AAON Annual Report 2011 | Quarterlytics

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FY2011 Annual Report · AAON

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COMpANy pROFiLe

OutdOOR AiR
HANdLiNg uNitS

CONdeNSiNg
uNitS

iNdOOR AiR HANdLiNg uNitS

RL SeRieS

CL SeRieS

H3 SeRieS

SA SeRieS

V3 SeRieS

RN SeRieS

CC SeRieS

ROOFtOp uNitS

M2 SeRieS

M3 SeRieS

F1 SeRieS

RQ SeRieS

CB SeRieS

RL SeRieS

RN SeRieS

RQ SeRieS

BOiLeR

pACkAged MeCHANiCAL ROOMS

BL SeRieS

LL SeRieS AiR—CONdeNSed

LL SeRieS
eVApORAtiVe—CONdeNSed

LC SeRieS AiR—CONdeNSed

AAON is engaged in the engineering, manufacturing, marketing and sales of air conditioning and heating equipment consisting

of rooftop units, chillers, air-handling units, make-up air units, heat recovery units, condensing units, commercial self-contained

units and coils. Since the founding of AAON in 1988, AAON has maintained a commitment to design, develop, manufacture and

deliver heating and cooling products to perform beyond all expectations and demonstrate the value of AAON to our customers.

AAON provides specific and unique solutions for individual customer requirements.

A n n u A l R e p o R t

FiNANCiAL HigHLigHtS

Income Data ($000)
Net Sales

Gross Profit

Operating Income

Interest Expense

Interest Income
Depreciation

Pre-Tax Income

Net Income

Earnings Per Share

(Basic)1
(Diluted)1

Balance Sheet ($000)
Working Capital

Current Assets

Net Fixed Assets

Accumulated Depreciation

Cash & Cash Investment

Total Assets

Current Liabilities

Long-Term Debt

Stockholders’ Equity
Stockholders’ Equity per Diluted Share1
Funds Flow Data ($000)
Operations

Investments

Financing

Net Increase (Decrease) in Cash

Ratio Analysis
Return on Average Equity

Return on Average Assets

Pre-Tax Income on Sales

Net Income on Sales

Total Liabilities to Equity
Quick Ratio2
Current Ratio
Year-End Price Earnings Ratio1

2011

2010

2009

2008

2007

$266,220

$244,552

$46,281

$22,169

$277

$98
$11,397

$21,513

$13,986

$0.57
$0.56

$45,700

$84,387

$93,502

$85,935

$13

$178,981

$38,687

$122,504

$4.92

$26,484
$(24,538)

$(4,326)

$(2,380)

11.7%

7.8%

8.1%

5.3%

0.5

1.1

2.2
37

$55,188

$32,715

$45

$258
$9,886

$32,693

$21,894

$0.87
$0.87

$55,502

$91,748

$67,418

$86,307

$2,393

$160,277

$36,246

$116,739

$4.61

$32,152
$(28,276)

$(27,200)

$(23,246)

18.7%

13.7%

13.4%

9.0%

0.4

1.2

2.5
22

$245,282

$67,545

$43,754

$71
$9,061

$43,892

$27,721

$1.07
$1.07

$65,354

$96,240

$59,896

$80,567

$25,639

$156,211

$30,886

$117,999

$4.54

$45,205
$(9,639)

$(10,101)

$25,370

25.8%

17.7%

17.9%

11.3%

0.3

1.9

3.1
12

$279,725

$67,176

$43,388

$71

$27
$9,412

$44,068

$28,589

$1.09
$1.07

$40,600

$80,118

$60,550

$72,269

$269

$140,743

$39,518

$121

$96,522

$3.60

$33,447
$(9,593)

$(24,460)

$(610)

29.8%

20.3%

15.8%

10.2%

0.5

1.0

2.0
13

$262,517

$57,369

$35,666

$10

$8
$9,665

$35,343

$23,156

$0.83
$0.81

$38,788

$76,295

$60,770

$63,579

$879

$137,140

$37,507

$239

$95,420

$3.36

$31,247
$(10,751)

$(20,036)

$591

24.8%

16.9%

13.5%

8.8%

0.4

1.1

2.0
16

1 Reflects 3-for-2 stock split in June 2011 and August 2007
2 Cash, cash equivalents + receivables/current liabilities.

2011

pReSideNt’S LetteR

Dear ShareholDer,This past year was one filled with many challenges and obstacles. Despite these circumstances, we are pleased to report that our sales gained 8.9% to $266.2 million from $244.6 million in 2010. During a period of continuing softness in non-residential construction, our positive sales performance can be directly attributed to a number of factors. The market acceptance of our technologically innovative products released in years

prior to 2011 continued to grow. In addition, the Tax Relief, Unemployment Insurance

Reauthorization and Job Creation Act of 2010 signed into law in December 2010,

which allowed 100% depreciation for qualified capital expenditures put in service in

calendar 2011, had a beneficial impact on our replacement business. We improved the

quantity and quality of our sales force as existing sales offices added personnel and

underperforming offices were replaced. Lastly, we increased training for our employees

and sales force regarding the features and benefits of our significantly advanced product

lines to allow for better sales communications.

A number of adverse factors, some non-recurring in nature, substantially impacted

our gross margins which decreased 16.1% from $55.2 million (22.6% of sales) to $46.3

million (17.4% of sales). Later in this report we will discuss the nature of these factors

in detail.

SG&A expenses were flat at $22.3 million (8.4% of sales) as compared with $22.5 million

(9.2% of sales) a year ago. Operating income declined sharply from $32.7 million (13.4%

of sales) in 2010 to $22.2 million (8.3% of sales). Included in the 2011 operating income

was a $1.8 million loss on the sale of equipment. Pre-tax income declined 34.2% from

$32.7 million (13.4% of sales) in 2010 to $21.5 million (8.1% of sales), and includes the

“During a
period of
continuing
softness in
non-residential
construction,
our positive
sales
performance
can be directly
attributed to
a number of

charge of our insurance deductible involved with our storm damage (discussed below).

Net income in 2011 declined to $14.0 million or $0.56 per diluted share from $21.9

factors.”

million or $0.87 per diluted share a year ago. Our 2011 tax rate was 35% versus 33%

in 2010. Our per share calculations are based upon 24.9 million fully diluted shares

outstanding in 2011 and 25.3 million fully diluted shares in 2010, and reflect a 3-2 stock

split on June 13, 2011.

StRONg FiNANCiAL CONditiON

Our financial condition at December 31, 2011 remained strong. Total current assets

were $84.4 million with a current ratio of 2.2:1. Capital expenditures climbed to a

record $35.9 million as compared with $17.4 million in 2010. Furthermore, we paid

dividends of $5.9 million. Despite all of these expenditures, we operated with no long-

term debt. Total shareholders’ equity at December 31, 2011 was $122.5 million or $4.92

per share compared with $116.7 million or $4.61 per share at year-end 2010.

deCReASed pROFitS

5. We experienced excellent response to our revised rooftop

1. In early February of last year the Tulsa area was hit by record

snowstorms which caused four roof collapses of approximately

24,100 square feet of the roof on our major manufacturing

facilities. Production was halted for eight and one-half days

and continuing production disruptions caused by holes in the

roof, with low temperatures until April and high temperatures

in the summer, severely impacted gross profit margins. While

the damage to the roof was covered by insurance subject to

a $500,000 deductible, operational losses and equipment

outages were not. Repairs of damaged machinery (not covered

by insurance) were undertaken by our own labor force; the

lines, particularly in the 2-6 ton, 16-30 ton and 26-70 ton

units. These three lines contribute approximately 65% of the

Company’s total volume. In anticipation of further increased

demand, particularly influenced by the expectation of

improvement in non-residential construction, we undertook

the relocation of three assembly lines and the rearrangement

of two others, plus the installation of new metal fabricating

equipment. There were numerous expenses and inefficiencies

which occurred as a result of these endeavors, but the enlarged

assembly lines and the installation of new equipment should

produce over $1 million of productivity improvement in 2012

lack and cost of which also restricted gross profit margins.

and beyond.

The repair of the roof and certain machinery and other

miscellaneous damages were finally completed in October of

CApitAL expeNdituReS

last year.

In the letter to shareholders in our 2010 annual report, we

estimated capital expenditures in the range of $28-30 million for

2. We traded in 11 metal fabricating machines which were

2011. By mid-year it became apparent that we needed to raise

purchased between 1997 and 2001. Due to their considerable

our forecast due to a number of factors. We continued to witness

usage, this equipment was often in need of repair and operated

excellent response to our technologically innovative, highly

with decreasing efficiency. In their place we purchased 18 new

reliable product lines. Furthermore, we determined that 11 of our

machines which are far more efficient and have a marked

metal fabricating machines would have to be replaced and 18 new

improvement on our manufacturing capacity and productivity.

machines were necessary to accommodate our future growth. In

The trade in of the old equipment created an after tax loss of $1

2010 we began renovation of an additional 165,000 square feet

million or $0.05 per share.

of manufacturing which houses the production of our 16-30 ton

and 26-70 ton rooftop lines. This facility was completed during

3. We implemented price increases of between 5%-13%

2011. We initiated the construction of a new 200,000 square foot

(depending upon the type of product) at various times in

warehouse and office building which was only partially completed

2011, some of which occurred late in the year. Still, market

by year- end. Our total capital expenditures in 2011 reached $35.9

conditions prevented us from fully passing on material and

million of which $27 million involved machinery purchases and

component parts price increases we incurred.

the remainder was for plant renovation and expansion. Our plant

capacity has been increased to $800 million of annual production

4. Our air handler and condensing unit production fell behind

while our machinery capacity can accommodate approximately

our order pace. The surge in orders required hiring new

$600 million of sales. Our machinery purchases in 2011 may be

employees which in turn meant additional training costs,

viewed as somewhat aggressive, but we wanted to take advantage

higher inefficiencies and significant overtime expenses. As the

of the Tax Relief, Unemployment Insurance Reauthorization and

year progressed many of these problems began to be resolved

Job Creation Act. The beneficial result will come in the form of

and we expect improved productivity and profitability from

a $10 million tax refund which represents the 100% write-off

these products in 2012 and beyond.

of the depreciation of our machinery purchased and installed

A n n u A l R e p o R t

during 2011 as well as some smaller tax refunds. This refund

recognizing sizeable cost savings and higher manufacturing

will greatly strengthen our liquidity position. For 2012, we have

efficiencies and productivity, which should necessarily translate

budgeted capital expenditures in the range of $10-12 million,

into improved operating margins, in 2012 and beyond.

most of which will be devoted to the completion and expansion

of our physical plant. We have introduced a new 55-140 ton unit

The Architecture Billings Index (ABI), a leading indicator of

which is equipped with variable speed compressors, direct drive

future construction activity, shows the decrease in construction

fans and has foam cabinetry. This unit is expected to have the

during 2008 and an improving, but still weak, demand for

highest efficiency in the industry and is designed for use in large

architectural design services from 2009 to 2012 (Figure 1). The

commercial and manufacturing facilities as well as for the retail

ABI is derived from a monthly survey and produced by the AIA

and healthcare markets. While the market for this product is not

Economics & Market Research Group. Based on a comparison

large when compared with our smaller tonnage products, its high

of data compiled since the survey’s inception in 1995 with

efficiency, which produces significant energy savings, should

figures from the Department of Commerce on Construction Put

enable AAON to gain a major share of this market over the next

in Place, the findings amount to a leading economic indicator

few years.

that provides a nine-to-twelve month glimpse into the future

of nonresidential construction activity. A score above 50 means

Over the past three years (2009-2011) we have spent more

architectural work is on the increase; below 50 means work is on

than $64 million to enlarge and renovate our plant and for new

the decrease. Architectural work does not always translate into

machinery purchases. Our customers have responded well to our

new construction or HVAC sales, but the index tends to provide

efforts as we continue to manufacture the most technologically

a decent lens into the mood of the real estate world. An increase

innovative products, which provide the highest efficiency

may lay the groundwork for new construction projects and

and produce significant energy savings. We expect to begin

HVAC sales months down the road.

ARCHITECTURE BILLINGS INDEX

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N
A
P
X
E
=
0
5
N
A
H
T

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E
T
A
E
R
G

(

X
E
D
N

S
G
N
I
L
L
I
B

JAN-03

JAN-04

JAN-05

JAN-06

JAN-07

JAN-08

JAN-09

JAN-10

JAN-11

JAN-12

Figure 1 – Architecture Billings index JAn. 2003-JAn. 2012

2011

FiguRe 2

U.S. ANNUAL CONSTRUCTION SPENDING & AAON SALES VERSUS YEAR

)
S
N
O
I
L
L
I
M
$
(

G
N
D
N
E
P
S
N
O
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C
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T
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N
A

.
S
.
U

450,000

400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

2003

2004

2005

2006

2007

2008

2009

2010

2011

U.S. ANNUAL CONSTRUCTION SPENDING ($1,000,000)

AAON SALES ($1,000)

450,000

400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

)
S
D
N
A
S
U
O
H
T
$
(

S
E
L
A
S
N
O
A
A

AAON’s sales grew 88% from $149

million to $280 million. From 2008

to 2011, U.S. annual construction

spending,

the

previously

mentioned categories, decreased

sharply from its 2008 peak to $252

billion in 2011. This was a decrease

of 37%. From 2008 to 2011, AAON

sales declined 5% from $280 million

to $266 million. AAON was able

to gain market share during this

three-year downturn

as more

customers became aware of the

unique features of our products that

make them energy efficient, easily

serviceable and different from all

From 2003 through 2008, United States annual construction

other HVAC manufacturers. Features such as the hinged access

spending in lodging, office, commercial, healthcare, educational,

to all components, direct drive fans that eliminate belt energy

religious and manufacturing projects increased 64% to $403

loss and a rigid polyurethane foam cabinet that saves heat and

billion from $245 billion (Figure 2). During the same period,

cooling dollars by preventing unwanted heat transfer through

tHe ONgOiNg SuCCeSS OF OuR COMpANy CAN Be diReCtLy AttRiButed tO OuR eMpLOyeeS.

September
Purchase of John Zink Air
Conditioning Division.

Spring
AAON purchased, renovated
and moved into a 184,000
square foot plant in Tulsa,
Oklahoma.
Introduced a new product line of
rooftop heating and air
conditioning units 2-140 tons.

December
Formed AAON Coil Products,
a Texas Corporation, as a
subsidiary to AAON, Inc. (Nevada)
and purchased coil making
assets of Coils Plus.

September
One-for-four reverse
stock split. Retired
$1,927,000 of
subordinated debt.

March
Purchase of property
with 26,000 square foot
building adjacent to
AAON Coil Products
plan in Longview,
Texas. Issued a 10%
stock dividend.

September
Completed expansion of the
Tulsa facility to 332,000
square feet.

Spring
Completed Tulsa, Oklahoma, and
Longview, Texas, plant additions yielding a total
exceeding one million square feet.

October
U.S. patent granted to AAON for air conditioner
with energy recovery heat wheel.

April
AAON received U.S. patent for
Blower Housing assembly.

December
Listed on NASDAQ Small
Cap—Symbol “AAON.”

Summer
Became a publicly traded company
with the reverse acquisition of Diamond
Head Resources (now “AAON, Inc.”),
a Nevada corporation.

August
AAON, an
Oklahoma corporation,
was founded.

November
Listed on the
NASDAQ National
Market System.

Spring
AAON Coil Products purchased,
renovated and moved into a 110,000
square foot plant in Longview, Texas.

January
Introduced a desiccant heat
recovery wheel option available
on all AAON rooftop units.

December
Purchased 40 acres with
457,000 square foot plan
and 22,000 square foot
oﬃce space located across
from Tulsa facility.

November
AAON yearly shipments
exceed $100 million.
Received U.S. patent for
Dimpled Heat
Exchanger Tube.

October
AAON listed in Forbes’
200 Best Small Companies

Fall
Expanded rooftop
product line to 230 tons
Introduced evaporative
condensing energy
savings feature. 3-for-2
stock split.

June
3-for-2 stock split.

July
AAON added as a
member of the Russell
2000® Index.

May

Purchase of the assets of

Air Wise, of Mississauga,

Ontario, Canada.

Fall

Industry introduction of the

modular air handler and

chiller products.

November

Introduction of light

commercial/residential

product lines.

December

AAON rings closing bell atNASDAQ

October

AAON Listed in Forbes ‘200

Best Small Companies’

August

3-for-2 stock split

March

Modular air handler product

extended to 50,000 CFM

August

AAON added to Standard &

Poor’s SmallCap 600 Index

June

AAON named to the

Fortune 40: Best

Stocks to Retire On

National Society of

Professional Engineers

Award AAON 2009

Product of the year

May

AAON increases

dividend payment

by 13%

October

AAON listed

in Forbes’

200 Best Small

Companies

July

AAON RQ

Series

Rooftop Unit

wins ACHR

News Dealer

Design Award

November

AAON donates jigh eﬃciency

equipment to ABC’s Extreme

Makeover: Home Edition

January

Outdoor mechanical room extended

to 540 tons of capacity

June

July

National Society of Professional Engineers awards RQ

Series High Eﬃciency Rooftop Unit "Product of the Year"

Geothermal RQ Series wins Silver in ACHR

News Dealer Design Competition

October

AAON, listed in

FORBES Magazine’s

“Hot Shots 200

Up & Comers.”

AAON listed in

Forbes’ 200 Best

Small Companies

July

Started

production of

polyurethane

foam-ﬁlled

double-wall

construction

panels for

rooftop and

chiller products

using newly

purchased

manufacturing

equipment.

August

AAON received U.S. Patent

for Plenum Fan Banding.

October

AAON rings opening bell at NASDAQ

AAON voted “Most Valuble Product”

July

AAONproducts

recieve Dealer

Design Awards

April

and “Product of the Year” by

from ACHR News

AAON introduces factory engineered

and assembled packaged mechanical

room, which includes a boilerand all

piping and pumping accessories.

June

Initiation of a semi-annual cash

dividend for AAON shareholders.

Consulting-Specifying

Engineer Magazine

AAON listed in Forbes’ 200 Best

Small Companies

October

AAON listed in

Forbes’ 200

Best Small

Companies

11’

October

Consulting-Specifying Engineer magazine awards

Geothermal RQ Series Product of the Year - Silver

July

Single Zone VAV rooftop units win Honorable

Mention in ACHR News Dealer Design Competition

October

RN series rooftop unit names 2010 Product of the Year

– Silver by Consulting

– Specifying Engineer Magazine

– Bronze by Consulting

– Specifying Engineer Magazine

LC series chiller product named 2010 Product of the year

A n n u A l R e p o R t

the cabinet attracted owners and engineers to AAON products.

competitive position internationally and contribution to the

Going forward, we expect to further gain market share as the

public’s standard of living.

desire for these features reaches additional customers who are

not yet familiar with our products.

Additionally, in July, AAON received two awards from the Air

ReCOgNitiONS

In June, the Company’s RQ Series High Efficiency Rooftop Unit

was recognized as the 2011 Product of the Year in the Large

Company category from the National Society of Professional

Engineers. “Celebrating its 28th year, the prestigious New Product

Award Competition recognizes companies whose pioneering

vision and design bring new products to the marketplace, while

highlighting the societal benefits of these new products,” said

Richard Buchanan, P.E., chairman of the New Product Award

Committee.

Conditioning, Heating and Refrigeration News Magazine. An

independent panel of 30 contractors acted as judges in the contest

that had 127 entries from over 80 different brands. The Company’s

Single Zone Variable Air Volume unit was an Honorable Mention

in the HVAC Light Commercial Equipment category while the

Company’s Geothermal RQ Series 2-6 ton rooftop unit was a

Silver Award winner in the HVAC High Efficiency Residential

Equipment category. “These awards give us a unique opportunity

to recognize the outstanding research and development efforts

that go into many of the products serving the HVACR industry

and the awards issue gives our readers an opportunity to read

about innovative installation and service solutions,” said NEWS

The purpose of the NSPE New Product Award program is to

publisher, John Conrad.

recognize the full spectrum of the benefits that come from the

research and engineering of new products. These include added

employment, economic development, strengthening the nation’s

Finally, in October the Company announced that its RQ series

geothermal rooftop unit had been named 2011 Product of the

tHe ONgOiNg SuCCeSS OF OuR COMpANy CAN Be diReCtLy AttRiButed tO OuR eMpLOyeeS.

