AAR CORP to Buy 65% of MRO Holdings for $1.82B Cash
AAR expects approximately $2.1 billion of new debt and approximately $231,550,159.50 in gross PIPE proceeds before fees.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
AAR CORP. (AIR) agreed to acquire 65% of MRO Holdings for an estimated cash purchase price of $1,819,174,310, subject to customary adjustments, plus 5,783.894 non-voting Series A Convertible Preferred shares with an agreed value of $780,825,690. Closing is expected in AAR’s fiscal third quarter ending February 2027, subject to regulatory approvals and customary conditions.
AAR may acquire another 5% before or after closing; options for the remaining 30% are exercisable in three 10% tranches on the second, third and fourth closing anniversaries. AAR expects net leverage of approximately 3.6x at closing, including run-rate synergies, and approximately 3.0x within two years, including phased synergies. The separate PIPE is for 2,215,791 common shares at $104.50 each, with expected gross proceeds of approximately $231,550,159.50.
MRO Holdings is expected to generate approximately $1.0 billion of calendar 2026 sales and $285 million of adjusted EBITDA. AAR projects roughly 400 basis points of pro forma adjusted EBITDA margin accretion before synergies and approximately $75 million of run-rate cost synergies within three to four years after closing. AAR’s first-quarter FY 2027 sales were $918.0 million, up 24% year over year; adjusted diluted EPS was $1.49, up 38%.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate pointQ1 sales: $918.0 million, up 24%; adjusted diluted EPS: $1.49, up 38%.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Pre-synergy adjusted EBITDA margin: approximately 16%, roughly 400 basis points accretive.
Negative
- Moderate pointCompetition-approval termination fee: $100 million, rising to $150 million if AAR extends the Outside Date. 2.2% of market cap
Insights
Analyzing...
8-K Event Classification
Key Figures
Key Terms
PIPE Offering financial
pari passu technical
Call Option financial
adjusted EBITDA margin financial
intercompany loan facility financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What is AAR (AIR) paying for its MRO Holdings acquisition?
When is the AAR (AIR) acquisition of MRO Holdings expected to close?
How will AAR (AIR) finance the MRO Holdings acquisition, and what are the PIPE terms?
What additional MRO Holdings ownership can AAR (AIR) acquire?
What were AAR (AIR)'s first-quarter FY 2027 results?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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| Item 1.01 | Entry into a Material Definitive Agreement. |
Share Purchase Agreement
On September 28, 2026, AAR CORP., a Delaware corporation (the “Company”), entered into a Share Purchase Agreement (the “Share Purchase Agreement”) by and among the Company, MROH Intermediate Holdco LLC, a Delaware limited liability company (the “Seller”), and MRO Holdings, Inc., a sociedad anónima organized under the laws of the Republic of Panama (“MRO Panama”), pursuant to which, among other things, the Company will acquire from the Seller 6,500 shares, representing 65% of the issued and outstanding shares (the “Acquired Shares”), of MRO Panama (the “Acquisition”). The Company has the option to acquire an additional 5% of the issued and outstanding shares, exercisable at any time prior to or following the closing of the Acquisition (the “Closing”), which is expected to occur in the Company’s fiscal third quarter ending February 2027, subject to receipt of regulatory approvals and satisfaction of other customary closing conditions set forth below.
The aggregate consideration for the Acquired Shares consists of (i) an estimated cash purchase price of $1,819,174,310 (the “Cash Purchase Price”), subject to customary adjustments at and after the Closing for net working capital, indebtedness, cash and transaction expenses, and (ii) 5,783.894 shares of newly designated non-voting Series A Convertible Preferred Stock of the Company, par value $1.00 per share (the “Series A Preferred Stock”), the terms of which are set forth in the form of Certificate of Designations for such Series A Preferred Stock (the “Certificate of Designations”) to be filed by the Company with the Delaware Secretary of State at the time of issuance of the Series A Preferred Stock, which has an agreed value of $780,825,690. The Series A Preferred Stock has no preference over and is pari passu with the Company’s common stock, par value $1.00 per share (the “Common Stock”), with respect to dividends or distributions. At the Closing, the Company will deposit $22,500,000 with an escrow agent to secure post-closing adjustment obligations. The terms of the Series A Preferred Stock are as set forth in the form of Certificate of Designations, attached hereto as Exhibit 3.1 to this Current Report on Form 8-K.
The Closing is subject to the satisfaction or waiver of customary closing conditions (the “Closing Conditions”), including, among other things, (i) receipt of applicable regulatory approvals; (ii) the accuracy of the parties’ representations and warranties and performance of their respective covenants, in each case, subject to certain materiality thresholds; (iii) the absence of any Material Adverse Effect (as defined in the Share Purchase Agreement), any injunction or restraint prohibiting the Acquisition, or any pending governmental litigation challenging the Acquisition; (iv) the consummation of certain pre-closing restructuring transactions within MRO Panama’s corporate group; and (v) other customary conditions.
The Share Purchase Agreement contains customary representations, warranties, covenants and agreements. The Share Purchase Agreement requires the Seller to use commercially reasonable efforts to cause MRO Panama and its subsidiaries (the “Group Companies”) to carry on their business activities in the ordinary course of business consistent with past practice in all material respects during the period between execution of the Share Purchase Agreement and Closing (the “Pre-Closing Period”). The Share Purchase Agreement restricts the Seller from causing or permitting the Group Companies to take certain actions during the Pre-Closing Period without the Company’s prior written consent, including, among others, (i) amending organizational documents, (ii) issuing, selling or repurchasing equity securities, (iii) making acquisitions or dispositions of material assets, (iv) declaring or paying dividends or distributions, (v) entering into, amending or terminating material contracts and (vi) making material changes to employee compensation or benefits. In addition, the Seller has agreed to cooperate with the Company in connection with the arrangement, syndication and consummation of certain debt and equity financing, including providing required financial and other information for inclusion in filings of the Company with the Securities and Exchange Commission (the “SEC”). Among other things, from the date of the Share Purchase Agreement until the earlier of the Closing or termination of the Share Purchase Agreement, the Seller and MRO Panama have also agreed not to consummate, solicit, initiate or encourage or facilitate any inquiries or proposals relating to alternate transactions involving MRO Panama or to engage in or continue any discussions or negotiations with respect to alternate transactions involving MRO Panama. The Company has also agreed to conduct its business in the ordinary course during the Pre-Closing Period and is restricted from amending its organizational documents in a manner that would adversely affect the Series A Preferred Stock consideration or entering into any change of control transaction without the Seller’s consent.
The Share Purchase Agreement contains certain termination rights for each of the Company and the Seller, including, among other things, (i) by mutual written consent of the Company and the Seller, (ii) by the Seller, if the Company breaches its representations, warranties or covenants in a manner that would cause the applicable Closing Conditions not to be satisfied and such breach is not cured by the earlier of September 28, 2027 (the “Outside Date”) and 30 days following written notice, (iii) by the Company, if the Seller or MRO Panama breaches its representations, warranties or covenants in a manner that would cause the applicable Closing Conditions not to be satisfied and such breach is not cured within the earlier of the Outside Date and 30 days following written notice, (iv) by either party, if the Closing has not occurred by the Outside Date and (v) by either party, if a final, non-appealable governmental order permanently prohibits the Acquisition; provided that no party may terminate the Share Purchase Agreement if its material breach of its obligations caused the failure of the Closing to occur. The Company has the right to extend the Outside Date to March 28, 2028 upon written notice to the Seller if the conditions set forth in the Share Purchase Agreement have been satisfied, other than certain conditions related to regulatory approvals. If the Company has not exercised its right to extend the Outside Date and if the conditions set forth in the Share Purchase Agreement other than the consummation of certain pre-closing restructuring transactions within MRO Panama’s corporate group have been satisfied, then the Outside Date shall be automatically extended to December 27, 2027. If the Share Purchase Agreement is terminated as a result of the failure to obtain required approvals under applicable competition laws, the Company would be required to pay the Seller, as sole and exclusive remedy (absent fraud or willful breach of the agreement), a termination fee of $100,000,000, or $150,000,000 if the Company has exercised its right to extend the Outside Date. Each party to the Share Purchase Agreement is entitled to specific performance of the terms thereof.
The foregoing description of the Share Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Share Purchase Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The Share Purchase Agreement has been included to provide investors with information regarding its terms. It is not intended to provide any other factual information about the Company, the Seller, MRO Panama or any of their respective affiliates. The representations, warranties and covenants contained in the Share Purchase Agreement were made only for purposes of the Share Purchase Agreement as of the specific dates therein, were solely for the benefit of the parties to the Share Purchase Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk among the parties to the Share Purchase Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Share Purchase Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Share Purchase Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures. The Share Purchase Agreement should not be read alone, but should instead be read in conjunction with the other information regarding the Company that is or will be contained in, or incorporated by reference into, its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other documents that the Company files with the SEC.
Form of Limited Liability Company Agreement of MRO Holdings
At the Closing, a newly formed and wholly owned subsidiary of the Company (“AAR NewCo”), newly formed subsidiaries of Seller (collectively “Seller NewCo”), and a newly formed parent company of MRO Panama (“MRO Holdings”) will enter into an Amended and Restated Limited Liability Company Agreement of MRO Holdings (the “LLC Agreement”). Under the LLC Agreement, AAR NewCo and Seller NewCo will be the members of MRO Holdings, which will hold the equity interests of MRO Panama following the Closing. The LLC Agreement will govern the management and operation of MRO Holdings and the rights and obligations of AAR NewCo and Seller NewCo as members. The LLC Agreement will provide for an eight-member board of managers, with AAR NewCo entitled to designate five managers (including one independent manager), and Seller NewCo entitled to designate three managers for so long as it holds equity securities of MRO Holdings. The AAR NewCo managers will collectively hold a majority of the votes on the board of managers at all times, and AAR NewCo will have the right to increase the size of the board above eight members in its sole discretion (subject to Seller NewCo’s consent when applicable in the following paragraph).
