AAR ́s digital services team is continuously developing innovative solutions, with a focus on digital integration at our MRO locations. Incorporating visual work assessments and signoffs, using drones and wearable technology for inspections and conducting virtual audits via handheld devices will optimize our MRO work with increased data transparency. In addition, we made several enhancements to our PAARTS Store SM , AAR ́s ecommerce site for aircraft parts to check inventory availability, order parts and track project status at any time, from any place. In the government market, AAR saw continued strong performance across global government contracts. Sales to government and defense contractors in FY21 comprised 51% of consolidated sales, compared to 38% in the year prior, reflecting both meaningful growth in our government business and the impact of COVID on our commercial business. AAR currently serves as a prime contractor to the U.S. Air Force, U.S. Army, U.S. Marine Corps, U.S. Marshals Service, U.S. Navy and U.S. Department of State (DoS). The valuable skills of our military veteran employee base significantly contribute to our company’s success in supporting government customers. Veterans comprise nearly one-quarter of AAR’s U.S. workforce and are a cornerstone of our talent acquisition efforts. AAR is committed to creating a safe and engaging environment for our nearly 5,000 employees around the globe, and to diverse hiring and STEM-focused education as we develop our talent pipeline. In FY21, Bloomberg named AAR one of the top 200 federal contractors in the U.S., VIQTORY recognized AAR as a Military Friendly ® Employer, U.S. Veterans Magazine awarded AAR again with the title “Best of the Best 2021 — Top Veteran-Friendly Companies” and Forbes named us to the “America’s Best Midsize Employers” for the third time. We introduced the first all-female class of technicians-in-training at our Miami MRO facility and partnered with the Corporation for Skilled Workforce and the Lumina Foundation to grow and diversify the aviation maintenance talent pool. The U.S. Department of Labor’s Employment and Training Division recognized our EAGLE Career Pathway Program, dedicated to growing the aviation maintenance technician pipeline, as a nationally registered apprenticeship. We also signed a Memorandum of Understanding with the American Association of Port Authorities’ ACCELerate! Apprenticeship Program, solidifying our commitment to expanding apprenticeship opportunities in the aviation industry. I would like to thank our customers for their partnership, our stockholders for their confidence in AAR and our Board of Directors for their guidance. I specifically wish to extend my gratitude to our employees for their continued dedication, especially for all their sacrifices during this time of uncertainty, to maintaining the highest level of service to our customers around the world. We look forward to continuing our commitment to Doing It Right ® , together. John M. Holmes President and Chief Executive Officer Selected financial highlights (dollars in millions except per share data) For the year ended May 31 Adjusted operating income (in millions) For the year ended May 31 Adjusted diluted EPS from continuing operations (a) For the year ended May 31 Operating income $ 85.2 $ 41.3 Investigation and remediation costs 4.4 10.1 Loss on sale of business 20.2 – Contract termination/restructuring costs and loss provisions, net 9.3 31.3 Asset impairment charges 7. 0 11.0 Facility consolidation and repositioning costs 4.5 4.9 Severance and furlough costs, net 9.0 7.1 Customer bankruptcy and credit charges 4.9 1.6 Government COVID-related subsidies, net (56.2) (2.8) Strategic financing evaluation costs 1.0 0.4 Adjusted operating income $ 89.3 $ 104.9 Diluted earnings per share from continuing operations $ 1.30 $ 0.71 Investigation and remediation compliance costs 0.10 0.22 Loss on sale of business 0.44 – Contract termination/restructuring costs and loss provisions, net 0.20 0.68 Customer bankruptcy and credit charges 0.10 0.04 Asset impairment charges 0.15 0.25 Government COVID-related subsidies, net (1.22) (0.06) Facility consolidation and repositioning costs 0.09 0.11 Severance, furlough and pension settlement charges, net 0.22 0.19 Gain on legal settlement (0.09) – Strategic financing evaluation costs 0.02 0.01 Adjusted diluted EPS from continuing operations $ 1.31 $ 2.15 Operating performance Net sales $ 1 ,652.3 $ 2,072.0 $ 2,051.8 $ 1 ,748.3 $ 1,590.8 Operating income 85.2 41.3 98.3 8 6.0 8 2.3 Diluted earnings per share from continuing operations $ 1.30 $ 0.71 $ 2.40 $ 2 .11 $ 1 .51 Financial position Working capital 600.2 1,055.6 595.0 6 09.4 5 53.4 Total assets 1,539.7 2,079.0 1,517.2 1, 524.7 1, 504.1 Total debt 135.2 602.0 142.9 1 78.9 15 6.2 Stockholders’ equity 974.4 902.6 905.9 9 36.3 9 14.2 2021 2020 Adjusted operating income and adjusted diluted earnings per share from continuing operations 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. These non-GAAP measures exclude items of an unusual nature including but not limited to certain income tax benefits, business divestitures, legal settlements, workforce actions, subsidies and costs, restructuring costs, facility consolidation and repositioning costs, impairment charges, investigation and remediation compliance costs and significant customer events such as early terminations, contract restructurings, forward loss provisions and credit charges. Pursuant to the requirements of Regulation G of the Exchange Act, we are providing the tables on the left that reconcile the above mentioned non-GAAP financial measures to the most directly comparable GAAP financial measures. (a)  All adjustments are presented net of applicable income taxes. 2021 2020 2021 20 20 20 19 20 18 2017 2 | AAR 2021 ANNUAL REPORT AAR 2021 ANNUAL REPORT | 3