AAON Annual Report 2021 | Quarterlytics

FY2021 Annual Report · AAON

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The history of AAON extends back 34 years when our founder Norm Asbjornson decided to create a

business that designs and produces semi-customized HVAC equipment that excelled in performance
relative to the market. Cutting edge innovation and engineering were the primary focus since day one.
This foundation supported the company’s growth in its early days and is just as important today.

Over the last several decades, AAON has led the nonresidential HVAC equipment market in quality,
customization, innovation, performance, energy efficiency, lower cost of ownership and reliability.
Today, we describe this as sustainable innovation. Historically, sustainable innovation came at an
upfront cost premium. Although we have always designed our equipment so that the cost over
the course of the life span of the equipment was very competitive, the premium upfront cost of
the equipment kept us from being mainstream. For that reason, we have been a niche provider until now.

Secular trends related to decarbonization and indoor air quality are leading to a shift in demand from
standard equipment to more capable, higher sophisticated equipment that is more energy efficient while
providing cleaner air quality. Simply put, demand is shifting towards the sustainable innovation that
AAON has been providing for decades. Sustainable innovation will still come with an upfront premium
price. However, AAON’s years of experience creating the most efficient automated production operations
that manufacture sustainable equipment positions the company with a big advantage. We believe this
transformation in the market will lead to AAON providing the highest quality equipment for the most
attractive price, which will allow the company to evolve from niche to mainstream.

AAON is engaged in the engineering, manufacturing, marketing and sale of air conditioning and

heating equipment consisting of standard, semi-custom and custom rooftop units, chillers,
packaged outdoor mechanical rooms, air handling units, condensing units, makeup air units,
energy recovery units, geothermal/water-source heat pumps, coils and controls. Since the founding
of AAON in 1987, AAON has maintained a commitment to design, develop, manufacture and deliver
innovative heating and cooling products to perform beyond all expectations and demonstrate the value of
AAON to our customers.

Controls(WSHP, RTU, SELF-CONTAINED, SPLIT SYSTEM, & CHILLER)Pioneer SilverPioneer GoldVCCX-2 Indoor Air Handling Units(800 - 50,000 + cfm)F1 SeriesH3 SeriesV3 SeriesSA SeriesM2 SeriesOutdoor Air Handling Units(800 - 72,000 + cfm)RZ Series, PinnacleRN SeriesRQ SeriesSelf-Contained Units (3-70 tons)M2 SeriesSA SeriesSB SeriesWater-Source Heat Pumps(½ - 230 tons)WH Series & WV Series,ProFit & EcoFitRQ SeriesRN SeriesSB SeriesSA SeriesRZ Series, PinnacleM2 SeriesPackaged Rooftop Units(2-240 tons)RQ SeriesRN SeriesRZ Series, PinnacleChillers(4-55 tons)LF SeriesCondensing Units(2-70 tons)CB SeriesCF SeriesBasX SolutionsCustom Air Handling UnitsData Center Cooling SystemsModular Cleanrooms2021 Pro Forma Net Sales BreakdownAbout AAONEnvironmentally Friendly HVAC Product Family*The operations of BasX have been included in our statements of income since the closing date on December 10, 2021. The above unaudited pro forma breakdown of net sales for the years ended December 31, 2021 are presented as if the combination had been made on January 1, 2021.Rooftop UnitsData Center CoolingSolutionsPartsCondensing UnitsWater-Source Heat PumpCleanroom SystemsOtherAir Handling65%97%2%3%3%4%5%7%9%United StatesInternationalAAON OklahomaAAON Coil ProductsBasX Solutions11%13%76%3%Pro Forma Net Sales by ProductPro Forma Net Sales by GeographyPro Forma Net Sales by Segment(Unaudited)5

2020

2019

2018

2017

Income Data ($000 except per share data)
Net Sales
Gross Profit
Operating Income
Interest Income (Expense), Net
Depreciation and Amortization
Pre-Tax Income
Net Income
Earnings per Share
Basic
Diluted