The board of managers will have exclusive authority to manage MRO Holdings, subject to certain matters requiring Seller NewCo’s prior written consent for so long as Seller NewCo holds units of MRO Holdings, including, among other things, (i) amending, waiving or terminating organizational documents of MRO Holdings or its subsidiaries in a manner that would materially and adversely impact Seller NewCo, (ii) creating new classes of equity securities or reclassifying existing equity securities, (iii) declaring or paying any non-pro rata distribution or redemption, or failing to make distributions in accordance with the dividend policy set forth in the LLC Agreement, (iv) changing the income tax status, tax classification or tax accounting methods of MRO Holdings or its subsidiaries or making any internal restructuring or reorganization, in each case that would be reasonably expected to materially and adversely impact Seller NewCo, (v) entering into, amending, modifying or terminating material related-party transactions, subject to specified exceptions, (vi) merging or consolidating MRO Holdings or its subsidiaries, selling all or substantially all of the assets of MRO Holdings or its subsidiaries or consummating an initial public offering, (vii) incurring indebtedness that is not on arm’s-length terms or that would result in MRO Holdings’ consolidated leverage exceeding 4.0x, or entering into any arrangement that would limit the ability of MRO Holdings or its subsidiaries to make distributions or require MRO Holdings to provide credit support for any member’s indebtedness, (viii) voluntarily dissolving, winding up or liquidating MRO Holdings or its subsidiaries and (ix) issuing, selling or granting equity securities of MRO Holdings, in each case subject to specified exceptions.
In addition, until AAR NewCo exercises and closes its second call right (which first becomes exercisable on the third anniversary of the Closing), the LLC Agreement will require Seller NewCo consent for acquisitions by MRO Holdings exceeding $50,000,000 in aggregate consideration, changes to the size or composition of the board of managers or non-representational committees of the board of managers, bankruptcy or insolvency proceedings, equity incentive plans (but not grants thereunder) and joint ventures or similar arrangements exceeding $50,000,000. For so long as Seller NewCo holds at least 10% of the units of MRO Holdings, AAR NewCo and the board of managers will consult with Seller NewCo with respect to the nomination of candidates for replacement of the chief executive officer, chief financial officer and other senior executives. No amendment to the LLC Agreement shall be made without the prior written consent of AAR NewCo and Seller NewCo, other than correcting typographical or ministerial errors, admitting members in accordance with the LLC Agreement or establishing a management incentive plan or the issuance of equity securities thereunder so long as such plan or equity issuance does not affect Seller NewCo’s rights, obligations, economic interests or governance rights under the LLC Agreement.
The LLC Agreement will provide for customary restrictions on transfers of MRO Holdings equity interests, subject to certain permitted-transfer exceptions, preemptive rights with respect to new equity issuances by MRO Holdings, and drag-along rights in connection with specified sale transactions. AAR NewCo’s drag-along right will allow AAR NewCo to cause a sale transaction following the fourth anniversary of the Closing, and in connection with such drag-along transaction, Seller NewCo will be entitled to receive the greater of (i) its pro rata share of the aggregate consideration and (ii) the call option purchase price that would be payable for its units pursuant to AAR NewCo’s call rights. Subject to applicable law and the terms of the LLC Agreement, distributions will generally be made pro rata to the members based on their respective units, and the LLC Agreement will provide for tax distributions in specified circumstances. The LLC Agreement will restrict all distributions to the members until the second anniversary of the Closing.
The LLC Agreement will also provide AAR NewCo with a call option to acquire all of Seller NewCo’s remaining units in MRO Holdings over a defined timeline (the “Call Option”). The Call Option will consist of (a) an initial option to acquire 5% of the units of MRO Holdings held by Seller NewCo as of immediately prior to the Closing from Seller NewCo, exercisable at any time prior to or following the Closing, subject to specified expiration events and (b) options to acquire all of Seller NewCo’s remaining units of MRO Holdings in three tranches, with the first, second and third tranches becoming exercisable on the second, third and fourth anniversaries of the Closing, respectively. Following the exercise of all three tranches, AAR NewCo shall have acquired all of the units of MRO Holdings held by Seller NewCo. Each tranche of the Call Option may be exercised during any 20-day period following the end of a fiscal month after it becomes exercisable. For the three-tranche Call Option, the purchase price will be determined based on the equity value of MRO Holdings calculated as the product of MRO Holdings’ last-twelve-months pro forma adjusted EBITDA and an applicable multiple (which is the greater of 13.5x and the ratio of the Company’s enterprise value to its last-twelve-months adjusted EBITDA, subject to a cap of 15.25x), adjusted for indebtedness, cash, equity method investments, minority interests and net working capital of MRO Holdings, along with other adjustments for expansion hangar capital expenditures, a run-rate true-up mechanism and an adjustment to the extent the Company subsequently gives effect to an EBITDA adjustment in its public filings that was previously requested by Seller NewCo and declined by AAR NewCo. The call option purchase price for each tranche equals the resulting equity value of MRO Holdings multiplied by the proportion of Seller NewCo’s units being acquired pursuant to such call option relative to the total outstanding equity securities of MRO Holdings.
Seller NewCo will have the ability to dispute the proposed calculations of the call option purchase price with any disputes to be resolved by an independent accounting or valuation firm in accordance with the LLC Agreement. Following each call closing, the applicable call option purchase price is also subject to a true-up based on actual indebtedness, cash and net working capital as of the call option closing, with any disputes to be resolved by an independent accounting or valuation firm in accordance with the procedures set forth in the LLC Agreement. At each call closing, AAR NewCo will deposit with an escrow agent an amount equal to 5% of target net working capital to secure post-closing adjustment obligations. For the initial 5% option, the purchase price will be the greater of (i) a per-unit price derived from the Cash Purchase Price paid by the Company in the Acquisition and (ii) the call option purchase price that would otherwise be applicable under the three-tranche Call Option. If AAR NewCo does not exercise a tranche of the Call Option within 60 days after it first becomes exercisable, then, at the time such tranche is exercised, the call option equity value used to determine the applicable purchase price will be the greater of (i) the call option equity value as of the date such tranche is first exercisable plus an amount equal to 8% per annum beginning on the fourth anniversary of the Closing and (ii) the call option equity value as of the date such tranche is actually exercised. The Call Option will expire upon the earlier of the sixth anniversary of the Closing, the date Seller NewCo ceases to hold any units, and the consummation of a sale of MRO Holdings. Certain deadlines and timing with respect to the Call Option will be subject to delay to the extent of the occurrence of a force majeure event and any related timing requirements will be tolled until such force majeure event is no longer continuing. In the event of a change of control of AAR NewCo, Seller will have the right to require AAR NewCo to purchase all of Seller NewCo’s units at a purchase price determined using the same equity valuation methodology applicable to the Call Option. If AAR NewCo has not exercised its call rights by the sixth anniversary of the Closing, Seller NewCo will have the right to cause MRO Holdings to initiate a sale process, subject to the terms and conditions set forth in the LLC Agreement.
Under the LLC Agreement, from the effective date of the LLC Agreement until Seller NewCo no longer holds any units of MRO Holdings, AAR NewCo and its subsidiaries (other than MRO Holdings and its subsidiaries) will be restricted from building, developing, operating, owning, managing or acquiring any heavy maintenance facility in North America (excluding the United States and Canada), Central America, South America and the Caribbean, other than through MRO Holdings, subject to certain limited exceptions. AAR NewCo and its subsidiaries (other than MRO Holdings and its subsidiaries) will also be restricted from soliciting or hiring certain senior employees of MRO Holdings and its subsidiaries during such period. The LLC Agreement will also provide for an intercompany loan facility between AAR NewCo and a subsidiary of MRO Holdings, which will be integrated into the distribution and leverage mechanics of the LLC Agreement.
Form of Stockholder’s Agreement
At the Closing, certain indirect equityholders of the Seller (each, an “Initial Stockholder”) will enter into a Stockholder’s Agreement with the Company (collectively, the “Stockholder’s Agreements”). The Stockholder’s Agreements will provide for certain governance and registration rights and subject the Initial Stockholders party to such agreements to certain transfer and standstill restrictions with respect to the shares of the Series A Preferred Stock to be issued to the Initial Stockholders as consideration in the Acquisition and the shares of Common Stock, issuable upon conversion thereof (collectively, the “Consideration Shares”). During the standstill period set forth in the Stockholder’s Agreements, each Initial Stockholder will generally be required to attend meetings of stockholders and vote its voting securities in accordance with the recommendation of the Company’s board of directors on matters submitted to the Company’s stockholders for a vote, other than specified matters for which the Initial Stockholders may vote in their discretion. The Stockholder’s Agreements also provide the Company with an irrevocable proxy, exercisable only upon a specified failure of an Initial Stockholder to comply with such obligations.
