Aar Corp. · NYSE:AIR

Aar — Investor Day (July 2023)

92 slides from Aar's investor day presentation, Jul 20, 2023

Slide 2: Forward-looking statements
© 2023 AAR CORP. All rights reserved worldwide. 2 Forward - looking statements Note: All results and expectations in the presentation reflect continuing operations unless otherwise noted. This presentation contains certain statements relating to future results, which are forward - looking statements
Slide 3: Agenda
© 2023 AAR CORP. All rights reserved worldwide. 3 Agenda Company and strategy John M. Holmes Market overview and position Chris Jessup Operations: Parts Supply: Used Serviceable Material Sal Marino Parts Supply: Distribution Frank Landrio Break Repair & Engineering Tom Hoferer Integrated Solutions N
Slide 5: John M. Holmes
© 2023 AAR CORP. All rights reserved worldwide. 5 John M. Holmes Joined AAR in 2001 Named General Manager of AAR’s parts trading business in 2003 Progressively assumed responsibility for the other businesses that comprise Aviation Services with a focus on achieving growth and operational efficiencie
Slide 6: Vision
© 2023 AAR CORP. All rights reserved worldwide. 6 Vision Be the most respected global independent provider of aviation parts and repair services Create value for customers through differentiated capabilities and offerings, resulting in a sustainable, unique competitive advantage
Slide 7: Global aerospace and defense aftermarket solutions
© 2023 AAR CORP. All rights reserved worldwide. 7 Global aerospace and defense aftermarket solutions Company Founded 1951 Market cap ~$2B Adjusted sales $2.0B NYSE AIR Employees ~5,000 Adj. operating margin 7.5% Note: Adjusted sales, adjusted operating margin and employees for fiscal year ended May
Slide 8: Business overview
© 2023 AAR CORP. All rights reserved worldwide. 8 Business overview Expanding from two reported segments to four Parts Supply 41% Repair & Engineering 27% Integrated Solutions 27% Expeditionary Services 5% $2.0B FY23 sales Commercial 67% Government 33% Note: Fiscal year (FY) ends May 31 Parts Supply
Slide 10: Corporate citizenship
© 2023 AAR CORP. All rights reserved worldwide. 10 Corporate citizenship ESG reporting • Published our first two ESG reports • Data reporting consistent with Global Reporting Initiative and Sustainable Accounting Standards Board • Added disclosures consistent with Task Force on Climate - Related Fin
Slide 11: Key messages
© 2023 AAR CORP. All rights reserved worldwide. 11 Key messages Actions taken have produced a stronger, better business than pre - pandemic • Exited underperforming contracts and businesses • Consolidated facilities • Developed proprietary labor pipelines • Improved airframe maintenance efficiency M
Slide 12: Re-segmentation of financial reporting
© 2023 AAR CORP. All rights reserved worldwide. 12 Aviation Services Re - segmentation of financial reporting Expeditionary Services Prior (FY23) New (FY23) Revenue: $1.9B Adj operating margin: 8.7% Revenue: $92M Adj operating margin: 8.4% Parts Supply Revenue: $818M Adj operating margin: 11.7% Repa
Slide 13: Connected businesses model
© 2023 AAR CORP. All rights reserved worldwide. 13 Connected businesses model Parts Supply: USM & Distribution • Sourcing to supply Repair & Engineering and Integrated Solutions • Data for use in repair capability development • Sales channels supported by maintenance relationships Repair & Engineeri
Slide 14: What's changed since 2019 Investor Day
© 2023 AAR CORP. All rights reserved worldwide. 14 What’s changed since 2019 Investor Day 1 2 3 4 Added dedicated USM supply and new distribution lines Fortress partnership for capital - light USM supply; won new distribution lines with Unison, Arkwin , Ontic, Northrop, Collins On course: Stronger,
Slide 15: Growth drivers
© 2023 AAR CORP. All rights reserved worldwide. 15 Growth drivers Large and growing markets with pandemic recovery still occurring and new aircraft delivery constraints further extending aftermarket demand Continuing government demand for commercial best practices approach to supporting its aircraft
Slide 16: Multi-year organic financial targets
© 2023 AAR CORP. All rights reserved worldwide. 16 3 - 5 year organic financial targets 5 - 10% annual revenue growth • Large and growing markets with pandemic recovery tailwinds • Multiple levers to take market share: proprietary USM supply, unique distribution model that is resonating with OEM par