September

Purchase of John Zink Air

Conditioning Division.

December

September

Spring

Formed AAON Coil Products,

Completed expansion of the

Completed Tulsa, Oklahoma, and

Tulsa facility to 332,000

Longview, Texas, plant additions yielding a total

square feet.

exceeding one million square feet.

Spring

AAON purchased, renovated

and moved into a 184,000

square foot plant in Tulsa,

Oklahoma.

Introduced a new product line of

rooftop heating and air

conditioning units 2-140 tons.

a Texas Corporation, as a

subsidiary to AAON, Inc. (Nevada)

and purchased coil making

assets of Coils Plus.

September

One-for-four reverse

stock split. Retired

$1,927,000 of

subordinated debt.

March

Purchase of property

with 26,000 square foot

building adjacent to

AAON Coil Products

plan in Longview,

Texas. Issued a 10%

stock dividend.

U.S. patent granted to AAON for air conditioner

with energy recovery heat wheel.

October

April

AAON received U.S. patent for

Blower Housing assembly.

October

AAON listed in Forbes’

200 Best Small Companies

Fall

Expanded rooftop

product line to 230 tons

Introduced evaporative

condensing energy

savings feature. 3-for-2

stock split.

May
Purchase of the assets of
Air Wise, of Mississauga,
Ontario, Canada.

Fall
Industry introduction of the
modular air handler and
chiller products.

Summer

Became a publicly traded company

with the reverse acquisition of Diamond

Head Resources (now “AAON, Inc.”),

a Nevada corporation.

December

Listed on NASDAQ Small

Cap—Symbol “AAON.”

November

Listed on the

NASDAQ National

Market System.

January

Introduced a desiccant heat

recovery wheel option available

on all AAON rooftop units.

Spring

AAON Coil Products purchased,

renovated and moved into a 110,000

square foot plant in Longview, Texas.

December

Purchased 40 acres with

457,000 square foot plan

and 22,000 square foot

oﬃce space located across

from Tulsa facility.

November

AAON yearly shipments

exceed $100 million.

Received U.S. patent for

Dimpled Heat

Exchanger Tube.

June

3-for-2 stock split.

July

AAON added as a

member of the Russell

2000® Index.

August

AAON, an

Oklahoma corporation,

was founded.

October
October
AAON, listed in
AAON, listed in
FORBES Magazine’s
FORBES Magazine’s
“Hot Shots 200
“Hot Shots 200
Up & Comers.”
Up & Comers.”
AAON listed in
AAON listed in
Forbes’ 200 Best
Forbes’ 200 Best
Small Companies
Small Companies

July
July
Started
Started
production of
production of
polyurethane
polyurethane
foam-ﬁlled
foam-ﬁlled
double-wall
double-wall
construction
construction
panels for
panels for
rooftop and
rooftop and
chiller products
chiller products
using newly
using newly
purchased
purchased
manufacturing
manufacturing
equipment.
equipment.

December
AAON rings closing bell atNASDAQ

October
October
AAON Listed in Forbes ‘200
AAON Listed in Forbes ‘200
Best Small Companies’
Best Small Companies’
August
August
3-for-2 stock split
3-for-2 stock split
March
March
Modular air handler product
Modular air handler product
extended to 50,000 CFM
extended to 50,000 CFM

August
AAON added to Standard &
Poor’s SmallCap 600 Index

June
June
AAON named to the
AAON named to the
Fortune 40: Best
Fortune 40: Best
Stocks to Retire On
Stocks to Retire On

National Society of
Professional Engineers
Award AAON 2009
Product of the year

National Society of
Professional Engineers
Award AAON 2009
Product of the year
May
May
AAON increases
AAON increases
dividend payment
dividend payment
by 13%
by 13%

October
October
AAON listed
AAON listed
in Forbes’
in Forbes’
200 Best Small
200 Best Small
Companies
Companies
July
July
AAON RQ
AAON RQ
Series
Series
Rooftop Unit
Rooftop Unit
wins ACHR
wins ACHR
News Dealer
News Dealer
Design Award
Design Award

November
November
AAON donates jigh eﬃciency
AAON donates jigh eﬃciency
equipment to ABC’s Extreme
equipment to ABC’s Extreme
Makeover: Home Edition
Makeover: Home Edition
January
January
Outdoor mechanical room extended
Outdoor mechanical room extended
to 540 tons of capacity
to 540 tons of capacity
June
National Society of Professional Engineers awards RQ
Series High Eﬃciency Rooftop Unit "Product of the Year"

June
National Society of Professional Engineers awards RQ
Series High Eﬃciency Rooftop Unit "Product of the Year"

July
July
Geothermal RQ Series wins Silver in ACHR
Geothermal RQ Series wins Silver in ACHR
News Dealer Design Competition
News Dealer Design Competition

November
November
Introduction of light
Introduction of light
commercial/residential
commercial/residential
product lines.
product lines.

August
AAON received U.S. Patent
for Plenum Fan Banding.

April
AAON introduces factory engineered
and assembled packaged mechanical
room, which includes a boilerand all
piping and pumping accessories.
June
Initiation of a semi-annual cash
dividend for AAON shareholders.

October
AAON rings opening bell at NASDAQ

AAON voted “Most Valuble Product”
AAON voted “Most Valuble Product”
and “Product of the Year” by
and “Product of the Year” by
Consulting-Specifying
Consulting-Specifying
Engineer Magazine
Engineer Magazine

AAON listed in Forbes’ 200 Best
AAON listed in Forbes’ 200 Best
Small Companies
Small Companies

July
July
AAONproducts
AAONproducts
recieve Dealer
recieve Dealer
Design Awards
Design Awards
from ACHR News
from ACHR News

October
AAON listed in
Forbes’ 200
Best Small
Companies

11’
11’

October
Consulting-Specifying Engineer magazine awards
Geothermal RQ Series Product of the Year - Silver

October
Consulting-Specifying Engineer magazine awards
Geothermal RQ Series Product of the Year - Silver
July
July
Single Zone VAV rooftop units win Honorable
Single Zone VAV rooftop units win Honorable
Mention in ACHR News Dealer Design Competition
Mention in ACHR News Dealer Design Competition

October
October
RN series rooftop unit names 2010 Product of the Year
RN series rooftop unit names 2010 Product of the Year
– Silver by Consulting
– Silver by Consulting
– Specifying Engineer Magazine
– Specifying Engineer Magazine
LC series chiller product named 2010 Product of the year
LC series chiller product named 2010 Product of the year
– Bronze by Consulting
– Bronze by Consulting
– Specifying Engineer Magazine
– Specifying Engineer Magazine

2011“As our most valuable
asset, we strive to
retain and motivate
employees in a
manner consistent
with shareholder
interests. An initial
step in this process
is to share the
profitability of
the Company with
all employees. Over
the years we have
distributed 10% of pre-
tax profits equally to
all personnel at each
operating subsidiary,
so as to provide an
immediate reward
for maintaining
the subsidiary’s
profitability”

Year – Silver in the HVACR category by the readers of Consulting-Specifying

Engineer. This award adds to the Company’s previous Product of the Year

successes including the RN series rooftop unit – 2010 Silver award winner,

the LC series chiller – 2010 Bronze winner and the 2008 announcement that

its rooftop product with Digital Precise Air Control (D-PAC) had been voted

Product of the Year-Gold in the HVAC category as well as Most Valuable

Product for the overall competition.

SALeS RepReSeNtAtiVe peRFORMANCe

Our sales representative network with 93 representatives operates 108

offices (some representatives have multiple offices) in all 50 states and

Canada. This network contributed over 95% of our total sales in 2011 and

performed exceptionally well during a most difficult economic environment.

End markets such as education, healthcare, government, municipal and the

military experienced good growth while there was continued weakness in

the commercial, manufacturing and retail sectors. In the past year, softness

in the economic environment impacted new construction demand, which

accounted for 45% of our business, while our replacement business (55% of

sales) encountered good growth, aided by the Tax Relief, Job Creation Act of

2010. We took some important steps to improve our representative network

in the past year by replacing some underperforming sales representative

offices in major markets while encouraging the addition of personnel to

other offices. Furthermore, we implemented extensive training for our sales

representatives so that they could better communicate the features and

benefits of AAON equipment. While this additional training was somewhat

costly, we believe the benefits of this endeavor were apparent in 2011 and

will continue to be realized this year and beyond. The success of our product

line diversification, along with our growing share of market, can be directly

attributed to the efforts of our sales representatives. We want to once again

commend them for their exceptional efforts during a most trying economic

and operating environment. We believe they will continue to significantly aid

the Company’s future growth.

OuR eMpLOyeeS

As our most valuable asset, we strive to retain and motivate employees in a

manner consistent with shareholder interests. An initial step in this process is

to share the profitability of the Company with all employees. Over the years

we have distributed 10% of pre-tax profits equally to all personnel at each

operating subsidiary, so as to provide an immediate reward for maintaining

A n n u A l R e p o R t

the subsidiary’s profitability. Effective January 1, 2012, we changed

Grandfathered Plan, with benefits similar to our existing plan, for

the structure of this incentive to be calculated at the consolidated

the 2011-2012 plan year.

level so that all employees who have worked during the quarter, and

remain employed until the end of the following quarter, will receive

We view our employees as a long-term investment in skills, talent

the same Profit Sharing payment from the Company. This change

and knowledge. We believe that our approach to personnel benefits

will emphasize the common focus upon corporate profitability.

increases shareholder value by creating an ownership perspective

while helping our employees meet their financial, health and

To encourage a longer-term focus, we maintain a 401(k) plan under

development goals.

which employees own nearly 4% of the Company’s outstanding

stock. This plan, which allows employees to benefit, along with

OutLOOk

other shareholders, from share appreciation, is now the fifth largest

Our vision for future growth is clear. We remain firmly committed

shareholder of the Company. In 2011, to ensure some level of AAON

to produce the most technologically innovative, energy efficient

stock ownership by all employees, we contributed an amount equal

products which create significant cost savings for our customers.

to 1.5% of each employee’s pre-tax earnings to the 401(k) plan,

We will continue to commit the necessary capital and manpower

in addition to the Company’s matching contribution (50% of all

to reach these goals. We believe that our strong financial condition

employee contributions to the plan up to 9% of compensation),

will enable us to achieve these objectives and remain debt free.

even if the employee chose to make no contribution of his or her

own. All Company contributions are used to purchase Company

I would like to take this opportunity to particularly commend

stock on the open market, whereas no employee contributions are

our Tulsa workforce which labored under extraordinarily severe

allowed to be invested in Company stock. Shares of AAON stock

temperature working conditions for a number of months in order

are later sold to the Company and retired if participants diversify

to return the Tulsa operations to its normal manufacturing level

their holdings, as they are permitted to do immediately, or if they

following the February snowstorms roof damage. Furthermore,

leave the plan. The 401(k) program encourages employee longevity

we are appreciative of the continuing support and confidence of

through a six-year benefit vesting structure.

our customers, sales representatives and shareholders as well as

the cooperation and loyalty of all of our employees, whose names

We are in our fourth year of offering a high-deductible health

appear at the end of this report. I believe AAON has embarked on

plan along with contributions to health savings accounts, wellness

a path of significant growth in sales and profitability in the current

incentives and on-site clinics that are focused on preventative care.

year and beyond.

Total plan and employee costs for the first four months of the 2011-

2012 plan year are the lowest, on an annualized per employee per

Sincerely,

month basis, in seven years and the 2010-2011 plan year had lower

total costs than the year before. We believe that giving employees

direct control over their healthcare dollars has made our employees

more conscious of their health and medical costs while keeping

Norman H. Asbjornson

expenses competitive for our employees, the Company and its

shareholders. Due to the uncertainty surrounding health care

President & CEO

March 23, 2012

reform legislation, we have maintained a plan with Grandfathered

Status for the 2011-2012 plan year. To regain some flexibility,

however, we began enrolling all newly eligible employees in a Non-

2011UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

[X]
For the fiscal year ended December 31, 2011

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

[_]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________________________ to _____________________________

Commission file number: 0-18953

AAON, INC.
(Exact name of registrant as specified in its charter)

Nevada
(State or other jurisdiction
of incorporation or organization)

2425 South Yukon, Tulsa, Oklahoma
(Address of principal executive offices)

87-0448736
(IRS Employer
Identification No.)

74107
(Zip Code)

Registrant’s telephone number, including area code: (918) 583-2266

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $.004
(Title of Class)
Rights to Purchase Series A Preferred Stock
(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

[_] Yes [X] No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

[_] Yes [X] No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site,
if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained

herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

[X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer

or a smaller reporting company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

[X] Yes [_] No

Large accelerated filer [_]
Non-accelerated filer [_]

Accelerated filer [X]
Smaller reporting company [_]

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act.)

[_] Yes [X] No

The aggregate market value of the common equity held by non-affiliates computed by reference to the closing price of
registrant’s common stock on the last business day of registrant’s most recently completed second quarter (June 30, 2011)
was $404.5 million.

As of February 29, 2012, registrant had outstanding a total of 24,574,058 shares of its $.004 par value Common Stock.

Portions of registrant’s definitive Proxy Statement to be filed in connection with the Annual Meeting of Stockholders

DOCUMENTS INCORPORATED BY REFERENCE

to be held May 15, 2012, are incorporated into Part III.

tABLe OF CONteNtS

iteM NuMBeR ANd CAptiON

pAge NuMBeR

pARt i

1. Business.

1A. Risk Factors.

1B. Unresolved Staff Comments.

2. Properties.

3. Legal Proceedings.

4. Mine Safety Disclosure.

pARt ii

5. Market for Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities.

6. Selected Financial Data.

7. Management’s Discussion and Analysis of Financial Condition
and Results of Operations.

7A. Quantitative and Qualitative Disclosures About Market Risk.

8. Financial Statements and Supplementary Data.

9. Changes in and Disagreements with Accountants on

Accounting and Financial Disclosure.

9A. Controls and Procedures.

9B. Other Information.

pARt iii

10. Directors, Executive Officers and Corporate Governance.

11. Executive Compensation.

12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters.

13. Certain Relationships and Related Transactions.

14. Principal Accountant Fees and Services.

pARt iV

15. Exhibits and Financial Statement Schedules.

FORwARd-LOOkiNg StAteMeNtS

This Annual Report includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words
such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “should”, “will”, and variations of such words and similar
expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve
certain risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from
what is expressed or forecasted in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date on which they are made. We undertake no obligations to update publicly any forward-looking
statements, whether as a result of new information, future events or otherwise. Important factors that could cause results to differ materially
from those in the forward-looking statements include (1) the timing and extent of changes in raw material and component prices, (2) the effects
of fluctuations in the commercial/industrial new construction market, (3) the timing and extent of changes in interest rates, as well as other
competitive factors during the year, and (4) general economic, market or business conditions.

pARt 1

iteM 1. BuSiNeSS.

geNeRAL deVeLOpMeNt ANd deSCRiptiON OF BuSiNeSS

AAON, Inc., a Nevada corporation, was incorporated on August 18, 1987. We have two operating subsidiaries, AAON, Inc., an Oklahoma
corporation and AAON Coil Products, Inc., a Texas corporation. Unless the context otherwise requires, references in this Annual Report to
“AAON,” the “Company”, “we”, “us”, “our”, or “ours” refer to AAON, Inc., and our subsidiaries.

We are engaged in the manufacture and sale of air-conditioning and heating equipment. Our products consist of rooftop units, chillers, air-
handling units, make-up air units, heat recovery units, condensing units, commercial self contained units and coils.

pROduCtS ANd MARketS

Our products serve the commercial and industrial new construction and replacement markets. To date, our sales have been primarily to the
domestic market. Foreign sales accounted for approximately 5% of our sales in 2011.

Our rooftop and condenser markets consist of units installed on commercial or industrial structures of generally less than 10 stories in height.
Our air-handling units, commercial self-contained units, chillers, and coils are applicable to all sizes of commercial and industrial buildings.

The size of these markets is determined primarily by the number of commercial and industrial building completions. The replacement market
consists of products installed to replace existing units/components that are worn or damaged. Historically, approximately half of the industry’s
market has consisted of replacement units.

The commercial and industrial new construction market is subject to cyclical fluctuations in that it is generally tied to housing starts, but has a lag
factor of 6-18 months. Housing starts, in turn, are affected by such factors as interest rates, the state of the economy, population growth and the
relative age of the population. When new construction is down, we emphasize the replacement market.

Based on our 2011 level of sales of $266 million, we estimate that we have approximately a 14% plus share of the rooftop market and a 1% share
of the coil market. Approximately 55% of our sales were generated from the sale to the renovation and replacement markets and 45% from
new construction. The percentage of sales for new construction vs. replacement to particular customers is related to the customer’s stage of
development.

We purchase certain components, fabricate sheet metal and tubing and then assemble and test the finished products. Our primary finished
products consist of a single unit system containing heating, cooling and/or heat recovery components in a self-contained cabinet, referred to in
the industry as “unitary” products. Our other finished products are chillers, coils, air-handling units, condensing units, make-up air units, heat
recovery units and commercial self-contained units.

We offer four groups of rooftop units. The RQ Series consisting of six cooling sizes ranging from one to six tons; the RN Series offered in 18
cooling sizes ranging from six to 70 tons, and an expansion of the RN series will be introduced in 2012 that will increase the cooling range up to

A n n u A l R e p o R t

140 tons and the number of cooling sizes from 18 to 26. The RL Series, which is offered in 15 cooling sizes ranging from 40 to 230 tons; and the
HA Series, which is a horizontal discharge package for either rooftop or ground installation offered in eight sizes ranging from seven and one-half
to 50 tons. We also offer the SA and SB models as an indoor package water cooled units with cooling capacities of 2 to 70 tons.

We manufacture a Model LC Chiller, air cooled, and a Model LL chiller, which is available in both air-cooled condensing and evaporative cooled
configurations covering a range of 3 to 540 tons.

Our air-handling units consist of the F1 and H3/V3 Series and the modular (M2 and M3) Series as well as air handling unit versions of the RN,
RL and SA units.

Our heat recovery option applicable to our RQ, RN and RL units, as well as our M2 and M3 Series air handlers, respond to the U.S. Clean Air
Act mandate to increase fresh air in commercial structures. Our products are designed to compete on the higher quality end of standardized
products.

Performance characteristics of our products range in cooling capacity from 1½ to 540 tons and in heating capacity from 69,000 - 9,000,000 BTU’s.
All of our products meet the Department of Energy’s minimum efficiency standards, which define the maximum amount of energy to be used
in producing a given amount of cooling. Many of our units far exceed these minimum standards and are among the highest efficiency units
currently available.

A typical commercial building installation requires a ton of air-conditioning for every 300-400 square feet or, for a 100,000 square foot building,
250 tons of air-conditioning, which can involve multiple units

MAjOR CuStOMeRS

No customer accounted for 10% of our sales during 2011, 2010 or 2009.

SOuRCeS ANd AVAiLABiLity OF RAw MAteRiALS

The most important materials we purchase are steel, copper and aluminum, which are obtained from domestic suppliers. We also purchase from
other domestic manufacturers certain components, including compressors, electric motors and electrical controls used in our products. We
attempt to obtain the lowest possible cost in our purchases of raw materials and components, consistent with meeting specified quality standards.
We are not dependent upon any one source for raw materials or the major components of our manufactured products. By having multiple
suppliers, we believe that we will have adequate sources of supplies to meet our manufacturing requirements for the foreseeable future.

We attempt to limit the impact of increases in raw materials and purchased component prices on our profit margins by negotiating with each of
our major suppliers on a term basis from six months to one year.

diStRiButiON

We employ a sales staff of 20 individuals and utilize approximately 93 independent manufacturer representatives’ (“Representatives”)
organizations having 108 offices to market our products in the United States and Canada. We also have one international sales organization,
which utilizes 12 distributors in other countries. Sales are made directly to the contractor or end user, with shipments being made from our
Tulsa, Oklahoma and Longview, Texas plants to the job site.