Subject to certain customary exceptions, the Stockholder’s Agreements will restrict transfers of the Consideration Shares for 18 months following the Closing, with 33.3% of the Consideration Shares issued to any Initial Stockholder at Closing becoming transferable after six months and 66.7% of the Consideration Shares issued to any Initial Stockholder at Closing becoming transferable after 12 months. The Stockholder’s Agreements will also contain customary restrictions on transfers to certain restricted persons. The Stockholder’s Agreements will provide the Initial Stockholders with customary shelf registration and piggyback registration rights with respect to the shares of Common Stock issuable upon conversion of the Series A Preferred Stock, subject to the terms and conditions set forth therein, including customary suspension, indemnification and expense provisions. The registration rights will terminate when no registrable securities remain outstanding and held by the Initial Stockholders.
The foregoing description of the form of Stockholder’s Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Stockholder’s Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Debt Finance Commitments
In connection with the Acquisition, the Company and certain financial institutions have entered into a debt commitment letter (the “Debt Commitment Letter”) providing fully committed debt financing in an aggregate amount sufficient to fund a portion of the expected Cash Purchase Price and related fees and expenses. The obligations of the financing sources under the Debt Commitment Letter are subject to a number of customary conditions. The Acquisition is not subject to any financing condition.
Securities Purchase Agreement
Concurrently with the execution of the Share Purchase Agreement, on September 28, 2026, the Company entered into Securities Purchase Agreements (collectively, the “Securities Purchase Agreement”) with certain accredited investors (collectively, the “Purchasers”), pursuant to which the Company agreed to issue and sell to the Purchasers, in a private placement (the “PIPE Offering”), an aggregate of 2,215,791 shares (the “PIPE Shares”) of Common Stock, at a purchase price of $104.50 per share.
The gross proceeds of the PIPE Offering are expected to be approximately $231,550,159.50, before deducting applicable fees and other expenses. The Company intends to use the net proceeds from the PIPE Offering to fund, in part, the Cash Purchase Price payable in connection with the Acquisition.
The PIPE Offering is expected to close on October 1, 2026, subject to the satisfaction of customary closing conditions (the “PIPE Closing”). The Securities Purchase Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties and termination provisions.
The PIPE Shares to be issued pursuant to the Securities Purchase Agreement have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws and will be issued pursuant to the exemption from registration provided for under Section 4(a)(2) of the Securities Act. The PIPE Shares may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act. Neither this Current Report on Form 8-K, nor any exhibit attached hereto, is an offer to sell or the solicitation of an offer to buy the PIPE Shares described herein.
Registration Rights Agreement
In connection with the PIPE Offering, the Company also entered into a Registration Rights Agreement, dated as of September 28, 2026 (the “Registration Rights Agreement”), with each of the Purchasers, providing for the registration for resale of the PIPE Shares pursuant to a registration statement (the “Registration Statement”) to be filed with the Securities and Exchange Commission (the “SEC”) no later than the 30th calendar day following the PIPE Closing, subject to extension to the 90th calendar day if certain required financial information relating to the Acquisition is not yet available. The Company has agreed to use commercially reasonable efforts to cause such registration statement to become effective no later than the 60th calendar day following the PIPE Closing (or, in the event of a full review by the SEC, the 90th calendar day following such closing).
The foregoing descriptions of the Securities Purchase Agreement and Registration Rights Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the Securities Purchase Agreement and Registration Rights Agreement, which are filed as Exhibits 10.2 and 10.3 to this Current Report on Form 8-K, each of which is incorporated herein by reference.
| Item 3.02. | Unregistered Sales of Equity Securities. |
The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.
Neither this Current Report on Form 8-K nor any exhibit attached hereto is an offer to sell or the solicitation of an offer to buy any securities of the Company.
| Item 7.01. | Regulation FD Disclosure. |
On September 28, 2026, the Company issued a press release announcing the execution of the Share Purchase Agreement and the Securities Purchase Agreement and made available on its website an investor presentation in relation therewith. Copies of the press release and the investor presentation are attached as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
The information in this Item 7.01, including Exhibit 99.1 and Exhibit 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section and shall not be deemed to be incorporated by reference into any filing by the Company under the Securities Act, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Cautionary Language Concerning Forward-Looking Statements
This Current Report on Form 8-K contains certain statements, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. The forward-looking statements included herein are subject to risks and uncertainties. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements give the Company’s current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “continue,” “estimate,” “expect,” “project,” “plan,” “potential,” “predict,” “intend,” “believe,” “may,” “might,” “will,” “would,” “should,” “seek,” “could,” “positions,” “likely,” “target,” “goal,” “strategy” or similar expressions and the negatives of those terms in connection with any discussion of the timing or nature of future operating or financial performance or other events, including statements regarding the Company’s expectations, intentions or strategies regarding the PIPE Offering, the expected use of proceeds from the PIPE Offering, the Acquisition, the expected benefits of the Acquisition, the anticipated timetable for completing the Acquisition, and the impact of the Acquisition on the Company’s business and future financial condition and operating results.
These forward-looking statements are subject to certain risks and uncertainties that may cause actual results to differ materially from historical results or those anticipated, depending on a variety of factors, including: factors that adversely affect the commercial aviation industry; adverse events and negative publicity in the aviation industry; a reduction in sales to the U.S. government and its contractors; cost overruns and losses on fixed-price contracts; nonperformance by subcontractors or suppliers; our ability to manage our operational footprint; a reduction in outsourcing of maintenance and repair activity by airlines; a shortage of skilled personnel or work stoppages; competition from other companies; financial, operational and legal risks arising as a result of operating internationally; the failure to complete, integrate and realize the anticipated benefits of acquisitions, including execution of related operational and financial plans; circumstances associated with divestitures; the inability to recover costs due to fluctuations in market values for aviation products and equipment; cyber or other security threats or disruptions; the need to make significant capital expenditures to keep pace with technological developments in our industry; restrictions on the use of intellectual property and tooling important to our business; the inability to protect the value of our intellectual property; our ability to manage our debt and fund our other liquidity needs; limitations on our ability to access the debt and equity capital markets or to draw down funds under loan agreements; non-compliance with restrictive and financial covenants contained in our debt and loan agreements; changes in or non-compliance with laws and regulations related to federal contractors, the aviation industry, international operations, safety and environmental matters, and the costs of complying with such laws and regulations; exposure to product liability and property claims that may be in excess of our liability insurance coverage; the risk that the Acquisition may not be completed in a timely manner or at all; the failure to satisfy the closing conditions to the Acquisition, including the receipt of required regulatory approvals; the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the Share Purchase Agreement, including in certain circumstances requiring the Company to pay a termination fee; the ability of the Company to obtain the necessary financing arrangements, including under the Debt Commitment Letter; the effect of the announcement or pendency of the Acquisition on the Company’s business relationships, operating results and business generally; risks that the Acquisition may disrupt the Company’s current business plans and operations; the Company’s ability to retain and hire key personnel in light of the Acquisition; risks related to diverting management’s attention from the Company’s ongoing business operations; unexpected costs, charges or expenses resulting from the Acquisition; potential litigation relating to the Acquisition; the ability of the Company to successfully integrate MRO Panama and its subsidiaries following the Closing and to achieve the anticipated benefits of the Acquisition, including estimated cost and operational synergies, and the timeline to realize such benefits; the effects of the Acquisition on the Company’s earnings, financial condition, net leverage ratio and credit ratings; the risk that the conditions to the PIPE Closing are not satisfied; the fact that the PIPE Offering may cause dilution to the Company’s existing stockholders; the impact of the Acquisition on the Company’s business and future financial condition and operating results, including the ability of the Company or MRO Panama to repay or prepay indebtedness incurred in connection with the transaction or otherwise; and other factors disclosed in the section entitled “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2026, as may be updated or supplemented by any subsequent filings with the SEC. Should one or more of these risks or uncertainties materialize adversely, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described.
While the Company believes that its assumptions are reasonable, it cautions that it is very difficult to predict the impact of known factors, and it is impossible to anticipate all factors that could affect actual results. These events and uncertainties are difficult or impossible to predict accurately and many are beyond the Company’s control. The risks described in these reports are not the only risks the Company faces, as additional risks and uncertainties not currently known or foreseeable or deemed immaterial may materially adversely affect the Company’s business, financial condition or results of operations in future periods. All forward-looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by the foregoing cautionary statements. The forward-looking statements included in this Current Report on Form 8-K are made only as of the date hereof. The Company assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.
| Item 9.01. | Financial Statements and Exhibits. |
| Exhibit No. |
Description |
| 2.1* | Share Purchase Agreement, dated as of September 28, 2026, by and among MROH Intermediate Holdco LLC, MRO Holdings, Inc. and AAR CORP. |
| 3.1 | Form of Certificate of Designations. |
| 10.1 | Form of Stockholder’s Agreement. |
| 10.2 | Form of Securities Purchase Agreement, dated as of September 28, 2026, by and among AAR CORP. and the purchasers party thereto. |
| 10.3 | Form of Registration Rights Agreement, dated as of September 28, 2026, by and among AAR CORP. and the purchasers party thereto. |
| 99.1 | Press release, dated September 28, 2026. |
| 99.2 | Investor Presentation. |
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
* Schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplementally a copy of any omitted schedule or exhibit upon request by the SEC.