Slide 17: What's next
© 2023 AAR CORP. All rights reserved worldwide. 17 What’s next… • Our large and growing markets • Used Serviceable Material leadership • Distribution model that is resonating with OEMs • Significantly more efficient Repair & Engineering business • Integration Solutions offerings that bring the best
Slide 19: Chris Jessup
© 2023 AAR CORP. All rights reserved worldwide. 19 Chris Jessup Joined AAR in 2008 when the Company acquired Avborne , where he held various senior executive roles in sales, marketing and business development dating back to 2002 Served in various senior leadership sales and operational roles from 20
Slide 20: Commercial air travel recovery and resilience
© 2023 AAR CORP. All rights reserved worldwide. 20 Commercial air travel recovery and resilience • AAR’s commercial sales have closely tracked global commercial air travel historically • Air travel has recovered significantly, but is still not back to pre - pandemic levels Source: ASM data from Ciri
Slide 21: Aircraft deliveries and retirements
© 2023 AAR CORP. All rights reserved worldwide. 21 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2018 2019 2020 2021 2022 2023 2024 2025 Forecast 2023 - 2025 Actuals 2018 - 2022 Qty of Aircraft Retired per Year Retirements % of Active Fleet Qty of Aircraft Delivered per Year 0.0 0.5 1.0 1.5 2.0 2.
Slide 22: AAR's markets are large and growing
© 2023 AAR CORP. All rights reserved worldwide. 22 AAR’s markets are large and growing • Global MRO market spend forecasted to return to pre - pandemic levels in calendar year 2023 • Older aircraft fleet expected to drive incremental MRO demand in near - term • As new aircraft production ramps - up,
Slide 23: Government market
© 2023 AAR CORP. All rights reserved worldwide. 23 Government market • Global tensions causing need for increased military posturing and defense spending • Allies’ and enemies’ defense spending increasing - growing logistics requirements challenging European and Indo - Pacific nations Source: Congre
Slide 24: Government market
© 2023 AAR CORP. All rights reserved worldwide. 24 Government market AAR well - positioned to support tighter U.S. sustainment budget environment • AAR long - term fleet support programs utilizing commercial best practices provide U.S. military with cost effective solutions • AAR used serviceable ma
Slide 25: Over 60 AAR sites around the world
© 2023 AAR CORP. All rights reserved worldwide. 25 North America Headquarters and warehouse near Chicago’s O’Hare International Airport; airframe MRO network; component repair; landing gear overhaul; Mobility Systems United Kingdom Parts Supply sales office in London’s Heathrow Airport; Integrated S
Slide 26: 15+ year relationship with each of top customers
© 2023 AAR CORP. All rights reserved worldwide. 26 15+ year relationship with each of top 10 customers Highly - diversified customer base with longstanding relationships OEMs Government Cargo airlines Regional airlines Commercial airlines United States Air Force (USAF) United States Navy (USN) Unite
Slide 28: Sal Marino
© 2023 AAR CORP. All rights reserved worldwide. 28 Sal Marino Over 30 years of aviation experience Joined AAR in 1994 Promoted to Vice President of GE Engine Products in 1999 Promoted to Vice President of AAR Aircraft Turbine Center in 2005 with responsibility for all commercial engine product Promo
Slide 29: Overview: Used Serviceable Material
© 2023 AAR CORP. All rights reserved worldwide. 29 Overview Parts Supply: Used Serviceable Material Key offerings • Used serviceable engine and airframe parts supply • Whole engine and aircraft sales and leasing • Engine and aircraft management and exchange • Focus platforms: ‒ CFM56 - 5B / 7B (737N
Slide 30: Asset selection: what we do
© 2023 AAR CORP. All rights reserved worldwide. 30 Asset selection What we do Parts Supply: Used Serviceable Material • Industry relationships / AAR reputation • Operators, lessors, MROs, trading companies • Cross - selling across AAR • AAR global sales org, product lines, tech department, complianc
Slide 31: Value proposition
© 2023 AAR CORP. All rights reserved worldwide. 31 Value proposition Parts Supply: Used Serviceable Material 30 - 50% savings over OEM prices Non - OEM, non - airline alternative Highly experienced with leading technical capability Speed, flexibility, and financial strength Customer confidence and t
Slide 32: Key achievements since 2019 Investor Day
