We examine the role that reporting and non-reporting incentives play in operating lease financing. Using a comprehensive dataset of publicly-traded and privately-held US airlines, we provide evidence that expanding financing capacity, accommodating volatile operations, and maximizing present value of tax deductions are important drivers of leasing decisions. Contrary to the common assertion, we find no evidence that reporting lower indebtedness, or “hiding” liabilities from investors, is a primary motive for lease usage, suggesting that reporting incentives play, at most, a secondary role. We discuss implications of these findings for standard setters and future research, and their relevance for proposed changes in financial reporting rules for leases.