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 hereunto duly authorized.
| AAR CORP. | ||
| Date: September 28, 2026 | ||
| By: | /s/ Jessica A. Garascia | |
| Jessica A. Garascia | ||
| Senior Vice President, General Counsel, Chief Administrative Officer and Secretary | ||
Exhibit 99.1
AAR accelerates its aftermarket platform strategy by agreeing to acquire a controlling interest in MRO Holdings
| · | Acquisition significantly enhances AAR’s scale, margins, and cash flow profile |
| · | Adds more than $1 billion in revenue supporting blue-chip, U.S. airline customers |
| · | Expands AAR’s consolidated adjusted EBITDA margins1 from approximately 12% to 16%, before synergies |
| · | Expected to be accretive to adjusted EPS in the first full fiscal year post closing |
| · | Updating AAR’s adjusted EBITDA margin target to approximately 19% to 20% within three to four years |
WOOD DALE, Illinois — September 28, 2026 — AAR CORP. (NYSE: AIR) (the “Company” or “AAR”), a leading Parts, Repair, and Software platform in the aviation aftermarket, today announced it has entered into a definitive agreement to acquire a 65% controlling interest in MRO Holdings at an implied enterprise value of $4.0 billion. This represents 10.7x MRO Holdings’ forecasted full calendar year 2026 adjusted EBITDA, including $75 million in anticipated run-rate cost synergies and net of transaction-related tax benefits with an expected present value of approximately $150 million. The transaction will expand and strengthen AAR’s leading aviation aftermarket platform and create significant additional growth opportunities across the Company’s core Parts, Repair, and Software activities. The combination creates advantages for AAR’s customers as the Company will offer a broader range of maintenance solutions.
MRO Holdings is a leading global provider of aircraft maintenance, repair, and overhaul (MRO) with more than four decades of experience. Through its team of approximately 10,000 professionals and 115 lines of airframe maintenance capacity, MRO Holdings performs aircraft maintenance and modifications across its extensive network in the Americas, with facilities in El Salvador, Mexico, Colombia, and the United States. Approximately 90% of MRO Holdings’ revenue is from sales to U.S. customers.
“Over the last several years, AAR has taken important steps to reshape our portfolio into an integrated Parts, Repair, and Software aviation aftermarket platform,” said John M. Holmes, Chairman, President and CEO of AAR. “Heavy maintenance is a foundational element of this platform, driving revenue to all other areas of the Company. Through the acquisition of MRO Holdings, we will create the largest heavy maintenance MRO in the world, servicing a combined total of nearly 3,000 aircraft per year in our hangars. As a result of this scale, we expect to drive additional volume through our Component MRO facilities, we will have a much larger channel for new and existing OEM distribution relationships, and we will have additional avenues for data collection supporting our software business. In addition, we see more growth opportunities for the heavy maintenance business itself, including widebody maintenance and increased capture of European and Middle Eastern fleets for service in the Americas.
“The transaction structure allows us to partner with a proven team that brings decades of experience in a strategically important region. This structure also provides the financial flexibility to continue to pursue AAR’s broader strategy. This highly strategic acquisition is truly transformational for AAR and marks a significant step in our long-term growth plan,” concluded Holmes.
1 Based on fiscal year 2026 results
In calendar year 2026, MRO Holdings is expected to generate approximately $1.0 billion of sales and $285 million of adjusted EBITDA, representing an adjusted EBITDA margin of approximately 27%. MRO Holdings also has an exceptional cash flow conversion profile, converting approximately 70% of adjusted EBITDA into adjusted cash flow from operating activities in calendar year 2025.
On a pro forma basis, the Company’s adjusted EBITDA margin before synergies is approximately 16%, or roughly 400 basis points accretive to AAR’s standalone FY 2026 results2. AAR expects to generate approximately $75 million of run-rate cost synergies from operations optimization, procurement savings, SG&A optimization, and the sharing of operational best practices. The Company expects to achieve the full run-rate benefit of the synergies within three to four years following closing and is targeting an adjusted EBITDA margin of approximately 19% to 20% in that timeframe.
Holmes continued, “While the strategic benefits are significant, the acquisition of MRO Holdings also greatly enhances our financial profile. The acquisition further strengthens our ability to generate above-market sales growth, and we see a path to 20% adjusted EBITDA margins in the next three to four years. Further, the cash generated by the combination of AAR and MRO Holdings will be substantial, allowing the Company to quickly de-lever and retain future financial flexibility. With greater scale and a stronger financial profile, AAR will be better positioned to deliver higher, more profitable growth across our Parts, Repair, and Software platform.”
“This is a major milestone in MRO Holdings' evolution, and AAR is the right partner,” said Roberto Kriete, Chairman of MRO Holdings. “Combining our technical expertise and customer relationships with AAR's broader aftermarket capabilities will strengthen our value proposition and support continued investment in our people, capabilities, and facilities. Together, MRO Holdings and AAR create a stronger platform with greater scale, deeper technical resources, and a broader ability to serve the world's leading airlines. We are staying on as shareholders of MRO Holdings because we share AAR's ambition for continued growth and want to be a part of it.”
“As a significant minority shareholder in MRO Holdings, we are proud to have been part of a period of meaningful growth for the company,” said Matt Evans, a Partner at Bain Capital. “MRO Holdings has built a differentiated offering with deep customer relationships, a highly skilled workforce, and a compelling position in a market supported by durable demand for aircraft maintenance. We believe AAR is an excellent partner for the company’s next chapter and look forward to participating in continued value creation as shareholders.”
2 Based upon AAR fiscal year 2026 and MRO Holdings expected calendar year 2026 results.
Transaction details
Under the terms of the agreement, AAR will initially acquire a 65% interest in MRO Holdings for an equity value of approximately $1.8 billion. As part of this initial transaction, AAR will also repay approximately $1.3 billion of MRO Holdings’ existing borrowings. AAR expects to fund the transaction, including related expenses, through approximately $2.1 billion of new debt, approximately $780 million of equity issued at $135 per share to existing MRO Holdings shareholders, and approximately $230 million of proceeds from a private investment in public equity (PIPE) offering, led by The Pritzker Organization and other blue-chip institutional investors.
AAR will have the option to acquire the remaining 35% ownership interest of MRO Holdings with 5% exercisable at any time within six years of the closing of the initial Acquisition, and the remaining 30% exercisable in three equal tranches of 10% on the second, third, and fourth anniversaries of the closing of the initial acquisition. AAR will control the MRO Holdings Board of Managers, and the selling owners will be subject to customary lockups and voting-support provisions with respect to the AAR shares they receive in the transaction.
The approximately $2.1 billion of new debt financing is supported by a fully committed bridge facility, which AAR intends to replace with permanent debt financing prior to closing. AAR expects net leverage at closing to be approximately 3.6x, including run-rate synergies. As part of the agreement, AAR will receive 100% of the excess cash flow from MRO Holdings during its first two years of ownership. AAR expects net leverage to be approximately 3.0x within two years following close of the transaction and to return to its target range of 2.0x to 2.5x over the medium term, even as we exercise the purchase options. AAR expects to maintain its BB-category credit rating profile at each of S&P and Moody’s.
The transaction is expected to close in AAR’s fiscal third quarter ending February 2027, subject to receipt of regulatory approvals and satisfaction of other customary closing conditions. The Board of Directors of AAR has unanimously approved the transaction. Following closing, AAR will fully consolidate MRO Holdings into its financial results.
Advisors
Goldman Sachs & Co. LLC; William Blair & Company, LLC; and Centerview Partners LLC are serving as financial advisors to AAR. Kirkland & Ellis LLP is serving as legal counsel to AAR. Goldman Sachs Bank USA and Wells Fargo Securities, LLC are serving as underwriters of the committed debt financing supporting the transaction, and Goldman Sachs & Co. LLC is exclusive placement agent for the PIPE offering.
Solomon Partners is serving as lead financial advisor to MRO Holdings. RBC Capital Markets, LLC is also advising MRO Holdings. Greenberg Traurig, LLP is serving as legal counsel to MRO Holdings.
Conference call
On Tuesday, September 29, 2026, at 7:00 a.m. CT, AAR will hold a conference call to discuss the transaction as well as the Company’s first quarter fiscal 2027 earnings results, which were announced in a separate release today. A listen-only webcast and slides can be accessed at https://edge.media-server.com/mmc/p/ogsm2rh7. Participants may join via phone by registering at https://register-conf.media-server.com/register/BIe2a403237161465d99fb8af7cc93b3e8. Once registered, participants will receive a dial-in number and a unique PIN that will allow them to access the call.
A replay of the conference call will be available for on-demand listening shortly after the completion of the call at the webcast link and will remain available for approximately one year.
A slide presentation pertaining to the transaction has also been made available on the Investors section of AAR’s website at https://www.aarcorp.com/en/investors/.
About AAR
AAR is a leading global aerospace and defense aftermarket solutions company with operations in over 20 countries. Headquartered in the Chicago area, AAR supports commercial and government customers through three primary operating segments: Parts Supply; Repair, Engineering, and Software; and Government Solutions. Additional information can be found at aarcorp.com.
About MRO Holdings
MRO Holdings is a leading aircraft maintenance and modifications provider with a focus on long-term solutions for the aviation industry. The company operates five facilities across the Americas, with a team of approximately 10,000 professionals and 115 lines of capacity. Driven by a deep commitment to safety, excellence, and partnership, MRO Holdings serves premier airlines around the world. United by the belief that “Together, we fly further,” the group is shaping the future of aviation through operational excellence, innovation, and trust. For more information, visit https://mroholdings.com/
Contacts
Investors
investors@aarcorp.com
+1-630-227-5830
Media
editor@aarcorp.com
+1-630-227-5100
Forward-looking statements
This press release contains certain statements relating to future events, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. The forward-looking statements included herein are subject to risks and uncertainties. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements give the Company’s current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “continue,” “estimate,” “expect,” “project,” “plan,” “potential,” “predict,” “intend,” “believe,” “may,” “might,” “will,” “would,” “should,” “seek,” “could,” “positions,” “likely,” “target,” “goal,” “strategy” or similar expressions and the negatives of those terms in connection with any discussion of the timing or nature of future operating or financial performance or other events, including statements regarding the Company’s expectations, intentions or strategies regarding the PIPE offering, the expected use of proceeds from the PIPE offering, the acquisition, the expected benefits of the acquisition, the anticipated timetable for completing the acquisition, and the impact of the acquisition on the Company’s business and future financial condition and operating results.