© 2023 AAR CORP. All rights reserved worldwide. 32 Key achievements since 2019 Investor Day Parts Supply: Used Serviceable Material 1 2 3 4 Secured long - term, capital - light, dedicated supply of CFM56 material Drove cultural change with customers that have not historically bought USM Partnered wi
Slide 33: Case study: CFM56 partnership with FTAI Aviation
© 2023 AAR CORP. All rights reserved worldwide. 33 Case study: CFM56 partnership with FTAI Aviation (NYSE: FTAI) Parts Supply: Used Serviceable Material Leading aviation company with a portfolio of 350+ CFM56 - 5B and - 7B engines, which power the A320 and B737 AAR receives recovery of investment in
Slide 34: Growth initiatives
© 2023 AAR CORP. All rights reserved worldwide. 34 Growth initiatives Parts Supply: USM Secure long - term supply on additional key platforms Continue to drive increased customer acceptance of USM Support USG customer’s requirement to consider USM Develop enhanced solutions for aircraft - on - groun
Slide 36: Frank Landrio
© 2023 AAR CORP. All rights reserved worldwide. 36 Frank Landrio Over 20 years of aviation experience Joined AAR in 2007 as VP of Finance: AAR Aircraft Component Services Promoted in 2009 to General Manager: AAR Aircraft Component Services Promoted in 2010 to Group CFO: Aviation Supply Chain Group P
Slide 37: Overview: Distribution
© 2023 AAR CORP. All rights reserved worldwide. 37 • Distribution on behalf of components OEMs to: ‒ Aircraft operators ‒ Government customers ‒ MROs • Third - party logistics / kitting Key customers 250,000 part numbers sold to over 2,500 customers Commercial Gov't BA/ GA Overview Parts Supply: Dis
Slide 38: What we do: Distribution
© 2023 AAR CORP. All rights reserved worldwide. 38 What we do Parts Supply: Distribution Commercial customers Government customers Approach • Industry leading provider of factory - new OEM parts to the commercial aftermarket • Global salesforce, robust warehousing network • 3rd party logistics / kit
Slide 39: Value proposition
© 2023 AAR CORP. All rights reserved worldwide. 39 Value proposition Parts Supply: Distribution Data - driven, market intelligent sales strategies Underpinned by connectivity to AAR ecosystem Innovative planning, forecasting & value - added services Global, highly technical sales force Independence:
Slide 40: Government distribution advantages
© 2023 AAR CORP. All rights reserved worldwide. 40 • Strategic planning and forecasting: reduced lead times (the largest value - add to the US Government) • Improved on - time delivery and product conformity: AAR on - time delivery rate is approximately double that of OEMs • Leverage full AAR milita
Slide 41: Key growth markets
© 2023 AAR CORP. All rights reserved worldwide. 41 Key growth markets Parts Supply: Distribution Electronics Foreign Military Business & General Aviation Targeted markets Parts & capabilities • Asia Pacific (Japan, Korea and Thailand) • Europe (incl NATO) • Middle East (Saudi Arabia & UAE) Platforms
Slide 42: Key achievements since 2019 Investor Day
© 2023 AAR CORP. All rights reserved worldwide. 42 Key achievements since 2019 Investor Day Parts Supply: Distribution 1 2 3 4 Added new distribution lines: GE Unison, Raytheon (Pratt & Whitney), TransDigm , Parker Aerospace Entered new end - markets: Business & general aviation with exclusive produ
Slide 43: Investments in eCommerce
© 2023 AAR CORP. All rights reserved worldwide. 43 Optimized customer experience, higher volumes, cost efficiency • Greater demand capture through improved Electronic Data Interchange and auto - quote functionalities • Real - time, dynamic market - driven pricing tailored to OEM and customer • Incre
Slide 44: Our journey: sales growth through new lines
© 2023 AAR CORP. All rights reserved worldwide. 44 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Our journey: sales growth through consistent addition of new lines Parts Supply: Distribution Consistent track record of growing market share Note: Logos represent new distribution lines ad
Slide 45: Growth initiatives
© 2023 AAR CORP. All rights reserved worldwide. 45 Growth initiatives Parts Supply: Distribution Offer OEMs opportunities for retrofit and competitive displacement Expand foreign military sales capabilities Increase business & general aviation offering Expand eCommerce, including via Trax Mission: B
Slide 47: Tom Hoferer
