<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended............June 30, 1994......
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ............ to ..............
Commission file number ....... 0-11350
International Lease Finance Corporation
(Exact name of registrant as specified in its charter)
California 22-3059110
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1999 Avenue of the Stars Los Angeles, California 90067
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(310) 788-1999
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes_____X______ No____________
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at July 30, 1994
----- ----------------------------
Common Stock, no par value 35,818,122
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
INDEX
Part I. Financial Information: Page No.
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets-June 30,
1994 and December 31, 1993 . . . . . . . . . . . . . .3
Condensed Consolidated Statements of Income
Three Months Ended June 30, 1994 and 1993. . . . . . .4
Condensed Consolidated Statements of Income
Six Months Ended June 30, 1994 and 1993 . . . . . . . 5
Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 1994 and 1993. . . . . . . .6
Notes to Condensed Consolidated Financial Statements. . . .8
Item 2. Management's Discussion and Analysis of the
Financial Condition and Results of Operations. . . . .9
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . 12
Signatures. . . . . . . . . . . . . . . . . . . . . . . . 13
Index to Exhibits . . . . . . . . . . . . . . . . . . . . 14
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
1994 1993
------------ -----------
(Dollars in thousands)
ASSETS (Unaudited)
Cash, including interest bearing accounts
of $37,648 (1994) and $51,657 (1993) $ 41,461 $ 61,566
Notes receivable 402,062 337,855
Net investment in finance and sales-
type leases 60,172 290,269
Flight equipment under operating leases 9,175,366 7,295,241
Less accumulated depreciation 919,437 779,404
--------- ---------
8,255,929 6,515,837
--------- ---------
Deposits on flight equipment purchases 729,149 820,048
Accrued interest, other receivables
and other assets 79,858 81,244
Investments 19,813 17,837
Deferred debt issue costs-less
accumulated amortization of $19,291
(1994) and $16,390 (1993) 18,077 15,165
--------- ---------
$9,606,521 $8,139,821
========== ==========
<PAGE>
LIABILITIES AND SHAREHOLDER'S EQUITY
Accrued interest and other payables $ 100,952 $ 92,229
Debt financing, net of deferred debt
discount of $18,974 (1994) and $10,194
(1993) 7,129,748 5,819,481
Security & other deposits on flight
equipment 408,699 437,004
Rentals received in advance 63,770 41,951
Deferred income taxes 414,757 339,753
Current income taxes (17,082) 222
SHAREHOLDER'S EQUITY
Preferred stock--no par value; 20,000,000
authorized shares
Market Auction Preferred Stock, $100,000 per
share liquidation value; Series A,B,C, and D
(1994 and 1993) each having 500 shares
issued and outstanding 200,000 200,000
Common stock--no par value; 100,000,000
authorized shares, 35,818,122 (1994
and 1993) issued and
outstanding 3,582 3,582
Additional paid-in capital 532,941 532,941
Retained earnings 769,154 672,658
--------- ---------
1,505,677 1,409,181
--------- ---------
$9,606,521 $8,139,821
========= =========
See notes to condensed consolidated financial statements.
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 1994 AND JUNE 30, 1993
1994 1993
-------- --------
(Dollars in thousands)
(Unaudited)
REVENUES:
Rentals of flight equipment $244,123 $198,494
Flight equipment marketing 43,623 3,394
Interest and other 9,812 21,067
------- -------
297,558 222,955
------- -------
EXPENSES:
Interest 90,544 75,271
Depreciation 83,335 66,754
Provision for overhaul 13,502 9,295
Selling, general & administrative 7,036 6,620
------- -------
194,417 157,940
------- -------
INCOME BEFORE INCOME TAXES 103,141 65,015
Provision for income taxes 38,843 23,558
------- -------
NET INCOME $ 64,298 $ 41,457
======= =======
See notes to condensed consolidated financial statements.
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1994 AND JUNE 30, 1993
1994 1993
---------- ----------
(Dollars in thousands)
(Unaudited)
REVENUES:
Rentals of flight equipment $ 463,010 $ 370,387
Flight equipment marketing 50,595 5,514
Interest and other 21,410 33,748
------- -------
535,015 409,649
------- -------
EXPENSES:
Interest 169,339 138,668
Depreciation 155,204 122,695
Provision for overhaul 24,262 16,423
Selling, general & administrative 14,386 12,640
------- -------
363,191 290,426
------- -------
INCOME BEFORE INCOME TAXES 171,824 119,223
Provision for income taxes 63,840 42,713
------- -------
NET INCOME $107,984 $ 76,510
======= =======
See note to condensed consolidated financial statements.
