Series R,
due March 1, 2012
</div></td>
<td> </td>
<td> </td>
<td align="right">600,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">265,371</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">334,629</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">5.300% Medium-Term
Notes, Series R,
due May 1, 2012
</div></td>
<td> </td>
<td> </td>
<td align="right">850,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">402,993</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">447,007</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">5.550% Medium-Term
Notes, Series Q,
due September 5,
2012
</div></td>
<td> </td>
<td> </td>
<td align="right">300,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">100,872</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">199,128</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">5.000% Medium-Term
Notes, Series Q,
due September 15,
2012
</div></td>
<td> </td>
<td> </td>
<td align="right">300,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">103,564</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">196,436</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">5.250% Medium-Term
Notes, Series Q,
due January 10,
2013
</div></td>
<td> </td>
<td> </td>
<td align="right">300,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">72,234</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">227,766</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">6.375% Medium-Term
Notes, Series R,
due March 25, 2013
</div></td>
<td> </td>
<td> </td>
<td align="right">1,000,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">47,146</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">952,854</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4,600,000</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,672,299</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,927,701</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>As of June 2, 2011.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(b)</td>
<td> </td>
<td>Includes notes that were validly tendered and accepted on June 2, 2011, and for which
payment was settled on June 3, 2011.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     <i>Euro Medium-Term Note Programme</i>: We have a $7.0 billion Euro Medium-Term Note
Programme, which will expire in September 2011. We had approximately $1.2
billion of Euro denominated notes outstanding under such Programme at June 30, 2011. The notes
mature on August 15, 2011, and bear interest based on Euribor with a spread of 0.375%. As a
bond issue matures, the principal amount of that bond becomes available for new issuances under
the Programme. We have eliminated the currency exposure arising from the notes by hedging the
notes into U.S. dollars and fixing the interest rates at a range of 5.355% to 5.367%. We
translate the debt into U.S. dollars using current exchange rates prevailing at the balance
sheet date. The foreign exchange adjustment for the foreign currency denominated notes was
$281.6 million and $165.4 million at June 30, 2011 and December 31, 2010, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     A rollforward for the six months ended June 30, 2011, of the foreign currency adjustment related to foreign currency denominated notes is presented
below:
</div>
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</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td align="center" colspan="2" nowrap="nowrap">(Dollars in thousands)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency adjustment related to foreign currency
denominated debt at December 31, 2010
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">165,400</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency period adjustment of non-US$ denominated debt
</div></td>
<td> </td>
<td> </td>
<td align="right">116,200</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency adjustment related to foreign currency
denominated debt at June 30, 2011
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">281,600</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     <i>Other Senior Notes</i>: On March 22, 2010 and April 6, 2010, we issued a combined $1.25
billion aggregate principal amount of 8.625% senior notes due September 15, 2015, and $1.5
billion aggregate principal amount of 8.750% senior notes due March 15, 2017, pursuant to an
indenture dated as of March 22, 2010. The notes are due in full on their scheduled maturity
dates. The notes are not subject to redemption prior to their stated maturity and there are no
sinking fund requirements. In connection with the note issuances, we entered into registration
rights agreements obligating us to, among other things, complete a registered exchange offer to
exchange the notes of each series for new registered notes of such series with substantially
identical terms, or register the notes pursuant to a shelf registration statement.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The annual interest rate on the affected notes increased by 0.25% per year for 90 days,
commencing on January 26, 2011, because the registration statement relating to the exchange
offer was not declared effective by the SEC by that date, as required under the registration
rights agreement. On April 26, 2011, the annual interest rate on the affected notes increased
by an additional 0.25% because we were unable to consummate the exchange offer by such date. We
completed the exchange offer on May 5, 2011, at which time the applicable interest rate
reverted to the original level.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The indenture governing the notes contains customary covenants that, among other things,
restrict our, and our restricted subsidiaries’, ability to <i>(i) </i>incur liens on assets; <i>(ii)</i>
declare or pay dividends or acquire or retire shares of our capital stock during certain events
of default; <i>(iii) </i>designate restricted subsidiaries as non-restricted subsidiaries or designate
non-restricted subsidiaries; <i>(iv) </i>make investments in or transfer assets to non-restricted
subsidiaries; and <i>(v) </i>consolidate, merge, sell, or otherwise dispose of all or substantially
all of our assets.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The indenture also provides for customary events of default, including but not limited to,
the failure to pay scheduled principal and interest payments on the notes, the failure to
comply with covenants and agreements specified in the indenture, the acceleration of certain
other indebtedness resulting from non-payment of that indebtedness, and certain events of
insolvency. If any event of default occurs, any amount then outstanding under the senior notes
may immediately become due and payable.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><i>Unsecured Bank Debt</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     On January 31, 2011, we entered into a new $2.0 billion unsecured three-year revolving
credit facility with a group of 11 banks that will expire on January 31, 2014. This revolving
credit facility provides for interest rates based on either a base rate or LIBOR plus an
applicable margin determined by a ratings-based pricing grid. The credit agreement contains
customary events of default and restrictive financial covenants that require us to maintain a
minimum fixed charge coverage ratio, a minimum consolidated tangible net worth and a maximum
ratio of consolidated debt to consolidated tangible net worth. As of June 30, 2011, no amounts
were outstanding under this revolving facility.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     As of June 30, 2011, $207.0 million of unsecured loans were outstanding under our credit
agreement dated as of October 13, 2006. These loans remain unsecured and mature on October 13,
2011, the original maturity date for this credit facility. The interest on the loans is based
on LIBOR plus a margin of 0.65% plus facility fees of 0.2% of the outstanding balance. The
remaining outstanding loans under the agreement, as amended, are secured. See <i>Secured Bank Debt</i>
above.