© 2023 AAR CORP. All rights reserved worldwide. 2 Tom Hoferer Over 30 years of aviation experience Joined AAR in 2023, VP Repair & Engineering USAF/Air National Guard Retired Chief Master Sergeant Served as President of GE Aerospace’s Unison Industries, a global leader in aircraft engine component s
Slide 48: Overview: Repair & Engineering
© 2023 AAR CORP. All rights reserved worldwide. 3 Overview Repair & Engineering #1 Independent North American MRO $533M FY23 sales Key customers Key activities Airframe Landing Gear Component Engineering • Airframe heavy maintenance • Landing gear overhaul via Miami facility • Component repair via f
Slide 49: What we do: Repair & Engineering
© 2023 AAR CORP. All rights reserved worldwide. 4 What we do Repair & Engineering LARGEST INDEPENDENT USM SUPPLIER GLOBALLY Airframe MRO Six hangars providing maintenance, repair, and overhaul (MRO) services • “Heavy checks” performed every ~2 years • Nose - to - tail lines of maintenance • Support
Slide 50: Facility overview
© 2023 AAR CORP. All rights reserved worldwide. 5 3,300 employees 12 sites #1 MRO i n North America 4.6M+ l abor hours 750+ a ircraft per year 2 ,500 technicians ~800 l anding gears serviced per year 30+ ATA Chapters 15,000+ c omponents repaired Airframe Maintenance Component Repair Landing G ear En
Slide 51: Value proposition
© 2023 AAR CORP. All rights reserved worldwide. 6 Value proposition Repair & Engineering Large network with customer - focused solutions Quality workforce performing reliable repairs Digital investments to improve efficiency Vertical capabilities creating one - stop - shop for all processes Innovati
Slide 52: Key achievements since 2019 Investor Day
© 2023 AAR CORP. All rights reserved worldwide. 7 1 2 3 4 Retained and enhanced skilled workforce Optimized footprint and rationalized product lines Drove further internal and external emphasis on safety Focused on narrowbody market and anchor customers Key achievements since 2019 Investor Day Repai
Slide 53: Workforce development through Eagle Career Pathway Program
© 2023 AAR CORP. All rights reserved worldwide. 8 Workforce development through Eagle Career Pathway Program Repair & Engineering EAGLE Career Pathway Program EAGLE schools National apprenticeships Choose Aerospace High school programs State grant programs Airline flow through programs Legislative i
Slide 54: Miami airframe MRO facility expansion
© 2023 AAR CORP. All rights reserved worldwide. 9 Miami airframe MRO facility expansion Repair & Engineering • AAR partnering with Miami Dade Aviation Department (MDAD) to build 114K sq. ft. three - bay hangar with back shops ‒ Will expand facility by 33% from nine aircraft slots to 12 ‒ Expected to
Slide 55: "Paperless" airframe maintenance
© 2023 AAR CORP. All rights reserved worldwide. 10 Delivers labor efficiency and improved aircraft turnaround time • Transforming airframe MRO with AAR’s new “paperless” software • Electronic work card that improves labor efficiency and reduces aircraft turnaround time • Custom application developed
Slide 56: PMA parts initiative
© 2023 AAR CORP. All rights reserved worldwide. 11 • Focused on reducing AAR’s component repair and overhaul costs through Parts Manufacturer Approval (PMA) parts development and usage • Invested in dedicated engineering team • Opportunities identified by leveraging part utilization data, engineerin
Slide 57: Growth initiatives
© 2023 AAR CORP. All rights reserved worldwide. 12 Growth initiatives Repair & Engineering Expand Airframe MRO in areas with critical mass Implement “Paperless” airframe maintenance Grow industry - leading Eagle Career Pathways Program Scale PMA parts initiative Expand Component Repair capabilities
Slide 59: Nicholas Gross
© 2023 AAR CORP. All rights reserved worldwide. 14 Nicholas Gross Over 20 years of aerospace and defense experience Prior service in the U.S. Air Force Joined AAR in 2016 as Vice President, Integrated Solutions - Government Named Vice President, Integrated Solutions, and corporate officer in 2019 Ho
Slide 60: Overview: Integrated Solutions
© 2023 AAR CORP. All rights reserved worldwide. 15 Overview Integrated Solutions Key offerings • Power/ Repair by the Hour Component Support • Contractor Logistics Support • Performance Based Logistics • Supply Chain & Third - Party Logistics • Focus platforms: Comprehensive parts and repair - based
Slide 61: What we do: Integrated Solutions
