AAR Corporation (AIR)

Backlog

        At May 31, 2009, backlog believed to be firm was approximately $492,500 compared to $466,700 at May 31, 2008. These amounts do not include expected sales from the A400M cargo system (see Item 1A—Risk Factors). Approximately $440,700 of our May 31, 2009 backlog is expected to be filled within the next 12 months.

5

Table of Contents

Backlog

        At May 31, 2008, backlog believed to be firm was approximately $466,700 compared to $319,700 at May 31, 2007. These amounts do not include expected sales from the A400M cargo system. Approximately $412,400 of our May 31, 2008 backlog is expected to be filled within the next 12 months. The increase in our backlog principally reflects an increase in backlog in our Aviation Supply Chain segment and in our Structures and Systems segment mainly due to the impact of the acquisition of Summa.

Backlog

        At May 31, 2008, backlog believed to be firm was approximately $466,700 compared to $319,700 at May 31, 2007. These amounts do not include expected
sales from the A400M cargo system. Approximately $412,400 of our May 31, 2008 backlog is expected to be filled within the next 12 months. The increase in our backlog principally reflects
an increase in backlog in our Aviation Supply Chain segment and in our Structures and Systems segment mainly due to the impact of the acquisition of Summa.

Backlog

At May 31, 2007, backlog believed to be firm was approximately $319,700 compared to $243,200 at May 31, 2006. Approximately $268,300 of this backlog is expected to be filled within the next 12 months.

Backlog

At May 31, 2006, backlog believed to be firm was approximately $243,200 compared to $160,400 at May 31, 2005. Approximately $224,900 of this backlog is expected to be filled within the next 12 months. The increase in our backlog is primarily due to increased orders for products supporting our defense customers’ tactical deployment activities and increased backlog in our Maintenance, Repair and Overhaul segment.

On June 16, 2005, we announced that our Cargo Systems operating unit was selected to provide cargo handling systems for the new A400M Military Transport Aircraft (A400M). We are teaming with Pfalz Flugzeugwerke GmbH of Speyer, Germany on the program. Initial sales of the cargo systems together with estimated revenue from spare parts sales and service are scheduled to begin toward the end of fiscal 2007. Our portion of revenue to be generated from the program is expected to exceed $300,000 through fiscal 2015, based on sales projections for the A400M. This contract is not included in our May 31, 2006 backlog.

At May 31, 2005, backlog believed to be firm was approximately $160,400 compared to $162,400 at May 31, 2004. Approximately $151,800 of this backlog is expected to be filled within the next 12 months.

On June 16, 2005, we announced that our Cargo Systems operating unit was selected to provide cargo handling systems for the new A400M Military Transport Aircraft. We are teaming with Pfalz Flugzeugwerke GmbH of Speyer, Germany on the program. Initial sales of the cargo systems together with estimated revenue from spare parts sales and service are scheduled to begin in fiscal 2007. Our portion of revenue to be generated from the program is expected to exceed $300,000 through fiscal 2015, based on sales projections for the A400M. Airbus Military currently has orders for 188 A400M’s from eight governments, including France and Germany, with deliveries scheduled to begin in 2008. This contract is not included in our May 31, 2005 backlog.