AAR : Presentation slides

Bank of America

Transportation, Airlines

and Industrials

Conference

May 16, 2024

aarcorp.com

reserved worldwide.	1

Forward-looking statements

This presentation and related discussion contain proprietary and confidential information regarding AAR CORP. (the "Company," "we," "us" and "our"), which is being provided to you solely for informational purposes and on the condition that you agree that you will hold it in strict confidence, take normal and reasonable precautions to maintain the confidentiality of such information and not reproduce, disclose, forward or distribute it in whole or in part without the Company's prior written consent. To the maximum extent permitted by law, none of the Company or its affiliates, directors, officers, partners, employees, agents or advisors or any other person accepts any liability related to the use or misuse of the information contained in this presentation. By attending or receiving this presentation, you acknowledge that you have read, understood and accepted the terms of this disclaimer.

This presentation shall not constitute an offer to sell or the solicitation of an offer to buy securities. This presentation should also not be considered as a recommendation by the Company or any of its affiliates or other person related to the Company, nor does it constitute an offer or invitation for the sale or purchase of any of the Company's securities, assets or business and shall not form the basis of any contract.

This presentation contains forward-looking statements within the meaning of the U.S. federal securities laws, including statements related to the Company's future operations and results, anticipated benefits of the Company's acquisition of Triumph Group's Product Support business (the "Acquisition") and expected contributions of the Triumph Group Product Support business to the Company's future financial results. Forward-looking statements may be identified because they contain words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "likely,'" "may," "might," "plan," "potential," "predict," "project," "seek," "should," "target," "will," "would" or similar expressions and the negatives of those terms. These statements are based on numerous assumptions and are subject to known and unknown risk and uncertainties. Actual results may vary materially from those expressed or implied in these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among others, risks associated with the Company's the ability to realize the anticipated benefits of the Product Support Business as rapidly or to the extent anticipated; our ability to successfully integrate the Product Support Business into our operations; factors that adversely affect the commercial aviation industry; the impact of pandemics and other disease outbreaks, such as COVID-19, and similar public health threats on air travel, worldwide commercial activity and our and our customers' ability to source parts and components; a reduction in the level of sales to the branches, agencies and departments of the U.S. government and their contractors; cost overruns and losses on fixed-price contracts; nonperformance by subcontractors or suppliers; changes in or non-compliance with laws and regulations that may affect certain of our aviation and government and defense related activities that are subject to licensing, certification and other regulatory requirements imposed by the Federal Aviation Administration, the U.S. State Department and other regulatory agencies, both domestic and foreign; a reduction in outsourcing of maintenance activity by airlines; a shortage of the skilled personnel on whom we depend to operate our business, or work stoppages; competition from other companies, including original equipment manufacturers, some of which have greater financial resources than we do; financial and operational risks arising as a result of operating internationally; inability to integrate acquisitions effectively and execute our operational and financial plan related to the acquisitions; inability to recover our costs due to fluctuations in market values for aviation products and equipment caused by various factors, including reductions in air travel, airline bankruptcies, consolidations and fleet reductions; asset impairment charges we may be required to recognize to reflect the non- recoverability of our assets or lowered expectations regarding businesses we have acquired; threats to our systems technology from equipment failures, cyber or other security threats or other disruptions; a need to make significant capital expenditures to keep pace with technological developments in our industry; a need to reduce the carrying value of our assets; inability to fully execute our stock repurchase program and return capital to our stockholders; restrictions on paying, or failure to maintain or pay dividends; limitations on our ability to access the debt and equity capital markets or to draw down funds under loan agreements; non-compliance with laws and regulations relating to the formation, administration and performance of our U.S. government contracts; exposure to product liability and property claims that may be in excess of our liability insurance coverage; the impact of adverse incidents involving, or adverse publicity concerning, our business or the aviation industry generally, which could harm our reputation and results of operations; decreased demand for our services due to mandatory groundings of aircraft; impacts from stakeholder and market focus on environmental, social and governance matters; the costs of compliance, and liability for non-compliance, with environmental regulations, including future requirements regarding climate change and environmental, social and governance matters; and the risks discussed in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K and subsequent reports. The Company cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company assumes no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as required by law.

The information contained herein does not purport to be all-inclusive. No representations or warranties, express or implied, are given by the Company or its affiliates, directors, officers, partners, employees, agents or advisors or any other person as to the accuracy, completeness, reasonableness or fairness of any information contained in this presentation, and no responsibility or liability whatsoever is accepted for the accuracy or sufficiency thereof or for any errors, omissions or misstatements, negligent or otherwise, relating thereto. Accordingly, neither the Company nor any of its affiliates, directors, officers, partners, employees, agents or advisors nor any other person shall be liable for any direct, indirect or consequential liability, loss or damages suffered by any person as a result of this presentation or their reliance on any statement, estimate, target, projection or forward-looking information in or omission from this presentation, and any such liability is expressly disclaimed.