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1994 AND JUNE 30, 1993
1994 1993
---- ----
(Dollars in thousands)
(Unaudited)
OPERATING ACTIVITIES:
Net Income $ 107,984 $ 76,510
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation of flight equipment 155,204 125,595
Deferred income taxes 75,004 48,159
Amortization of deferred debt
issue costs 2,901 2,963
Gain on sale of flight equipment and
investments(1993 only)included in
amount financed (33,967) (2,372)
Increase in notes receivable (34,545) (4,755)
Equity in net income of affiliates (1,251) (1,531)
Changes in operating assets and liabilities:
(Increase) decrease in accrued interest,
other receivables and other assets 1,385 (24,057)
Increase in accrued interest and
other payables 8,725 3,912
Decrease in current income taxes payable (17,304) (35,652)
Increase in rentals received in advance 21,818 1,074
----------- -----------
Net cash provided by operating activities 285,954 189,846
----------- -----------
INVESTING ACTIVITIES:
Acquisition of flight equipment
for operating leases (1,793,842) (1,754,023)
Proceeds from disposal of flight
equipment-net of gain 69,449 24,009
Collections on notes receivable 66,687 46,444
Advances on notes receivable (10,410) (14,650)
Collections on finance and sales-type
leases 7,224 7,025
Sale of investments - net of gain 32,822
Purchase of investments (725)
----------- -----------
Net cash used in investing activities (1,661,617) (1,658,373)
----------- -----------
<PAGE>
FINANCING ACTIVITIES:
Proceeds from debt financing 2,783,050 2,977,484
Debt issue costs (5,814) (7,975)
Increase in MAPS issue costs (37)
Change in unamortized debt discount (8,780) (3,904)
Payments in reduction of debt financing (1,464,003) (1,586,176)
Decrease in deposits and progress payments 90,899 104,771
Decrease in customer deposits (28,306) (32,716)
Payment of common and preferred dividends (11,488) (6,964)
----------- -----------
Net cash provided by financing activities 1,355,558 1,444,483
----------- -----------
Decrease in cash (20,105) (24,044)
Cash at beginning of period 61,566 55,181
----------- -----------
Cash at end of period $ 41,461 $ 31,137
=========== ===========
<PAGE>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
1994 1993
---- ----
(Dollars in thousands)
(Unaudited)
Cash paid during the period for:
Interest (net of amount capitalized $20,738
(1994) and $20,292 (1993)) $157,655 $121,467
Income taxes 6,140 30,206
1994:
Flight equipment with a net book value of $222,873 was transferred from
finance leases to operating leases.
Flight equipment was received in exchange for notes receivable in the
amount of $3,737.
Notes in the amount of $89,675 were received as partial payment in
exchange for flight equipment sold with a book value of $55,708.
1993:
Flight equipment with a net book value of $60,478 was transferred from
operating leases to finance leases.
Flight equipment was received in exchange for notes receivable in the
amount of $41,987.
Notes in the amount of $9,241 were received in exchange for flight
equipment sold with a book value of $8,237.
Note in the amount of $27,000 was received upon redemption of
investment in preferred stock.
See notes to condensed consolidated financial statements.
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1994
(UNAUDITED)
A. The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and in
accordance with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been
included. Certain reclassifications have been made to the 1993
condensed consolidated financial statements to conform to the 1994
presentation. Operating results for the three and six month periods
ended June 30, 1994 are not necessarily indicative of the results
that may be expected for the year ended December 31, 1994. For
further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's annual report on
Form 10-K for the year ended December 31, 1993.
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Company borrows funds for the purchase of flight equipment,
including the making of progress payments during the construction phase,
principally on an unsecured basis from various sources. The Company's
debt financing was comprised of the following at the following dates:
Dec. 31, June 30,
1993 1994
---- ----
(Dollars in thousands)
Public term debt with single
maturities $2,550,000 $3,000,000
Public medium-term notes with
varying maturities 1,765,920 1,710,170
Capital lease obligations - 240,000
Bank term debt and revolvers 20,000 20,000
Other term debt 48,778 23,503
---------- ----------
Total term debt 4,384,698 4,993,673
Commercial paper 1,444,977 1,957,549
Bank lines of credit - 197,500
Less: Deferred debt discount (10,194) (18,974)
---------- ----------
Total Debt Financing $5,819,481 $7,129,748
========== ==========
Composite interest rate 5.89% 5.87%
Percentage of total debt at fixed rates 74.77% 66.92%
Composite interest rate on fixed rate
debt 6.70% 6.55%
Bank prime rate 6.00% 7.25%
The interest on substantially all the public debt (exclusive of
the commercial paper) is fixed for the term of the respective notes. The
Company has committed revolving loans and lines of credit with 29 banks
aggregating $1,186 million and an uncommitted line of credit with one
bank in the amount of $200 million; $197.5 million was outstanding
thereunder at June 30, 1994. Bank debt principally provides for interest
rates that vary according to the pricing option then in effect and range
from prime, .30% to 3/8% over LIBOR or .425% to .50% over CD rates, at
the Company's option. Bank financings may be subject to either
compensating balances or commitment fees of up to .25% of amounts
available.
The Company has an effective shelf registration with respect to
$2.449 billion of debt securities, under which $100 million of notes were
sold through June 30, 1994. Additionally, a $500 million Medium Term
Note Program has been implemented under the shelf registration, under
which $18.0 million has been sold through June 30, 1994.
<PAGE>
In 1994, the Company entered into an Export Credit Lease Facility
in the amount of $555 million which is available for the acquisition of
up to 10 aircraft manufactured by Airbus to be delivered in 1994. As of
June 30, 1994 the Company had canceled the options to finance three of
the aircraft aggregating $97 million. In addition, as of June 30, 1994
the Company had used such facility to finance three aircraft delivered in
the second quarter of 1994 aggregating $240 million. As a result, $218
million remains available to finance the remaining four aircraft as of
June 30, 1994.
The Company believes that it has sufficient financing sources
available to meet its capital requirements through 1994.
Results of Operations-Three months ended June 30, 1994 versus June 30,
1993.
The increase in revenues from the rentals of flight equipment from
$198,494,000 in 1993 to $244,123,000 in 1994, a 23.0% increase, is
attributable to the acquisition of additional new aircraft as the fleet
of flight equipment on operating lease increased from 215 at June 30,
1993 to 259 at June 30, 1994, a 20.5% increase.