© 2023 AAR CORP. All rights reserved worldwide. 16 What we do Integrated Solutions Government: Contractor Logistics Support Contracted total platform sustainment managing e nd - user fleets across all aspects of flight operations • Provide all levels of maintenance, engineering, and modifications •
Slide 62: Value proposition
© 2023 AAR CORP. All rights reserved worldwide. 17 Value proposition Integrated Solutions Commercial best practices applied to government customers Substantial savings relative to alternatives Global reach to support customers Skilled and empowered talent Tailored solutions to optimize fleet readine
Slide 63: Key achievements since 2019 Investor Day
© 2023 AAR CORP. All rights reserved worldwide. 18 Key achievements since 2019 Investor Day Integrated Solutions 1 2 3 4 Restructured power - by - the - hour portfolio to improve performance and reduce risk, and create foundation for selected additional growth Awarded and stood up new Air Force appr
Slide 64: F-16 maintenance for U.S. Air Force in Europe
© 2023 AAR CORP. All rights reserved worldwide. 19 Integrated Solutions F - 16 maintenance, modifications and upgrades for U.S. Air Force in Europe Significant savings for the Marine Corps vs. new aircraft Scalable operational c apability Established F - 16 MRO in 8 months Infrastructure Established
Slide 65: NDAA creates additional USM opportunity
© 2023 AAR CORP. All rights reserved worldwide. 20 National Defense Authorization Act creates additional USM opportunity U.S. Air Force recently established KC - 46 Initial Spares contract vehicle for the procurement of USM • First of its kind contract enabling USM on a new platform • Offering immed
Slide 66: Growth initiatives
© 2023 AAR CORP. All rights reserved worldwide. 21 Growth initiatives Integrated Solutions Secure long - term contracts to support key platforms Further expand into military - specific airframes Continue to drive increased USG acceptance of USM Expand AAR offerings across government markets Enhance
Slide 68: Trax history and leadership
AAR CORP. All rights reserved worldwide. Confidential and proprietary document. 23 Founded Trax 1997, saw need for a windows - based MRO ERP system… Y2K compliant and better user interface Rapidly grew Trax as customer felt assured by Y2K compliance and were elated with non - green - screen GUI Firs
Slide 69: Leading provider of mobile and cloud-based software
AAR CORP. All rights reserved worldwide. Confidential and proprietary document. 24 Leading provider of mobile and cloud - based software for airlines, other aircraft operators and MROs 138 customers with an average tenure of 10+ years Products increase maintenance efficiency, improve asset utilizati
Slide 70: What does Trax do for its customers?
AAR CORP. All rights reserved worldwide. Confidential and proprietary document. 25 Turnkey software supports all aspects of maintenance at airline s , government aircraft operators and MROs Maintenance management Technical management Quality management Materials purchasing Financial management Line
Slide 71: Customers and market
AAR CORP. All rights reserved worldwide. Confidential and proprietary document. 26 z • Used by over 138 individual airlines, government operators, and MROs • Supports over 5,000 aircraft in operation today (excludes MROs) • In the hands of and on the desktops of over 62,000 users • Used by over 8,50
Slide 72: Integrated maintenance ecosystem
AAR CORP. All rights reserved worldwide. Confidential and proprietary document. 27 • AAR's parts and MRO experience plus Trax's software creates basis for a comprehensive offering • Maintenance processes are streamlined by integrating parts supply & MRO services with management software • Software e
Slide 73: Vision: A new parts ecosystem
AAR CORP. All rights reserved worldwide. Confidential and proprietary document. 28 • Trax’s embedded market position helps foresee maintenance needs and parts replacements. • AAR and other supplier informed readiness with parts ensures that necessary replacements can be done just in time. • Aircraft
Slide 74: Growth initiatives
AAR CORP. All rights reserved worldwide. Confidential and proprietary document. 29 Mission: Be the leading innovator of MRO software and technology - based solutions Bolster Trax’s back - office functions to support scale: quality, customer support, accounting Co - create products with AAR and other
Slide 76: Sean Gillen