Our products and sales strategy focus on niche markets. The targeted markets for our equipment are customers seeking products of better quality
than offered, and/or options not offered, by standardized manufacturers.

To support and service our customers and the ultimate consumer, we provide parts availability through our sales offices and have factory service
organizations at each of our plants. Also, a number of the manufacturer representatives we utilize have their own service organizations, which, in
connection with us, provide the necessary warranty work and/or normal service to customers.

Our product warranty policy is: the earlier of one year from the date of first use or 18 months from date of shipment for parts only; an additional
four years for compressors (if applicable); 15 years on aluminized steel gas-fired heat exchangers (if applicable); 25 years on stainless steel heat
exchangers (if applicable); and 10 years on gas-fired heat exchangers in RL products (if applicable). With the introduction of the RQ product line
in 2010, our warranty policy for the RQ series was implemented to cover parts for two years from date of unit shipment and labor for one year
from date of unit shipment.

2011ReSeARCH ANd deVeLOpMeNt

The ability to successfully bring new products to market that meet new energy efficiency standards, environmental regulations, and are
engineered for performance, flexibility, and serviceability in a timely manner has rapidly become a critical factor in competing in the heating,
ventilation and air conditioning (“HVAC”) equipment industry. We must continually develop new and improved products in order to compete
effectively and to meet evolving regulatory standards in all of our major product lines.

All of our R&D activities are self-sponsored, rather than customer-sponsored. R&D has involved the RQ, RN and RL (rooftop units), F1, H/V,
M2 and M3 (air handlers), LC and LL (chillers), CB and CC (condensing units), SA (commercial self-contained units) and BL (boilers), as well as
component evaluation and refinement, development of control systems and new product development. We incurred research and development
expenses of approximately $4.8 million, $3.6 million and $3.1 million in 2011, 2010 and 2009, respectively.

BACkLOg

Our current backlog as of March 1, 2012 was approximately $55.3 million compared to approximately $37.9 million as of March 1, 2011. The
current backlog consists of orders considered by management to be firm and generally are filled on average within approximately 60 days to 92
days after an order is deemed to become firm; however, the orders are subject to cancellation by the customers.

wORkiNg CApitAL pRACtiCeS

Working capital practices in the industry center on inventories and accounts receivable. Our management regularly reviews our working capital
with a view of maintaining the lowest level consistent with requirements of anticipated levels of operation. Our greatest needs arise during
the months of July - November, the peak season for inventory (primarily purchased material) and accounts receivable. Our working capital
requirements are generally met by cash flow from operations and a bank revolving credit facility, which currently permits borrowings up to $30
million. We believe that we will have sufficient funds available to meet our working capital needs for the foreseeable future. We expect to renew
our revolving credit agreement in July 2012.

SeASONALity

Sales of our products are moderately seasonal with the peak period being July - November of each year.

COMpetitiON

In the standardized market, we compete primarily with Lennox International, Inc., Ingersoll Rand Limited, Johnson Controls Inc. and United
Technologies Corporation. All of these competitors are substantially larger and have greater resources than we do. In the custom market,
we compete with many larger and smaller manufacturers. Our products compete on the basis of total value, quality, function, serviceability,
efficiency, availability of product, product line recognition and acceptability of sales outlet. However, in new construction where the contractor
is the purchasing decision maker, we are often at a competitive disadvantage because of the emphasis placed on initial cost. In the replacement
market and other owner-controlled purchases, we have a better chance of getting the business since quality and long-term cost are generally taken
into account.

eMpLOyeeS

As of March 1, 2012, we employed approximately 1,491 permanent employees and 15 temporary employees. Our employees are not currently
represented by unions. Management considers relations with our employees to be good.

A n n u A l R e p o R t

pAteNtS, tRAdeMARkS, LiCeNSeS ANd CONCeSSiONS

We do not consider any patents, trademarks, licenses or concessions to be material to our business operations, other than patents issued
regarding our heat recovery wheel option, blower, gas-fired heat exchanger and evaporative condenser desuperheater which have terms of twenty
years with expiration dates ranging from 2016 to 2022.

eNViRONMeNtAL MAtteRS

Laws concerning the environment that affect or could affect our domestic operations include, among others, the Clean Water Act, the Clean
Air Act, the Resource Conservation and Recovery Act, the Occupational Safety and Health Act, the National Environmental Policy Act, the
Toxic Substances Control Act, regulations promulgated under these Acts, and any other federal, state or local laws or regulations governing
environmental matters. We believe that we are in compliance with these laws and that future compliance will not materially affect our earnings or
competitive position.

AVAiLABLe iNFORMAtiON

Our Internet website address is http://www.aaon.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934 will be available
through our Internet website as soon as reasonably practical after we electronically file such material with, or furnish it to, the SEC.

iteM 1A. RiSk FACtORS.

The following risks and uncertainties may affect our performance and results of operations.

OuR BuSiNeSS HAS BeeN HuRt By tHe CuRReNt eCONOMiC dOwNtuRN.

Our business is affected by a number of economic factors, including the level of economic activity in the markets in which we operate. The state
of the United States economy has negatively impacted the commercial and industrial new construction markets. The current decline in economic
activity in the United States could materially affect our financial condition and results of operations. Sales in the commercial and industrial
new construction markets correlate closely to the number of new homes and buildings that are built, which in turn is influenced by cyclical
factors such as interest rates, inflation, consumer spending habits, employment rates and other macroeconomic factors over which we have no
control. In the heating, ventilation, and air conditioning (“HVAC”) business, a decline in economic activity as a result of these cyclical or other
factors typically results in a decline in new construction and replacement purchases, which has resulted in a decrease in our sales volume and
profitability

we MAy Be AdVeRSeLy AFFeCted By pROBLeMS iN tHe AVAiLABiLity, OR iNCReASeS iN tHe pRiCeS,
OF RAw MAteRiALS ANd COMpONeNtS.

Problems in the availability, or increases in the prices, of raw materials or components could depress our sales or increase the costs of our
products. We are dependent upon components purchased from third parties, as well as raw materials such as steel, copper and aluminum. We
enter into cancelable and noncancelable contracts on terms from six months to one year for raw materials and components at fixed prices.
However, if a key supplier is unable or unwilling to meet our supply requirements, we could experience supply interruptions or cost increases,
either of which could have an adverse effect on our gross profit.

we RiSk HAViNg LOSSeS ReSuLtiNg FROM tHe uSe OF NON-CANCeLABLe Fixed pRiCe CONtRACtS

Historically, we attempted to limit the impact of price fluctuations on commodities by entering into non-cancelable fixed price contracts with
our major suppliers for periods of 6 - 18 months. We expect to receive delivery of raw materials from our fixed price contracts for use in our
manufacturing operations. These fixed price contracts are not accounted for as derivative instruments since they meet the normal purchases and
sales exemption.

2011we MAy NOt Be ABLe tO SuCCeSSFuLLy deVeLOp ANd MARket New pROduCtS.

Our future success will depend upon our continued investment in research and new product development and our ability to continue to realize
new technological advances in the HVAC industry. Our inability to continue to successfully develop and market new products or our inability
to achieve technological advances on a pace consistent with that of our competitors could lead to a material adverse effect on our business and
results of operations.

we MAy iNCuR MAteRiAL COStS AS A ReSuLt OF wARRANty ANd pROduCt LiABiLity CLAiMS
tHAt wOuLd NegAtiVeLy AFFeCt OuR pROFitABiLity.

The development, manufacture, sale and use of our products involve a risk of warranty and product liability claims. Our product liability
insurance policies have limits that, if exceeded, may result in material costs that would have an adverse effect on our future profitability. In
addition, warranty claims are not covered by our product liability insurance and there may be types of product liability claims that are also not
covered by our product liability insurance.

we MAy NOt Be ABLe tO COMpete FAVORABLy iN tHe HigHLy COMpetitiVe HVAC BuSiNeSS.

Competition in our various markets could cause us to reduce our prices or lose market share, or could negatively affect our cash flow, which
could have an adverse effect on our future financial results. Substantially all of the markets in which we participate are highly competitive. The
most significant competitive factors we face are product reliability, product performance, service and price, with the relative importance of these
factors varying among our product line. Other factors that affect competition in the HVAC market include the development and application of
new technologies and an increasing emphasis on the development of more efficient HVAC products. Moreover, new product introductions are an
important factor in the market categories in which our products compete. Several of our competitors have greater financial and other resources
than we have, allowing them to invest in more extensive research and development. We may not be able to compete successfully against current
and future competition and current and future competitive pressures faced by us may materially adversely affect our business and results of
operations.

tHe LOSS OF NORMAN H. ASBjORNSON COuLd iMpAiR tHe gROwtH OF OuR BuSiNeSS.

Norman H. Asbjornson, our founder, has served as our President and Chief Executive Officer from inception to date. He has provided the
leadership and vision for our growth. Although important responsibilities and functions have been delegated to other highly experienced and
capable management personnel, our products are technologically advanced and well positioned for sales into the future and we carry key man
insurance on Mr. Asbjornson, his death, disability or retirement could impair the growth of our business. We do not have an employment
agreement with Mr. Asbjornson

OuR StOCkHOLdeR RigHtS pLAN ANd SOMe pROViSiONS iN OuR ByLAwS ANd NeVAdA LAw
COuLd deLAy OR pReVeNt A CHANge iN CONtROL.

Our stockholder rights plan and some provisions in our bylaws and Nevada law could delay or prevent a change in control, which could adversely
affect the price of our common stock.

OuR BuSiNeSS iS SuBjeCt tO tHe RiSkS OF iNteRRuptiONS By pROBLeMS SuCH AS COMputeR
ViRuSeS.

Despite our implementation of network security measures, our services are vulnerable to computer viruses, break-ins and similar disruptions
from unauthorized tampering with our computer systems. Any such event could have a material adverse affect on our business.

expOSuRe tO eNViRONMeNtAL LiABiLitieS COuLd AdVeRSeLy AFFeCt OuR ReSuLtS OF
OpeRAtiONS.

Our future profitability could be adversely affected by current or future environmental laws. We are subject to extensive and changing federal,
state and local laws and regulations designed to protect the environment in the United States and in other parts of the world. These laws and
regulations could impose liability for remediation costs and result in civil or criminal penalties in case of non-compliance. Compliance with
environmental laws increases our costs of doing business. Because these laws are subject to frequent change, we are unable to predict the future
costs resulting from environmental compliance.

A n n u A l R e p o R t

extReMe gOVeRNMeNtAL ReguLAtiONS.

We always face the possibility of new governmental regulations which could have a substantial or even extreme negative effect on our operations
and profitability. Specifically, Final Rule, Regulatory Identification No. 1904-AC23, published on March 7, 2011, which, if fully implemented
subsequent to the current suspense date of January 1, 2013, would have highly detrimental consequences to all industries involving sales of
energy using products by imposing burdensome, excessive and, in part, impossible testing requirements.

we ARe SuBjeCt tO AdVeRSe CHANgeS iN tAx LAwS.

Our tax expense or benefits could be adversely affected by changes in tax provisions, unfavorable findings in tax examinations or differing
interpretations by tax authorities. We are unable to estimate the impact that current and future tax proposals and tax laws could have on our
results of operations. We are currently under review by the IRS for tax years 2008 and 2009 and three state sales tax audits for which we do not
expect any major assessments.

iteM 1B. uNReSOLVed StAFF COMMeNtS.

None.

iteM 2. pROpeRtieS.

As of December 31, 2011, we own approximately 1.5 million square feet of space for office, manufacturing, warehouse and assembly operations in
Tulsa, Oklahoma and Longview, Texas. We believe that our facilities are well maintained and are in good condition and suitable for the conduct
of our business.

Our plant and office facilities in Tulsa, Oklahoma, consist of a 342,000 sq. ft. building (327,000 sq. ft. of manufacturing/warehouse space
and 15,000 sq. ft. of office space) located on a 12-acre tract of land at 2425 South Yukon Avenue (the “original facility”), and a 861,000 sq. ft.
manufacturing/warehouse building and a 54,000 sq. ft. office building (the “expansion facility”) located on a 40-acre tract of land across the street
from the original facility (2440 South Yukon Avenue). We own the original facility and the expansion facility. Both plants are of sheet metal
construction.

Our manufacturing area is in heavy industrial type buildings, with total coverage by bridge cranes, containing manufacturing equipment
designed for sheet metal fabrication and metal stamping. The manufacturing equipment contained in the facilities consists primarily of
automated sheet metal fabrication equipment, supplemented by presses. Assembly lines consist of seven cart-type conveyor lines with variable
line speed adjustment, which are motor driven. Subassembly areas and production line manning are based upon line speed.

Our operations in Longview, Texas, are conducted in a plant/office building at 203-207 Gum Springs Road, containing 258,000 sq. ft. on 14
acres. The manufacturing area (approximately 251,000 sq. ft.) is located in three 120-foot wide sheet metal buildings connected by an adjoining
structure. The remaining 7,000 square feet are utilized as office space. The facility is built for light industrial manufacturing. An additional,
contiguous 15 acres were purchased in 2004 and 2005 for future expansion. We own both the existing plant/office building, and the 15 acres
designated for future expansion.

iteM 3. LegAL pROCeediNgS.

We are not a party to any pending legal proceeding which management believes is likely to result in a material liability and no such action is
contemplated by or, to the best of our knowledge, has been threatened against us.

iteM 4. MiNe SAFety diSCLOSuRe.

Not applicable.

2011pARt 2

iteM 5. MARket FOR RegiStRANt’S COMMON eQuity, ReLAted StOCkHOLdeR
MAtteRS ANd iSSueR puRCHASeS OF eQuity SeCuRitieS.

Our common stock is quoted on the NASDAQ Global Select Market under the symbol “AAON”. The table below summarizes the high and low
reported sale prices for our common stock for the past two fiscal years. As of the close of business on February 29, 2012, there were 1,006 holders
of record, and approximately 4,321 beneficial owners, of our common stock.

QuARteR eNded

HigH

LOw

March 31, 2010

June 30, 2010

September 30, 2010

December 31, 2010

March 31, 2011

June 30, 2011

September 30, 2011

December 31, 2011

15.37

16.84

17.42

19.76

21.98

23.44

24.23

22.98

12.43

14.33

13.39

15.27

17.51

20.07

14.91

14.64

At the discretion of the Board of Directors we pay semi-annual cash dividends. Board approval is required to determine the date of declaration
and amount for each semi-annual dividend payment. The Board of Directors approved dividend payments of $0.12 per share related to the 3-for-
2 stock split effective June 13, 2011.

During 2011 we declared dividends to shareholders of record at the close of business on June 10, 2011 and December 1, 2011 which were paid on
July 1, 2011 and December 22, 2011, respectively. We paid cash dividends of $5.9 million and $9.2 million in 2011 and 2010, respectively.

On November 6, 2007, our Board of Directors authorized a stock buyback program, targeting repurchases of up to approximately 10% (2.7
million shares) of our outstanding stock from time to time in open market transactions. On May 12, 2010, we completed the stock buyback
program. Through May 12, 2010, we repurchased a total of 2.7 million shares under this program for an aggregate price of $36.1 million, or an
average price of $13.36 per share. We purchased the shares at current market prices.

On May 17, 2010, the Board authorized a new stock buyback program, targeting repurchases of up to approximately 5% (1.3 million shares) of
our outstanding stock from time to time in open market transactions. Through June 28, 2010, we repurchased a total of approximately 0.718
million shares under this program for an aggregate price of $11.5 million, or an average price of $16.04 per share. We purchased the shares at
current market prices. We did not repurchase any of our equity securities during 2011.

On July 1, 2005, we entered into a stock repurchase arrangement by which employee-participants in our 401(k) savings and investment plan
are entitled to have shares of AAON stock in their accounts sold to us to provide diversification of their investments. The maximum number of
shares to be repurchased is contingent upon the number of shares sold by employees. Through December 31, 2011, we repurchased approximately
1.7 million shares for an aggregate price of $21.5 million, or an average price of $12.71 per share. We purchased the shares at current market
prices.

A n n u A l R e p o R t

On November 7, 2006, the Board of Directors authorized us to repurchase shares from certain directors and officers following their exercise of
stock options. The maximum number of shares to be repurchased is contingent upon the number of shares sold. Through December 31, 2011,
we repurchased approximately 0.580 million shares for an aggregate price of $8.1 million, or an average price of $13.98 per share. We purchased
the shares at current market prices.

Repurchases during the fourth quarter of 2011 were as follows:

iSSueR puRCHASeS OF eQuity SeCuRitieS

period

(a)
total Number of
Shares (or units)
purchased

(b)
Average price
paid per Share
(or unit)

(d)
Maximum Number
(or Approximate
dollar Value) of
Shares (or units)
that May yet Be
purchased under the
plans or programs

October 2011

November 2011

December 2011

Total

15,549

13,852

20,118

49,519

$18.64

$21.15

$21.09

$20.34

15,549

13,852

20,118

49,519

2011COMpARAtiVe StOCk peRFORMANCe gRApH

The following performance graph compares our cumulative total shareholder return, the NASDAQ Composite and a peer group of U.S. industrial
manufacturing companies in the air conditioning, ventilation, and heating exchange equipment markets from December 31, 2006 through
December 31, 2011. The graph assumes that $100 was invested at the close of trading December 31, 2006, with reinvestment of dividends. Our
peer group includes Lennox International, Inc., Ingersoll Rand Limited, Johnson Controls Inc., and United Technologies Corporation. This table
is not intended to forecast future performance of our Common Stock.

COMpuLSiON OF 5 yeAR CuMuLAtiVe tOtAL RetuRN
ASSuMeS iNitiAL iNVeStMeNt OF $100
deCeMBeR 2011

200.00

180.00

160.00

140.00

120.00

100.00

80.00

60.00

40.00

20.00

0.00

2006

2007

2008

2009

2010

2011

AAON INC.

S&P 500 Index - Total Returns

Peer Group

This stock performance Graph is not deemed to be “soliciting material” or otherwise be considered to be “filed” with the SEC or subject to Regulation 14A or 14C under
the Securities Exchange Act of 1934 (Exchange Act) or to the liabilities of Section 18 of the Exchange Act, and should not be deemed to be incorporated by reference into
any filing under the Securities Act of 1933 or the Exchange Act, except to the extent the Company specifically incorporates it by reference into such a filing.

A n n u A l R e p o R t

iteM 6. SeLeCted FiNANCiAL dAtA.

The following selected financial data should be read in conjunction with our Consolidated Financial Statements and Notes thereto included
under Item 8 of this report and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Item 7.

Results of Operations:

2011

2010

2009

2008

2007

yeARS eNded deCeMBeR 31,

Net sales

Net income

Earnings per share*:

Basic

Diluted

Dividends per share*

Weighted average shares outstanding:

Basic*

Diluted*

(in thousands, except per share data)

266,220 $

244,552 $

245,282 $

279,725 $

262,517

13,986 $

21,894 $

27,721 $

28,589 $

23,156

0.57 $

0.56 $

0.24 $

0.87 $

0.24 $

1.07 $

0.24 $

1.09 $

1.07 $

0.21 $

0.83

0.81

0.21

24,690

24,881

25,198

25,339

25,780

25,963

26,340

26,782

27,942

28,391

deCeMBeR 31,

Financial position at end of Fiscal year:

2011

2010

2009

2008

2007

Working capital

Total assets

Long-term and current debt

Total stockholders’ equity

(in thousands)

45,700 $

55,502 $

65,354 $

40,600 $

38,788

178,981 $

160,277 $

156,211 $

140,743 $

137,140

4,575

- $

76 $

3,113 $

330

122,504 $

116,739 $

117,999 $

96,522 $

95,420

* All share and per share amounts reflect a three-for-two stock split effective June 13, 2011.

iteM 7. MANAgeMeNt’S diSCuSSiON ANd ANALySiS OF FiNANCiAL CONditiON
ANd ReSuLtS OF OpeRAtiONS.

OVeRView

We engineer, manufacture and market air-conditioning and heating equipment consisting of rooftop units, chillers, air-handling units, make-
up air units, heat recovery units, condensing units, commercial self-contained units and coils. These products are marketed and sold to retail,
manufacturing, educational, medical and other commercial industries. We market our products to all 50 states in the United States and certain
provinces in Canada. Foreign sales were approximately 5% of our 2011 sales.