These forward-looking statements are subject to certain risks and uncertainties that may cause actual results to differ materially from historical results or those anticipated, depending on a variety of factors, including: factors that adversely affect the commercial aviation industry; adverse events and negative publicity in the aviation industry; a reduction in sales to the U.S. government and its contractors; cost overruns and losses on fixed-price contracts; nonperformance by subcontractors or suppliers; our ability to manage our operational footprint; a reduction in outsourcing of maintenance and repair activity by airlines; a shortage of skilled personnel or work stoppages; competition from other companies; financial, operational and legal risks arising as a result of operating internationally; the failure to complete, integrate and realize the anticipated benefits of acquisitions, including execution of related operational and financial plans; circumstances associated with divestitures; the inability to recover costs due to fluctuations in market values for aviation products and equipment; cyber or other security threats or disruptions; the need to make significant capital expenditures to keep pace with technological developments in our industry; restrictions on the use of intellectual property and tooling important to our business; the inability to protect the value of our intellectual property; our ability to manage our debt and fund our other liquidity needs; limitations on our ability to access the debt and equity capital markets or to draw down funds under loan agreements; non-compliance with restrictive and financial covenants contained in our debt and loan agreements; changes in or non-compliance with laws and regulations related to federal contractors, the aviation industry, international operations, safety and environmental matters, and the costs of complying with such laws and regulations; exposure to product liability and property claims that may be in excess of our liability insurance coverage; the risk that the acquisition may not be completed in a timely manner or at all; the failure to satisfy the closing conditions to the acquisition, including the receipt of required regulatory approvals; the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the Share Purchase Agreement, including in certain circumstances requiring the Company to pay a termination fee; the ability of the Company to obtain the necessary financing arrangements, including under the Debt Commitment Letter; the effect of the announcement or pendency of the acquisition on the Company’s business relationships, operating results and business generally; risks that the acquisition may disrupt the Company’s current business plans and operations; the Company’s ability to retain and hire key personnel in light of the acquisition; risks related to diverting management’s attention from the Company’s ongoing business operations; unexpected costs, charges or expenses resulting from the acquisition; potential litigation relating to the acquisition; the ability of the Company to successfully integrate MRO Holdings and its subsidiaries following the Closing and to achieve the anticipated benefits of the acquisition, including estimated cost and operational synergies, and the timeline to realize such benefits; the effects of the acquisition on the Company’s earnings, financial condition, net leverage ratio and credit ratings; the risk that the conditions to the PIPE Closing are not satisfied; the fact that the PIPE offering may cause dilution to the Company’s existing stockholders; the impact of the acquisition on the Company’s business and future financial condition and operating results, including the ability of the Company or MRO Holdings to repay or prepay indebtedness incurred in connection with the transaction or otherwise; and other factors disclosed in the section entitled “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2026, as may be updated or supplemented by any subsequent filings with the SEC. Should one or more of these risks or uncertainties materialize adversely, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described.
The Company derives many of its forward-looking statements from its operating budgets and forecasts, which are based on many detailed assumptions. While the Company believes that its assumptions are reasonable, it cautions that it is very difficult to predict the impact of known factors, and it is impossible to anticipate all factors that could affect actual results. These events and uncertainties are difficult or impossible to predict accurately and many are beyond the Company’s control. The risks described in these reports are not the only risks the Company faces, as additional risks and uncertainties not currently known or foreseeable or deemed immaterial may materially adversely affect the Company’s business, financial condition or results of operations in future periods. All forward-looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by the foregoing cautionary statements. The forward-looking statements included in this press release are made only as of the date hereof. The Company assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.
Adjusted EBITDA margin is a “non-GAAP financial measure” as defined in Regulation G of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We believe this non-GAAP financial measure is relevant and useful for investors as it illustrates our core operating performance unaffected by the impact of certain items that management does not believe are indicative of our ongoing and core operating activities. When reviewed in conjunction with our GAAP results and the accompanying reconciliation, we believe this non-GAAP financial measure provides additional information that is useful to gain an understanding of the factors and trends affecting our business and provides a means by which to compare our operating performance against that of other companies in the industries in which we compete. This non-GAAP measure should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measure calculated in accordance with GAAP.
Pursuant to the requirements of Regulation G of the Exchange Act, we are providing the following table that reconciles the above-mentioned non-GAAP financial measure to the most directly comparable GAAP financial measure:
AAR CORP. and subsidiaries
| Adjusted EBITDA (In millions - unaudited) | Three months ended May 31, | Year ended May 31, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net income | $ | 50.7 | $ | 34.0 | $ | 187.7 | $ | 12.5 | ||||||||
| Income tax expense | 7.0 | 13.6 | 58.2 | 26.4 | ||||||||||||
| Other (income) expense, net | 1.1 | (0.1 | ) | 2.1 | 0.3 | |||||||||||
| Interest expense, net | 16.3 | 18.4 | 70.5 | 73.6 | ||||||||||||
| Depreciation and amortization | 21.0 | 13.7 | 72.1 | 55.2 | ||||||||||||
| Acquisition and integration expenses (benefit) | 10.2 | (0.9 | ) | 28.2 | 10.8 | |||||||||||
| Bargain purchase gain | 6.2 | –– | (29.5 | ) | –– | |||||||||||
| Loss (Gain) related to sale and exit of business/joint venture, net | (1.2 | ) | 7.1 | (1.4 | ) | 70.3 | ||||||||||
| Gain on sale of headquarters building | –– | –– | (9.8 | ) | –– | |||||||||||
| Impairment charge related to product line exit | –– | –– | 4.9 | –– | ||||||||||||
| Severance charges | –– | –– | 1.0 | –– | ||||||||||||
| Government COVID-related subsidy liability (reversal) | –– | 0.8 | (0.7 | ) | 0.8 | |||||||||||
| FCPA settlement and investigation costs | –– | –– | –– | 65.3 | ||||||||||||
| Russian bankruptcy court judgment (reversal) | –– | –– | –– | (11.1 | ) | |||||||||||
| Contract termination cost | –– | –– | –– | 0.2 | ||||||||||||
| Stock-based compensation | 4.5 | 4.3 | 17.8 | 19.9 | ||||||||||||
| Adjusted EBITDA | $ | 115.8 | $ | 90.9 | $ | 401.1 | $ | 324.2 | ||||||||
| Net income margin | 5.5 | % | 4.5 | % | 5.7 | % | 0.4 | % | ||||||||
| Adjusted EBITDA margin | 12.5 | % | 12.4 | % | 12.1 | % | 11.8 | % | ||||||||
Exhibit 99.2
© 2026 AAR CORP. All rights reserved worldwide Acquisition of Controlling Interest in MRO Holdings & First Quarter Fiscal Year 2027 Earnings September 29, 2026
Disclaimer Note : All results and expectations in the presentation reflect continuing operations unless otherwise noted . The information contained herein has been prepared solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities and should not be treated as giving investment advice . It is not targeted to the specific investment objectives, financial situation or particular needs of any recipient . No representations or warranties, express or implied, are given in, or in respect of, this presentation . To the fullest extent permitted by law, in no circumstances with AAR CORP . , MRO Holdings or any of their respective subsidiaries, equity holders, affiliates, representatives, partners, directors, officers, employees, advisors or agents be responsible or liable for any direct, indirect or consequential loss or loss of profit arising from the use of this presentation, its contents, its omissions, reliance on the information contained within it, or on opinions communicated in relation thereto or otherwise arising in connection therewith . Forward - Looking Statements This presentation contains certain forward - looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995 . Forward - looking statements often address our expected future operating and financial performance and financial condition, or targets, goals, commitments, and other business plans, and often may also be identified because they contain words such as “anticipate,” “continue,” “estimate,” “expect,” “project,” “plan,” “potential,” “predict,” “intend,” “believe,” “may,” “might,” “will,” “would,” “should,” “seek,” “could,” “positions,” “likely,” “target,” “goal,” “strategy” or similar expressions and the negatives of those terms . These forward - looking statements are subject to certain risks and uncertainties that may cause actual results to differ materially from historical results or those anticipated, depending on a variety of factors, including : factors that adversely affect the commercial aviation industry ; adverse events and negative publicity in the aviation industry ; a reduction in sales to the U . S . government and its contractors ; cost overruns and losses on fixed - price contracts ; nonperformance by subcontractors or suppliers ; our ability to manage our operational footprint ; a reduction in outsourcing of maintenance and repair activity by airlines ; a shortage of skilled personnel or work stoppages ; competition from other companies ; financial, operational and legal risks arising as a result