In addition to its leasing operations, the Company actively engages
in the marketing of flight equipment on a principal and commission basis
as well as the disposition of flight equipment at the end of the lease
term. Revenue from such flight equipment marketing increased from
$3,394,000 in 1993 to $43,623,000 in 1994 as a result of the nature of
the related flight equipment marketed. Flight equipment marketing
revenue consisted of the following number of transactions in each period:
1994 1993
---- ----
Sales of flight equipment 3 -
Commissions 2 4
Disposition of leased flight equipment 8 3
Interest and other income decreased from $21,067,000 in 1993 to
$9,812,000 in 1994 due primarily to the forfeiture of a security deposit
by a lessee in 1993 for an aircraft to be delivered in 1995.
Expenses as a percentage of total revenues decreased to 65.3% in the
second quarter of 1994 compared to 70.8% in the second quarter of 1993.
This decrease is due, in part, to remarketing income in the second
quarter of 1994. Interest expense increased from $75,271,000 in 1993 to
$90,544,000 in 1994 primarily as a result of an increase in gross debt
outstanding at quarter end from $5,640 million at 1993 to $7,149 million
at 1994 to finance aircraft acquisitions. However, the Company's
composite borrowing rate decreased as follows:
1994 1993 Decrease
---- ---- --------
Beginning of Quarter 5.79% 6.29% .50%
End of Quarter 5.87% 6.11% .24%
---- ---- ----
Average 5.83% 6.20% .37%
Depreciation of flight equipment increased from $66,754,000 in 1993
to $83,335,000 in 1994 due to the addition of aircraft.
Provision for overhauls increased from $9,295,000 in 1993 to
$13,502,000 in 1994 due to an increase in the number of aircraft on which
the Company collects overhaul reserves and therefore an increase in the
number of hours flown for which an overhaul reserve is provided. In
addition, the rate at which overhaul reserves are provided increased in
1994, causing part of the increase.
Provision for income taxes increased from $23,558,000 in 1993 to
$38,843,000 in 1994 as a direct result of an increase in pretax income.
The Company's effective income tax rate increased from 36.2% in 1993 to
37.7% in 1994.
Results of Operations-Six months ended June 30, 1994 versus 1993.
The increase in revenues from the rentals of flight equipment from
$370,387,000 in 1993 to $463,010,000 in 1994, a 25% increase, is
attributable to the acquisition of additional new aircraft as the fleet
of flight equipment on operating lease increased from 215 at June 30,
1993 to 259 at June 30, 1994, a 20.5% increase.
In addition to its leasing operation, the Company actively engages
in the marketing of flight equipment on a principal and commission basis
as well as the disposition of flight equipment at the end of the lease
term. Revenue from such flight equipment marketing increased from
$5,514,000 in 1993 to $50,595,000 in 1994 as a result of the nature of
the related flight equipment marketed. Flight equipment marketing
revenue consisted of the following number of transactions in each period:
1994 1993
---- ----
Sales of flight equipment 3 -
Commissions 2 4
Disposition of leased flight equipment 10 4
Interest and other income decreased from $33,748,000 in 1993 to
$21,410,000 in 1994 due primarily to the forfeiture of a security deposit
by a lessee in 1993 for an aircraft to be delivered in 1995.
Expenses as a percentage of total revenues decreased to 67.9% in the
first six months of 1994 compared to 70.9% in the first six months of
1993. This decrease is due, in part, to remarketing income in the first
six months of 1994. Interest expense increased from $138,668,000 in 1993
to $169,339,000 in 1994, primarily as a result of an increase in gross
debt outstanding at the six months ended from $5,640 million at 1993 to
$7,149 million at 1994 to finance aircraft acquisitions. However, the
Company's composite borrowing rate decreased as follows:
1994 1993 Decrease
---- ---- --------
Beginning of Six months 5.89% 6.55% .66%
End of Six months 5.87% 6.11% .24%
----- ----- -----
Average 5.88% 6.33% .45%
Depreciation of flight equipment increased from $122,695,000 in 1993
to $155,204,000 in 1994 due to the addition of aircraft.
Provision for overhauls increased from $16,423,000 in 1993 to
$24,262,000 in 1994 due to an increase in the number of aircraft on which
the Company collects overhaul reserves and therefore an increase in the
number of hours flown for which an overhaul reserve is provided. In
addition, the rate at which overhaul reserves are provided increased in
1994, causing part of the increase.
Provision for income taxes increased from $42,713,000 in 1993 to
$63,840,000 in 1994 as a direct result of an increase in pretax income.
The Company's effective income tax rate increased from 35.8% in 1993 to
37.2% in 1994.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits:
10.1 First Amendment to the $283,333,338 Revolving
Credit Agreement, dated as of May 31, 1994,
by and between the Registrant, the financial
institutions listed on the signature pages thereto
(the "Banks") and Union Bank of Switzerland Los
Angeles Branch, as agent for the Banks.
10.2 Amendment No. 3 to the Airbus A330 Purchase
Agreement, dated as of May 23, 1994, by and
between AVSA, S.A.R.L. and the Registrant.
(Confidential treatment requested)
10.3 A330 Option Exercise pursuant to Amendment
No. 2, dated December 10, 1992, to the A330
Purchase Agreement, dated November 10, 1988.
10.4 Option Waiver Notice pursuant to Amendment
No. 1, dated June 18, 1991, to the A321
Purchase Agreement, dated February 14, 1990
and Amendment No. 2, dated December 10, 1992,
to the A300-600R Purchase Agreement, dated
November 10, 1988.