Our business can be affected by a number of economic factors, including the level of economic activity in the markets in which we operate. The
recent state of the economy has negatively impacted the commercial and industrial new construction markets. A further decline in economic
activity could result in a decrease in our sales volume and profitability. Sales in the commercial and industrial new construction markets correlate
closely to the number of new homes and buildings that are built, which in turn is influenced by cyclical factors such as interest rates, inflation,
consumer spending habits, employment rates and other macroeconomic factors over which we have no control.

2011
We sell our products to property owners and contractors through a network of manufacturers representatives and our internal sales force.
The demand for our products is influenced by national and regional economic and demographic factors. The commercial and industrial new
construction market is subject to cyclical fluctuations in that it is generally tied to housing starts, but has a lag factor of 6-18 months. Housing starts,
in turn, are affected by such factors as interest rates, the state of the economy, population growth and the relative age of the population. When new
construction is down, we emphasize the replacement market.

The principal components of cost of goods sold are labor, raw materials, component costs, factory overhead, freight and engineering expense.
The principal high volume raw materials used in our manufacturing processes are steel, copper and aluminum and are obtained from domestic
suppliers. We also purchase from domestic manufacturers certain components, including compressors, motors and electrical controls. The raw
materials market has been volatile during 2011 and 2010 due to the economic environment and uncertainty in the financial markets. For the year
ended December 31, 2011 prices for copper and steel increased approximately 3% and 10%, respectively from prior year, while the cost of aluminum
decreased approximately 2%. For the year ended December 31, 2010 the cost of copper, steel, and aluminum increased approximately 88.7% and
11.5%, and 66.7% from 2009.

We attempt to limit the impact of price fluctuations of the raw materials used in our manufacturing processes by entering into cancelable and
non-cancelable fixed price contracts with our major suppliers for periods of approximately 6 - 18 months. In addition, from time to time we use
derivative contracts to partially mitigate the volatility in the prices for some of these commodities.

The following are key highlights and events that impacted our results of operations, cash flows, and financial condition in 2011:

• Net sales for 2011 were $266 million, the second highest in the Company’s history in the last 10 years, compared to $245 million in 2010. The
increase in net sales was a direct result of the increase in market acceptance of products released during the year and the signing into law of the
Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act on December 31, 2010 which provided 100 percent tax depreciation
bonus on qualified capital investments put in service through December 31, 2011 which prompted our customers to benefit and take advantage
of this provision of the law.

• We estimate that we have captured approximately 14% plus share of the rooftop market and a 1% share of the coil market. Approximately 55% of

our sales were generated from the sale to the renovation and replacement markets and 45% from new construction markets.

• Income from operations was $22.2 million compared to $32.7 million in 2010. The decline in operational income was primarily due to lower
gross margins caused by increases in raw materials and component costs and lost production for 8.5 days that resulted from the collapse of the
roof for one of our manufacturing facilities.

• Net income for 2011 was $13.9 million down by $7.9 million compared to $21.9 million in 2010. The decrease was the result of higher commodity
and purchase parts prices and our inability to fully pass on the additional costs to our customers as a result of tight market conditions and fierce
competition.

• We paid $35.9 million in capital expenditures. A loss of approximately $1.8 million was incurred from the trade-in of production equipment that
was replaced with new state of the art equipment that combines the latest advancement in automation and laser technology as a result of our
strategic vision to improve current manufacturing efficiencies.

• We paid cash dividends of $5.9 million, and announced a 3-for-2 stock split effective on June 13, 2011.

ReSuLtS OF OpeRAtiONS
The following is a summary of the income statement information as a percentage of net sales:

A n n u A l R e p o R t

yeARS eNdiNg deCeMBeR 31,

2011

2010

(in thousands)

2009

266,220

100.0%

244,552

100.0%

245,282

100.0%

219,939

46,281

22,310

1,802

22,169

(277)

(477)

21,513

7,527

82.6%

17.4%

8.4%

0.7%

8.3%

(0.1)%

0.04%

(0.2%)

8.1%

2.8%

189,364

55,188

77.4%

22.6%

177,737

67,545

72.5%

27.5%

22,546

9.2%

23,850

9.7%

(73)

(0.03)%

(59)

(0.02)%

32,715

13.4%

43,754

(45)

258

(0.02)%

0.10%

(235)

(0.10)%

32,693

13.4%

10,799

4.4%

(9)

43,892

16,171

17.8%

0.0%

0.03%

17.9%

6.6%

11.3%

13,986

5.3%

21,894

9.0%

27,721

Net sales

Cost of sales

Gross profit

Selling, general and
administrative expenses

Loss (gain) on disposal of assets

Income from operations

Interest expense

Interest income

Other income (expense), net

Income before income taxes

Income tax provision

Net income

yeAR eNded deCeMBeR 31, 2011 VS. yeAR eNded deCeMBeR 31, 2010

Net SALeS

Net sales for the year ended December 31, 2011 increased by 9%, or $21.7 million to $266.2 million, compared with the same period in 2010.
The increase in net sales was the result of the favorable reception to our new products, a significant increase in the replacement market of
approximately 10% over prior year, and increased market share.

gROSS pROFit

Gross margin decreased by $8.9 million (16.1%) to $46.3 million in 2011 compared to 2010. As a percentage of sales, gross margins were 17.4%
and 22.6% in 2011 and 2010, respectively. The decrease in gross profit was caused by increases in raw material and component part costs of
approximately 6% that we were unable to neutralize completely with price increases for some of our product lines, and increased labor costs and
freight cost of 8% and 1%, respectively.

The principal components of cost of goods sold are labor, raw materials, component costs, factory overhead, freight out and engineering expense.
The principal high volume raw materials used in our manufacturing processes are steel, copper and aluminum, which are obtained from domestic
suppliers. For the year ended December 31, 2011 we experienced price increases in copper and steel of approximately 3% and 10%, and an overall
price decrease in aluminum of approximately 2% as compared to 2010.

SeLLiNg, geNeRAL ANd AdMiNiStRAtiVe expeNSeS

Selling, General and Administrative (“SG&A”) expenses decreased by $0.236 million, or 1.1% to $22.3 million in 2011 compared to
2010, and as a percentage of net sales, SG&A expenses declined to 8.4% in 2011 from 9.2% in 2010. The decrease was primarily due to lower
profit sharing expense of approximately $1.4 million as a result of lower operating income before income tax offset by increases in salaries and
employee benefits of $0.6 million, and advertising expense and professional fees of approximately $0.6 million.

2011

iNteReSt expeNSe

Interest expense was approximately $0.277 million and $0.045 million in 2011 and 2010, respectively. The increase in interest expense of $0.232
million in 2011 from prior year was due to increased borrowings on the revolving credit facility. During 2011 we borrowed $82.1 million from
the revolving credit facility as compared to $20.8 million in 2010. Interest on borrowings is payable monthly at LIBOR plus 2.5%. For the year
ended December 31, 2011, we paid a weighted average interest rate of approximately 3.4%.

iNteReSt iNCOMe

Interest income decreased by approximately $0.160 million to $0.098 million in 2011 compared to the same period in 2010. The decreased was
due primarily to all of our investments maturing and no additional funds invested in 2011.

OtHeR iNCOMe (expeNSe)

Other expense, net increased by $0.242 million to $0.477 million in 2011 from $0.235 million in 2010. The increase in other expense is primarily
due to repair expenses related to roof damage to one of our manufacturing facilities in Tulsa, Oklahoma caused by a severe snowstorm in
February 2011.

yeAR eNded deCeMBeR 31, 2010 VS. yeAR eNded deCeMBeR 31, 2009

Net SALeS

Net sales were $244.6 million and $245.3 in 2010 and 2009, respectively. Sales in 2010 remained substantially level with 2009 despite poor
economic conditions that caused the non-residential construction market spending to decline by approximately 14.1% from 2009 overall
spending, as a result of our strategy of releasing new products in the markets in which we compete while maintaining prices constant which
resulted in increased market share.

gROSS pROFit

Gross margin declined by $12.4 million or 18.3% to $55.2 million in 2010 from $67.5 million in 2010. As a percentage of sales, gross margins
were 22.6% and 27.5% in 2010 and 2009, respectively. The decrease in gross margin was primarily a result of the absence of a derivative related to
a copper hedge of $2.2 million that we benefited from in 2009, higher raw material and commodity costs, increased labor expenses to relocate a
production line and set up new production lines for the Tulsa building addition and related supplies to stock the new lines, and our inability in
the current economic environment to implement price increases to our minimum sales prices for HVAC units.

The raw materials market was volatile during 2010 and 2009 due to the economic environment. We experienced price increases for copper, steel
and aluminum of approximately 88.7%, 11.5%, and 66.7%, respectively in 2010 compared to 2009.

SeLLiNg, geNeRAL ANd AdMiNiStRAtiVe expeNSeS

Selling, General and Administrative (“SG&A”) expenses decreased by $1.3 million, or 5.5% to $22.5 million in 2010 compared to 2009, and as
a percentage of net sales, SG&A expenses declined to 9.2% in 2010 from 9.7% in 2009. The decrease was primarily due to lower profit sharing
expense of $1.0 million as a result of lower operating income before income tax.

iNteReSt expeNSe

Interest expense was approximately $0.045 million and $0.009 million in 2010 and 2009, respectively. The increase in interest expense of
approximately $0.036 million was due to increased borrowings on the revolving credit facility. We borrowed $20.8 million from the revolving
credit facility during 2010 compared to $10.0 million during 2009. We paid interest on borrowings at the greater of 4.0% or LIBOR plus 2.5% or
at an average of approximately 4.0% for the year ended December 31, 2010.

A n n u A l R e p o R t

iNteReSt iNCOMe

Interest income was approximately $0.258 million and $0.071 million in 2010 and 2009, respectively. The increase in interest income of
$0.187 million in 2010 from 2009 was due primarily to interest income generated from investments in corporate notes and bonds that average
approximately $10.9 million in invested funds through September 30, 2010 and ended with a balance of $9.5 million at December 31, 2010.

OtHeR iNCOMe (expeNSe)

Other expense, net decreased by $0.311 million to $0.235 million in 2010 from income of $0.076 million in 2009 due to the termination of a lease
for one of our facilities during the second quarter of 2009.

LiQuidity ANd CApitAL ReSOuRCeS

Our working capital and capital expenditure requirements are generally met through net cash provided by operations and the occasional use of
the revolving bank line of credit based on our current liquidity at the time.

geNeRAL

On July 30, 2011 we renewed and increased the line of credit with the Bank of Oklahoma, National Association from $15.2 million to $30
million. The revolving line of credit matures on July 29, 2012. We expect to renew our line of credit in July 2012 with favorable terms as we do
not anticipate a tightening of funds in the financial markets. Under the line of credit, there is one standby letter of credit of $0.9 million. At
December 31, 2011 we have approximately $ 24.5 million of borrowings available under the revolving credit facility. No fees are associated with
the unused portion of the committed amount.

As of December 31, 2011 our outstanding balance under the revolving credit facility is $4.6 million and no borrowings were outstanding at
December 31, 2010. Interest on borrowings is payable monthly at LIBOR plus 2.5%. The weighted average interest rate was 3.4% and 4.0% for
the years ended December 31, 2011 and 2010, respectively.

At December 31, 2011 we were in compliance with all of the covenants under the revolving credit facility. We are obligated to comply with certain
financial covenants under the revolving credit facility. These covenants require that we meet certain parameters related to our tangible net worth,
total liabilities to tangible net worth ratio and working capital. At December 31, 2011 our tangible net worth was $122.5 million which meets the
requirement of being at or above $95.0 million. Our total liabilities to tangible net worth ratio were 0.46 to 1.0 which meets the requirement of
not being above 2 to 1. Our working capital was $45.7 million which meets the requirement of being at or above $35.0 million. Starting on June
30, 2012 our working capital requirement will change from $35.0 million to $40.0 million.

We repurchased shares of stock under our authorized stock buyback programs, employees’ 401(k) savings, investment plan, and from option
exercises of our directors and officers in the open market in the amount of $3.7 million for 0.212 million shares, $19.5 million for 1.2 million
shares and $3.1 million for approximately 0.246 million shares of stock in 2011, 2010 and 2009, respectively.

For the year ended December 31, 2011, 2010 and 2009 we paid cash dividends of $5.9 million, $9.2 million, and $5.9 million respectively.

During the quarter ended December 31, 2011, the Company recognized an income tax receivable of approximately $10.0 million. The tax
receivable represents the anticipated Federal and State estimated tax over payments as of December 31, 2011 primarily as a result of new
equipment purchases placed in service during the year which qualified for the 100% bonus tax depreciation expense allowed under the Tax Relief,
Unemployment Insurance Reauthorization and Job Creation Act of 2010.

2011Based on historical performance and current expectations, we believe our cash and cash equivalents balance, the projected cash flows generated
from our operations, our existing committed revolving credit facility (or comparable financing) and our expected ability to access capital markets
will satisfy our working capital needs, capital expenditures and other liquidity requirements associated with our operations in 2012 and the
foreseeable future.

StAteMeNt OF CASH FLOwS

The table below reflects a summary of our net cash flows provided by operating activities, net cash flows used in investing activities, and net cash
flows used in financing activities for the years indicated.

2011

2010

2009

(in millions)

Net cash provided by operating activities

26.5

32.2

45.2

Net cash used in investing activities

Net cash used in financing activities

(24.5)

(4.3)

(28.3)

(27.2)

(9.6)

(10.1)

cAsh Flows From operAting Activities

Net cash provided by operating activities was $26.5 million in 2011 compared to $32.2 million in 2010. This decrease was due to lower net
income, and an unfavorable change in working capital. For the year ended December 31, 2011, net income decreased by $7.9 million and includes
a non-cash loss on the sale of assets of $1.8 million. For 2010, net income decreased by $5.8 million from 2009.

Significant fluctuations in working capital were as follows:

• Inventory - more cash was used in 2011 as improved demand resulted in increased volume and higher prices for raw materials,
component, and parts in our inventory balance as compared to 2010 resulting in decreased cash flows of $1.3 million. In 2010,
inventory increased by $4.8 million primarily as a result of increased inventory levels associated with an increase in our backlog from
2009 and valuation of inventories associated with higher raw material and component part prices.

• Accounts receivable - impact of $6.1 million. We experienced improved collection rates as a result of targeted sales discounts for some
of our selected customers. In 2010, accounts receivable negatively impacted cash flows by $6.4 million due primarily to slow customer
payments and relatively flat sales from the previous year.

• Accounts payable – accounts payable decreased cash flows by approximately $2.8 million to support the growth in the business. For
the year ended December 31, 2010 accounts payable increased cash flows by approximately $6.5 million as a result of the increase in
inventory levels and timing of payments to vendors.

• Accrued liabilities – accrued liabilities decreased cash flows by approximately $3.0 million due to changes in certain reserves

estimates as a result of better and improved experience and a decreased in amounts due to our representatives offset by a slight
increase in accrued payroll and employee benefits. For the year ended December 31, 2010 accrued liabilities increased cash flows by
approximately $2.4 million due to an increase in amounts due to our representatives, payroll and workers compensation partially offset
by a decrease in medical self-insurance reserves.

A n n u A l R e p o R t

cAsh Flows From investing Activities

Net cash used by investing activities was $24.5 million for the year ended December 31, 2011 compared with net cash used in investing activities
of $28.3 million in 2010. The change in investing activities is primarily attributable to net proceeds from investments of $11.0 million, as well as
proceeds from the sale of assets of approximately $0.5 million. These proceeds were offset by an increase in capital expenditures during 2011.

Net cash used in investing activities was $28.3 million for the year ended December 31, 2010 compared with $9.6 million in 2009. The change
in investing activities is primarily attributable to an increase in investments in corporate bonds and notes and certificates of deposits of
approximately $14.8 million and capital expenditures during 2010.

Capital expenditures were $35.9 million, $17.5 million and $9.8 million in 2011, 2010 and 2009, respectively. Capital expenditures in 2011 were
primarily investments in our manufacturing and production equipment to support our growth and improve efficiencies with equipment which
combines the latest advancement in automation and laser technology.

The capital expenditure program for 2012 is estimated to be approximately in the range of $10 million to $12 million, including amounts
approved in prior periods. Many of these projects are subject to review and cancellation at the discretion of our CEO and Board of Directors
without incurring substantial charges.

cAsh Flows From FinAncing Activities

Net cash used in financing activities during the year ended December 31, 2011 was $4.3 million, compared with $27.2 million during 2010. The
change in financing activities is primarily related to approximately $3.7 million of share repurchases as well as dividend payments of $5.9 million,
partially offset by an increase in borrowing of approximately $4.6 million and stock options and restricted stock awards exercised.

Net cash used in financing activities during the year ended December 31, 2010 was $27.2 million, compared with $10.1 million during 2009. The
change in financing activities is primarily related to increase share repurchases of approximately $19.5 million and cash dividend payments of
$9.2 million in 2010, partially offset by stock options exercised.

OFF-BALANCe SHeet ARRANgeMeNtS

We are not party to any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our
financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.

COMMitMeNtS ANd CONtRACtuAL AgReeMeNtS

The following table summarizes our contractual agreements as of December 31, 2011

pAyMeNtS due By peRiOd

CONtRACtuAL OBLigAtiONS

tOtAL

LeSS tHAN
1 yeAR

1–3 yeARS

4–5 yeARS

AFteR 5
yeARS

(in millions)

Revolving credit facility

Purchase obligations(1)

Total contractual obligations

4.6 $

9.2 $

4.6

2.3 $

6.9 $

2.3 $

- $

(1) The purchase obligation consists of delivery of R-410A refrigerant from one supplier. The price used to calculate the purchased obligation
amount is the average price paid during 2011 as the quantity is fixed, but not the price.

2011

CONtiNgeNCieS

We are subject to various claims and legal actions that arise in the ordinary course of business. We closely monitor these claims and legal actions
and frequently consult with our legal counsel to determine whether they may, when resolved, have a material adverse effect on our financial
position or results of operations. While we are unable to estimate the ultimate dollar amount of exposure or loss in connection with these matters,
we make accruals as warranted. We believe that we have adequately provided in our consolidated financial statements for the potential impact of
these contingencies. We also believe that the outcomes will not significantly affect the long-term results of operations, our financial position or
our cash flows.

CRitiCAL ACCOuNtiNg pOLiCieS

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“US
GAAP”) requires management to make estimates and assumptions about future events, and apply judgments that affect the reported amounts
of assets, liabilities, revenue and expenses in our consolidated financial statements and related notes. We base our estimates, assumptions and
judgments on historical experience, current trends and other factors believed to be relevant at the time our consolidated financial statements are
prepared. However, because future events and their effects cannot be determined with certainty, actual results could differ from our estimates and
assumptions, and such differences could be material. We believe the following critical accounting policies affect our more significant estimates,
assumptions and judgments used in the preparation of our consolidated financial statements.

revenue recognition – We recognize revenues from sales of products when the products are shipped and the title and risk of
ownership pass to the customer. Final sales prices are fixed based on purchase orders. Sales allowances and customer incentives are treated as
reductions to sales and are provided for based on historical experiences and current estimates. Our policy is to record the collection and payment
of sales taxes through a liability account.

We present revenues net of certain payments to our independent manufacturer representatives (“Representatives”). Representatives are national
companies that are in the business of providing HVAC units and other related products and services to customers. The end user customer orders
a bundled group of products and services from the Representative and expects the Representative to fulfill the order. Only after the specifications
are agreed to by the Representative and the customer, and the decision is made to use an AAON HVAC unit, will we receive notice of the order.
We establish the amount we must receive for our HVAC unit (“minimum sales price”), but do not control the total order price which is negotiated
by the Representative with the end user customer.

We are responsible for billings and collections resulting from all sales transactions, including those initiated by our Representatives. The
Representatives submit the total order price to us for invoicing and collection. The total order price includes our minimum sales price and
an additional amount which may include both the Representatives’ fee and amounts due for additional products and services required by the
customer. These additional products and services may include controls purchased from another manufacturer to operate the unit, start-up
services, and curbs for supporting the unit (“Third Party Products”). All are associated with the purchase of a HVAC unit but may be provided by
the Representative or another third party. The Company is under no obligation related to Third Party Products.