</div>
<!-- Folio -->
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</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><i>Subordinated Debt</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     In December 2005, we issued two tranches of subordinated debt totaling $1.0 billion. Both
tranches mature on December 21, 2065, but each tranche has a different call option. The $600
million tranche had a call option date of December 21, 2010, and the $400 million tranche has a
call option date of December 21, 2015. We did not exercise the call option at December 21, 2010
and the interest rate on the $600 million tranche changed from a fixed interest rate of 5.90%
to a floating rate with an initial credit spread of 1.55% plus the highest of <i>(i) </i>3 month
LIBOR; <i>(ii) </i>10-year constant maturity treasury; and <i>(iii) </i>30-year constant maturity treasury.
The interest will reset quarterly and at June 30, 2011, the interest rate was 5.74%. The $400
million tranche has a fixed interest rate of 6.25% until the 2015 call option date, and if we
do not exercise the call option, the interest rate will change to a floating rate, reset
quarterly, based on the initial credit spread of 1.80% plus the highest of <i>(i) </i>3 month LIBOR;
<i>(ii) </i>10-year constant maturity treasury; and <i>(iii) </i>30-year constant maturity treasury. If we
choose to redeem the $600 million tranche, we must pay 100% of the principal amount of the
bonds being redeemed, plus any accrued and unpaid interest to the redemption date. If we choose
to redeem only a portion of the outstanding bonds, at least $50 million principal amount of the
bonds must remain outstanding.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 8 - us-gaap:DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>H. Derivative Activities</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We use derivatives to manage exposures to interest rate and foreign currency risks. At
June 30, 2011, we had interest rate and foreign currency swap agreements with a related
counterparty and interest rate cap agreements with an unrelated counterparty. Our foreign
currency swap agreements mature on August 15, 2011, our interest rate swap agreements mature in
2014 and 2015, and our interest rate cap agreements mature in 2018.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We record changes in fair value of derivatives in income or OCI depending on the
designation of the hedge as either a fair value hedge or cash flow hedge, respectively. Where
hedge accounting is not achieved, the change in fair value of the derivative is recorded in
income. In the case of a re-designation of a derivative contract, the balance accumulated in
AOCI at the time of the re-designation is amortized into income over the remaining life of the
underlying derivative.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We have entered into two interest rate cap agreements with an unrelated counterparty in
connection with a secured financing transaction. We have not designated the interest rate caps
as hedges, and all changes in fair value are recorded in income.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     All of our interest rate and foreign currency swap agreements are subject to a master
netting agreement, which would allow the netting of derivative assets and liabilities in the
case of default under any one contract. During the second quarter of 2011, we novated our
trades and our master netting agreement, changing our counterparty from AIGFP to AIG Markets,
Inc., both wholly-owned subsidiaries of AIG. All other terms of our master netting agreement
remained unchanged and all instruments designated as hedges continued to qualify for their
respective treatment under US GAAP. Our derivative portfolio is recorded at fair value on our
balance sheet on a net basis in Derivative assets, net (see Note I — <i>Fair Value Measurements</i>).
We account for all of our interest rate swap and foreign currency swap agreements as cash flow
hedges. We do not have any credit risk related contingent features and are not required to post
collateral under any of our existing derivative contracts.