© 2023 AAR CORP. All rights reserved worldwide. 31 Sean Gillen Joined AAR in 2019 in his current role where he oversees the financial, accounting, tax, treasury and investor relations functions Previously served as Vice President and Treasurer at USG Corporation Prior to USG, was employed at Goldman
Slide 77: Historical financial performance
© 2023 AAR CORP. All rights reserved worldwide. 32 Historical financial performance Adjusted sales ($M) Adjusted diluted EPS Net debt / adjusted EBITDA Adjusted operating income ($M) and margin Note: FY ends May 31; figures reflect continuing operations; see Appendix for reconciliation of non - GAAP
Slide 78: Actions taken have yielded consistent financial improvement
© 2023 AAR CORP. All rights reserved worldwide. 33 x Consolidated footprint to optimize cost base and preferred customer support x Exited underperforming product lines and contracts x Reduced selected headcount x Eliminated non - essential spend x Used market dislocation and relative strength to tak
Slide 79: Significant progress since 2019
© 2023 AAR CORP. All rights reserved worldwide. 34 Significant progress since 2019 $2,052 $1,991 FY19 FY23 $115 $149 5.6% 7.5% FY19 FY23 $2.44 $2.86 FY19 FY23 Adjusted sales ($M) Adjusted operating income ($M) and margin Adjusted EPS Down 3% Up 30% Up 17% Higher margins and earnings on sales that ar
Slide 80: Capital allocation priorities
© 2023 AAR CORP. All rights reserved worldwide. 35 • Current leverage of 1.1x net debt / Adjusted EBITDA; S&P BB credit rating • Maintain conservative balance sheet; target net leverage ratio of 1.0x – 2.0x EBITDA • Max leverage ratio of 3.5x EBITDA • Support new business wins in Parts Supply via in
Slide 81: M&A priorities and approach
© 2023 AAR CORP. All rights reserved worldwide. 36 M&A priorities and approach Strategic focus areas x Value - added / IP - enabled parts platforms x Additional distribution customers and OEM relationships x Differentiated MRO capability and scale x Integrated Solutions – Government past performance
Slide 82: Key messages
© 2023 AAR CORP. All rights reserved worldwide. 37 1 2 3 4 Focused portfolio of aftermarket aviation services expected to benefit from market growth and increased market share Operating margin significantly increased since pre - pandemic due to cost discipline and actions to improve underperforming
Slide 84: Key takeaways
© 2023 AAR CORP. All rights reserved worldwide. 39 Key takeaways 2 3 4 5 1 6 Fundamentally improved the business since pre - pandemic and added greater transparency Large and growing markets Multiple levers to take market share Continued margin expansion opportunity History of aerospace aftermarket
Slide 87: Non-GAAP financial measures
© 2023 AAR CORP. All rights reserved worldwide. 42 Non - GAAP financial measures This presentation includes financial results for the Company with respect to adjusted diluted earnings per share from continu ing operations, adjusted sales, adjusted EBITDA, adjusted operating income and net debt, whic
Slide 88: Adjusted sales, adjusted operating income and adjusted operating margin
© 2023 AAR CORP. All rights reserved worldwide. 43 Adjusted sales, adjusted operating income and adjusted operating margin Non - GAAP financial measures ($ in millions) Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Sal
Slide 89: Adjusted diluted earnings per share from continuing operations
© 2023 AAR CORP. All rights reserved worldwide. 44 Adjusted diluted earnings per share from continuing operations Non - GAAP financial measures FY17 FY18 FY19 FY20 FY21 FY22 FY23 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4
Slide 90: Adjusted EBITDA
© 2023 AAR CORP. All rights reserved worldwide. 45 Adjusted EBITDA Non - GAAP financial measures ($ in millions) 12 Months Ended FY17 FY18 FY19 FY20 FY21 FY22 FY23 Q1 FY20Q2 FY20Q3 FY20Q4 FY20Q1 FY21Q2 FY21Q3 FY21Q4 FY21Q1 FY22Q2 FY22Q3 FY22Q4 FY22Q1 FY23Q2 FY23Q3 FY23Q4 FY23 Q1 FY20Q2 FY20Q3 FY20Q1
Slide 91: Net debt / adjusted EBITDA
© 2023 AAR CORP. All rights reserved worldwide. 46 Net debt / adjusted EBITDA Non - GAAP financial measures ($ in millions) FY17 FY18 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY24 Total debt $156.2 $178.9 $142.9 $
Slide 92: FY23 segment adjusted sales, operating income and margin
© 2023 AAR CORP. All rights reserved worldwide. 47 FY23 segment adjusted sales, adjusted operating income and adjusted operating margin Non - GAAP financial measures ($ in millions) Aviation Services Expeditionary Services Corporate/ Other Total Parts Supply Repair & Engineering Integrated Solutions