The Representatives do not provide us with a break-out of the amount of the total order price over the minimum sales price which includes
the Representatives’ fee and Third Party Product amounts (“Due to Representatives”). The Due to Representatives amount is paid only after all
amounts associated with the order are collected from the customer. The amount of payments to our Representatives was $51.6 million, $51.4
million and $58.0 million for the years ended December 31, 2011, 2010, and 2009, respectively.

AllowAnce For douBtFul Accounts – Our allowance for doubtful accounts is estimated to cover the risk of loss related
to accounts receivable. We establish an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers,
historical trends in collections and write-offs, current customer status, the age of the receivable, economic conditions and other information.
Aged receivables are reviewed on a monthly basis to determine if the reserve is adequate and adjusted accordingly at that time. The evaluation of
these factors involves subjective judgments. Thus, changes in these factors or changes in economic circumstances may significantly impact our
Consolidated Financial Statements.

inventory reserves – We establish a reserve for inventories based on the change in inventory requirements due to product line
changes, the feasibility of using obsolete parts for upgraded part substitutions, the required parts needed for part supply sales, replacement parts
and for estimated shrinkage.

A n n u A l R e p o R t

wArrAnty – A provision is made for estimated warranty costs at the time the product is shipped and revenue is recognized. The warranty
period is: the earlier of one year from the date of first use or 18 months from date of shipment for parts only; an additional four years on
compressors (if applicable); 15 years on aluminized steel gas-fired heat exchangers (if applicable); 25 years on stainless steel heat exchangers (if
applicable); and 10 years on gas-fired heat exchangers in RL products (if applicable). With the introduction of the RQ product line in 2010, our
warranty policy for the RQ series was implemented to cover parts for two years from date of unit shipment and labor for one year from date of
unit shipment. Warranty expense is estimated based on the warranty period, historical warranty trends and associated costs, and any known
identifiable warranty issue.

Due to the absence of warranty history on new products, an additional provision may be made for such products. Our estimated future warranty
cost is subject to adjustment from time to time depending on changes in actual warranty trends and cost experience. Should actual claim rates
differ from our estimates, revisions to the estimated product warranty liability would be required.

medicAl insurAnce – A provision is made for medical costs associated with our Medical Employee Benefit Plan, which is primarily a
self-funded plan. A provision is made for estimated medical costs based on historical claims paid and potential significant future claims. The plan
is supplemented by employee contributions and any claim over $125,000 is covered by insurance.

stock compensAtion – We measure and recognize compensation expense for all share-based payment awards made to our
employees and directors, including stock options and restricted stock awards, based on their fair values at the time of grant. Compensation
expense, net of estimated forfeitures, is recognized on a straight-line basis during the service period of the related share-based compensation
award. The fair value of each option award and restricted stock award is estimated on the date of grant using the Black-Scholes-Merton option
pricing model. The use of the Black-Scholes option valuation model requires the input of subjective assumptions such as: the expected volatility,
the expected term of the options granted, expected dividend yield, and the risk free rate.

Actual results have been within management’s expectations.

New ACCOuNtiNg pRONOuNCeMeNtS

In January 2010, the FASB issued ASU No. 2010-06, Improving Disclosures about Fair Value Measurements (ASU 2010-06). The provisions of
ASU 2010-06 amend Topic 820 to require reporting entities to make new disclosures about recurring and nonrecurring fair value measurements
including significant transfers into and out of Level 1 and Level 2 fair value measurements and information on purchases, sales, issuances, and
settlements on a gross basis in the reconciliation of Level 3 fair value measurements. ASU 2010-6 was effective for annual reporting periods
beginning after December 15, 2009, except for Level 3 reconciliation disclosures which are effective for annual periods beginning after December
15, 2010. The adoption of the standard did not have a material impact of the consolidated financial statements.

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value
Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The ASU amends the fair value measurement and disclosure guidance for
measuring amounts at fair value as well as disclosures about these measurements. The amendments introduced are effective for annual periods
beginning after December 15, 2011, and should be applied prospectively. This ASU clarifies existing concepts and the amendments are not
expected to result in significant changes to how the Company currently applies the fair value principles.

In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income. This standard eliminates the current option to report
other comprehensive income and its components in the statement of changes in equity. The amendment requires that all non-owner changes in
stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements.
In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second
statement that should present total other comprehensive income, the components of other comprehensive income, and the total of comprehensive
income. The amendment must be applied retrospectively and is effective for fiscal years and interim periods within those years, beginning after
December 15, 2011. We do not expect the adoption of this standard to have a material effect on our consolidated financial statements.

2011iteM 7A. QuANtitAtiVe ANd QuALitAtiVe diSCLOSuReS ABOut MARket RiSk.

We experience various market risks, primarily from commodity prices and interest rates. We do not use derivative financial instruments to hedge
our interest rate risk. However, occasionally we use financial derivatives to economically hedge our commodity price risk. We do not use financial

derivatives for speculative purposes.

iNteReSt RAte RiSk.

We are exposed to interest rate risk on our revolving credit facility, which bears a variable interest rate of LIBOR plus 2.5%. At December 31, 2011
we had borrowings of $4.6 million outstanding under the revolving credit facility. The weighted average interest rate was 3.4% and 4.0% for the
years ended December 31, 2011 and 2010, respectively.

COMMOdity pRiCe RiSk

We are exposed to volatility in the prices of commodities used in some of our products and occasionally we use fixed price cancellable and non-
cancellable contracts with our major suppliers for periods of 6 to 18 months to manage this exposure. From time to time we use financial derivatives
to economically hedge our commodity price risk. We do not have committed commodity derivative instruments in place at December 31, 2011.

iteM 8. FiNANCiAL StAteMeNtS ANd SuppLeMeNtARy dAtA.

The financial statements and supplementary data are included commencing at page 28.

iteM 9. CHANgeS iN ANd diSAgReeMeNtS witH ACCOuNtANtS ON
ACCOuNtiNg ANd FiNANCiAL diSCLOSuRe.

Not Applicable.
.
iteM 9A. CONtROLS ANd pROCeduReS.

(A) evAluAtion oF disclosure controls And procedures

At the end of the period covered by this Annual Report on Form 10-K, our management, under the supervision and with the participation of our
Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and
procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer believe that:

• Our disclosure controls and procedures are designed at a reasonable assurance threshold to ensure that information required to be

disclosed by us in the reports we file under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within
the time periods specified in the SEC’s rules and forms; and

• Our disclosure controls and procedures operate at a reasonable assurance threshold such that important information flows to appropriate
collection and disclosure points in a timely manner and are effective to ensure that such information is accumulated and communicated
to our management, and made known to our Chief Executive Officer and Chief Financial Officer, particularly during the period when this
Annual Report was prepared, as appropriate to allow timely decisions regarding the required disclosure.

Our Chief Executive Officer and Chief Financial Officer have evaluated our disclosure controls and procedures and concluded that these controls
and procedures were effective as of December 31, 2011.

(B) mAnAgement’s AnnuAl report on internAl control over FinAnciAl reporting

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Our internal control over
financial reporting is a process designed by, or under the supervision of, our principal executive and principal financial officer, and effected by
our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

A n n u A l R e p o R t

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can
provide only reasonable assurance with respect to financial statement preparation and presentation.

In making our assessment of internal control over financial reporting, management used the criteria issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on our assessment, we believe that, as of
December 31, 2011, our internal control over financial reporting is effective at the reasonable assurance level based on those criteria.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2011 has been audited by Grant Thornton LLP,
our independent registered public accounting firm, as stated in their report which is included in this Item 9A of this report on Form 10-K.

There have been no changes in internal control over financial reporting that occurred during the fourth quarter of 2011 that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders
AAON, Inc.

We have audited AAON, Inc.’s (a Nevada Corporation) and subsidiaries, collectively, the “Company”, internal control over financial reporting
as of December 31, 2011, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control
over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion of the Company’s internal
control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A
company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.

2011Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011,
based on criteria established in Internal Control – Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated
balance sheets of AAON, Inc. and subsidiaries, as of December 31, 2011 and 2010, and the related consolidated statements of income,
stockholders’ equity and comprehensive income, and cash flows for each of the three years in the period ended December 31, 2011 and our report
dated March 14, 2012, expressed an unqualified opinion on those consolidated financial statements.

/s/ GRANT THORNTON LLP

Tulsa, Oklahoma
March 14, 2012

iteM 9B. OtHeR iNFORMAtiON.

None.

A n n u A l R e p o R t

pARt 3

iteM 10. diReCtORS, exeCutiVe OFFiCeRS ANd CORpORAte gOVeRNANCe.

The information required by Items 401, 405, 406 and 407(c)(3), (d)(4) and (d)(5) of Regulation S-K is incorporated by reference to the
information contained in our definitive Proxy Statement to be filed with the Securities and Exchange Commission in connection with our annual
meeting of shareholders scheduled to be held on May 15, 2012.

COde OF etHiCS

We adopted a code of ethics that applies to our principal executive officer, principal financial officer and principal accounting officer or persons
performing similar functions, as well as other employees and directors. Our code of ethics can be found on our website at www.aaon.com. We
will also provide any person without charge, upon request, a copy of such code of ethics. Requests may be directed to AAON, Inc., 2425 South
Yukon Avenue, Tulsa, Oklahoma 74107, attention Kathy I. Sheffield, or by calling (918) 382-6204.

iteM 11. exeCutiVe COMpeNSAtiON.

The information required by Items 402 and 407(e)(4) and (e)(5) of Regulation S-K is incorporated by reference to the information contained in
our definitive Proxy Statement to be filed with the Securities and Exchange Commission in connection with our annual meeting of shareholders
scheduled to be held on May 15, 2012.

iteM 12. SeCuRity OwNeRSHip OF CeRtAiN BeNeFiCiAL OwNeRS ANd
MANAgeMeNt ANd ReLAted StOCkHOLdeR MAtteRS.

The information required by Item 403 and Item 201(d) of Regulation S-K is incorporated by reference to the information contained in our
definitive Proxy Statement to be filed with the Securities and Exchange Commission in connection with our annual meeting of stockholders
scheduled to be held May 15, 2012.

iteM 13. CeRtAiN ReLAtiONSHipS ANd ReLAted tRANSACtiONS, ANd diReCtOR
iNdepeNdeNCe

tRANSACtiONS witH ReLAted peRSONS

The information required to be reported pursuant to Item 404 of Regulation S-K and paragraph (a) of Item
407 of Regulation S-K is incorporated by reference in our definitive proxy statement relating to our
2012 annual meeting of shareholders scheduled to be held May 15, 2012.

Our Code of Conduct guides the Board of Directors in its actions and deliberations with respect to related party transactions. Under the Code,
conflicts of interest, including any involving the directors or any Named Officers, are prohibited except under any guidelines approved by the
Board of Directors. Only the Board of Directors may waive a provision of the Code of Conduct for a director or a Named Officer, and only
then in compliance with all applicable laws, rules and regulations. We have not entered into any new related party transactions and have no
preexisting related party transactions in 2011, 2010 or 2009.

iteM 14. pRiNCipAL ACCOuNtANt FeeS ANd SeRViCeS.

This information is incorporated by reference in our definitive Proxy Statement to be filed with the Securities and Exchange Commission in
connection with our annual meeting of stockholders scheduled to be held May 15, 2012.

2011pARt 4

iteM 15. exHiBitS ANd FiNANCiAL StAteMeNt SCHeduLeS.

(a)

Financial statements.

See Index to Consolidated Financial Statements on page 25.

(b)

Exhibits:

(A)
(A-1)
(B)
(B-1)

(A)
(A-1)
(B)

(3)

(4)

(10.1)

(10.2)

(21)

(23)

(31.1)

(31.2)

(32.1)

(32.2)

Articles of Incorporation (i)
Article Amendments (ii)
Bylaws (i)
Amendments of Bylaws (iii)

Third Restated Revolving Credit and Term Loan Agreement and related documents (iv)
Amendment Seven to Third Restated Revolving Credit Loan Agreement (v)
Rights Agreement dated February 19, 1999, as amended (vi)

AAON, Inc. 1992 Stock Option Plan, as amended (vii)

AAON, Inc. 2007 Long-Term Incentive Plan, as amended (viii)

List of Subsidiaries (ix)

Consent of Grant Thornton LLP

Certification of CEO

Certification of CFO

Section 1350 Certification – CEO

Section 1350 Certification – CFO

(i)

(ii)

(iii)

Incorporated herein by reference to the exhibits to our Form S-18 Registration Statement No. 33-18336-LA.

Incorporated herein by reference to the exhibits to our Annual Report on Form 10-K for the fiscal year ended
December 31, 1990, and to our Forms 8-K dated March 21, 1994, March 10, 1997, and March 17, 2000.

Incorporated herein by reference to our Forms 8-K dated March 10, 1997, May 27, 1998 and
February 25, 1999, or exhibits thereto.

(iv)

Incorporated by reference to exhibit to our Form 8-K dated July 30, 2004.

(v)

Incorporated herein by reference to exhibit to our Form 8-K dated July 30, 2011

(vi)

(vii)

(viii)

(ix)

Incorporated by reference to exhibits to our Forms 8-K dated February 25, 1999, and August 20, 2002, and
Form 8-A Registration Statement No. 000-18953, as amended.

Incorporated herein by reference to exhibits to our Annual Report on Form 10-K for the fiscal year ended
December 31, 1991, and to our Form S-8 Registration Statement No. 33-78520, as amended.

Incorporated herein by reference to Appendix B to our definitive Proxy Statement for the 2007 Annual
Meeting of Stockholders filed April 23, 2007.

Incorporated herein by reference to exhibits to our Annual Report on Form 10-K for the fiscal year ended
December 31, 2004.

A n n u A l R e p o R t

SigNAtuReS
Pursuant to the requirement of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly
caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

Dated: March 14, 2012

AAON, INC.

By:

/s/ Norman H. Asbjornson
Norman H. Asbjornson, President

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Dated: March 14, 2012

/s/ Norman H. Asbjornson
Norman H. Asbjornson
President and Director
(principal executive officer)

/s/ Kathy I. Sheffield
Kathy I. Sheffield
Vice President and Treasurer
(principal financial officer
and principal accounting officer)

/s/ John B. Johnson, Jr.
John B. Johnson, Jr.
Director

/s/ Jack E. Short
Jack E. Short
Director

/s/ Paul K. Lackey, Jr.
Paul K. Lackey, Jr.
Director

/s/ A.H. McElroy II
A.H. McElroy II
Director

/s/ Jerry R. Levine
Jerry R. Levine
Director

/s/ Joseph E. Cappy
Joseph E. Cappy
Director

2011

iNdex tO CONSOLidAted FiNANCiAL StAteMeNtS

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Income

Consolidated Statements of Stockholders’ Equity and Comprehensive Income

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

pAge

A n n u A l R e p o R t

2011REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders
AAON, Inc.

We have audited the accompanying consolidated balance sheets of AAON, Inc. (a Nevada Corporation) and subsidiaries (the “Company”) as
of December 31, 2011 and 2010, and the related consolidated statements of income, stockholders’ equity and comprehensive income, and cash
flows for each of the three years in the period ended December 31, 2011. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of AAON,
Inc. and subsidiaries as of December 31, 2011 and 2010, and the results of their operations and their cash flows for each of the three years in the
period ended December 31, 2011, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s
internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control – Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 14, 2012, expressed an
unqualified opinion on the effectiveness of internal control over financial reporting.

/s/ GRANT THORNTON LLP
Tulsa, Oklahoma
March 14, 2012

A n n u A l R e p o R t

AAON, iNC., ANd SuBSidiARieS
CONSOLidAted BALANCe SHeetS

deCeMBeR 31,

Assets

2010
(in thousands, except share and per share data)

2011

Current Assets:

Cash and cash equivalents
Certificates of deposit
Investments held to maturity at amortized cost
Accounts receivable, net
Income tax receivable
Note receivable, current
Inventories, net
Prepaid expenses and other
Deferred tax assets

Total Current Assets

Property, plant and equipment:
Land
Buildings

Machinery and equipment
Furniture and fixtures

Total property, plant and equipment
Less: Accumulated depreciation
Property, plant and equipment, net

Note receivable, long-term

Total assets
Liabilities and Stockholders’ equity
Current liabilities:

Revolving credit facility
Accounts payable
Accrued liabilities
Total current liabilities

Deferred tax liabilities
Commitments and contingencies

Stockholders’ equity:

Preferred stock, $.001 par value, 11,250,000 shares authorized,

no shares issued*

Common stock, $.004 par value, 112,500,000 shares authorized,
24,618,324 and 24,758,480 issued and outstanding at December
31, 2011 and 2010, respectively*

Additional paid-in capital

Retained earnings

Total stockholders’ equity

Total liabilities and stockholders’ equity

* Reflects three-for-two stock split effective June 13, 2011.

13
-
-
34,137
10,016
27
34,948
723
4,523

84,387

1,340
56,057

114,256
7,784
179,437
85,935
93,502

1,092

178,981

4,575
14,118
19,994
38,687
17,790

122,406

122,504

178,981

The accompanying notes are an integral part of these statements.

2,393
1,503
9,520
39,901
-
26
33,602
656
4,147

91,748

1,328
45,482

100,559
6,356
153,725
86,307
67,418

1,111

160,277

-
13,017
23,229
36,246
7,292

116,640

116,739

160,277

2011

AAON, iNC., ANd SuBSidiARieS
CONSOLidAted StAteMeNtS OF iNCOMe

Net sales

Cost of sales

Gross profit

Selling, general and administrative expenses

Loss (gain) on disposal of assets

Income from operations

Interest expense

Interest income

Other income (expense), net

Income before income taxes

Income tax provision

Net income

Earnings per share:

Basic*

Diluted*

Cash dividends declared per common share*

Weighted average shares outstanding:

Basic*

Diluted*

* Reflects three-for-two stock split effective June 13, 2011.

yeARS eNdiNg deCeMBeR 31,

2011

2010

2009

(in thousands, except per share data)

266,220 $

244,552 $

245,282

219,939

189,364

177,737

46,281

55,188

67,545

22,310

22,546

23,850

1,802

22,169

(277)

(477)

21,513

7,527

(73)

(59)

32,715

43,754

(45)

258

(235)

(9)

32,693

43,892

10,799

16,171

13,986 $

21,894 $

27,721

0.57 $

0.56 $

0.24 $

0.87 $

0.24 $

24,690

24,881

25,198

25,339

1.07

0.24

25,780

25,963

The accompanying notes are an integral part of these statements.