</div>
<!-- Folio -->
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</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Derivatives have notional amounts, which generally represent amounts used to calculate
contractual cash flows to be exchanged under the contract. The following table presents
notional and fair values of derivatives outstanding at the following dates:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Asset Derivatives</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Liability Derivatives</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Notional Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Fair Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Notional Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Fair Value</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">USD</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000">USD</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(In thousands)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">June 30, 2011:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Derivatives designated as
hedging instruments:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest rate swap agreements (a)
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">553,319</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(48,004 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange swap agreements
</div></td>
<td> </td>
<td align="left">€</td>
<td align="right">1,000,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">254,200</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total derivatives designated as
hedging instruments
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">254,200</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(48,004 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Derivatives not designated as
hedging instruments:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest rate cap agreements
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">83,788</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">708</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total derivatives
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">254,908</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(48,004 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">December 31, 2010:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Derivatives designated as
hedging instruments:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest rate swap agreements (a)
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">625,717</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(56,244 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange swap agreements
</div></td>
<td> </td>
<td align="left">€</td>
<td align="right">1,000,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">114,431</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total derivatives designated as
hedging instruments
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">114,431</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(56,244 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Derivatives not designated as
hedging instruments:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest rate cap agreements
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">89,520</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,963</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total derivatives
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">116,394</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(56,244 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>Converts floating interest rate debt into fixed rate debt.</td>
</tr>
</table>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     During the three and six months ended June 30, 2011 and 2010, we recorded the
following in OCI related to derivative instruments:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Gain (Loss)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Gain (Loss)</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">June 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">June 30,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(Dollars in thousands)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Effective portion of change in fair
market value of derivatives (a)(b)
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">44,955</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(166,030</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">145,613</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(221,234</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange component of cross currency
swaps (credited) charged to income
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(32,100</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">203,520</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(116,200</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">334,720</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of balances of de-designated
hedges and other adjustments
</div></td>
<td> </td>
<td> </td>
<td align="right">874</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,040</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,915</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,292</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Income tax effect
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,805</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(13,485</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(10,965</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(40,172</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net changes in cash flow hedges, net of taxes
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">8,924</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">25,045</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">20,363</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">74,606</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>Includes $(255) and $(299) of combined CVA and MVA for the three and six month periods
ended June 30, 2011, respectively, and $25,208 and $(62,620) of combined CVA and MVA for
the three and six month periods ended June 30, 2010, respectively.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(b)</td>
<td> </td>
<td>2010 includes losses of $(15,409) on a derivative contract that matured during the six
months ended June 30, 2010, that was de-designated as a cash flow hedge and then
subsequently re-designated during the life of the contract.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The following table presents the effective portion of the unrealized gain (loss) on
derivative positions recorded in OCI:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14">Amount of Unrealized Gain or (Loss)</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14">Recorded in OCI on Derivatives</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">(Effective Portion)</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">June 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">June 30,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td align="left">Derivatives Designated as Cash Flow Hedges</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(Dollars in thousands)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest rate swap agreements
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(6,093</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">4,836</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(5,717</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(4,582</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange swap agreements
</div></td>
<td> </td>
<td> </td>
<td align="right">34,778</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(198,011</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">117,494</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(271,080</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total (a)
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">28,685</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(193,175</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">111,777</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(275,662</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>Includes $(255) and $(299) of combined CVA and MVA for the three and six month periods
ended June 30, 2011, respectively, and $25,208 and $(62,620) of combined CVA and MVA for
the three and six month periods ended June 30, 2010, respectively.</td>
</tr>
</table>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The following table presents amounts reclassified from AOCI into income when cash payments
were made or received on our qualifying cash flow hedges:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14">Amount of Gain or (Loss) Reclassified from</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14">AOCI Into Income</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">(Effective Portion)</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">Location of Gain or (Loss) Reclassified from AOCI</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">June 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">June 30,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000">into Income (Effective Portion)</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(Dollars in thousands)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest rate swap agreements — interest expense
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(6,511</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(8,128</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(13,414</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(16,915</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange swap agreements — interest expense