12 Computation of Ratio of Earnings to Fixed
Charges and Preferred Stock Dividends.
b) Reports on Form 8-K:
1. Form 8-K, event date May 17, 1994 (Item 7).
2. Form 8-K, event date May 20, 1994 (Item 5).
3. Form 8-K, event date May 26, 1994 (Item 7).
4. Form 8-K, event date July 26, 1994 (Item 7).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
INTERNATIONAL LEASE FINANCE CORPORATION
August 12, 1994 /s/ Leslie L. Gonda
Date LESLIE L. GONDA
Chairman of the Board
August 12, 1994 /s/ Pamela S. Hendry
Date PAMELA S. HENDRY
Assistant Vice President
Finance and Controller
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit No.
10.1 First Amendment to the $283,333,338 Revolving
Credit Agreement, dated as of May 31, 1994, by
and between the Registrant, the financial
institutions listed on the signature pages thereto
(the "Banks") and Union Bank of Switzerland Los
Angeles Branch, as agent for the Banks.
10.2 Amendment No. 3 to the Airbus A330 Purchase
Agreement, dated as of May 23, 1994, by and
between AVSA, S.A.R.L. and the Registrant.
(Confidential treatment requested)
10.3 A330 Option Exercise pursuant to Amendment
No. 2, dated December 10, 1992, to the A330
Purchase Agreement, dated November 10, 1988.
10.4 Option Waiver Notice pursuant to Amendment
No. 1, dated June 18, 1991, to the A321
Purchase Agreement, dated February 14, 1990
and Amendment No. 2, dated December 10, 1992,
to the A300-600R Purchase Agreement, dated
November 10, 1988.
12. Computation of Ratio of Earnings to Fixed Charges
and Preferred Stock Dividends
<PAGE>
FIRST AMENDMENT TO $283,333,338
REVOLVING CREDIT AGREEMENT
THIS FIRST AMENDMENT TO THE $283,333,338 REVOLVING
CREDIT AGREEMENT ("Amendment") is made as of May 31, 1994, among
INTERNATIONAL LEASE FINANCE CORPORATION, a California corporation
(the "Company"), the financial institutions listed on the
signature pages hereof (each a "Bank" and collectively the
"Banks") and Union Bank of Switzerland Los Angeles Branch, as
Agent for the Banks (the "Agent").
W I T N E S S E T H
WHEREAS, the Company, the Banks and the Agent entered
into the $283,333,338 Revolving Credit Agreement, dated as of
June 1, 1993 (the "Credit Agreement"); and
WHEREAS, the signatories hereto desire to increase the
Aggregate Commitment and to amend the Credit Agreement as set
forth herein.
NOW, THEREFORE, in consideration of the premises and of
the covenants and agreements contained herein and in the Credit
Agreement, the parties hereto agree that the Credit Agreement is
hereby amended as set forth herein:
1. Capitalized terms used herein which are not
otherwise defined herein but are defined in the Credit Agreement
shall have the meanings given to them in the Credit Agreement.
2. (a) The definition of the "Aggregate Commitment"
set forth in Section 1.2 of the Credit Agreement is amended to
read in its entirety as follows:
"Aggregate Commitment means $504,019,611 as reduced by
any reduction in the Commitments made from time to time
pursuant to Section 5.1 or 13.8."
(b) Schedule I of the Credit Agreement is amended
to read in its entirety as set forth on Schedule I attached
hereto.
3. The definition of the "Consolidated Tangible Net
Worth" set forth in Section 1.2 of the Credit Agreement is
amended to read in its entirety as follows:
"Consolidated Tangible Net Worth means, as of the date
of any determination, the total of shareholders' equity
(including capital stock, additional paid-in capital and
retained earnings after deducting treasury stock), less the
sum of the total amount of goodwill, organization expenses,
unamortized debt discount and expense (determined on an
after tax basis), deferred assets other than prepaid
insurance and prepaid taxes, the excess of cost of shares
acquired over book value of related assets, surplus
resulting from any revaluation write-up of assets subsequent
to December 31, 1992, and such other assets as are properly
classified as intangible assets, all determined in
accordance with generally accepted accounting principles in
the United States consolidating the Company and its
Subsidiaries, and less the excess, if any, of all Restricted
Investments of the Company and its Subsidiaries on a
consolidated basis over $10,000,000."
4. (a) Subsection (c) of Section 9.10 of the Credit
Agreement is amended to read in its entirety as follows:
"(c) sell or assign, with or without recourse, any
accounts receivable or chattel paper; provided, however,
that the Company's Wholly-owned Subsidiary incorporated in
connection with the subsidized financing or the acquisition
of Airbus Industrie aircraft may assign its accounts
receivable associated with the leasing of such aircraft by
way of security for Indebtedness to the extent such Wholly-
owned Subsidiary may create Liens to secure Indebtedness
pursuant to Section 9.17(l); or"
(b) In addition, Section 9.10 of the Credit
Agreement is amended to add the following as the final paragraph
thereof:
"Notwithstanding anything to the contrary set forth in
subsection (b) of this Section 9.10 and the immediately
preceding paragraph, such subsection (b) shall not prevent
the Company or any Subsidiary from transferring, and the
Company and any Subsidiary shall be permitted to transfer,
aircraft into one or more trusts or other special purpose
entities in connection with the issuance by such entity of
Indebtedness secured by such aircraft and related rental
income; provided, however, that all proceeds (net of
expenses related to the issuance of such Indebtedness) from
the sale of such Indebtedness shall be applied promptly to
repay other Indebtedness; and provided, further, that
following the issuance of any such Indebtedness the Company
shall otherwise be in compliance with all other covenants
set forth herein, including Section 9.17."
