AAR CORP Commitments Disclosure
14. Commitments
We enter into purchase obligations, which arise in the ordinary course of business and represent a binding commitment to acquire inventory, including raw materials, parts and components, as well as equipment to support the operations of our business. The aggregate amount of purchase obligations due in each of the next five fiscal years is $657.1 million in 2026, $156.9 million in 2027, $26.7 million in 2028, $2.4 million in 2029 and $2.6 million in 2030.
We routinely issue letters of credit and performance bonds in the ordinary course of our business. These instruments are typically issued in conjunction with insurance contracts or other business requirements. The total of these instruments outstanding at May 31, 2025 was approximately $7.9 million.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jul 22, 2025 | Showing above |
| 2024 | Jul 19, 2024 | |
| 2023 | Jul 18, 2023 | |
| 2022 | Jul 21, 2022 | |
| 2021 | Jul 21, 2021 | |
| 2020 | Jul 21, 2020 | |
| 2019 | Jul 18, 2019 | |
| 2018 | Jul 11, 2018 | |
| 2017 | Jul 12, 2017 | |
| 2016 | Jul 13, 2016 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.