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9,759</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(19,017</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(20,422</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(37,289</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange swap agreements — lease revenue
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(224</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(16,270</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(27,145</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(33,836</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(54,428</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We estimate that within the next twelve months, we will amortize into earnings
approximately $73.3 million of the pre-tax balance in AOCI under cash flow hedge accounting in
connection with our program to convert debt from floating to fixed interest rates.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The following table presents the effect of derivatives recorded in the Condensed,
Consolidated Statements of Income for the three and six months ended June 30, 2011 and
2010:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14">Amount of Gain or (Loss) Recognized</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14">in Income on Derivatives</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">(Ineffective Portion) (a)</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">June 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">June 30,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(Dollars in thousands)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Derivatives Designated as Cash Flow Hedges:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Interest rate swap agreements
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(27</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(32</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(58</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(91</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Foreign exchange swap agreements
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(322</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,338</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,008</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(25,629</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(349</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,370</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">950</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(25,720</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Derivatives Not Designated as a Hedge:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Interest rate cap agreements (b)
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(245</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,373</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,126</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,428</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Reconciliation to Condensed, Consolidated
Statements of Income:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Income effect of maturing derivative contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(15,409</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Reclassification of amounts de-designated as
hedges recorded in AOCI
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(874</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,040</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,915</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,292</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Effect from derivatives, net of change in
hedged items due to changes in foreign exchange
rates
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,468</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(4,783</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(2,091</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(44,849</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>All components of each derivative’s gain or loss were included in the assessment of
effectiveness.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(b)</td>
<td> </td>
<td>An additional $(77) and $(6) and $(131) and $(7) of amortization of premium paid to
the derivative counterparty was recognized in Interest expense during the three and six
months ended June 30, 2011 and 2010, respectively.</td>
</tr>
</table>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 9 - us-gaap:DerivativesAndFairValueTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="1%" nowrap="nowrap" align="left"><b>I.</b></td>
<td width="1%"> </td>
<td><b>Fair Value Measurements</b></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     Fair value is defined as the price that would be received to sell an asset, or paid to
transfer a liability, in an orderly transaction between market participants at the measurement
date. The degree of judgment used in measuring the fair value of financial instruments
generally correlates with the level of pricing observability. Assets and liabilities recorded
at fair value on our Condensed, Consolidated Balance Sheets are measured and classified in a
hierarchy for disclosure purposes consisting of three levels based on the observability of
inputs available in the marketplace used to measure the fair value. Level 1 refers to fair
values determined based on quoted prices in active markets for identical assets; Level 2 refers
to fair values estimated using significant other observable inputs; and Level 3 refers to fair
values estimated using significant non-observable inputs.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     <i>Assets and Liabilities Measured at Fair Value on a Recurring Basis</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The following table presents our assets and liabilities measured at fair value on a
recurring basis as of June 30, 2011 and December 31, 2010, categorized using the fair value
hierarchy described above.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 2</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 3</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Counterparty Netting (a)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="18">(Dollars in thousands)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">June 30, 2011:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Derivative assets
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">254,908</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(48,004</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">206,904</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Derivative liabilities
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(48,004</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">48,004</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">206,904</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">206,904</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">December 31, 2010:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Derivative assets
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">116,394</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(56,244</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">60,150</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Derivative liabilities
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(56,244</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">56,244</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">60,150</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">60,150</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>As permitted under GAAP, we have elected to offset derivative assets and derivative
liabilities under our master netting agreement.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Assets and Liabilities Measured at Fair Value on a Non-recurring Basis</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We measure the fair value of aircraft and certain other assets on a non-recurring basis,
generally quarterly, annually, or when events or changes in circumstances indicate that the
carrying amount of the assets may not be recoverable.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The fair value of an aircraft is classified as a Level 3 valuation. Fair value of flight
equipment is determined using an income approach based on the present value of cash flows from
contractual lease agreements, contingent rentals where appropriate, and projected future lease
payments, which extend to the end of the aircraft’s economic life in its highest and best use
configuration, as well as a disposition value, based on the expectations of market
participants.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We recognized impairment charges and fair value adjustments for the three and six months
ended June 30, 2011 and 2010, as provided in Note E — <i>Aircraft Impairment Charges and Fair
Value Adjustments on Flight Equipment Sold or to be Disposed.</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The following table presents the effect on our condensed, consolidated financial
statements as a result of the non-recurring impairment charges and fair value adjustments
recorded to Flight equipment for the six months ended June 30, 2011:
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Impairment</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Charges and </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Depreciation </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Carrying </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Book Value at</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair Value</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">and Other</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Value at June</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">December 31, 2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Adjustments</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Reclassifications</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Sales</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Adjustments</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">30, 2011</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(Dollars in millions)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Flight equipment under operating lease