5. Section 9.11 of the Credit Agreement is amended to
read in its entirety as follows:
"Section 9.11. Consolidated Liabilities to
Consolidated Tangible Net Worth Ratio. Not permit the ratio
of Consolidated Liabilities to Consolidated Tangible Net
Worth to exceed (A) 500% on and as of the last day of any
fiscal year or (B) 550% at any other time."
6. Section 9.14 of the Credit Agreement is amended to
read in its entirety as follows:
"Section 9.14. Adjusted Tangible Net Worth. Not
permit the Company's Adjusted Tangible Net Worth to be less
than $1,200,000,000 plus 50% of the cumulative net income of
the Company and its Subsidiaries determined on a
consolidated basis in accordance with United States
generally accepted accounting principles since December 31,
1993 plus 50% of (a) the cumulative equity capital
contributions from AIG and (b) net proceeds from the sale of
preferred stock, in each case for the period from
December 31, 1993 to and including the date of any
determination hereunder."
7. Subsection (l) of Section 9.17 of the Credit
Agreement is amended to read in its entirety as follows:
"(l) Liens securing Indebtedness of the Company's
Wholly-owned Subsidiary incorporated outside the United
States incurred in connection with the subsidized financing
of the acquisition of Airbus Industrie aircraft, the
repayment obligations of which will be supported by
guaranties issued by certain European government export
credit agencies and a Company Guaranty and a pledge of the
assets of (including any rights to or interests in any
reserve or security deposit held by) such Wholly-owned
Subsidiary or shares of such Wholly-owned Subsidiary,
provided that such Liens shall encumber only the assets of
(including any rights to or interests in any reserve or
security deposit held by) such Wholly-owned Subsidiary or
such pledged shares of such Wholly-owned Subsidiary, and
provided further that the aggregate amount of Indebtedness
of such Wholly-owned Subsidiary secured by Liens does not at
any time exceed $555 million, minus the amount of
outstanding Liens permitted under Section 9.17(m); and"
8. Each of Exhibit H and Exhibit I of the Credit
Agreement is amended to read in its entirety as set forth on
Exhibit H and Exhibit I, respectively, attached hereto.
9. THIS AMENDMENT SHALL BE A CONTRACT MADE UNDER,
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES.
10. This Amendment may be executed in any number of
counterparts and by the different parties on separate
counterparts and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but
one and the same instrument.
11. When (a) counterparts of this Amendment executed
by each party shall have been lodged with the Agent (or, in the
case of any Bank as to which an executed counterpart shall not
have been so lodged, the Agent shall have received telegraphic,
telex or other written confirmation of execution of a counterpart
hereof by such Bank), (b) the Agent shall have received a
favorable opinion of counsel for the Company in form and
substance satisfactory to the Agent, and (c) the Agent shall have
received a certificate signed by an Authorized Officer of the
Company to the effect that no Event of Default or Unmatured Event
of Default has occurred and is continuing as of the date thereof,
the representations and warranties contained in Section 8 of the
Credit Agreement are true and correct as of the date thereof as
if made on the date thereof, and since the date of the most
recent audited financial statements there has been no material
adverse change in the business, credit, operations, financial
condition or prospects of the Company and its Subsidiaries taken
as a whole, this Amendment shall become effective as of the date
hereof and the Agent shall so inform all of the parties hereto.
12. The Credit Agreement, as amended hereby, shall be
binding upon the Company, the Banks and the Agent and their
respective successors and assigns, and shall inure to the benefit
of the Company, the Banks and the Agent and the respective
successors and assigns of the Banks and the Agent.
13. Except as expressly provided in this Amendment,
all of the terms, covenants, conditions, restrictions and other
provisions contained in the Credit Agreement shall remain in full
force and effect.
<PAGE>
IN WITNESS WHEREOF, this Amendment to the Credit
Agreement has been duly executed and delivered by the individual
parties hereto and the duly authorized officers of the corporate
parties hereto on the date first hereinabove written.
INTERNATIONAL LEASE FINANCE
CORPORATION
By: __/s/ ALAN H. LUND___________
Name: Alan H. Lund
Title: Senior Vice President,
Chief Financial Officer and
Treasurer
By: __/s/ PAMELA S. HENDRY_______
Name: Pamela S. Hendry
Title: Assistant Vice President
Finance and Controller
UNION BANK OF SWITZERLAND,
acting through its Los Angeles
Branch, in its individual
corporate capacity and as Agent
By: __/s/ ANDREW T. TAMMEN_______
Name: Andrew T. Tammen
Title: Assistant Vice President
By: __/s/ L. SCOTT SOMMERS_______
Name: L. Scott Sommers
Title: Vice President
THE BANK OF NEW YORK
By: __/s/ OLAYINKA T. BAMGBOSE___
Name: Olayinka T. Bamgbose
Title: Assistant Vice President
THE BANK OF NOVA SCOTIA
By: __/s/ JAMES M. SPANIER_______
Name: James M. Spanier
Title: Representative
By: _____________________________
Name: ___________________________
Title: __________________________
THE CHASE MANHATTAN BANK
By: __/s/ SHERWOOD E. EXUM, JR.__
Name: Sherwood E. Exum, Jr.