All amounts in this presentation are in USD unless otherwise stated. All trademarks and logos depicted in this presentation are the property of their respective owners and are displayed solely for purposes of illustration. Such use should not be construed as an endorsement of the products or services of the Company.

Non-GAAP Financial Measures

This presentation contains certain financials measures that are not recognized under U.S. generally accepted accounting principles ("GAAP"), including: adjusted sales, adjusted pro forma sales, adjusted operating income, adjusted pro forma operating income, adjusted operating margin, adjusted pro forma operating margin, adjusted diluted earnings per share from continuing operations, adjusted EBITDA, adjusted pro forma EBITDA, net debt, pro forma net debt, net debt to adjusted EBITDA and pro forma net debt to adjusted EBITDA. See the appendix to this presentation for additional information and reconciliations of such non-GAAP financial measures.

© 2024 AAR CORP. All rights reserved worldwide.	2

Company

Global aerospace and defense aftermarket solutions

	Founded	Market cap	Pro forma sales
Key	1951	~$2.5B	$2.5B
metrics	NYSE	Employees	Adj. pro forma op. margin
	AIR	~5,700	8.9%

Selected

customers

Note: Pro forma sales and adjusted pro forma operating margin are non-GAAP financial measures and reflect results for last twelve months ended February 29, 2024 plus results for the Triumph Product support business acquired on March 1, 2024 for the last twelve months ended December 31, 2023. Employees for fiscal year ended May 31, 2023 plus 700 Triumph Product Support employees. Market cap as of May 9, 2024. See Appendix for reconciliation of non-GAAP financial measures.

Businesses

Parts

Supply

Repair &

Engineering

Integrated

Solutions

Expeditionary

Services

© 2024 AAR CORP. All rights reserved worldwide.	3

Business segment overview

Expeditionary Services
3%			Parts Supply
Integrated		•	Used serviceable material (USM)
Solutions	Parts
25% $2.5B	Supply	•	New parts distribution
PF LTM	38%
	• Online PAARTSSM Store
sales
Repair &		•	24/7 global aircraft-on-ground (AOG) service
Engineering
34%

Integrated Solutions

• Government aircraft maintenance, logistics, and operations support programs
• Commercial flight-hour-based aircraft component support
• Consumable and expendable parts programs
• Trax ERP software for aircraft MRO

Government

28%

$2.5B

PF LTM

sales

Commercial

72%

Repair & Engineering

• Airframe maintenance, repair & overhaul (MRO)
• Component Services (including Triumph Product Support) & Landing Gear Overhaul
• Engineering
• Development of proprietary Parts Manufacturer Approval (PMA) parts

Expeditionary Services

Mobility Systems: Rapid deployment sustainment solutions for government applications

• Pallets for use in military transport aircraft
• Containers for customized air-mobile shipping and storage of equipment
• Shelter systems for military operations

Figures reflect results for last twelve months ended February 29, 2024 plus results for the Triumph Product support business acquired on March 1, 2024 for the last twelve months ended December 31, 2023.

© 2024 AAR CORP. All rights reserved worldwide.	4

Triumph Product Support acquisition

Furthering AAR's

Connected Business

Model

Acquisition summary:

• Aggregate purchase price of $725 million. Net purchase price of $645 million when adjusted for $80 million present value of tax benefits
• Closed March 1, 2024

Anticipated strategic highlights:

• Significantly accretive to margins with highly attractive overall financial profile
• Meaningfully scales AAR's proprietary repair capabilities, highly complementary with existing portfolio
• Thailand facility enables significant expansion of operations and capabilities in APAC
• Potential benefits of integrating AAR existing parts / trading / integrated solutions volumes with Product Support's facilities and proprietary capabilities
• Anticipated run-rate cost synergies of ~$10 million
• Strong combined free cash flow

© 2024 AAR CORP. All rights reserved worldwide.	5

Global expertise and reach

Customers in over 150 countries

North America

United Kingdom

Europe

Middle East

Asia	Australasia

Headquarters and warehouse near Chicago's O'Hare International Airport; airframe MRO network; component services; landing gear overhaul; Mobility Systems

Parts Supply sales office in London's Heathrow Airport; Integrated Solutions - commercial and Parts Supply team in Gatwick

Component services in Amsterdam; warehouse network includes Brussels and Hanover serving EMEA; sales office in Paris

Warehouse and sales office in Dubai serving EMEA; Integrated Solutions - government