of operating internationally ; the failure to complete, integrate and realize the anticipated benefits of acquisitions, including execution of related operational and financial plans ; circumstances associated with divestitures ; the inability to recover costs due to fluctuations in market values for aviation products and equipment ; cyber or other security threats or disruptions ; the need to make significant capital expenditures to keep pace with technological developments in our industry ; restrictions on the use of intellectual property and tooling important to our business ; the inability to protect the value of our intellectual property ; our ability to manage our debt and fund our other liquidity needs ; limitations on our ability to access the debt and equity capital markets or to draw down funds under loan agreements ; non - compliance with restrictive and financial covenants contained in our debt and loan agreements ; changes in or non - compliance with laws and regulations related to federal contractors, the aviation industry, international operations, safety and environmental matters, and the costs of complying with such laws and regulations ; exposure to product liability and property claims that may be in excess of our liability insurance coverage ; the risk that the acquisition may not be completed in a timely manner or at all ; the failure to satisfy the closing conditions to the acquisition, including the receipt of required regulatory approvals ; the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the Share Purchase Agreement governing the acquisition, including in certain circumstances requiring the Company to pay a termination fee ; the ability of the Company to obtain the necessary financing arrangements ; the effect of the announcement or pendency of the acquisition on the Company’s business relationships, operating results and business generally ; risks that the acquisition may disrupt the Company’s current business plans and operations ; the Company’s ability to retain and hire key personnel in light of the acquisition ; risks related to diverting management’s attention from the Company’s ongoing business operations ; unexpected costs, charges or expenses resulting from the acquisition ; potential litigation relating to the acquisition ; the ability of the Company to successfully integrate MRO Holdings and its subsidiaries following the Closing and to achieve the anticipated benefits of the acquisition, including estimated cost and operational synergies, and the timeline to realize such benefits ; the effects of the acquisition on the Company’s earnings, financial condition, net leverage ratio and credit ratings ; the risk that the conditions to the closing of the PIPE transaction are not satisfied ; the fact that the PIPE transaction may cause dilution to the Company’s existing stockholders ; the impact of the acquisition on the Company’s business and future financial condition and operating results, including the ability of the Company or MRO Holdings to repay or prepay indebtedness incurred in connection with the transaction or otherwise ; and other factors disclosed in the section entitled “Risk Factors” of the Company’s Annual Report on Form 10 - K for the fiscal year ended May 31 , 2026 , as may be updated or supplemented by any subsequent filings with the SEC . In particular, forward - looking statements in this presentation include statements regarding our second quarter and FY 2027 guidance, the expected achievement of run - rate cost synergies, anticipated accretion to Adj . EPS, expected expansion of Adj . EBITDA margins, expected leverage at, and following, the closing of the transaction, expected financial results of MRO Holdings for fiscal year 2026 , ending December 31 , 2026 , estimated $ 150 million tax benefits and anticipated accretion to AAR CORP . 's Adj . EBITDA margin targets . There can be no assurance that any of these outcomes will occur or will be achieved within the expected timeframes or at the levels anticipated . Should one or more of these risks or uncertainties materialize adversely, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described . The Company derives many of its forward - looking statements from its operating budgets and forecasts, which are based on many detailed assumptions . While the Company believes that its assumptions are reasonable, it cautions that it is very difficult to predict the impact of known factors, and it is impossible to anticipate all factors that could affect actual results . These events and uncertainties are difficult or impossible to predict accurately and many are beyond the Company’s control . The risks described in these reports are not the only risks the Company faces, as additional risks and uncertainties not currently known or foreseeable or deemed immaterial may materially adversely affect the Company’s business, financial condition or results of operations in future periods . All forward - looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by the foregoing cautionary statements . The forward - looking statements included in this presentation are made only as of the date hereof . The Company assumes no obligation to update or revise any forward - looking statement, whether as a result of new information, future events or otherwise, except as required by law . Presentation Materials : The statements included and the information provided in this presentation are made as of the date of this presentation unless otherwise noted . MRO Holdings Financial Information : This presentation contains certain adjusted financial information of MRO Holdings as of fiscal year 2025 . Such financial information is based on management’s estimates and has not been audited or reviewed by independent accountants . Non - GAAP Financial Measures : This presentation includes certain non - GAAP financial measures . Please refer to the Appendix for additional information on these non - GAAP financial measures and reconciliations to the comparable GAAP measures . AAR CORP . is not providing a reconciliation of forward - looking non - GAAP financial measures to the most directly comparable forward - looking GAAP measure because the information is not available without unreasonable effort . This is due to the inherent difficulty of forecasting the timing and amount of certain items, such as, but not limited to, unusual gains and losses, the ultimate outcome of pending litigation, the impact and timing of potential acquisitions and divestitures, and other structural changes or their probable significance . Each of the adjustments has not occurred, are out of AAR CORP . ’s control, and/or cannot be reasonably predicted . For this reason, AAR CORP . is unable to address the probable significance of the unavailable information . Intellectual Property : This presentation may contain trademarks, service marks, trade names and copyrights of other companies, which are the property of their respective owners, and the use herein does not imply an affiliation with or endorsement by the owners of these trademarks, service marks, tradenames and copyrights . Solely for convenience, some of the trademarks, service marks, trade names and copyrights referred to in this presentation may be listed without the TM, SM, ©, or ® symbols, but AAR CORP . will assert, to the fullest extent under applicable law, the rights of the applicable owners, if any, to these trademarks, service marks, trade names, and copyrights . Third - party logos included herein may represent past customers, present customers, competitors, or may be provided simply for illustrative purposes only . Inclusion of such logos does not necessarily imply affiliation with or endorsement by such firms or businesses . There is no guarantee that AAR CORP . will work, or continue to work, with any of the firms or businesses whose logos are included herein . © 2026 AAR CORP. All rights reserved worldwide 2
Q1 Highlights © 2026 AAR CORP. All rights reserved worldwide 3 Consolidated Sales: 73% commercial; 27% government / defense. See Appendix for reconciliation of Non - GAAP financial measures. Optimized Portfolio Driving Growth and Profitability Q1 Results $918 24% Sales (M) Sales growth $117 12.7% +100 bps Adj. EBITDA (M) Adj. EBITDA margin Adj. margin growth $97 10.6% +90 bps Adj. Operating Income (M) Adj. Op. Income margin Adj. margin growth $1.49 38% Adj. Diluted EPS Growth • Sales growth +24% YoY driven by growth across all key Parts, Repair, and Software activities • Continuing to drive adj. EBITDA margin expansion • Margins +100 bps YoY including expected short - term dilution from HAECO Americas acquisition • +38% YoY adj. diluted EPS growth driven by operating performance • Q1 record $57M adj. cash from operations , 48% of adj. EBITDA Compared to Q1 FY26
Q1 FY27 Segment Results © 2026 AAR CORP. All rights reserved worldwide 4 $317.8 $414.8 Q1 FY26 Q1 FY27 Parts Supply +31% Sales Growth Repair, Engineering, & Software +31% Sales Growth Government Solutions +4% Sales Growth • Above - market organic sales growth in new parts Distribution of +23% • Margin expansion driven by USM and Distribution growth • Organic growth in Airframe MRO, Component MRO, and Software • HAECO Americas dilutive to Q1 segment margins as expected • Growth and margin expansion at Mobility Systems and newer programs more than offsetting WASS 1 decline $226.4 $297.5 Q1 FY26 Q1 FY27 $133.9 $138.8 Q1 FY26 Q1 FY27 Sales ($M) and adj. EBITDA margin (%) 1. Worldwide Aviation Support Services (WASS) is a government program for the U.S. Department of State 13.8% Adj. EBITDA margin 15.3% 13.1% 11.9% 10.7% 15.3% +150 bps (120) bps +460 bps
Q2 and FY 2027 Outlook Total sales growth (ex. LCP) 1 14% – 16% Adj. EBITDA margin (ex. LCP) 2 13.0 % – 13.4% Q2 FY27 Guidance © 2026 AAR CORP. All rights reserved worldwide 5 Estimated tax rate 28% 1. Reflects total sales growth excluding the Legacy Commercial Programs segment 2. Reflects adjusted EBITDA margin excluding the Legacy Commercial Programs segment FY 2027 GUIDANCE Prior as of July 2026 Total sales g rowth (ex. LCP) 1 Low double - digits to low teens Note: Q2 and FY 2027 guidance does not include impact of MRO Holdings acquisition Current as of Sep 2026 Low teens
Accelerating the Execution of AAR’s Strategy with MRO Holdings Acquisition 1 AAR to acquire 65% controlling interest in MRO Holdings at an Enterprise Value of $4.0B Proven M&A playbook to guide integration and deleveraging, with compelling synergy opportunity 4 © 2026 AAR CORP. All rights reserved worldwide 6 2 Advances strategy to become the leading aviation aftermarket platform; builds additional avenues for Parts, Repair, & Software growth 3 Significantly enhances AAR’s scale, margins, and cash flow profile