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">331.2</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(150.6</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">75.6</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(53.0</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(11.4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">191.8</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Flight equipment held for sale
</div></td>
<td> </td>
<td> </td>
<td align="right">262.2</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.5</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(78.7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(181.8</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.2</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Lease receivables and other assets
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.1</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">593.4</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(147.1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(234.8</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(11.4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">200.1</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 10 - us-gaap:FairValueDisclosuresTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="1%" nowrap="nowrap" align="left"><b>J.</b></td>
<td width="1%"> </td>
<td><b>Fair Value Disclosures of Financial Instruments</b></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We used the following methods and assumptions in estimating our fair value disclosures for
financial instruments:
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     <i>Cash</i>: The carrying value reported on the balance sheet for cash and cash equivalents
approximates its fair value.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     <i>Notes Receivable</i>: The fair values for notes receivable are estimated using discounted cash
flow analyses, using market derived discount rates.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     <i>Debt Financing</i>: The fair value of our long-term fixed rate debt is estimated using
discounted cash flow analyses, based on our spread to U.S. Treasury bonds for similar debt at
year end. The fair value of our long-term floating rate debt is estimated using discounted cash
flow analysis based on credit default spreads.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     <i>Derivatives</i>: Fair values were based on the use of a valuation model that utilizes, among
other things, current interest, foreign exchange and volatility rates, as applicable.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The carrying amounts and fair values of our financial instruments at June 30, 2011 and
December 31, 2010, are as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">June 30, 2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">December 31, 2010</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Carrying Amount </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair Value of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Carrying Amount of</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair Value of</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">of Asset (Liability)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"> Asset (Liability)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"> Asset (Liability)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"> Asset (Liability)</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14">(Dollars in thousands)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash, including restricted cash
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">2,559,523 </td>
<td nowrap="nowrap">(a)</td>
<td> </td>
<td align="left">$</td>
<td align="right">2,559,523</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">3,524,750 </td>
<td nowrap="nowrap">(a)</td>
<td> </td>
<td align="left">$</td>
<td align="right">3,524,750</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Notes receivable
</div></td>
<td> </td>
<td> </td>
<td align="right">20,628</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19,548</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">65,065</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">64,622</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Debt financing (including
subordinated debt and foreign
currency adjustment)
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(25,647,884</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(26,750,239</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(27,719,500</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(28,267,765 </td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Derivative assets
</div></td>
<td> </td>
<td> </td>
<td align="right">206,904</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">206,904</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">60,150</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">60,150</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>Includes restricted cash of $421.0 million (2011) and $457.1 million (2010).</td>
</tr>
</table>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 11 - ilfc:SecurityDepositsOnAircraftOverhaulRentalsAndOtherCustomerDepositsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="1%" nowrap="nowrap" align="left"><b>K.</b></td>
<td width="1%"> </td>
<td><b>Security Deposits on Aircraft, Overhaul Rentals and Other Customer Deposits</b></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     As of June 30, 2011 and 2010, Security deposits, Overhaul rentals and Other customer
deposits were comprised of:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">June 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">December 31, 2010</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(Dollars in thousands)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Security deposits paid by lessees
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">901,832</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">945,195</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Overhaul rentals
</div></td>
<td> </td>
<td> </td>
<td align="right">607,419</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">555,423</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other customer deposits
</div></td>
<td> </td>
<td> </td>
<td align="right">172,889</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">120,166</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,682,140</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,620,784</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 12 - us-gaap:RelatedPartyTransactionsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="1%" nowrap="nowrap" align="left"><b>L.</b></td>
<td width="1%"> </td>
<td><b>Related Party Transactions</b></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     <i>Related Party Allocations and Fees: </i>We are party to cost sharing agreements, including
tax, with AIG. Generally, these agreements provide for the allocation of corporate costs based
upon a proportional allocation of costs to all subsidiaries. We also pay other subsidiaries of
AIG a fee related to management services provided for certain of our foreign subsidiaries and
we earn management fees from two trusts consolidated by AIG for the management of aircraft we
sold to the trusts in prior years. In March 2010, we paid AIG $85.0
million that was due and payable on a loan related to certain tax planning activities we had
participated in during 2002 and 2003.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     <i>Loans from AIG Funding: </i>We borrowed $3.9 billion from AIG Funding, a subsidiary of AIG, in
2009 to assist in funding our liquidity needs. On August 20, 2010, we prepaid in full the
principal balance of approximately $3.9 billion plus accrued interest.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     <i>Derivatives and Insurance Premiums: </i>The counterparty of all of our interest rate swap and
foreign currency swap agreements as of June 30, 2011 was AIG Markets, Inc., a wholly-owned
subsidiary of AIG. See
Note I — <i>Fair Value Measurements </i>and Note H — <i>Derivative Activities</i>. In addition, we
purchase insurance through a broker who may place part of our policies with AIG. Total
insurance premiums were $3.7 million and $3.5 million for the six months ended June 30, 2011
and 2010, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     Our financial statements include the following amounts involving related parties:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">Three Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000">Six Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">June 30, 2011</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">June 30, 2010</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">June 30, 2011</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">June 30, 2010</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td align="left">Income Statement</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14">(Dollars in thousands)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expense (income):
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Interest expense on loans from AIG
Funding
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">62,035</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">122,545</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Effect from derivatives on contracts
with AIGFP novated to AIG Markets,
Inc.