Title: Managing Director
<PAGE>
CHEMICAL BANK
By: __/s/ RICHARD W. STEWART_____
Name: Richard W. Stewart
Title: Vice President
FIRST INTERSTATE BANK OF CALIFORNIA
By: __/s/ THOMAS J. HELOTES______
Name: Thomas J. Helotes
Title: Vice President
THE FUJI BANK, LIMITED
By: __/s/ YASUJI IKAWA___________
Name: Yasuji Ikawa
Title: Joint General Manager
BAYERISCHE HYPOTHEKEN UND
WECHSEL-BANK AG, NEW YORK BRANCH
By: __/s/ JOHN QUIGLEY___________
Name: John Quigley
Title: Vice President
By: __/s/ STEVE ATWELL___________
Name: Steve Atwell
Title: Assistant Vice President
NATIONSBANK OF GEORGIA, N.A.
By: __/s/ FRANK R. CALLISON______
Name: Frank R. Callison
Title: Vice President
<PAGE>
BANCO DI NAPOLI
By: __/s/_CLAUDE P. MAPES________
Name: Claude P. Mapes
Title: First Vice President
By: __/s/ ARTHUR KOOPER__________
Name: Arthur Kooper
Title: Assistant Vice President
BAYERISCHE LANDESBANK
By: __/s/ WILFRIED FREUDENBERGER_
Name: Wilfried Freudenberger
Title: Executive Vice President
and General Manager
By: __/s/ PETER OBERMANN_________
Name: Peter Obermann
Title: First Vice President
Manager Corporate Finance
COMMERZBANK AG, LOS ANGELES BRANCH
By: __/s/ ROBERT HOCHHALTER______
Name: Robert Hochhalter
Title: Senior Vice President and
Manager
By: __/s/ WERNER SCHMIDBAUER_____
Name: Werner Schmidbauer
Title: Assistant Vice President
DAI-ICHI KANGYO BANK LTD.,
LOS ANGELES AGENCY
By: __/s/ TOMOHIRO NOZAK_________
Name: Tomohiro Nozak
Title: Senior Vice President
and Joint General Manager
<PAGE>
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK
By: __/s/ KAREN A. BRINKMAN______
Name: Karen A. Brinkman
Title: Vice President
By: __/s/ RONALD K. RAPP_________
Name: Ronald K. Rapp
Title: Assistant Vice President
DRESDNER BANK AG, LOS ANGELES AGENCY
AND GRAND CAYMAN BRANCH
By: __/s/ JON M. BLAND___________
Name: Jon M. Bland
Title: Senior Vice President
By: __/s/ BARBARA J. READICK_____
Name: Barbara J. Readick
Title: Vice President
THE SAKURA BANK LTD.
LOS ANGELES AGENCY
By: __/s/ OFUSA SATO_____________
Name: Ofusa Sato
Title: Senior Vice President and
Assistant General Manager
BANK OF MONTREAL
By: __/s/ GERALD J. HUGHES_______
Name: Gerald J. Hughes
Title: Director
<PAGE>
BANCA NAZIONALE DEL LAVORO S.p.A.
NEW YORK BRANCH
By: __/s/ GIULIO GIOVINE_________
Name: Giulio Giovine
Title: Vice President
By: __/s/ CARLO VECCHI___________
Name: Carlo Vecchi
Title: Senior Vice President
BANK OF HAWAII
By: __/s/ KARL K. Y. PAN_________
Name: Karl K. Y. Pan
Title: Senior Vice President
CANADIAN IMPERIAL BANK OF COMMERCE
By: __/s/ STEPHEN D. REYNOLDS____
Name: Stephen D. Reynolds
Title: Vice President
CIBC, Inc.
DAIWA BANK TRUST COMPANY
By: __/s/ MASAFUMI ASAI__________
Name: Masafumi Asai
Title: Second Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED
LOS ANGELES AGENCY
By: __/s/ TOSHINARI LIYODA_______
Name: Toshinari Liyoda
Title: Senior Vice President
THE MITSUI TRUST & BANKING CO.,
LTD.
By: __/s/ YUSAKU OTANI___________
Name: Yusaku Otani
Title: General Manager and Agent
ISTITUTO BANCARIO SAN PAOLO
DI TORINO, SPA
By: __/s/ ROBERTO GORLIER________
Name: Roberto Gorlier
Title: Branch Manager
By: __/s/ DONALD W. BROWN________
Name: Donald W. Brown
Title: First Vice President
BANCO CENTRAL HISPANOAMERICANO
By: __/s/ JOSE CASTELLO__________
Name: Jose Castello
Title: Senior Vice President
<PAGE>
Schedule I
Schedule of Banks
Bank Commitment
Union Bank of Switzerland . . . . . . . . . . . . . $46,666,667
Commerzbank AG, Los Angeles Branch . . . . . . . . 40,000,000
The Bank of Nova Scotia . . . . . . . . . . . . . . 30,000,000
DG Bank Deutsche GenossenschaftsBank . . . . . . . 30,000,000
The Chase Manhattan Bank . . . . . . . . . . . . . 28,333,333
First Interstate Bank of California . . . . . . . . 26,666,667
Bayerische Hypotheken Und
Wechsel-Bank A.G., New York Branch . . . . . . . 26,666,667
Nationsbank of Georgia, N.A. . . . . . . . . . . . 26,666,667
Chemical Bank . . . . . . . . . . . . . . . . . . . 25,490,196
Banco di Napoli . . . . . . . . . . . . . . . . . . 20,000,000
Dresdner Bank AG, Los Angeles Agency
and Grand Cayman Branch . . . . . . . . . . . . . 20,000,000
The Sakura Bank Ltd., Los Angeles
Agency . . . . . . . . . . . . . . . . . . . . . 20,000,000
The Bank of New York . . . . . . . . . . . . . . . 16,666,667
Daiwa Bank Trust Company . . . . . . . . . . . . . 16,666,667
The Fuji Bank, Limited . . . . . . . . . . . . . . 16,666,667
The Mitsui Trust & Banking Co., Ltd.,
Los Angeles Agency . . . . . . . . . . . . . . . 16,666,667
Dai-Ichi Kangyo Bank Ltd.,
Los Angeles Agency . . . . . . . . . . . . . . . 15,000,000
Bank of Montreal . . . . . . . . . . . . . . . . . 13,333,333
Banca Nazionale del Lavoro S.p.A.