A n n u A l R e p o R t

AAON, iNC., ANd SuBSidiARieS
CONSOLidAted StAteMeNtS OF StOCkHOLdeRS’ eQuity ANd COMpReHeNSiVe iNCOMe

COMMON StOCk
SHAReS AMOuNt

pAid-iN
CApitAL

ACCuMuLAted
OtHeR
COMpReHeNSiVe
iNCOMe

RetAiNed
eARNiNgS

tOtAL

(in thousands)

Balance at December 31, 2008

25,812*

102*

$ 538 $ 778 $

95,104 $ 96,522

Comprehensive income:

Net income

Foreign currency translation adjustment

Total comprehensive income

Stock options exercised and
restricted stock awards vested,
including tax benefits

Share-based compensation

Stock repurchased and retired

Dividends

Balance at December 31, 2009

Comprehensive income:

Net income

Foreign currency translation adjustment

Total comprehensive income

Stock options exercised and
restricted stock awards vested,
including tax benefits

Share-based compensation

Stock repurchased and retired

Dividends

Balance at December 31, 2010
Net income and total comprehensive
income

Stock options exercised and
restricted stock awards vested,
including tax benefits

Share-based compensation

Stock repurchased and retired

Dividends

–

255

–

(246)

–

25,821

–

170

–

(1,233)

–

24,758

–

(212)

–

(1)

–

102

–

(3)

–

(1)

–

1,938

848

(2,680)

–

644

–

1,524

791

(2,959)

–

705

680

(1,375)

(10)**

–

299

–

1,077

–

(1,077)

–

27,721

–

(448)

(6,201)

116,176

21,894

1,155

–

(16,518)

(6,067)

116,640

299

28,020

1,939

848

(3,129)

(6,201)

117,999

21,894

21,972

1,524

791

(19,480)

(6,067)

116,739

13,986

–

(2,295)

(5,925)

705

680

(3,671)

(5,935)

Balance at December 31, 2011

24,618

$ 98

$ –

$ 122,406

$ 122,504

* Reflects 3-for-2 stock split effective June 13, 2011
** Includes cash payment of fractional shares resulting from 3-for-2 stock split effective June 13, 2011

The accompanying notes are an integral part of these statements

2011

AAON, iNC., ANd SuBSidiARieS
CONSOLidAted StAteMeNtS OF CASH FLOwS

OpeRAtiNg ACtiVitieS

Net income

Adjustments to reconcile net income to net cash provided

by operating activities:

Depreciation

Amortization of bond premiums

Provision for losses on accounts receivable, net of adjustments

Provision for excess and obsolete inventories

Share-based compensation

Excess tax benefits from stock options exercised and

restricted stock awards vested

(Gain) loss on disposition of assets

Unrealized gain on financial derivative asset

Effect of foreign currency (gain) loss

Deferred income taxes

Changes in assets and liabilities:

Accounts receivable

Income tax receivable

Inventories

Prepaid expenses and other

Financial derivative asset

Accounts payable

Accrued liabilities

Net cash provided by operating activities

iNVeStiNg ACtiVitieS

Proceeds from sale of property, plant and equipment

Investment in certificates of deposit

Maturities of certificates of deposit

Investments held to maturity

Maturities of investments

Proceeds from assets held for sale

Proceeds from note receivable

Capital expenditures

Net cash used in investing activities

(Continued on next page)

yeARS eNded deCeMBeR 31,

2011

2010

2009

(in thousands)

$ 13,986 $ 21,894 $

27,721

11,397

156

(289)

(50)

680

(211)

1,802

(8)

10,122

6,053

(10,016)

(1,296)

(67)

(2,751)

(3,024)

26,484

482

1,503

9,886

379

(117)

791

(356)

(73)

(14)

(558)

(6,403)

(4,814)

431

2,214

6,522

2,370

32,152

136

(2,745)

1,242

(12,018)

9,364

(35,914)

(24,538)

2,119

460

(17,470)

(28,276)

9,061

410

848

(703)

(59)

(2,200)

3,531

5,495

7,243

(660)

(6,334)

842

45,205

135

(9,774)

(9,639)

A n n u A l R e p o R t

AAON, iNC., ANd SuBSidiARieS
CONSOLidAted StAteMeNtS OF CASH FLOwS (CONtiNued)

FiNANCiNg ACtiVitieS

Borrowings under revolving credit facility

Payments under revolving credit facility

Payments of long-term debt

Stock options exercised

Excess tax benefits from stock options exercised and
restricted stock awards vested

Repurchase of stock

Cash dividends paid to stockholders

Net cash used in financing activities

Effects of exchange rate on cash

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

82,078

(77,503)

494

211

(3,671)

(5,935)

(4,326)

(2,380)

2,393

20,839

(20,839)

(76)

1,168

356

(19,480)

(9,168)

(27,200)

(23,246)

25,639

9,972

(12,873)

(136)

1,236

703

(3,129)

(5,874)

(10,101)

(95)

25,370

269

13 $

2,393 $ 25,639

The accompanying notes are an integral part of these statements.

AAON, iNC., ANd SuBSidiARieS
NOteS tO CONSOLidAted FiNANCiAL StAteMeNtS

deCeMBeR 31, 2011

1. BuSiNeSS deSCRiptiON

AAON, Inc. is a Nevada corporation which was incorporated on August 18, 1987. Our operating subsidiaries include AAON, Inc., an Oklahoma
corporation and AAON Coil Products, Inc., a Texas corporation. The Consolidated Financial Statements include our accounts and the accounts
of our subsidiaries. Unless the context otherwise requires, references in this Annual Report to “AAON,” the “Company”, “we,” “us,” “our” or “ours”
refer to AAON, Inc., and our subsidiaries.

We are engaged in the manufacture and sale of air conditioning and heating equipment consisting of rooftop units, chillers, air-handling units,
make-up air units, heat recovery units, condensing units and coils.

2. SuMMARy OF SigNiFiCANt ACCOuNtiNg pOLiCieS

principles oF consolidAtion

These financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The
accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated.

cAsh And cAsh equivAlents

We consider all highly liquid temporary investments with original maturity dates of three months or less to be cash equivalents. Cash and cash
equivalents consist of bank deposits and highly liquid, interest-bearing money market funds.

2011

investments

Investments with a maturity of greater than three months to one year are classified as short-term investments. Investments with maturities
beyond one year may be classified as short-term if we reasonably expect the investment to be realized in cash or sold or consumed during the
normal operating cycle of the business; otherwise, they are classified as long-term. Investments available for sale are recorded at market value.
Investments held to maturity are measured at amortized cost in the consolidated balance sheets if it is our intent and ability to hold those
securities to maturity. Any unrealized gains and losses on available for sale securities are reported as other comprehensive income (loss) as a
separate component of stockholders’ equity until realized or until a decline in fair value is determined to be other than temporary.

We have no outstanding investments in certificates of deposit and corporate notes and bonds at December 31, 2011. At December 31, 2010
investments in certificates of deposits and corporate notes and bonds amounted to $1.5 million and $9.5 million, respectively.

Accounts And notes receivABle

Accounts and notes receivable are stated at amounts due from customers, net of an allowance for doubtful accounts. We generally do not require
that our customers provide collateral. The Company determines its allowance for doubtful accounts by considering a number of factors, including
the credit risk of specific customers, the customer’s ability to pay current obligations, historical trends, economic and market conditions and the
age of the receivable. Accounts are considered past due when the balance has been outstanding for greater than ninety days. Past due accounts
are generally written-off against the allowance for doubtful accounts only after all collection attempts have been exhausted.

concentrAtion oF credit risk

Our customers are concentrated primarily in the domestic commercial and industrial new construction and replacement markets. To date, our
sales have been primarily to the domestic market, with foreign sales accounting for approximately 5% of revenues for the years ended December
31, 2011 and 2010. No customer accounted for 10% of our sales during 2011, 2010 or 2009 or more than 5% of our accounts receivable balance at
December 31, 2011 or 2010.

FAir vAlue oF FinAnciAl instruments

The carrying amounts of cash and cash equivalents, receivables, accounts payable and accrued expenses approximate fair value because of the
short-term maturity of the items. The carrying amount of the Company’s revolving line of credit, and other payables, approximate their fair
values either due to their short term nature, the variable rates associated with the debt or based on current rates offered to the Company for debt
with similar characteristics. See Note 10 for further detail about fair market value.

inventories

Inventories are valued at the lower of cost or market using the first-in, first-out (“FIFO”) method. Cost in inventory includes purchased parts and
materials, direct labor and applied manufacturing overhead. We establish an allowance for excess and obsolete inventories based on product line
changes, the feasibility of substituting parts and the need for supply and replacement parts.

property, plAnt And equipment

Property, plant and equipment, including significant improvements, are recorded at cost, net of accumulated depreciation. Repairs and
maintenance and any gains or losses on disposition are included in operations.

Depreciation is computed using the straight-line method over the following estimated useful lives:

Buildings

Machinery and equipment

Furniture and Fixtures

10-40 years

3-15 years

2-5 years

impAirment oF long-lived Assets

We periodically review long-lived assets for possible impairment when events or changes in circumstances indicate, in management’s judgment,
that the carrying amount of an asset may not be recoverable. Recoverability is measured by a comparison of the carrying amount of an asset or
asset group to its estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the undiscounted cash flows
are less than the carrying amount of the asset or asset group, an impairment loss is recognized for the amount by which the carrying amount of
the asset or asset group exceeds its fair value.

A n n u A l R e p o R t

reseArch And development

The costs associated with research and development for the purpose of developing and improving new products are expensed as incurred. For the
years ended December 31, 2011, 2010, and 2009 research and development costs amounted to approximately $4.8 million, $3.6 million, and $3.1
million, respectively.

Advertising

Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2011, 2010, and 2009 was approximately $1.2
million, $0.877 million and $0.761 million respectively.

shipping And hAndling

We incur shipping and handling costs in the distribution of products sold that are recorded in cost of sales. Shipping charges that are billed to
the customer are recorded in revenues and as an expense in cost of sales. For the years ended December 31, 2011, 2010 and 2009 shipping and
handling fees amounted to approximately $8.7 million, $8.6 million, and $10.2 million, respectively.

income tAxes

Income taxes are accounted for under the asset and liability method. The Company recognizes deferred tax assets and liabilities for the expected
future tax consequences of temporary differences between the book carrying amounts and the tax basis of assets and liabilities. We establish
accruals for uncertain tax positions when it is more likely than not that our tax return positions may not be fully sustained. The Company
records a valuation allowance for deferred tax assets when, in the opinion of management, it is more likely than not that deferred tax assets will
not be realized.

stock compensAtion

The Company recognizes expense for its share-based compensation based on the fair value of the awards that are granted. The Company’s share-
based compensation plans provide for the granting of stock options, and restricted stock. The fair values of stock options are estimated at the date
of grant using the Black-Scholes option valuation model. The use of the Black-Scholes option valuation model requires the input of subjective
assumptions. Measured compensation cost, net of estimated forfeitures, is recognized ratably over the vesting period of the related share-based
compensation award. The fair value of restricted stock awards is determined based on the market value of the Company’s shares on the grant date
and the compensation expense is recognized on a straight-line basis during the service period of the respective grant.

FinAnciAl derivAtives

The Company occasionally uses derivative financial instruments to reduce its exposure to the risk of increasing commodity prices. Contract
terms of the hedging instrument closely mirror those of the hedged forecasted transaction providing for the hedge relationship to be highly
effective both at inception and continuously throughout the term of the hedging relationship. The Company does not engage in speculative
transactions, nor does the Company hold or issue financial instruments for trading purposes.

The Company recognizes all derivatives on the balance sheets at fair value. Derivatives that do not meet the criteria for hedge accounting are
adjusted to fair value through income. If the derivative is designated as a cash flow hedge, changes in the fair value are recognized in accumulated
other comprehensive income (loss) until the hedged transaction is recognized in income. If a hedging instrument is terminated, any unrealized
gain (loss) at the date of termination is carried in accumulated other comprehensive income (loss) until the hedged transaction is recognized in
income. The ineffective portion of a derivative’s change in fair value is recognized in income in the period of change.

revenue recognition

We recognize revenues from sales of products when the products are shipped and the title and risk of ownership pass to the customer. Final sales
prices are fixed based on purchase orders. Sales allowances and customer incentives are treated as reductions to sales and are provided for based
on historical experiences and current estimates. Our policy is to record the collection and payment of sales taxes through a liability account.

2011We are responsible for billings and collections resulting from all sales transactions, including those initiated by our Representatives. The
Representatives submit the total order price to us for invoicing and collection. The total order price includes our minimum sales price and
an additional amount which may include both the Representatives’ fee and amounts due for additional products and services required by the
customer. These additional products and services may include controls purchased from another manufacturer to operate the unit, start-up
services, and curbs for supporting the unit (“Third Party Products”). All are associated with the purchase of a HVAC unit but may be provided by
the Representative or another third party. The Company is under no obligation related to Third Party Products.

The Representatives do not provide us with a break-out of the amount of the total order price over the minimum sales price which includes
the Representatives’ fee and Third Party Product amounts (“Due to Representatives”). The Due to Representatives amount is paid only after all
amounts associated with the order are collected from the customer. The amount of payments to our representatives was $51.6 million, $51.4
million and $58.0 million for the years ended December 31, 2011, 2010, and 2009, respectively.

insurAnce reserves

Under the Company’s insurance programs, coverage is obtained for significant liability limits as well as those risks required to be insured by law
or contract. It is the policy of the Company to self-insure a portion of certain expected losses related primarily to workers’ compensation and
medical liability. Provisions for losses expected under these programs are recorded based on the Company’s estimates of the aggregate liabilities
for the claims incurred.

product wArrAnties

A provision is made for the estimated cost of maintaining product warranties to customers at the time the product is sold based upon historical
claims experience by product line. The Company records a liability and an expense for estimated future warranty claims based upon historical
experience and management’s estimate of the level of future claims. Changes in the estimated amounts recognized in prior years are recorded as
an adjustment to the liability and expense in the current year.

use oF estimAtes

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Because these estimates
and assumptions require significant judgment, future actual results could differ from those estimates and could have a significant impact
on our results of operations, financial position and cash flows. We reevaluate our estimates and assumptions on a monthly basis. The most
significant estimates include the allowance for doubtful accounts, inventory reserves, warranty accrual, medical insurance accrual, share-based
compensation and the fair value of derivative financial instruments. Actual results could differ materially from those estimates.

reclAssiFicAtions

Certain amounts have been reclassified from the prior year presentation to conform to the current year presentation with no impact to reported
net income or stockholders’ equity.

A n n u A l R e p o R t

3. ACCOuNtS ReCeiVABLe

Accounts receivable and the related allowance for doubtful accounts are as follows:

Accounts receivable

Less: Allowance for doubtful accounts

Total, net

Allowance for doubtful accounts:

Balance, beginning of period

Provision for losses on accounts receivable

Adjustments to provision

Accounts receivable written off, net of recoveries

Balance, end of period

4. iNVeNtORieS

deCeMBeR 31,

2011

2010

(in thousands)

34,405

(268)

34,137

40,501

(600)

39,901

yeARS eNded deCeMBeR 31,

2011

2010

2009

(in thousands)

600

673

(962)

(43)

268

776

617

(734)

(59)

600

795

629

(630)

(18)

776

The components of inventories at December 31, 2011 and 2010, and the related changes in the allowance for excess and obsolete inventories for
the three years ended December 31, 2011, 2010 and 2009, are as follows:

Raw materials

Work in process

Finished goods

Less: Allowance for excess and obsolete inventories

deCeMBeR 31,

2011

2010

(in thousands)

$ 31,746

$ 28,560

1,979

1,523

35,248

(300)

3,334

2,058

33,952

(350)

33,602

Total, net

34,948

yeARS eNded deCeMBeR 31,

2011

2010

2009

(in thousands)

Allowance for excess and obsolete inventories:

Balance, beginning of period

$ 350

$ 760

$ 350

Provision for excess and obsolete inventories

Adjustments to reserve

Inventories written off

Balance, end of period

205

(255)

300

800

(800)

(410)

350

1,849

(1,439)

$ 760

2011

5. NOte ReCeiVABLe

In connection with the closure of our Canadian facility on May 18, 2009 we sold land and a building in September 2010 and assumed a note
receivable from the borrower secured by the property. The $1.1 million, fifteen-year note has an interest rate of 4.0% and is payable to us monthly,
and has a $0.6 million balloon payment due in October 2025. Interest payments are recognized in interest income.

We evaluate the note for impairment on a quarterly basis. We determine the note receivable to be impaired if we are uncertain of its collectability
based on the contractual terms. At December 31, 2011 and 2010 there was no impairment.

6. SuppLeMeNtAL CASH FLOw iNFORMAtiON

Cash paid for interest payments were approximately $0.277 million, $0.045 million, and $0.009 million for the years ended December 31, 2011,
2010 and 2009, respectively. Payments for income taxes were $6.4 million, $7.8 million and $10.0 million for the years ended December 31, 2011,
2010 and 2009, respectively.

Capital expenditures amounted to $39.8 million, $17.5 million and $9.8 million in 2011, 2010 and 2009, respectively. At December 31, 2011, $3.9
million of capital expenditures are accrued in accounts payable.

For the year ended December 31, 2011 we incurred a loss of approximately $1.8 million from the trade-in of production equipment. This
equipment was replaced with new state of the art equipment that combines the latest advancement in automation and laser technology as a result
of our strategic vision to improve our current manufacturing efficiencies.

7. wARRANtieS

A provision is made for estimated warranty costs at the time the related products are sold based upon the warranty period, historical trends,
new products and any known identifiable warranty issues. Warranty expense was $4.2 million, $4.5 million and $4.8 million for the years ended
December 31, 2011, 2010 and 2009, respectively.

Changes in the warranty accrual during the years ended December 31, 2011, 2010 and 2009 are as follows:

2011

2010

2009

(in thousands)

Balance, beginning of the year

7,300

7,200

6,589

Payments made

Warranties issued

Adjustments related to changes in estimates

Balance, end of period

(5,387)

5,146

(966)

(4,405)

3,987

518

6,093

7,300

(4,211)

4,822

7,200

8. ACCRued LiABiLitieS

At December 31, accrued liabilities were comprised of the following:

Warranty

Due to Representatives

Payroll

Workers’ compensation

Medical self-insurance

Employee benefits and other

Total

2011

2010

(in thousands)

6,093

7,300

7,891

1,736

886

326

3,062

19,994

9,668

2,398

855

734

2,274

23,229

A n n u A l R e p o R t

9. ReVOLViNg CRedit FACiLity

Our revolving credit facility provides for maximum borrowings of $30.0 million which is provided by the Bank of Oklahoma, National
Association. Under the line of credit, there is one standby letter of credit totaling $0.9 million. Borrowings available under the revolving credit
facility at December 31, 2011, were $24.5 million. Interest on borrowings is payable monthly at LIBOR plus 2.5%. No fees are associated with the
unused portion of the committed amount. As of December 31, 2011 our outstanding balance under the revolving credit facility is $4.6 million
and had no borrowings outstanding at December 31, 2010. At December 31, 2011 and 2010, the weighted average interest rate was 3.4% and
4.0%, respectively.

At December 31, 2011, we were in compliance with our financial covenants. These covenants require that we meet certain parameters related to
our tangible net worth, total liabilities to tangible net worth ratio and working capital. At December 31, 2011 our tangible net worth was $122.5
million which meets the requirement of being at or above $95.0 million. Our total liabilities to tangible net worth ratio were 0.46 to 1.0 which
meets the requirement of not being above 2 to 1. Our working capital was $45.7 million which meets the requirement of being at or above $35.0
million.

10. FAiR VALue MeASuReMeNtS

The Company determines the fair value of its financial instruments based on the fair value definition and hierarchy levels established in the
guidance of ASC Topic 820, ‘Fair Value Measurements and Disclosure’. Three levels are established within the hierarchy that may be used to
measure fair value:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 1 assets and liabilities include exchange-traded
derivative contracts, U.S. treasury securities and certain publicly traded equity securities.

Level 2: Observable inputs, including Level 1 prices that have been adjusted; quoted prices for similar assets or liabilities; quoted prices in
markets that are less active than traded exchanges; and other inputs that are observable or can be substantially corroborated by observable market
data.

Level 3: Unobservable inputs that are supported by little or no market activity and that are a significant component of the fair value of the assets
or liabilities. Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market.
These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Judgment is
required in evaluating both quantitative and qualitative factors in the determination of significance for purposes of fair value level classification.
Level 3 amounts can include assets and liabilities whose value is determined using pricing models, discounted cash flow methodologies, or
similar techniques, as well as assets and liabilities for which the determination of fair value requires significant management judgment or
estimation.

The lowest level of input that is a significant component of the fair value measurement determines the placement of the entire fair value
measurement in the hierarchy. Our assessment of the significance of a particular input to the fair value measurement requires judgment, and may
affect the valuation of the fair value of the financial instrument and its placement within the hierarchy level.

11. iNCOMe tAxeS

The provision for income taxes consists of the following:

Current

Deferred

yeARS eNdiNg deCeMBeR 31,

2011

2010

2009

(in thousands)

$ (2,594)

$ 10,241

$ 19,529

10,121

558

(3,358)

$ 7,527

$ 10,799

$ 16,171

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate before the provision for
income taxes.

2011The reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows:

Federal statutory rate

State income taxes, net of federal benefit

Other

yeARS eNdiNg deCeMBeR 31,

2011

2010

2009

(in thousands)

35%

(4)%

35%

(6%)

33%

35%

(2%)

37%

The “other” tax rate primarily relates to the domestic production activity credit, certain domestic credits and a change in rate applied to deferred
taxes.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amount used for income tax purposes.