AAR — Investor Day (July 2023) on 6ix

Aar — Investor Day (July 2023)

Slide 1: Investor Day July 20, 2023

Slide 2: Forward-looking statements

Slide 3: Agenda

Slide 4: Company and strategy

Slide 5: John M. Holmes

Slide 6: Vision

Slide 7: Global aerospace and defense aftermarket solutions

Slide 8: Business overview

Slide 9: Values: Doing It Right

Slide 10: Corporate citizenship

Slide 11: Key messages

Slide 12: Re-segmentation of financial reporting

Slide 13: Connected businesses model

Slide 14: What's changed since 2019 Investor Day

Slide 15: Growth drivers

Slide 16: Multi-year organic financial targets

Slide 17: What's next

Slide 18: Market overview and positioning

Slide 19: Chris Jessup

Slide 20: Commercial air travel recovery and resilience

Slide 21: Aircraft deliveries and retirements

Slide 22: AAR's markets are large and growing

Slide 23: Government market

Slide 24: Government market

Slide 25: Over 60 AAR sites around the world

Slide 26: 15+ year relationship with each of top customers

Slide 27: Parts Supply: Used Serviceable Material

Slide 28: Sal Marino

Slide 29: Overview: Used Serviceable Material

Slide 30: Asset selection: what we do

Slide 31: Value proposition

Slide 32: Key achievements since 2019 Investor Day

Slide 33: Case study: CFM56 partnership with FTAI Aviation

Slide 34: Growth initiatives

Slide 35: Parts Supply: Distribution

Slide 36: Frank Landrio

Slide 37: Overview: Distribution

Slide 38: What we do: Distribution

Slide 39: Value proposition

Slide 40: Government distribution advantages

Slide 41: Key growth markets

Slide 42: Key achievements since 2019 Investor Day

Slide 43: Investments in eCommerce

Slide 44: Our journey: sales growth through new lines

Slide 45: Growth initiatives

Slide 46: Repair & Engineering

Slide 47: Tom Hoferer

Slide 48: Overview: Repair & Engineering

Slide 49: What we do: Repair & Engineering

Slide 50: Facility overview

Slide 51: Value proposition

Slide 52: Key achievements since 2019 Investor Day

Slide 53: Workforce development through Eagle Career Pathway Program

Slide 54: Miami airframe MRO facility expansion

Slide 55: "Paperless" airframe maintenance

Slide 56: PMA parts initiative

Slide 57: Growth initiatives

Slide 58: Integrated Solutions

Slide 59: Nicholas Gross

Slide 60: Overview: Integrated Solutions

Slide 61: What we do: Integrated Solutions

Slide 62: Value proposition

Slide 63: Key achievements since 2019 Investor Day

Slide 64: F-16 maintenance for U.S. Air Force in Europe

Slide 65: NDAA creates additional USM opportunity

Slide 66: Growth initiatives

Slide 67: Trax aviation software

Slide 68: Trax history and leadership

Slide 69: Leading provider of mobile and cloud-based software

Slide 70: What does Trax do for its customers?

Slide 71: Customers and market

Slide 72: Integrated maintenance ecosystem

Slide 73: Vision: A new parts ecosystem

Slide 74: Growth initiatives

Slide 75: Financial overview

Slide 76: Sean Gillen

Slide 77: Historical financial performance

Slide 78: Actions taken have yielded consistent financial improvement

Slide 79: Significant progress since 2019