New York Branch . . . . . . . . . . . . . . . . . 11,666,667
The Industrial Bank of Japan,
Limited, Los Angeles Agency . . . . . . . . . . . 11,666,667
Bank of Hawaii . . . . . . . . . . . . . . . . . . 10,196,079
Bayerische Landesbank . . . . . . . . . . . . . . . 10,000,000
Istituto Bancario San Paolo di Torino SPA . . . . . 10,000,000
Banco Central Hispanoamericano,
San Francisco Agency . . . . . . . . . . . . . . 8,333,333
Canadian Imperial Bank of Commerce . . . . . . . . 6,666,667
____________
$504,019,611
<PAGE>
Exhibit H
SCHEDULE OF SUBSIDIARIES
AND SPECIAL PURPOSE CORPORATIONS*
Jurisdiction
Name: of Incorporation
Interlease Management Corporation California
Interlease Aviation Corporation California
ILFC Aircraft Holding Corporation California
Aircraft SPC-1, Inc. California
Aircraft SPC-2, Inc. California
**ILFC (Bermuda) No. III Ltd. Bermuda
**ILFC (Bermuda) No. 4, Ltd. Bermuda
**ILFC (Bermuda) No. 5, Ltd. Bermuda
**ILFC (Bermuda) No. 6, Ltd. Bermuda
ILFC Ireland Ireland
**International Lease Finance
Corporation Ltd. Bermuda
ILFC Belgium S.A. Belgium
ILFC International Lease Finance
Corporation Ltd. Canada
Atlantic International Aviation
Holdings, Inc. California
____________________
* Each Subsidiary and special purpose corporation is
wholly-owned, directly or indirectly, by the Company.
** Special purpose subsidiaries.
<PAGE>
Exhibit I
SCHEDULE OF PARTNERSHIPS
AND JOINT VENTURES
Pacific Ocean Leasing Ltd.
Pacific Asia Leasing Ltd.
Hoeri Corp.
AMENDMENT NO. 3
TO THE AIRBUS A330 PURCHASE AGREEMENT
dated as of November 10, 1988
between
AVSA, S.A.R.L.
and
INTERNATIONAL LEASE FINANCE CORPORATION
This Amendment No. 3 (hereinafter referred to as the "Amendment")
entered into as of May 23, 1994, by and between AVSA, S.A.R.L., a
societe a responsabilite limitee organized and existing under the
laws of the Republic of France, having its registered office
located at 2, Rond-Point Maurice Bellonte, 31700 Blagnac, France
(hereinafter referred to as the "Seller") and INTERNATIONAL LEASE
FINANCE CORPORATION, a corporation organized and existing under
the laws of the State of California, having its principal
corporate offices located at 1999 Avenue of the Stars, 39th
Floor, Los Angeles, CA 90067, U.S.A. (hereinafter referred to as
the "Buyer");
WITNESSETH
WHEREAS, the Buyer and the Seller entered into a certain A330
Purchase Agreement, dated as of November 10, 1988, relating to
the sale by the Seller and the purchase by the Buyer of three (3)
firmly ordered Airbus Industrie A330-300 model aircraft, which
agreement, as previously amended and supplemented together with
all Exhibits, Appendices, and Letter Agreements attached thereto,
and as amended by Amendment No. 1 dated as of June 18, 1991, and
Amendment No. 2 dated as of December 10, 1992, which relates to
the purchase by the Buyer of one (1) firmly ordered Airbus
Industrie A330-300 model aircraft (the "Incremental Aircraft")
and one option Airbus Industrie A330-300 model aircraft (the
"Incremental Option Aircraft"), is hereinafter called the
"Agreement";
WHEREAS, the Buyer has firmly ordered one (1) Incremental Option
Aircraft, scheduled for delivery in April 1999, which was ordered
under Amendment No. 2 to the Agreement, pursuant to a notice by
the Buyer to the Seller, dated May 23, 1994 (the "A330 Option
Exercise Notice"), which Incremental Option Aircraft is now
considered an Incremental Aircraft.
*
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. *
2. DELIVERY*
3. PREDELIVERY PAYMENTS
It is agreed that the deposit and predelivery payment for
the April 1999 Incremental Aircraft pursuant to Paragraph 8
of Amendment No. 2 to the Agreement and the Option Exercise
Notice will be credited against the first predelivery
payment due pursuant to Amendment No. 5.
_______________
*PURSUANT TO 17 CFR 240.24b-2, CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
<PAGE>
4. CONFIDENTIALITY
Subject to any legal or governmental requirements of
disclosure, the parties (which for this purpose shall
include their employees, agents and advisors) shall maintain
the terms and conditions of this Amendment and any reports
or other data furnished hereunder strictly confidential.
