AAR CORP.

Aviation parts, repair and support

AAR CORP. trades on the New York Stock Exchange as AIR. It sells aviation parts and provides aircraft repair, maintenance, engineering, software and government support services.

AAR's latest results before the deal

Figures are in millions of dollars for the three months ended August 31. Fiscal 2027's first quarter ended in August 2026. These are AAR's reported U.S. GAAP results before acquiring MRO Holdings.

Metric	Q1 FY2026	Q1 FY2027
Revenue	$739.6	$918.0
Net income	$34.4	$40.1
Operating cash flow	-$44.9	$55.8

Working-capital movements contributed substantially to the cash improvement. At August 31, AAR held $104.5 million of cash, excluding restricted cash. Total debt before issuance costs was $885 million; company-defined net debt, subtracting cash, was $780.5 million.

In September, AAR forecast 14% to 16% sales growth for the quarter ending November 30. That forecast excludes MRO Holdings and the Legacy Commercial Programs segment.

The MRO Holdings acquisition remains pending

AAR agreed on September 28, 2026, to buy an initial 65% controlling stake in MRO Holdings, a provider of heavy aircraft maintenance. The agreement values the whole business at about $4 billion including debt. AAR also has an option to buy another 5% and later options for the sellers' remaining interest.

The September plan targeted net debt of about 3.6 times adjusted EBITDA at closing, including expected savings, declining to about 3 times within two years. These are prospective combined-company targets.

How the target's cash generation changed

MRO Holdings' figures below use IFRS and cover the six months ended June 30. Dollar amounts are in millions. The target's accounting basis and reporting period differ from AAR's table above.

Metric	H1 2025	H1 2026
Revenue	$465.8	$489.1
Operating profit	$109.3	$99.9
Operating cash flow	$72.8	$31.5
Adjusted operating cash flow	$95.4	$50.2
Adjusted cash conversion	60.2%	35.4%

Adjusted cash conversion divides company-defined adjusted operating cash by adjusted earnings before interest, taxes, depreciation and amortization. Adjustments include estimated capacity and savings from newer facilities, expansion expenses and other selected costs. They increase the measure above reported cash.

For the twelve months through June 2026, reported target revenue was $943.7 million. Adjusted revenue of $1.02 billion included an $80.6 million facility-capacity estimate and a small timing adjustment. Adjusted earnings before interest, taxes, depreciation and amortization were $291.4 million, including $30.6 million of estimated facility benefits and savings.

The same historical figures were available in the October 27 presentation. More recent preliminary estimates put MRO Holdings' September 30 debt at $1.39 billion and cash at $81.3 million.

The November financing step

On November 2, AAR proposed $955 million of notes due in 2031 and $960 million due in 2034. Its funding assumptions also include about $230 million from a credit line, $231.6 million of gross share-placement proceeds and preferred shares valued at $780.8 million issued to sellers. Interest rates in the illustrative financial model are assumptions; the offering announcement did not set final coupons.

A loan of up to $1.35 billion from AAR's group to MRO Holdings would refinance the target's existing debt. It is part of the funding uses and is eliminated within the combined accounts. The acquisition and note offering remained pending at announcement. New facility utilization, cash generation and debt reduction will determine how the plan develops.