AAR to acquire a controlling interest of 65% in MRO Holdings Acquisition Significantly Enhances AAR’s Profile © 2026 AAR CORP. All rights reserved worldwide 7 1 As of FY 2026. 2 Represents FY2026 for AAR and CY2026E for MRO Holdings. • Highly strategic acquisition in core Airframe MRO business • Achieves scale that accelerates growth of Parts, Repair, and Software aftermarket platform • Scale helps drive additional volume to high - margin Component MRO activity • Builds channels for existing OEM distribution partners and new OEM agreements • Creates additional avenues for data collection for Software solutions • Transaction structure enables long - term partnership with proven operators that have regional expertise Enhances Financial Profile • Increases AAR’s revenue by ~30+% 1 • ~400 bps accretive to AAR’s Adj. EBITDA margin before synergies 2 , from ~12% to ~16% • Meaningfully enhances cash conversion profile • Expected to be high - single digit percentage accretive to Adj. EPS in first full fiscal year post close • ~$75M run - rate cost synergies across site optimization, procurement savings, ISG&A, and the application of AAR processes to MRO Holdings' operations • Significant cross - selling opportunities not captured in plan • Run rate synergies expected to be achieved by FY2030 Strategic Transaction Transformative Benefits • Nearshoring of Widebody maintenance work currently being done in Asia • Increased European and Middle Eastern fleet capture for service in the Americas • Cross - selling opportunities across services Growth Vectors Synergies
Integrated Business: Platform for Self - Reinforcing Growth © 2026 AAR CORP. All rights reserved worldwide 8 • New parts Distribution drives long - term relationships with OEMs • OEM relationships support technical requirements for Component MRO • Highly transactional USM business keeps us in close contact with Parts buyers and provides critical market intelligence for new parts Distribution • Component MRO supports Airframe MRO and USM activities with Repairs • Airframe MRO allows us to collect data relevant to OEMs for new parts Distribution • Airframe MRO is a highly visible activity that helps drive volume to higher - margin Component MRO Parts Repair • Data available through Parts and Repair activities improve Software offering and enable us to quickly identify market trends • Software provides platform through which customers can purchase Parts and Repairs • Planning tools provide insight to long - range maintenance planning, allowing us to optimize Airframe MRO capacity and improve Parts Supply provisioning Software Software Strengthening leadership in heavy maintenance to drive volume through component repair shops Leveraging position within customer value chain to win additional distribution contracts with OEMs Approaching 3,000 aircraft serviced annually, accessing a broader pool of data which improves efficiency for Repair and Parts MRO Holdings Acquisition Grows and Strengthens AAR’s Platform
AAR is a Global Leader in Aircraft Heavy Maintenance © 2026 AAR CORP. All rights reserved worldwide 9 AAR is a Leader in Heavy Maintenance • Widebody & Narrowbody fleet is expected to grow from ~29,000 aircraft in 2026 to ~42,000 aircraft in 2035 1 • Strong passenger deman d and ongoing OEM delivery issues result in older installed base of aircraft • Strong position in critical narrowbody and regional aircraft across North America • Deep relationships with skilled labor pipelines creates natural barriers to entry • Proprietary systems and operating model drive efficiency and rapid turnaround times • Achieves attractive margin due to best - in - class execution • Digitally - enabled solutions collecting proprietary data Aging Global Fleets Sustain Demand 1 Source: Naveo Limited, April 2026 What is Heavy Maintenance? • Heavy maintenance is a recurring, mission - critical service to aircraft through their useful life • Time - based checks of the aircraft involving inspection, repair, overhaul, modification, and refurbishment • Required by regulators and/or the airlines themselves, regardless of how often the aircraft fly • Value - add service that requires highly skilled technicians and hangar capacity • Highly visible and strategic service within the airline, enabling significant cross - sell potential
A leader in airframe maintenance, repair, and overhaul services across the Americas MRO Holdings at a Glance © 2026 AAR CORP. All rights reserved worldwide Note: Financial information for MRO Holdings is prepared in accordance with IFRS. 1 As of August 2026. 2 Pro forma for full - year operation of two newly established facilities in 2026. 3 As of April 2026. 4 Represents CY2025A. 10 Key Statistics (CY 2026E) $1.0B Adj. Sales $2 85 M Adj. EBITDA 2 27% Adj. EBITDA margin $203M Adj. Operating Cash Flow 4 5 Airframe MRO Facilities 1 12M Annual service hours 10,000+ Team members 3 100% Aftermarket Airframe MRO Business • Specializes in airframe heavy maintenance checks • Comprehensive capabilities across narrowbody and select widebody platforms • Blue - chip customers comprising some of the largest airlines in the Americas; ~90% sales to U.S. customers • Strategic nearshore footprint across Colombia, Mexico, and El Salvador Ancillary Businesses • Integrated in - house support platform spanning engineering and logistical solutions • End - to - end lifecycle support for heavy maintenance • Embedded backshop and repair capabilities across facilities Double - Digit Sales CAGR CY Sales ($M) CY Adj. EBITDA ($M) ~20% Adj. EBITDA CAGR 2015A 2016A 2017A 2018A 2019A 2020A 2021A 2022A 2023A 2024A 2025A 2026E
AAR MRO Holdings Combined Footprint Offers Differentiated Scale and Flexibility © 2026 AAR CORP. All rights reserved worldwide 11 Note: MRO Holdings MRO footprint: 19 hangars, 115 lines. AAR has a facility in Indianapolis which we are currently exiting. 1. Based on labor hours Greensboro, NC Lake City, FL Windsor, Ontario Trois - Rivières, Québec Rockford, IL Miami, FL Oklahoma City, OK Medellin, Colombia Winston - Salem, NC Jacksonville, FL Querétaro, Mexico San Salvador, El Salvador • From 7 to 12 facilities • From 7M to 19M annual service hours combined • From ~1,200 to nearly 3,000 aircraft serviced/yr Creates largest MRO in the world 1
Acquisition Meaningfully Improves Financial Profile Increases growth potential, margins, and cash conversion profile © 2026 AAR CORP. All rights reserved worldwide 12 See Appendix for reconciliation of Non - GAAP financial measures. 1 FY26 for AAR and CY25 for MRO Holdings; combined figure reflects pro forma adjustments for interest expense incurred in connection with the transaction. 2 FY26 for AAR and CY25 for MRO Holdings; calculated as a 5 - point quarterly average. 3 FY26 for AAR and CY26E for MRO Holdings. $4.3 $3.3 FY 2026 Sales ($B) $686 $401 FY 2026 Adj. EBITDA ($M) 16% Before synergies 12.1% FY 2026 Adj. EBITDA margin 19 - 20% 3 - 4 year, including synergies 13 - 14%+ 3 - year, ex. LCP Target Adj. EBITDA margin + $272 (40%) $94 (24%) Adj. Operating Cash Flow 1 (% adj. EBITDA) 3.4x 3.0x Inventory Turns 2 1.2% 1.1% Maintenance Capex % sales 3 • Adds sca le and significantly expands margins • Enhances cash conversion profile due to low NWC and maintenance capex • Strong cash generation supports deleveraging following close • Financial flexibility expected to support integration and future ownership purchases
Large Addressable Market in Repair with Strong Secular Growth Drivers Industry - leading position & efficiency capabilities enable us to capture additional share in large, fragmented market © 2026 AAR CORP. All rights reserved worldwide 13 Key market drivers 1 Increasing air travel driving growing airline demand for high - quality solutions, delivered on time 2 Regulations require regular mandatory maintenance 3 New aircraft delivery constraints 4 Limited network capacity Component maintenance Heavy airframe maintenance t oday Repair total addressable market Modifications • Leading provider of heavy maintenance in North America; opportunity to capture incremental volume in North American Widebody and European and Middle Eastern operators • Leverage combined platform to capture additional gains in Component maintenance Source: AAR Management; Naveo Limited, April 2026.
AAR to Acquire Controlling Interest in MRO Holdings Overview of Transaction Terms © 2026 AAR CORP. All rights reserved worldwide 14 • Acquire controlling interest of MRO Holdings at implied enterprise value of $4.0B • Initial acquisition of 65% equity ownership with MRO Holdings shareholders retaining 35% • Represents EV of ~10.7x 1 MRO Holdings’ 2026E adj. EBITDA 2 , including ~$75M of run - rate cost synergies 3 Consideration • Acquisition of initial 65% financed through combination of new debt and AAR equity issuance • Approximately $780M upfront equity consideration issued to current MRO Holdings shareholders, resulting in ~12% pro forma own ers hip • Lock - up period expiring in three equal parts 6, 12, and 18 months post - closing for shares issued to MRO Holdings shareholders • Additional ~$230M of equity to be issued in a PIPE transaction, resulting in ~5% pro forma ownership • All debt at MRO Holdings (other than local working capital facilities) to be paid at closing; AAR provides intercompany loan wit h excess cash flow used to repay loan in first 2 years post - closing; thereafter, available for repayments and distributions, depending on MRO Holdings net leverage • Expected closing in AAR’s fiscal Q3 ending February 2027, subject to customary regulatory approval Financing, Timing, and Close • AAR net leverage at close of ~3.6x (incl. run - rate synergies), with path to 2.0x – 2.5x in the medium term • Expect net leverage to be ~3.0x within two years following close (incl. phased synergies) Leverage • AAR holds option to acquire additional 5% ownership of MRO Holdings at any time • AAR holds option to acquire remaining 30% ownership of MRO Holdings in three tranches (on the 2 nd , 3 rd , and 4 th anniversaries of initial closing; 10% each) • Call option exercise price based on then - current AAR LTM EV/EBITDA multiple, with a floor of 13.5x and cap of 15.25x (~12x – 14x net of expected present value of tax benefit) Call Options • AAR controls MRO Holdings Board • MRO Holdings selling holders will be subject to customary lockups and voting support provisions with respect to shares held i n A AR Governance 1 Net of tax benefits with an expected present value of approximately $150M. 2 Represents estimate for FYE 31 - Dec - 2026. 3 Run - rate synergies expected to be achieved by within three to four years.
