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0.00x Total Debt / Equity (Conservative)

A 200bps rate increase adds ~$8-12M annual interest expense given ~$400M variable-rate debt; meaningful but manageable at ~3-5% of EBITDA

Medium intensity; US-China trade tariffs on metals and components disrupt supply chains.

Middle East MRO parts logistics (Gulf airspace) and Indo-Pacific military component sourcing from Taiwan-adjacent suppliers

Moderate exposure: UK GBP (~15% intl revenue), EUR (~10%), and emerging Middle East USD-pegged contracts limit devaluation risk materially

Operations in 30+ countries; top revenue markets UK, Netherlands, Middle East—GBP and EUR present ~20-25% of revenue with real devaluation exposure

Medium intensity; commodities: Steel, Aluminum, Copper, Crude Oil (fuel), Rare Earth Elements, Plastics/Resins; geopolitical: US-China trade tariffs on metals and components disrupt supply chains.

No single vendor exceeds 30% of input costs; Boeing and Airbus OEM parts are concentrated but substitutable via PMA and DER approvals

Minimal disruption; AAR operates predominantly physical MRO/logistics infrastructure with on-premise and proprietary systems, not cloud-dependent

Some back-office ERP and supply chain systems on cloud, but core MRO operations are facility- and technician-based, not digitally delivered

Low API coupling risk; AAR's core value is physical MRO labor and hangar capacity, not software integrations or platform APIs

Near-zero Howey risk; revenue derives from fee-for-service aircraft maintenance and government logistics contracts, not investment schemes

Medium

Moderate GDPR exposure via EU operations; CCPA limited given B2B focus; DoD contract data handling under CMMC/ITAR adds compliance complexity

Low-moderate; MRO market fragmented with Lufthansa Technik, ST Engineering as peers; no dominant market share exceeding 15% globally

Medium burden; regimes: FAA, DOT, OSHA, EPA, ITAR, FTC; Export controls and defense procurement rules create contract concentration risk.

~60-65% recurring via multi-year government and commercial airline MRO contracts; ~35-40% transactional component and parts sales

Labor-hour and cost-plus government contracts plus commercial MRO time-and-materials; parts distribution adds transactional margin

Cost-plus on government contracts limits margin compression risk; commercial MRO pricing tied to labor rates and parts costs, vulnerable to wage inflation

Moderate (6/10); long-term government contracts provide stability but limit upside; commercial airline customers have negotiating leverage on renewal

19.0% Gross Margin (Thin (<20%))

No free-rider problem; services are contractual and physical; churn risk tied to airline bankruptcies and DoD budget sequestration

Largely headcount-linear; MRO is labor-intensive—doubling revenue requires ~80-85% proportional headcount growth; limited operating leverage

Low scalability without capital investment in hangars and technicians; marginal cost of growth is high relative to software peers

Not applicable; AAR does not operate a franchise model

At 10x scale, CAC efficiency improves via government contract incumbency advantage, but hangar capacity constraints become binding; ROIC likely compresses

Minimal network effects; reputation and certifications create barriers but value doesn't compound with user scale

1.4% Return on Assets (Excellent)

Tier 2 (moderate resilience); government/defense contracts (~40% revenue) are recession-proof; commercial aviation MRO is cyclically sensitive

U.S. government and DoD (~40% revenue)—high concentration risk mitigated by contract diversification across agencies

Commercial airlines globally (~55% revenue)—top 5 airline customers likely represent 25-30% of commercial segment, creating moderate concentration risk

["11-0000 Management Occupations", "13-0000 Business and Financial Operations Occupations", "15-0000 Computer and Mathematical Occupations", "17-0000 Architecture and Engineering Occupations", "23-0000 Legal Occupations", "33-0000 Protective Service Occupations", "37-0000 Building and Grounds Cleaning and Maintenance Occupations", "41-0000 Sales and Related Occupations", "43-0000 Office and Administrative Support Occupations", "47-0000 Construction and Extraction Occupations", "49-0000 Installation, Maintenance, and Repair Occupations", "51-0000 Production Occupations", "53-0000 Transportation and Material Moving Occupations"]

0.3 (HIL — ~30% of characteristic roles agent-automatable)

1.2% CapEx / Revenue (Low-CapEx Asset-Light)

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AIR