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,223</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,410</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(965</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(42,421</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Interest on derivative contracts with
AIGFP novated to AIG Markets, Inc.
</div></td>
<td> </td>
<td> </td>
<td align="right">16,270</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">27,145</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33,836</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">54,204</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Lease revenue related to hedging of
lease receipts with AIGFP
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">224</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Allocation of corporate costs from AIG
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(10,246</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,617</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,140</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">5,877</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Management fees received
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,305</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,387</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,545</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,685</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Management fees paid
</div></td>
<td> </td>
<td> </td>
<td align="right">24</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">114</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">52</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">354</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center" style="border-bottom: 0px solid #000000">December 31, </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000">Balance Sheet</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">June 30, 2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">(Dollars in thousands)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Asset (liability):
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Derivative assets, net
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">206,196</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">58,187</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Income taxes payable to AIG (a)
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(142,442 </td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(108,784</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Accrued corporate costs payable to AIG
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(21,954</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(20,753</td>
<td nowrap="nowrap">)</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>We paid approximately $26 million to AIG during the six months ended June 30, 2011.</td>
</tr>
</table>
</div>
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<!-- Begin Block Tagged Note 13 - us-gaap:CommitmentsAndContingenciesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="1%" nowrap="nowrap" align="left"><b>M.</b></td>
<td width="1%"> </td>
<td><b>Commitments and Contingencies</b></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Guarantees</i>
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" style="background: transparent"> </td>
<td width="2%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td><i>Asset Value Guarantees: </i>We have guaranteed a portion of the residual value of 20
aircraft to financial institutions and other unrelated third parties for a fee. These
guarantees expire at various dates through 2023 and generally obligate us to pay the
shortfall between the fair market value and the guaranteed value of the aircraft and
provide us with an option to purchase the aircraft for the guaranteed value. At June
30, 2011, the maximum aggregate potential commitment that we were obligated to pay
under such guarantees, without any offset for the projected value of the aircraft,
was approximately $470 million.</td>
</tr>
<tr>
<td style="font-size: 6pt"> </td>
</tr>
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" style="background: transparent"> </td>
<td width="2%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td><i>Aircraft Loan Guarantees: </i>We guarantee two loans collateralized by aircraft to
financial institutions. The guarantees expire in 2014, when the loans mature, and
obligate us to pay an amount
up to the guaranteed value upon the default of the borrower, which may be offset
by a portion of the underlying value of the aircraft collateral. At June 30, 2011, the
guaranteed value, without any offset for the projected value of the aircraft, was
approximately $20 million<i>.</i></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     Management regularly reviews the underlying values of the aircraft collateral to determine
our exposure under these guarantees. The next strike date for asset value guarantees is in the
fourth quarter of 2011. If called upon to perform under these contracts, our maximum exposure
is approximately $9 million. We do not currently anticipate that we will be required to perform
under any of the guarantees based upon the underlying values of the aircraft collateralized.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Legal Contingencies</i>
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" style="background: transparent"> </td>
<td width="2%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td><i>Flash Airlines, Yemen Airways-Yemenia and Airblue Limited: </i>We are named in
lawsuits in connection with the 2004 crash of our Boeing 737-300 aircraft on lease to
Flash Airlines, an Egyptian carrier; the 2009 crash of our Airbus A310-300 aircraft
on lease to Yemen Airways-Yemenia, a Yemeni carrier; and the 2010 crash of our Airbus
A320-200 aircraft on lease to Airblue Limited, a Pakistani carrier. These lawsuits
were filed by the families of victims on the flights and seek unspecified damages for
wrongful death, costs, and fees. The Flash Airlines litigation originally commenced
in May 2004 in California, but all U.S. proceedings were dismissed in favor of
proceedings in France where claims are pending before the Tribunal de Grande Instance
civil courts in Bobigny and Paris. As of August 5, 2011, the parties are engaged in
settlement negotiations. We believe that we have substantial defenses to this action
and available liability insurance is adequate to cover our defense costs and any
potential liability. The Yemen Airways litigation and the Airblue Limited litigation
were filed in January 2011 and March 2011, respectively, in California Superior Court
in Los Angeles County. We have been served with the complaints, and each litigation
is in its incipient stage. While the plaintiffs have not specified any amount of
damages, we believe that we are adequately covered by available liability insurance
for both lawsuits and that we have substantial defenses to these actions. We do not
believe that the outcome of any of these lawsuits will have a material effect on our
consolidated financial condition, results of operations or cash flows.</td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We are also a party to various claims and litigation matters arising in the ordinary
course of our business. We do not believe the outcome of any of these matters will be material
to our consolidated financial position, results of operations or cash flows.