Illustrative Sources and Uses Capital Allocation Overview © 2026 AAR CORP. All rights reserved worldwide 15 Deleveraging Profile • C ommitted financing structure with $2.1B of debt capital and ~$1.0B of equity financing issued to MROH Shareholders and via a PIPE • Balanced capital allocation framework supporting both deleveraging and shareholder returns • AAR to receive repayments of intercompany loans from all excess cash flows from MRO Holdings in the first 2 - years for deleveraging; thereafter, available for repayments and distributions, depending on MRO Holdings net leverage Note: Shares to MROH shareholders valued at $135.00. Illustratively excludes fees. Assumes $945M of cash issued to MRO Holdin gs shareholders. 1 Includes 100% credit for run - rate synergies. 2 Includes phased synergies. ~3.6x ~3.0x At Close (Expected) 24 Months Post Close 1 2 Sources ~$780 Equity issued to MROH shareholders ~230 Equity issued in PIPE ~2,065 New transaction debt ~$3,075 Total sources Uses ~$1,725 Equity purchase price ~1,350 Refinance target net debt ~$3,075 Total uses
© 2026 AAR CORP. All rights reserved worldwide 16
APPENDIX © 2026 AAR CORP. All rights reserved worldwide 17
© 2026 AAR CORP. All rights reserved worldwide 18 This presentation includes financial results for the Company with respect to adjusted sales, adjusted diluted earnings per share, adjusted EBITDA , adjusted operating income, adjusted EBITDA margin, adjusted cash from operations, and net leverage which are “non - GAAP financial measures” as defined in Regulation G of the Securities Exchange Act of 1934 , as amended (the “Exchange Act”) . We believe these non - GAAP financial measures are relevant and useful for investors as they illustrate our actual operating performance unaffected by the impact of certain items . When reviewed in conjunction with our GAAP results and the accompanying reconciliations, we believe these non - GAAP financial measures provide additional information that is useful to gain an understanding of the factors and trends affecting our business and provide a means by which to compare our operating performance against that of other companies in the industries we compete . These non - GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP . Adjusted EBITDA is net income (loss) before interest income (expense), other income (expense), income taxes, depreciation and amortization, stock - based compensation, and items of an unusual nature including but not limited to business divestitures and acquisitions, workforce actions, COVID - related subsidies and costs, impairment and exit charges, facility consolidation and repositioning costs, FCPA investigation settlement and related costs, equity investment gains and losses, pension settlement charges, legal judgments, acquisition, integration and amortization expenses from recent acquisition activity, and significant customer events such as early terminations, contract restructurings, forward loss provisions, and bankruptcies . Adjusted operating income is adjusted EBITDA gross of depreciation and amortization and stock - based compensation . Pursuant to the requirements of Regulation G of the Exchange Act, we provide tables that reconcile the above - mentioned non - GAAP financial measures to the most directly comparable GAAP financial measures in the Appendix at the end of this presentation . The Company is not providing reconciliations of forward - looking total sales growth and adjusted EBITDA margin to the most directly comparable forward - looking GAAP measures because the information is not available without unreasonable effort . This is due to the inherent difficulty of forecasting the timing and amount of certain items, such as, but not limited to, unusual gains and losses, the ultimate outcome of pending litigation, the impact and timing of potential acquisitions and divestitures, and other structural changes or their probable significance . Each of the adjustments has not occurred, are out of the Company’s control and/or cannot be reasonably predicted . For this reason, the Company is unable to address the probable significance of the unavailable information . Non - GAAP Financial Measures
Q1 FY27 adjusted diluted earnings per share © 2026 AAR CORP. All rights reserved worldwide 19 Non - GAAP Financial Measures Q1 FY27 Q1 FY26 Diluted earnings per share $1.00 $0.95 Acquisition, integration, and amortization expenses 0.62 0.18 Gain related to sale of businesses, net - (0.02) Severance charges - 0.03 Government COVID-related subsidy liability (reversal) - (0.02) Tax effect on adjustments (a) (0.13) (0.04) Adjusted diluted earnings per share $1.49 $1.08 (a) Calculation uses estimated statutory tax rates on non-GAAP adjustments except for the impact from certain acquisition-related non-deductible items.
Q1 FY27 adjusted sales, operating income, operating margin, EBITDA, and EBITDA margin by segment © 2024 AAR CORP. All rights reserved worldwide. 20 © 2026 AAR CORP. All rights reserved worldwide Non - GAAP Financial Measures Q1 FY27 Q1 FY26 Repair, Legacy Repair, Legacy ($ in millions) Parts Engineering, Government Commercial Corporate Parts Engineering, Government Commercial Corporate Supply and Software Solutions Programs & Other Consolidated Supply and Software Solutions Programs & Other Consolidated Sales $414.8 $297.5 $138.8 $66.9 $0.0 $918.0 $317.8 $226.4 $133.9 $61.5 $0.0 $739.6 Operating income (loss) 55.3 16.0 19.1 2.9 (21.2) 72.1 40.9 20.0 12.7 0.4 (9.1) 64.9 Operting income margin 13.3% 5.4% 13.8% 4.3% NA 7.9% 12.9% 8.8% 9.5% 0.7% NA 8.8% Operating income (loss) 55.3 16.0 19.1 2.9 (21.2) $72.1 40.9 20.0 12.7 0.4 (9.1) $64.9 Acquisition, integration & amortization expenses 2.8 13.5 - - 8.6 24.9 - 5.1 - - 1.3 6.4 Severance charges - - - - - - - 0.4 - 0.3 0.3 1.0 Government COVID-related subsidy liability (reversal) - - - - - - - - - - (0.7) (0.7) Adjusted operating income $58.1 $29.5 $19.1 $2.9 ($12.6) $97.0 $40.9 $25.5 $12.7 $0.7 ($8.2) $71.6 Adjusted operating margin 14.0% 9.9% 13.8% 4.3% NA 10.6% 12.9% 11.3% 9.5% 1.1% NA 9.7% Operating income (loss) $55.3 $16.0 $19.1 $2.9 ($21.2) $72.1 $40.9 $20.0 $12.7 $0.4 ($9.1) $64.9 Depreciation and amortization 7.0 9.2 1.8 - 0.8 18.8 2.2 7.5 1.3 1.7 1.1 13.8 Stock-based compensation 1.3 0.9 0.3 0.1 5.2 7.8 0.7 0.6 0.3 0.1 3.6 5.3 Acquisition and integration expenses - 9.2 - - 8.6 17.8 - 1.1 - - 1.3 2.4 Severance charges - - - - - - - 0.4 - 0.3 0.3 1.0 Government COVID-related subsidy liability (reversal) - - - - - - - - - - (0.7) (0.7) Adjusted EBITDA $63.6 $35.3 $21.2 $3.0 ($6.6) $116.5 $43.8 $29.6 $14.3 $2.5 ($3.5) $86.7 Adjusted EBITDA margin 15.3% 11.9% 15.3% 4.5% NA 12.7% 13.8% 13.1% 10.7% 4.1% NA 11.7%
AAR Non - GAAP Financial Measures © 2026 AAR CORP. All rights reserved worldwide 21 Adjusted sales, Adjusted EBITDA, Adjusted EBITDA margin ($ in millions) FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 Sales $1,652.3 $1,820.0 $1,990.5 $2,318.9 $2,780.5 $3,308.0 Contract termination/restructuring & loss provision, net and bankruptcy charge (0.9) (2.9) 0.1 2.3 (32.2) - Adjusted sales $1,651.4 $1,817.1 $1,990.6 $2,321.2 $2,748.3 $3,308.0 Net income (loss) $35.8 $78.7 $90.2 $46.3 $12.5 $187.7 Loss from discontinued operations 10.5 (0.2) (0.4) - - - Income tax expense (benefit) 18.2 26.6 31.4 12.0 26.4 58.2 Other (income) expense, net (4.3) (2.2) 0.8 0.4 0.3 2.1 Interest expense, net 4.8 2.3 11.2 41.0 73.6 70.5 Loss on extinguishment of debt - - - - - - Depreciation and amortization 36.3 33.1 27.9 41.2 55.2 72.1 Acquisition and integration expenses - - 6.2 29.7 10.8 28.2 Bargain purchase gain - - - - - (29.5) Gain on sale of headquarters building - - - - - (9.8) Impairment charge related to product line exit - - - - - 4.9 FCPA settlement, investigation, and remediation costs 4.4 3.7 4.7 10.5 65.3 - Loss (Gain) related to sale and exit of business/joint venture, net 20.2 1.7 0.7 2.8 70.3 (1.4) Russian bankruptcy court judgment (reversal) - - 1.8 11.2 (11.1) - Contract termination/restructuring & loss provision, net 9.3 0.9 2.0 4.8 0.2 - Government COVID-related subsidies, net (56.2) (4.9) (1.6) - 0.8 (0.7) Pension settlement charge - - - 26.7 - - Severance costs 9.0 2.0 0.1 0.5 - 1.0 Asset impairment and exit charges 7.0 3.5 - - - - Facility consolidation and repositioning costs 4.5 0.2 - - - - Customer bankruptcy and credit charges 4.9 1.0 1.5 - - - Strategic financing evaluation costs 1.0 - - - - - Costs related to strategic projects (reversals) - 1.8 (0.2) - - - Stock-based compensation 9.2 8.2 13.5 15.3 19.9 17.8 Adjusted EBITDA $114.6 $156.4 $189.8 $242.4 $324.2 $401.1 Adjusted EBITDA margin 6.9% 8.6% 9.5% 10.4% 11.8% 12.1% Year ended May 31,
AAR Non - GAAP Financial Measures © 2026 AAR CORP. All rights reserved worldwide 22 Adjusted cash provided by operating activities Three months ended ($ in millions) FY 2026 August 31, 2026 $98.7 $55.8 Cash provided by operating activities Amounts outstanding on accounts receivable financing program 21.3 25.7 Beginning of period (25.7) (25.0) End of period $94.3 $56.5 Adjusted cash provided by operating activities