The significant components of the Company’s deferred tax assets and liabilities at December 31, 2011, and 2010 are as follows:

Net current deferred assets and (liabilities) relating to:

Valuation reserves

Warranty accrual

Other accruals

Other, net

Net long-term deferred assets and (liabilities) relating to:

Depreciation

Share-based compensation

Other, net

deCeMBeR 31,

2011

2010

(in thousands)

$ 221

$ 342

2,376

1,216

710

2,385

1,311

109

$ 4,523

$ 4,147

(18,802)

(7,796)

648

364

504

$ (17,790)

$ (7,292)

We file income tax returns in the U.S., state and foreign income tax returns jurisdictions. We are currently under examination for our U.S.
federal income taxes for 2008 and 2009 and are subject to examination for tax years 2010 and 2011, and to non-U.S. income tax examinations for
the tax years of 2007 through 2010. In addition, we are subject to state and local income tax examinations for the tax years 2006 through 2011.

We are unaware of any positions for which it is reasonably possible that the total amounts of any unrecognized tax benefit will significantly
increase or decrease within 12 months of the reporting date. There are no unrecognized tax benefits that if recognized would impact the effective
tax rate at December 31, 2011 and 2010. The Company recognizes accrued interest and penalties related to income tax balances in income tax
expense.

A n n u A l R e p o R t

12. SHARe-BASed COMpeNSAtiON

We have historically maintained a stock option plan for key employees, directors and consultants (“the 1992 Plan”). The 1992 Plan provided for
6.6 million shares of common stock to be issued under the plan. Under the terms of the plan, the exercise price of shares granted may not be less
than 85% of the fair market value at the date of the grant. Options granted to directors prior to May 25, 2004, vest one year from the date of grant
and are exercisable for nine years thereafter. Options granted to directors on or after May 25, 2004, vest one-third each year, commencing one
year after the date of grant. All other options granted vest at a rate of 20% per year, commencing one year after date of grant, and are exercisable
during years 2-10.

On May 22, 2007, our stockholders adopted a Long-Term Incentive Plan (“LTIP”) which provides an additional 1,125,000 shares that can be
granted in the form of stock options, stock appreciation rights, restricted stock awards, performance units and performance awards. Since incep-
tion of the Plan, non-qualified stock options and restricted stock awards have been granted with the same vesting schedule as the previous plan.
Under the LTIP, the exercise price of shares granted may not be less than 100% of the fair market value at the date of the grant.

We recognized approximately $0.389 million, $0.446 million and $0.484 million at December 31, 2011, 2010 and 2009, respectively, in pre-tax
compensation expense related to stock options in the Consolidated Statements of Income. The total pre-tax compensation cost related to un-
vested stock options not yet recognized as of December 31, 2011 is $1.1 million and is expected to be recognized over a weighted-average period
of 2.3 years.

The following weighted average assumptions were used to determine the fair value of the stock options granted on the original grant date for
expense recognition purposes for options granted during December 31, 2011, 2010 and 2009:

director and Officers

Expected dividend yield

Expected volatility

Risk-free interest rate

Expected life

employees:

Expected dividend yield

Expected volatility

Risk-free interest rate

Expected life

2011

N/A

1.19%

45.22%

1.41%

8 years

2010

1.53%

45.37%

2.63%

7 years

1.53%

45.29%

2.44%

8 years

2009

1.87%

47.47%

2.53%

7 years

1.87%

46.94%

2.62%

8 years

The expected term of the options is based on evaluations of historical and expected future employee exercise behavior. The risk-free
interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at the
grant date. Volatility is based on historical volatility of our stock over time periods equal to the expected life at grant date.

2011The following is a summary of stock options outstanding as of December 31, 2011:

OptiONS OutStANdiNg

OptiONS exeRCiSABLe

NuMBeR
OutStANdiNg
At
deCeMBeR 31,
2011*

weigHted
AVeRAge
ReMAiNiNg
CONtRACtuAL
LiFe*

weigHted
AVeRAge
exeRCiSe
pRiCe*

AggRegAte
iNtRiNSiC
VALue*

NuMBeR
exeRCiSABLe At
deCeMBeR 31,
2011*

weigHted
AVeRAge
exeRCiSe
pRiCe*

81,850

229,500

171,200

170,500

653,050

2.42

5.71

5.86

9.14

6.23

6.91

9.78

12.29

16.28

11.77

13.58

10.71

8.20

4.21

10.44

81,850

153,900

114,200

16,200

366,150

6.91

9.56

12.12

15.91

10.05

RANge OF
exeRCiSe
pRiCeS*

6.45 – 7.21

7.53 – 10.66

10.75 – 13.79

15.51 – 21.57

Total

* Reflects 3-for-2 stock split effective June 13, 2011

A summary of option activity under the plan is as follows:

OptiONS

SHAReS*

weigHted
AVeRAge
exeRCiSe pRiCe*

weigHted
AVeRAge
ReMAiNiNg
CONtRACtuAL
teRM*

AggRegAte
iNtRiNSiC
VALue ($000)

Outstanding at December 31, 2008

Granted

Exercised

Forfeited or Expired

Outstanding at December 31, 2009

Granted

Exercised

Forfeited or Expired

Outstanding at December 31, 2010

Granted

Exercised

Forfeited or Expired

Outstanding at December 31, 2011

Exercisable at December 31, 2011

869,364

139,500

(246,020)

(72,075)

690,770

121,500

(149,420)

(33,600)

629,250

89,500

(56,350)

(9,350)

653,050

366,150

8.19

10.61

5.02

11.33

9.48

15.13

7.82

12.01

10.83

16.60

8.77

12.86

11.77

10.05

* Reflects 3-for-2 stock split effective June 13, 2011

6.23

4.62

5,693

3,824

The weighted average grant date fair value of options granted during 2011 and 2010 was $7.06 and $6.57, respectively. The total intrinsic value of
options exercised during December 31, 2011, 2010 and 2009 was $1.1 million, $2.4 million and $3.3 million, respectively. The cash received from
options exercised during December 31, 2011, 2010 and 2009 was $0.494 million, $1.2 million and $1.2 million, respectively. The impact of these
cash receipts is included in financing activities in the accompanying Consolidated Statements of Cash Flows. For the year ended December 31,
2011, 2010 and 2009, the excess tax benefits of stock options exercised and restricted stock awards vested was $0.211 million, $0.356 million and
$0.703 million, respectively.

A n n u A l R e p o R t

A summary of the status of the unvested stock options is as follows:

Unvested at January 1, 2011

Granted

Vested

Forfeited

Unvested at December 31, 2011

* Reflects 3-for-2 stock split effective June 13, 2011

SHAReS*

weigHted AVeRAge
gRANt dAte FAiR VALue*

309,900

89,500

(103,800)

(8,700)

286,900

$ 5.37

7.06

5.10

6.11

$ 5.97

The total grant date fair value of options vested during December 31, 2011 and 2010 was $0.5 million and $0.5 million, respectively.

During 2007, the Compensation Committee of the Board of Directors authorized and issued restricted stock awards to directors and key employ-
ees. The restricted stock award program offers the opportunity to earn shares of AAON Common Stock over time, rather than options that give
the right to purchase stock at a set price. Restricted stock awards granted to directors vest one-third each year. All other restricted stock awards
vest at a rate of 20% per year. Restricted stock awards are grants that entitle the holder to shares of common stock subject to certain terms. The
fair value of restricted stock awards is based on the fair market value of AAON common stock on the respective grant dates, reduced for the pres-
ent value of dividends.

These awards are recorded at their fair value on the date of grant and compensation cost is recorded using straight-line vesting over the service
period. The weighted average grant date fair value of restricted stock awards granted during 2011 and 2010 was $20.65 and $14.83 per share, re-
spectively. We recognized approximately $0.291 million, $0.344 million and $0.364 million at December 31, 2011, 2010 and 2009, respectively in
pre-tax compensation expense related to restricted stock awards in the Consolidated Statements of Income. In addition, as of December 31, 2011,
unrecognized compensation cost related to unvested restricted stock awards was approximately $0.466 million which is expected to be recognized
over a weighted average period of 1.5 years.

A summary of the unvested restricted stock awards is as follows:

Unvested at January 1, 2011

Granted

Vested

Forfeited

Unvested at December 31, 2011

* Reflects 3-for-2 stock split effective June 13, 2011

SHAReS*

42,075

15,750

(20,475)

37,350

201113. eMpLOyee BeNeFitS

Defined Contribution Plan - 401(k) – We sponsor a defined contribution plan (“the Plan”). Eligible employees may make contributions in ac-
cordance with the Plan and IRS guidelines. In addition to the traditional 401(k), effective July 2010, eligible employees were given the option of
making an after-tax contribution to a Roth 401(k) or a combination of both. Effective May 30, 2005, the Plan was amended to provide for auto-
matic enrollment and provided for an automatic increase to the deferral percentage at January 1st of each year and each year thereafter, unless
the employee elects to decline the automatic increase and enrollment. Beginning with pay periods after May 30, 2005, the one year enrollment
waiting period was waived.

Under the plan the Company contributes a specified percentage of each eligible employee’s compensation. In addition, the Company contrib-
utes 1.5% of eligible payroll to the 401(k) plan each year. We contribute in the form of cash and direct the investment to shares of AAON stock.
Employees are 100% vested in salary deferral contributions and vest 20% per year at the end of years two through six of employment in employer
matching contributions. For the year ended December 31, 2011, 2010 and 2009 we made matching contributions of $2.2 million, $1.7 million
and $1.2 million, respectively. Administrative expenses were approximately $0.108 million, $0.097 million and $0.081 million for the years ended
2011, 2010 and 2009, respectively.

Profit Sharing Bonus Plan – We maintain a discretionary profit sharing bonus plan under which 10% of pre-tax profit is paid to eligible employ-
ees on a quarterly basis in order to reward employee productivity. Eligible employees are regular full-time employees who are actively employed
and working on the first day of the calendar quarter and remain continuously, actively employed and working on the last day of the quarter and
who work at least 80% of the quarter. Profit sharing expense was $2.4 million, $3.8 million and $4.8 million for the years ended December 31,
2011, 2010 and 2009, respectively.

14. SHAReHOLdeRS’ eQuity

Stockholder Rights Plan - During 1999, the Board of Directors adopted a Stockholder Rights Plan (the “Plan”), which was amended in 2002.
Under the Plan, stockholders of record on March 1, 1999, received a dividend of one right per share of our Common Stock. Stock issued after
March 1, 1999, contains a notation incorporating the rights. Each right entitles the holder to purchase one one-thousandth (1/1,000) of a share of
Series A Preferred Stock at an exercise price of $90. The rights are traded with our Common Stock. The rights become exercisable after a person
has acquired, or a tender offer is made for, 15% or more of our Common Stock. If either of these events occurs, upon exercise the holder (other
than a holder owning more than 15% of the outstanding stock) will receive the number of shares of our Common Stock having a market value
equal to two times the exercise price.

The rights may be redeemed by us for $0.001 per right until a person or group has acquired 15% of our Common Stock. The rights expire on
August 20, 2012.

Stock Repurchase - On May 12, 2010, we completed a stock buyback program under a Board of Directors authorization dated November 6, 2007.
As authorized we repurchased a total of 2.7 million shares under this program for an aggregate price of approximately $36.1 million, or an aver-
age price of $13.36 per share. We purchased these shares at current market prices.

On May 17, 2010, the Board authorized a new stock buyback program, targeting repurchases of up to approximately 5% (approximately 1.3 mil-
lion shares) of our outstanding stock from time to time in open market transactions. Through June 28, 2010, we repurchased a total of approxi-
mately 0.718 million shares for an aggregate price of $11.5 million, or an average price of $16.04 per share. We purchased the shares at current
market prices. No purchases were made during 2011.

On July 1, 2005, we entered into a stock repurchase arrangement by which employee participants in our 401(k) savings and investment plan are
entitled to have shares of AAON stock in their accounts sold to us to provide diversification of their investments. The maximum number of
shares to be repurchased is not known under the program as the amount is contingent on the number of shares sold by employees. Through De-
cember 31, 2011, we repurchased 1.7 million shares for an aggregate price of $21.5 million or an average price of $12.71 per share. We purchased
the shares at current market prices.

On November 7, 2006, the Board of Directors authorized us to repurchase shares from certain directors and officers following their exercise of
stock options. The maximum number of shares to be repurchased under the program is not known as the amount is contingent on the number
of shares sold. Through December 31, 2011, we repurchased 579,625 shares for an aggregate price of $8.1 million or an average price of $13.98
per share. We purchased the shares at current market prices.

A n n u A l R e p o R t

Dividends - At the discretion of the Board of Directors we pay semi-annual cash dividends. Board approval is required to determine the date of
declaration and amount for each semi-annual dividend payment. The Board of Directors approved dividend payments of $0.12 per share related
to the 3-for-2 stock split effective on June 13, 2011.

15. COMMitMeNtS ANd CONtiNgeNCieS

We are party to several short-term, cancelable and occasionally non-cancelable, fixed price contracts with major suppliers for the purchase of raw
material and component parts. We expect to receive delivery of raw materials for use in our manufacturing operations. These contracts are not
accounted for as derivative instruments because they meet the normal purchases and sales exemption.

16. eARNiNgS peR SHARe

Basic net income per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding during
the period. Diluted net income per share assumes the conversion of all potentially dilutive securities and is calculated by dividing net income by
the sum of the weighted average number of shares of common stock outstanding plus all potentially dilutive securities. Dilutive common shares
consist primarily of stock options and restricted stock awards.

The following table sets forth the computation of basic and diluted earnings per share:

NuMeRAtOR:

Net Income

deNOMiNAtOR:

Basic earnings per share –
Weighted average shares*

yeARS eNded,

2011

2010

2009

(in thousands except share and per share data)

$ 13,986

$ 21,894

$ 27,721

24,689,852

25,198,166

25,780,395

Effect of dilutive stock options and restricted stock*

191,294

141,227

183,057

Diluted earnings per share –
Weighted average shares*

Earnings per share

Basic*

Diluted*

Anti-dilutive shares*

Weighted average exercise price of

anti-dilutive shares*

* Reflects 3-for-2 stock split effective June 13, 2011

24,881,146

25,339,393

25,963,452

$0.57

$0.56

171,250

$0.87

121,500

$1.07

340,425

$16.35

$15.23

$10.43

201117. QuARteRLy ReSuLtS (uNAudited)

The following is a summary of the quarterly results of operations for the years ending December 31, 2011 and 2010:

2011

Net sales

Gross profit

Net income

Earnings per share:

Basic*

Diluted*

2010

Net sales

Gross profit

Net income

Earnings per share:

Basic*

Diluted*

QuARteR eNded

MARCH 31

juNe 30

SepteMBeR 30 deCeMBeR 31

(in thousands, except per share data)

$ 59,913

$ 69,076

$ 73,829

$ 63,402

11,638

3,650

0.15

11,737

3,839

0.16

0.15

14,259

5,626

8,647

871**

0.23

0.04

QuARteR eNded

MARCH 31

juNe 30

SepteMBeR 30

deCeMBeR 31

(in thousands, except per share data)

$ 49,309

12,994

5,118

$ 64,531

15,506

5,821

$ 64,886

12,497

5,173

$ 65,826

14,191

5,782

0.20

0.23

0.21

0.23

* Reflects three-for-two stock split effective June 13, 2011.
** Includes a pre-tax loss from the trade-in of production equipment of approximately $1.8 million.

A n n u A l R e p o R t

CONSeNt OF iNdepeNdeNt RegiSteRed puBLiC ACCOuNtiNg FiRM

We have issued our reports dated March 14, 2012, with respect to the consolidated financial statements and internal control over financial report-
ing included in the Annual Report of AAON, Inc. on Form 10-K for the year ended December 31, 2011. We hereby consent to the incorporation
by reference of said reports in the Registration Statements of AAON, Inc. on Forms S-8 (File No. 333-52824, effective December 28, 2000 and File
No. 333-151915, effective June 25, 2008).

/s/ GRANT THORNTON LLP
Tulsa, Oklahoma

March 14, 2012

2011CeRtiFiCAtiON

exHiBit 31.1

I, Norman H. Asbjornson, certify that:

1. I have reviewed this Annual Report on Form 10-K of AAON, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered
by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects

the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined

in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervi-
sion, to ensure that material information relating to the registrant, including our consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

d) disclosed in this report any change in the registrant’s internal controls over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to

the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting.

Dated: March 14, 2012

/s/ Norman H. Asbjornson

Norman H. Asbjornson
Chief Executive Officer

A n n u A l R e p o R t

exHiBit 31.2

CeRtiFiCAtiON

I, Kathy I. Sheffield, certify that:

1. I have reviewed this Annual Report on Form 10-K of AAON, Inc.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects

the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to

the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably

likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal con-

trol over financial reporting.

Dated: March 14, 2012

/s/ Kathy I. Sheffield

Kathy I. Sheffield
Chief Financial Officer

2011

CeRtiFiCAtiON puRSuANt tO
18 u.S.C. SeCtiON 1350,
AS AdOpted puRSuANt tO
SeCtiON 906 OF tHe SARBANeS-OxLey ACt OF 2002

exHiBit 32.1

In connection with the Annual Report of AAON, Inc. (the “Company”), on Form 10-K for the year ended December 31, 2011, as filed
with the Securities and Exchange Commission on the date hereof (the “Report”), I, Norman H. Asbjornson, Chief Executive Officer of the Com-
pany, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and our results of operations.

Dated: March 14, 2012

/s/Norman H Asbjornson

Norman H. Asbjornson
Chief Executive Officer

A n n u A l R e p o R t

exHiBit 32.2

CeRtiFiCAtiON puRSuANt tO
18 u.S.C. SeCtiON 1350,
AS AdOpted puRSuANt tO
SeCtiON 906 OF tHe SARBANeS-OxLey ACt OF 2002

In connection with the Annual Report of AAON, Inc. (the “Company”), on Form 10-K for the year ended December 31, 2011, as filed

with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kathy I. Sheffield, Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and our results of operations.

Dated: March 14, 2012

/s/ Kathy I. Sheffield

Kathy I. Sheffield
Chief Financial Officer

2011

OFFiCeRS

NormaN H. asbjorNsoN has served as President and a director of the Company since 1988. Mr. Asbjornson has been in senior management positions in the heating and air conditioning industry for over 40 years.RobeRt G. FeRGus has served as Vice President of the Company since 1988. Mr. Fergus has been in senior management positions in the heating and air conditioning industry for over 40 years. Kathy I. SheffIeld became treasurer of the Company in 1999 and Vice President in June of 2002. Ms. Sheffield previously served as Accounting Manager of the Company from 1988 to 1999. John B. Johnson, Jr. has served as Secretary and a director of the Company since 1988. Mr. Johnson is a member of the firm of Johnson & Jones which serves as General Counsel of the Company. DaviD E. KnEbEl has served as Vice President of Sales for the Company since 2005. Mr. Knebel has been in the heating and air conditioning industry for over 40 years, holding positions in design, research, software development, engineering, teaching, sales and senior management.BOARd OF diReCtORS

Back row (from left to right): Paul K. Lackey, Jr., Jerry R. Levine, A.H. McElroy, II, Joseph E. Cappy
Front row (from left to right): John B. Johnson, Jr., Norman H. Asbjornson, Jack E. Short

NORMAN H. ASBjORNSON
President/CEO

jOHN B. jOHNSON, jR. Secretary

jOSepH e. CAppy was elected a director
of the Company in 2010. From 1997 to 2003,
Mr. Cappy served as the Chairman, President
and CEO of DollarThrifty Automotive Group.
From 1987 to 1997 he was Vice President of
Chrysler Corporation. From 1982 to 1987 he
was President and CEO of American Motors
Corporation.

jACk e. SHORt was elected to the Board
in July 2004 and is the Chairman of the
Audit Committee. Mr. Short was employed
by PriceWaterhouseCoopers for 29 years
and retired as the managing partner of the
Oklahoma practice in 2001.