</div>
</div>
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<!-- Begin Block Tagged Note 14 - ilfc:VariableInterestEntitiesTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="1%" nowrap="nowrap" align="left"><b>N.</b></td>
<td width="1%"> </td>
<td><b>Variable Interest Entities</b></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     Our leasing and financing activities require us to use many forms of entities to achieve
our business objectives and we have participated to varying degrees in the design and formation
of these entities. Our involvement in VIEs varies and includes being a passive investor in the
VIE with involvement from other parties, managing and structuring all activities of the VIE,
and being the sole shareholder of the VIE. See Note G — <i>Debt Financings </i>for more information on
entities created for the purpose of obtaining financing.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Investment Activities</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We have variable interests in ten entities to which we previously sold aircraft. The
interests include debt financings, preferential equity interests and, in some cases, providing
guarantees to banks which had provided the secured senior financings to the entities. Each
entity owns one aircraft. The individual financing agreements are cross-collateralized by the
aircraft. Because we do not control the activities which significantly impact the economic
performance of the entities, we do not consolidate the entities into our condensed,
consolidated financial statements. We have a credit facility with these entities to provide
financing up to approximately $13.5 million, of which approximately $7.6 million was borrowed
at June 30, 2011. The
maximum exposure to loss for these entities is approximately $19 million, which is the combined
net carrying value of this investment and maximum borrowings available under the credit
facility at June 30, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Non-Recourse Financing Structures</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We continue to consolidate one entity in which ILFC has a variable interest that was
established to obtain secured financing for the purchase of an aircraft. ILFC provided $39.0
million of subordinated financing to the entity and the entity borrowed $106.0 million from
third parties, $82.0 million of which is non-recourse to ILFC. The entity owns one aircraft
with a net book value of $134.7 million at June 30, 2011. We have determined that we are the
primary beneficiary of this entity because we control and manage all aspects of this entity,
including directing the activities that most significantly affect the entity’s economic
performance, and we absorb the majority of the risks and rewards of this entity.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We also consolidate a wholly-owned subsidiary we created for the purpose of obtaining
secured financing for an aircraft. The entity meets the definition of a VIE because it does not
have sufficient equity to operate without ILFC’s subordinated financial support in the form of
intercompany notes, which serve as equity even though they are legally debt instruments. This
entity borrowed $55.4 million from a third party. The loan is non-recourse to ILFC and is
secured by the aircraft and the lease receivables. The entity owns one aircraft with a net book
value of $89.8 million at June 30, 2011. We have determined that we are the primary beneficiary
of this entity because we control and manage all aspects of this entity, including directing
the activities that most significantly affect the entity’s economic performance, and we absorb
the majority of the risks and rewards of this entity.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Wholly-Owned ECA Financing Vehicles</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We have created certain wholly-owned subsidiaries for the purpose of purchasing aircraft
and obtaining financing secured by such aircraft. The secured debt is guaranteed by the
European ECAs. The entities meet the definition of a VIE because they do not have sufficient
equity to operate without ILFC’s subordinated financial support in the form of intercompany
notes, which serve as equity even though they are legally debt instruments. We control and
manage all aspects of these entities, including directing the activities that most
significantly affect the entity’s economic performance, we absorb the majority of the risks and
rewards of these entities and we guarantee the activities of these entities. These entities are
therefore consolidated into our condensed, consolidated financial statements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Other Secured Financings</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We have created a number of wholly-owned subsidiaries for the purpose of obtaining secured
financings. The entities meet the definition of a VIE because they do not have sufficient
equity to operate without ILFC’s subordinated financial support in the form of intercompany
notes, which serve as equity even though they are legally debt instruments. One of the entities
borrowed $550 million from third parties and a portfolio of 37 aircraft will be transferred
from ILFC to the subsidiaries of the entity to secure the loan. We control and manage all
aspects of these entities, including directing the activities that most significantly affect
the entity’s economic performance, we absorb the majority of the risks and rewards of these
entities and we guarantee the activities of these entities. These entities are therefore
consolidated into our condensed, consolidated financial statements. See Note G — <i>Debt
Financings </i>for more information on these financings.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Wholly-Owned Leasing Entities</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     We have created wholly-owned subsidiaries for the purpose of facilitating aircraft leases
with airlines. The entities meet the definition of a VIE because they do not have sufficient
equity to operate without ILFC’s subordinated financial support in the form of intercompany
loans, which serve as equity even though they are legally debt instruments. We control and
manage all aspects of these entities, including directing the activities that most
significantly affect the entity’s economic performance, we absorb the majority of the risks and
rewards of these entities and we guarantee the activities of these entities. These entities are
therefore consolidated into our condensed, consolidated financial statements.