Without limiting the generality of the foregoing, the Buyer
shall use its best efforts to limit the disclosure of the
contents of this Amendment, to the extent legally
permissible, in any filing that the Buyer is required to
make with any governmental agency, and the Buyer shall make
all applications that may be necessary to implement the
foregoing. The Buyer and the Seller shall consult with each
other prior to making any public disclosure, otherwise
permitted hereunder, of this Amendment or the terms and
conditions thereof. The provisions of this Paragraph 4
shall survive any termination of this Amendment.
5. EFFECT OF AMENDMENT
The Agreement shall be deemed to be amended to the extent
herein provided, and, except as specifically amended hereby,
shall continue in full force and effect in accordance with
its original terms. All capitalized terms not otherwise
defined herein shall have the meanings provided for in the
Purchase Agreement.
6. GOVERNING LAW AND JURISDICTION
THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE
PERFORMANCE OF THIS AMENDMENT SHALL BE DETERMINED ALSO IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
ANY DISPUTE ARISING HEREUNDER SHALL BE REFERRED TO THE
FEDERAL OR STATE COURTS LOCATED IN NEW YORK CITY, NEW YORK,
AND EACH OF THE PARTIES HERETO IRREVOCABLY SUBMITS TO AND
ACCEPTS SUCH JURISDICTION.
THE UNITED NATIONS CONVENTION ON THE INTERNATIONAL SALE OF
GOODS SHALL NOT APPLY TO THIS AMENDMENT.
<PAGE>
If the foregoing correctly sets forth our
understanding, please execute this Amendment in the space
provided below, whereupon this Amendment shall constitute part of
the Purchase Agreement.
Agreed and Accepted, Yours sincerely,
INTERNATIONAL LEASE AVSA, S.A.R.L.
FINANCE CORPORATION
/s/ Robert G. Duncan /s/ Christophe Mourey
By: Robert G. Duncan By: Christophe Mourey
Its: Senior Vice President Its: Chief Executive Officer
Date: May 23, 1993 Date: May 23, 1993
May 23, 1994
AVSA S.A.R.L.
2, Rond Point Maurice Bellonte
31700 Blagnac
France
Re: A330 OPTION EXERCISE
Dear Ladies and Gentlemen:
ILFC hereby irrevocably exercises its option to purchase one new
A330-300 for delivery in April 1999, pursuant to Amendment No. 2,
dated December 10, 1992, to the A330 Purchase Agreement, dated
November 10, 1988.
ILFC has paid a deposit for the aircraft, which will be credited
against the predelivery payment due pursuant to paragraph 8 of
Amendment No. 2, dated December 10, 1992, to the A330 Purchase
Agreement, dated November 10, 1988.
ILFC hereby designates General Electric CF6-80 engines for this
aircraft. We kindly ask you to confirm our order to General
Electric.
Sincerely yours,
INTERNATIONAL LEASE FINANCE CORPORATION
/s/ Steven F. Udvar-Hazy
By: Steven F. Udvar-Hazy
Its: President and CEO
Date: May 23, 1994
May 23, 1994
AVSA S.A.R.L.
2, Rond Point Maurice Bellonte
31700 Blagnac
France
Re: Option Waiver Notice
Dear Ladies and Gentlemen:
ILFC hereby irrevocably waives its right to purchase:
a) one new Airbus A321 option aircraft scheduled for delivery
in April 1999, pursuant to Amendment No. 1, dated June 18,
1991, to the A321 Purchase Agreement, dated February 14,
1990;
b) three new Airbus A300-600R scheduled for delivery in June
1997, March 1998 and February 1999, pursuant to Amendment
No. 2, dated December 10, 1992 to the A300-600R Purchase
Agreement, dated November 10, 1988.
ILFC desires and AVSA hereby agrees to credit the option fees
paid in respect of these four (4) aircraft against the
predelivery payments due pursuant to Amendment No. 5, dated
May 23, 1994, to the A340 Purchase Agreement, dated November 10,
1988.
INTERNATIONAL LEASE AVSA, S.A.R.L.
FINANCE CORPORATION
/s/ Steven F. Udvar-Hazy /s/ Christophe Mourey
By: Steven F. Udvar-Hazy By: Christophe Mourey
Its: President and CEO Its: President and CEO
Date: May 23, 1994 Date:
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED
STOCK DIVIDENDS FOR THE SIX MONTHS ENDED JUNE 30, 1994 AND
JUNE 30, 1993
1994 1993
---- ----
(Dollars in thousands)
Earnings:
Net Income . . . . . . . . . . . . . . . . .$107,984 $ 76,510
Add:
Provision for income taxes . . . . . . . . .63,840 42,713
Fixed charges . . . . . . . . . . . . . . 190,077 158,960
Less:
Capitalized interest . . . . . . . . . . . 20,738 20,292
------- -------
Earnings as adjusted (A) . . . . . . . . . $341,163 $257,891
======= =======
Preferred dividend requirements. . . . . . . .$ 3,411 $ 1,424
Ratio of income before provision
for income taxes to net income . . . . . 159% 156%
------- -------
Preferred dividend factor on pretax
basis. . . . . . . . . . . . . . . . . . 5,423 2,221
------- -------
Fixed Charges:
Interest expense . . . . . . . . . . . . . 169,339 138,668
Capitalized interest . . . . . . . . . . . 20,738 20,292
------- -------
Fixed charges as adjusted. . . . . . . . 190,077 158,960
------- -------
Fixed charges and preferred stock
dividends (B) . . . . . . . . . . . . . . .$195,500 $161,181
======= =======
Ratio of earnings to fixed charges
and preferred stock dividends
(A) divided by (B). . . . . . . . . . . . . . 1.75x 1.60x
===== =====