Sales office in China;	Warehouse in Auckland;
Regional sales office in	sales office in Melbourne
Singapore; warehouse and
engineering for interior
modifications

Central and South America

Sales office supporting customers in Latin America; Integrated Solutions - government

Corporate headquarters Repair & Engineering Parts Supply

Integrated Solutions - commercial Integrated Solutions - government Mobility Systems

Trax

Over 60 AAR sites around the world

© 2024 AAR CORP. All rights reserved worldwide.	6

Highly-diversified customer base with longstanding relationships

15+ year relationship with each of top 10 customers

Commercial airlines	Cargo airlines

OEMs

Regional airlines

Government

United States Air Force (USAF)

United States Navy (USN)

United States Army (USA)

International Narcotics and Law Enforcement (INL)

Colombian Air Force

Japan Ministry of Defense (JMOD)

Norway - Royal Norwegian Air Force (RNAF)

Royal Netherlands Air Force (RNLAF)

United Kingdom Ministry of Defence (UK MoD)

Top customers by sales - FY2023

Customer	% of sales 2
U.S. Government 1	23%
	8%
	6%
	5%
	4%
	3%
	2%
Boeing	2%
	2%
	1%

1 Consists of numerous contracts across the U.S. Navy, U.S. Air Force, U.S. Army, U.S. Defense Logistics Agency and U.S. Department of State | 2 Percent of AAR FY2023 sales

© 2024 AAR CORP. All rights reserved worldwide.	7

Trax acquisition: acquired in March 2023

Software for aircraft maintenance & fleet management

Supports all aspects of maintenance

iOS and Web Apps to support most roles

Task	AeroDox	QuickTurn Visual Check
Control

Materials Maintenance Technical

purchasing management management

Line Control	Content	EzStock	Production
	Control		Control

Quality	Financial	Shop Control Customer	PilotLog	CabinLog
management	management
Portal
AAR MRO expertise + Trax software = integrated maintenance ecosystem
		© 2023 AAR CORP. All rights reserved worldwide.	8

AAR growth drivers

Large and growing markets with new aircraft delivery constraints extending aftermarket demand, and additional Asia exposure via Triumph acquisition

Increasing USM adoption by commercial customers and U.S. Government supported by proprietary AAR supply

Continued market share gain in distribution leveraging technical global sales force delivering value-added"Sales as a Service" to component OEMs

Additional airframe maintenance capacity at existing locations that have deeper labor pools, paired with long-term customer commitments

Continuing government demand for commercial best practices approach to supporting its aircraft, which AAR is uniquely positioned to provide

Trax and other digital offerings including Trax's eMRO aviation software and eMobility suite of apps, and investments in eCommerce

Technology-drivenMRO efficiency: paperless hangar initiative, drone-based inspections, wearables to leverage fewer expert technicians

Development of proprietary PMA parts for internal and external consumption based on demand from MRO operations

© 2024 AAR CORP. All rights reserved worldwide.

9

Historical financial performance

Sales ($M)		Adjusted operating income ($M) and margin

							$2,482								$220
						$2,216
	$2,052	$2,072			$1,991								$175
$1,748	$1,652	$1,820								$149
								$115			$115			8.9%
								$90	$105		7.5%	7.9%
										$69
								5.2%	5.6%	5.0%	4.2%	6.3%
FY18	FY19	FY20	FY21	FY22	FY23	LTM Feb	LTM Feb	FY18	FY19	FY20	FY21	FY22	FY23	LTM Feb	LTM Feb
							Pro Forma								Pro Forma

Adjusted diluted EPS

Net debt / adjusted EBITDA

$2.86

$3.27

3.6x

$2.44

$2.15

$2.38

$1.87

$1.31

1.0x

1.3x

1.1x

1.0x

0.7x

0.7x

0.3x

FY18

FY19

FY20

FY21

FY22

FY23

Feb '24 Feb '24

FY18

FY19

FY20

FY21

FY22

FY23

LTM Feb

Pro Forma

Note: FY ends May 31; adjusted figures are non-GAAP financial measures; figures reflect continuing operations; pro forma sales reflect results for last twelve months ended February 29, 2024 plus results for the Triumph Product support business acquired on March 1, 2024 for the last twelve months ended December 31, 2023; adjusted pro forma operating income, adjusted pro forma operating margin and pro forma net debt/adjusted EBITDA are non-GAAP financial measures and reflect results for last twelve months ended February 29, 2024 plus results for the Triumph Product support business acquired on March 1, 2024 for the last twelve months ended December 31, 2023. See Appendix for reconciliation of non-GAAP financial measures.

© 2024 AAR CORP. All rights reserved worldwide.	10