</div>
</div>
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<!-- Begin Block Tagged Note 15 - us-gaap:OtherLiabilitiesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="1%" nowrap="nowrap" align="left"><b>O.</b></td>
<td width="1%"> </td>
<td><b>Other Expenses</b></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Three
Months Ended June 30, 2011 and 2010</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     For the three month periods ended June 30, 2011 and 2010, Other expenses consist primarily
of lease charges related to aircraft reclassified to or from Flight equipment held for sale.
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>Six Months Ended June 30, 2011 and 2010</i></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     For the six months ended June 30, 2011, we recognized a $20 million expense related to the
cancellation of an aircraft engine order. We eliminated the economic effect of the $20 million
expense by negotiating with our manufacturer vendors to recover these costs. The recovery will
be in two payments. One of these payments is related to a 2007 agreement with one manufacturer
for us to extend our evaluation period of aircraft under order until at least 2010. This
payment is contingent upon our cancelling of the aircraft order and is not contingent on
placing any new order with the manufacturer. As a result of the cancellation of such aircraft
order in March 2011, we recorded the related payment receivable of $10 million in Interest and
other in the Condensed, Consolidated Statement of Income for the six months ended June 30,
2011. The second payment of $10 million is related to an agreement with another manufacturer,
which among other contractual terms, includes a provision to reimburse us for the remaining
costs associated with the March 2011 order cancellation. The reimbursement payment will be
recognized as a reduction of the cost basis of future aircraft deliveries, as we determined the
payment to be connected with the purchase of such aircraft. In addition to this charge, for the
six months ended June 30, 2011, Other expenses include $12.2 million resulting from the write
down of two notes receivable, partially offset by approximately $2.5 million aggregate lease
related income, net of lease charges.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     For the six months ended June 30, 2010, Other expenses consist of lease related costs we
expensed as a result of agreements with third parties to sell aircraft subject to operating
leases.
</div>
</div>
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<!-- Begin Block Tagged Note 16 - us-gaap:SubsequentEventsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="1%" nowrap="nowrap" align="left"><b>P.</b></td>
<td width="1%"> </td>
<td><b>Subsequent Event</b></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     On August 2, 2011, we entered into a stock purchase agreement with AerCap, Inc. (“AerCap”)
and AerCap Holdings N.V. to acquire all of the issued and outstanding shares of capital stock
of AeroTurbine, Inc., a wholly-owned direct subsidiary of AerCap (“AeroTurbine”), for an
aggregate cash purchase price of $228 million. In connection with the acquisition, we have also
agreed to guarantee AeroTurbine’s $425 million secured revolving credit facility. There was
approximately $298.6 million outstanding under this facility as of July 31, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     The closing of this acquisition is currently expected to occur during 2011 and is subject
to the satisfaction of several customary closing conditions, including applicable antitrust
approvals.
</div>
</div>
36799000
2165077000
5220000
3225000
3050000
78673000
76438000
13103000
29177000
50905000
2235000
11193000
192161000
22309000
47977000
19901000
42977000
-40172000
-13485000
-10965000
-4805000
66000
79000
114000
114000
100000
100000
500
500
500
500
500
500
500
500
Approximately $26 million was paid to AIG for ILFC tax liability.