A.H. MCeLROy, ii was elected as
a director of the Company in 2007.
From 1997 to present, Mr. McElroy has
served as President and CEO of McElroy
Manufacturing, Inc., a manufacturer of fusion
equipment and fintube machines.

pAuL k. LACkey, jR. was elected as a
director of the Company in 2007. From 2001
to present, Mr. Lackey has served as CEO
and president of NORDAM, a privately held
aerospace company.

jeRRy R. LeViNe has served as a director
of the Company since 2008. Since 1999, Mr.
Levine has provided investor and shareholder
relations services and advice to the Company.

CORpORAte
dAtA

Transfer Agent and
Registrar
Progressive Transfer Company,
1981 East Murray-Holladay
Road, Suite 200,
Salt Lake City, Utah 84117

Auditors
Grant Thornton LLP,
2431 East 61st Street, Suite
500, Tulsa, Oklahoma 74136

General Counsel
Johnson & Jones,
2200 Bank of America
Center, 15 West Sixth Street,
Tulsa, Oklahoma 74119

Investor Relations
Jerry Levine,
105 Creek Side Road,
Mt. Kisco, New York 10549,
Ph: 914-244-0292,
Fax: 914-244-0295,
jrladvisor@yahoo.com

Executive Offices
2425 South Yukon Avenue,
Tulsa, Oklahoma 74107

Common Stock
NASDAQ-AAON

tHANkS tO OuR eMpLOyeeS

Edgar Acevedo

Estronz

Maria D. Acosta
Maria L. Acosta
Martha Acosta
Martin Acosta
Andres Acosta-Lujan
Enriqueta Adame
Derrick Adams
Gary Adams
Robert Adams
Rodney Adams
Ryan Adams
Timothy Adams
Michael Addy
Brian Adkins
Maria Aguayo
Arturo Aguilar
Miguel Aguilera
Daniel Alagdon
Martha Alanis
Javier Alba
Julio Albino
Eric Alexander
James Alexander
Shannon Alford
Brendan Allen
Donald Allen
Kevin Allen
Earl Alston
Luis Alvarado De La

Cruz

Michael Amburgey
Thomas Amburn
Sarah Andersen
Elbert Anderson
Jose Andrada
Fannie Andrews
Margarito Angeles
Wesley Anselme
Alfredo Antonio
Daniel Aponte
Lorenzo Aragon
Nohemi Aranda
Clyde Archer
Uriel Arellano Guerra
Jose Argumedo

Ruiz

Thomas Armer, Jr.
Rondell Armstrong
Shawn Armstrong
Maria Arredondo
Gerardo Arroyo
Eleazar Arroyo

Alvarez

Norman Asbjornson
Scott Asbjornson
David Ashlock
Gary Ashmore
Lamario Ashton
Dwight Austin
Ivan Avalos
Jesus Avelar Saldivar
Joseph Avila
Orlando Ayala

Nora Backus
Richard Backus
Leslie Bacon
Justin Bagby
Bruce Bailey
Dwight Baker
Eric Baker
John Baldwin
Miguel Barajas
Jennifer Barbee
Carolyn Barber
Ray Barber
Candy Barbosa
Gregory Barker, Jr.
Justin Barlett
Daniel Barnard
David Barnett
Ana Barragan De

Alteneh

Nereyda Barrios De

Perez
Rosa Barro
Maria Barron
Teresa Barron
Michael Bass
Stuart Baugh
Cody Bayer
John Beard
Aaron Beavers
Daniel Beck
Lionel Beckman
Kevin Begley
Jesse Bennett
Bonnie Benson
Brandon Benton
James Berden
Ida Bermudez
Gary Bernier
Elliot Berryhill
Sergio Beserra
William Birmingham
Seth Black
Vickie Black
Brian Blackmon
Debbie Blackmon
Maria Blanco
David Blevins
Justin Blevins
Tabitha Bodine
Gene Boese
Kim Boih
Lun Boih
Scott Bolden
James Bond
Michael Boney
Debra Booher
Michael Booth
Ronnie Booth
Robert Botello
Rosendo Botello
Demetrius Boyd
John Boyd
Ivan Boykin
Brian Bradford
Myoshia Bradley

Christopher Brantley
Arlando Brewer
Shahani Britt
Dustin Brod
Arlunda Brooks
David Brown
Jermaine Brown
Wallace Brown
Freddie Brown, Iii
Johnny Brown, Jr.
Christopher Bryant
William Bryant
Jon Buck
Darvin Bull
Jason Bunnell
Kelli Burkes
Monica Burns
Lavar Burton
Stephen Burton
Douglas Burtrum
Wayne Bush
Verenice Bustos
Beatrice Butler
Rhett Butler
Rosa Butler
David Bya
Jeremy Byram
Michael Cable
Janibal Cabudoy
Victor Cade
Alejandro Cadena
Dora Cadena
Jose Cadenas
Santiago Cadenas
Cleveland Cage, Jr.
Margarito Calderon
Screeman Calico
Jorge Calixto
Elizabeth Calvillo
Lazaro Cama
Maria Camacho
Christina Camarda
April Cameron
David Campbell
Arthur Candler
Yong Cantrell
Carlos Caraballo

Mariani

Refugio Carachure
Jorge Carcamo
Anthony Cardenas
Billy Carder
Tevin Carmons
Vincent Carson
Larry Carter, Jr.
James Cason
Patrick Castorena
Soledad Castro
Jose Castro M
Hector Cazares
Elvis Cerda
Francisco Cervantes
Guadalupe Chairez-

Galan

Jonathan Chapman

Patrick Chapman
Clark Chase
Edgar Chavez
Gregory Chavez
Ramiro Chavez
Rita Chavez
Jose Chavez Perez
Dale Cherry
Daniel Cherry
Adan Chicas
Larenzo Chiles
Man Ciin
Hau Cin
Kam Cin
Kham Cin
Sian Cin
Tg Cin Za Khai
Dim Cing
Hau Cing
Man Cing
Nem Cing
Vung Cing
Justin Claiborne
George Clark
John Clark
Samuel Clark, Jr.
Stephanie Cleveland
William Cleveland
Brenda Coats
David Cochran
Kenneth Cochran
Kenneth Cochran, Jr.
Troy Cockrum
Michael Coffelt
Arthur Cole
Latoya Coleman
Ronald Collins
Dale Conkwright
Michael Conley
Jude Connolly
Roberto Contreras
Maria Cook
Mark Cook
Michael Coolidge
Scott Coon
Donna Coonfield
Allen Cooper
James Cooper
Alvis Copeland
Pablo Cordova
Cordova
Elaine Corkhill
Roberto Corona
Genoveva Corona De

Rivera
Rosa Cortez
Jonathan Coti
Curtis Counce
Billy Cox
Jerry Cox
Maxine Cox
Robert Cox
Adrian Crabtree
Richard Craite
Steven Crase

Devin Creech
Juan Crespo-
Maisonet
Mikel Crews
Darryl Crossnoe
Darrell Crow
Carolyn Crutchfield
Jose Cruz
Jose Cuadroz
Victory Cullom, Ii
Robert Cummings
Gene Curtis
Kevin Cyrus
Hau K. Dal
Hau S. Dal
Gwendolyn Daniels
John Daniels
Justin Daniels
William Daugherty
Jan Daulton
Jenifur Davidson
Byron Davis
Carolyn Davis
Cathy Davis
Chester Davis
Jerry Davis
Marleitta Davis
Rhonda Davis
Richard Davis
Samuel Davis
Cookie Davison
Wilfredo De Jesus
Otilia De Jones
Matilde De La Torre
Yoana De La Torre
Alvaro De Leon
Mendoza
Pedro De Los
Santos, Jr.

David Debenedictis
Freddie Deboe
Bobby Degraffenreid
Ismael Delapaz
Eva Delatorre
David Delay
Juana Delobo
Andres Delos Santos
Raquel Deluna
Shiira Demery
Demario Dennis
Raymond Denton
Bruce Derr
Jermein Devers
Audencia Devilla
Roy Deville
Charles Deweese
Anthony Diaz
Miguel Diaz Burgos
Ciin Dim
Richard Dobson
Rickey Dodson
Edreys Dominguez
Leslie Donaldson
Thang Dop Mui
Suanne Doty

tHANkS tO OuR eMpLOyeeS

Thomas Dreadfulwater
Michael Drew
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Jeffrey Easter
Stephen Edmonds
Harvey Ellis
Brent Elsheimer
Austin Embry
Gregory English
Tinisha English
John Enochs
Jeffrey Enox
Eva Enriquez
Steven Ervin
Daisy Escalante
Teresa Escobedo
Norberto Esparza-

Torres

Leonardo Espinoza

Flores

Jesus Estrada-
Gonzalez
Stephen Etter
Gilda Etumudor
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Joshua Everett
Reginald Everidge, Jr.
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Shawn Fairley
Jeremy Farris
Jeffrey Fath
Richard Faust
Robert Fergus
Catalina Fernandez
Fabiola Fernandez
Samuel Fields
Jahel Fierros
Thomas Fierros
Jesse Figueroa
Christian Figueroa

Mauras
Sterlyn Finch
Nicholas Finkbiner
Anthony Fisher
Bruce Fisher
Chad Fisher
Anthony Fizer
Copotenia Fletcher, Jr.
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Efigenia Flores
Juana Flores
Laura Flores
Ruby Floyd
Vicky Floyd
John Floyd, Jr.
Mark Fly
Sharon Fontenot
Harold Ford
Gregory Foreman
Sheila Forrest
Alex Foster
Bradley Foster

Christopher Foster
Frederick Foster
Kyle Foth
Cory Foughty
Charles Fowler, Iii
Loretta Fowlkes
Stephen Fox
Kenneth Foyil
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Damion Franklin
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Revonda Franks
Matthew Frederick
Gary Frederiksen, Jr.
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Angel Frias
Barry Friend
Wade Fuller
Rony Gadiwalla
Curtiss Gaines
Ranulfo Galicia
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Gregorio Galindo
Maria Galindo
Mayra Galindo
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Josue Gallegos
Belinda Galvan
Ma Galvan
Andrez Garcia
Angel Garcia
Roberto Garcia
Wuilson Garcia
Alvarado

Isidro Garcia Arriaga
Juan Garcia Fonseca
Norma Garibay
Patrick Garrett, Sr.
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Michael Garrison, Jr.
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Steve Geary
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Penny Glossinger
Jim Goekler
Celia Gomez
Jose Gomez
Maria Gomez
Moises Gomez
Maria Gomez Medina
Daniel Gomez-Sigala
Adrian Gonzalez
Imelda Gonzalez
Marisela Gonzalez
Raul Gonzalez
Jason Goodman
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Dale Graham
Buenaventura

Granados-Rubios

Michael Green
Ray Green
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Aaron Griffin
John Griffin
Kevin Griffin
Ronald Grimes

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Carolina Guillen
Ronald Guinn
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Nancy Hackney
Donald Hafemann
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Vickie Hagan
Joshua Halfpap
Dennis Hall
Jack Hall
Kelly Hall
Koren Hall
Stephen Hall
Scott Hamilton
Otis Hamilton
Jeffrey Hammer
Sam Hammoud
Joseph Hampton, Jr.
Donald Harden
Brandon Harper
Brandy Harris
Ladarius Harris
Natasha Harris
Stacey Harris
Marcus Harry
Robi Hartmann
Heather Haskins
James Hasselbring
Troy Hatfield
Vung Hau
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Tim Hefflin
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Jennifer Henderson
Kevin Henson
Tou Her
Armando Hernandez
Blanca Hernandez
Corcina Hernandez
Lily Hernandez
Luis Hernandez
Maria Hernandez
Maria M. Hernandez
Mariano Hernandez
Samuel Herrera
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Mark Heston
Damiun Hicks
Takeo Higa
Brenda Higgins
Larry Highfield
Dewayne Hightower
Quinton Hilburn
Latasha Hill
Marcus Hill
Juan Hinojosa
Tyson Hinther
Bon Hoang
Samuel Hobson
Bryan Holland
Donna Holloway
Lawrence Honel

Stephen Hoover
Gary Horn
Kevin Horn
Terri Horn
Scott Horton
Stanley Horton
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Larry Howard
Do Ngaih Huai
Nuam Huai
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Philip Hudson
Ruben Huerta
Anthony Huffman
Jimmy Hughes
Ronald Hutchcraft
Gary Hutchins
Cindi Hutton
Tan Huynh
Okechukwu Ibeh
Alexander Ignatenkov
Samuel Ingram
Tim Ingram, Sr.
Michael Isham
Belinda Jackson
Jeff Jackson
Danny Jacot
Jose Jamaica
Alejandro Jaramillo
Joseph Jelinek, Jr.
Rachael Jennings
Genelle Jimboy
Vincent Jimenez
Pedro Jimenez-Delfin
Samuel Jimison
Frederick Jimmerson
Ashley Johnson
Ed Johnson
Holly Johnson
Lakendrick Johnson
Sylvia Johnson
Timothy C. Johnson
Timothy L. Johnson
Cheryl Jones
Danny Jones
David Jones
Dean Jones
Djuan Jones
Henry Jones
Jeremy Jones
Raymon Jones
Remia Jones
Ricky Jones
Rose Jones
Terry Jones
Timothy Jones
James Jones, Jr.
Rodney Jordan
Sean Jordan
Jaime Juarez
Leandro Jumelles

Nunez

Garrett Kaiser
Patrick Kaiser
Do Kam
Hau Kam
Khual Kam
Ngin Kam

Dal Kap
Gin Kap
Lian Kap
Ngin Kap
Thang Kap
Brian Kastl
Michael Katuin
Adam Kauffman
Eryn Kavanaugh
Tuang Kawi
Richard Keaton
Aaron Kelly
Quinn Kelly, Jr.
Brian Kelsey
Gregg Kennedy
Ronald Kenney
Antony Khai
Do Khai
En Khai
John Khai
Kham Khai
Lang Khai
Mang K. Khai
Mang L. Khai
Nang Khai
Pau Khai
Peter Khai
Peter Khai
Thang H. Khai
Thang S. Khai
Vuum Khai
Go Kham
Mung Kham
Ngun Kham
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Cin Khin
Niang Khoi
Hau Khual
Khai Khual
Thang Khual
Za Khual
Cin Khup
Dai Khup
Deih Khup
Kap Khup
Kham Khup
Kham Khup
Ngin Khup
Thang Khup
Tuan Khup
Justin Kidd
Alan Kilgore
Andrew Kilgore
Cin K. Kim
Cin T. Kim
Cing Kim
Hau Kim
Kap Kim
Thang D. Kim
Thang T. Kim
Bryan King
Cody King
Gene King
Joseph King
Lori King
Randy King
Russell King
Roger Kinkade, Jr.
David Knebel

Christian Knox
Robert Knuth
Scott Koscheski
James Koss
Edward Kracke, Ii
Robert Krafjack
Larry Kreps
Mikhail Krupenya
Karl Kuenemann
Thu Kun Hen
Laura Kyle
Carmelo Laboy Ramos
Phillip Lafond
Giang Lai
Do Lal
Sei Lal
George Lam
Mang Lam
Cole Lambert
Quinton Lambert
Deborah Lane
Donald Laney
Gin Lang
Kap Lang
Pum Lang
Kap Langh
Thawng Langh
Martin Larsen
Michael Lavallee
Bill Lawson
Jeffrey Lawson
Ronald Lawson
Steven Lazarin
Anh Le
Lai Le
Michel Lebel
Jose Lebron
David Lee
Gralind Lee
Jacqueline Lee
Rhonda Lee
Kevin Lee, Jr.
Matthew Leeper
Hugo Lerma
Boy Let
Dal Lian
Do Lian
Gin Lian
Hau Lian
Kam Lian
Sing Lian
Tha Lian
Thang D. Lian
Thang K. Lian
Tuan L. Lian
Tuan S. Lian
Ping Lin
Jerry Lincoln
Thomas Lincoln
William Lindsay
Jerome Linwood
John Livingston
Jonathan Lockmiller
Samuel Lockridge
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Margarito Lopez
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Robert Lopez

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Ana Lopez Martinez
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Quannah Ludlow
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Lu Lun
Mariana Luna
Ryan Luna
Joshua Lundy
Kelly Lybarger
Jimmy Mabry
Gregory Mack
Charles Madden
Jorge Madrigal
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N Mai
Carlos Malone
Jeffrey Maly
Ciin Man
Cing Man
Maria Mancilla
Dal Khan Mang
Dal Kim Mang
En Mang
Kam Mang
Kham Mang
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Lian Mang
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Thang Mang
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Ma Marquez De-

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Florentino Martin-

Romo

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Miguel Martinez
Obdulia Martinez
Rafael Martinez

Espinoza

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Leon

Hector Martinez

Molina

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Ordaz

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Thomas Masengale,

Jr.

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Brittaney Medders
J Medina Olvera
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Edwin Mendez

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Ronald Modlin
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Enoc Montes
Jerome

Montgomery, Jr.

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Marc Moore
Maria Moore
Tony Moore
Alfonso Moran
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Myron Morgan
Shannon Morrison
Desron Morrow
Marcus Morrow
Phillip Moss, Jr.
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Do Muang
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En Mung
Gin L. Mung
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Kam Mung
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Lang Mung
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Suan S. Mung
Thang Mung
Tuan Mung
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Vung Mung
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Gonzalez
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Munoz
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Roy Mcconnell
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Debra Mccowan
Wesley Mccowan, Jr.
David Mccoy
Marc Mccuin
Michael Mccuin
Kathy Mcculloch
Loyd Mcdaniel
Randall Mcdaniel
Sharon Mcdaniel
Karen Mcdow
James Mcelroy
Deborah Mcfarlin
Charles Mcgraw
Mark Mcillwain
Michael Mcillwain
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Domingo Mcknight
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Krystal Nail
Omar Najera
Sing Nang
Thomas Nang
Marcus Naranjo
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Go Naulak
Jose Nava
Maria Nava
Abel Navejas
Clayton Neal
Mark Neal
Samuel Neale
Natalie Neilson
Brian Nelson
Ronald Nelson
Ciin Neu
Robert Neu
Cing Ngaih
Duong Nguyen
Gam Nguyen
Hoang-Chi Nguyen
Phuoc Nguyen
Thanh Nguyen
Cing Niang
Dim Niang
Leen Niang
Karen Niles-Blayer
Hank Noeske
Christopher Norfleet
Willie Norfleet
Robert Norfleet, Jr.

Eric Norris
Debra Nothnagel
Mary Nu
Let Nung
John Nutt
Michael O’brien
James O’neill, Jr.
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Deangelo Oakley
Alexander Ofosu
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Maria Olivas De

Torres
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Edmundo Paiz
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Candido Palomo
J Paniagua
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Perez

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Alexander

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Tuang Pi
Thang K. Piang
Thang L. Piang
Zam Piang
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Fernando Pineda, Jr.
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Basant Pokhrel
Renu Pokhrel
Mark Pool
Timothy Pool
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James Potter
Ardeshir Pouraryan
Mark Powell
Rudy Powell
Greg Powers
Jeffery Powers
Jose Prado
Kenneth Prentice, Jr.
Lee Prince
Lian Pu
Sian Pu
Alma Puga
Daniel Puga, Jr.
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Jesus Quinones
Sahir Rafah
Cold Rain
Nimalakirthi
Rajasinghe
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Raymon Ramirez
Samuel Ramirez
William Ramirez
Nandy Ramirez B
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Robert Rayno
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Sandra Reader
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Freeman Reed, Jr.
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Robert Riddell
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Delmecio Riser
Stephen Riser
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Michael Robinson
William Robinson, Jr.
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Alonso Rodriguez
Diana Rodriguez
Endis Rodriguez
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Maria Rodriguez
Martin Rodriguez
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Rebecca Rodriguez
Rivelino Rodriguez
Luz Rodriguez Becerra
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Santibanez

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Tony Rogers
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Richard Rowe, Jr.
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Jimmy Russell
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Kimberly Russell
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Wenceslao Santiago
Harold Santiago Torres
Carlos Santiago Torrez
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Donald Scott, Sr.
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Let Sei
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Thomas Shaw, Jr.
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Jordan Smith
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Sweetie Smith
Robert Smith, Ii
Wilbert Smith, Jr.
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Showe Soe
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Cin Kim Thang

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Cin Lian Thang
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Let Thang
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