Balance Sheet ($000 except per share data)
Working Capital
Current Assets
Net Fixed Assets
Accumulated Depreciation
Cash and Cash Equivalents
Total Assets
Current Liabilities
Long-Term Debt
Stockholders’ Equity
Stockholders’ Equity per Diluted Share

534,517
137,830
69,253
(132)
30,343
69,182
58,758

1.12
1.09

131,312
218,080
258,062
224,146
2,859
650,180
86,768
46,406
466,170
8.68

514,551
155,849
101,836
88
25,634
101,975
79,009

1.51
1.49

161,218
220,251
223,340
203,125
79,025
449,008
59,033
6,363
350,865
6.61

Funds Flow Data ($000)
Operations
Investments
Financing
Net Increase (Decrease) in Cash

Ratio Analysis
Gross Profit
Return on Average Equity
Return on Average Assets
Pre-Tax Income on Sales
Net Income on Sales
Total Liabilities to Equity
Quick Ratio1
Current Ratio
Year-End Price Earnings Ratio

61,183
(158,719)
18,735
(78,801)

128,814
(61,273)
(29,626)
37,915

25.8%
14.4%
10.7%
12.9%
11.0%
39.5%
1.0
2.5
72.9

30.3%
24.7%
19.3%
19.8%
15.4%
28.0%
2.3
3.7
44.7

469,333
119,425
67,011
66
22,766
67,031
53,711

433,947
103,533
55,351
196
17,655
55,500
42,329

405,232
123,651
74,235
298
15,007
74,624
53,830

1.03
1.02

0.81
0.80

1.02
1.01

131,521
187,549
178,094
179,242
26,797
371,424
56,028
6,320
290,140
5.51

97,925
(37,046)
(18,500)
42,379

25.4%
19.9%
15.8%
14.3%
11.4%
28.0%
2.0
3.3
48.4

93,167
140,658
163,003
166,880
1,994
307,994
47,491
-
249,443
4.74

54,856
(34,635)
(39,684)
(19,463)

23.9%
17.3%
14.0%
12.8%
9.8%
23.5%
1.3
3.0
43.8

104,002
153,537
142,375
149,963
21,457
296,590
49,535
-
238,925
4.50

57,994
(31,052)
(29,638)
(2,696)

30.5%
24.1%
19.5%
18.4%
13.3%
24.1%
1.7
3.1
36.3

1 = (Cash & cash equivalents + investments + receivables)/current liabilities

Financial HighlightsLongview Expansion Grand Opening CeremonyThe expansion nearly doubled capacity to 487,000 sq. ft. We expect this new capacity will help accelerate volume, reduce production times and improve overall efficiency.Letter from the PresidentDear Fellow Stockholder,INNOVATIONGary FieldsPresident & CEOThe year 2021 was a year of two tales for AAON. The Company had several milestone-like
achievements that were significant for the future growth of the Company. At the same time,
performance was lackluster due to several macro factors that challenged the operations. The year
was one of, if not the most, challenging years our industry has faced in 30-plus years. Inflation
was rampant amongst most of our input costs, the labor market was tight for much of the year
and supply chain issues created a lot of operational inefficiencies. All while managing through the
pandemic-related issues. On the other hand, we posted another year of record sales, our backlog
grew 249.6%, we closed on the Company’s first acquisition of substantial size in 20 years, and we
hosted one of the most impactful meetings with our sales channel in Company history. In our view,
while the earnings performance was underwhelming, we managed through the headwinds well
and achieved a lot, positioning us well for the long-term. In our view, the fundamentals of the
Company are strong and the outlook is better than ever.

Letter from the PresidentDear Fellow Stockholder,INNOVATIONGary FieldsPresident & CEOFinancial Performance
In 2021, AAON’s net sales grew 3.9% to $534.5 million.
While this was the 11th straight year of record sales for the
company, price increases drove all of the growth. Volumes
were down 2% and the BasX Solutions acquisition, which
closed on December 10th, contributed about 1%. Gross profit
margin contracted to 25.8%, from 30.3% in 2020, which led
to a contraction in earnings. The factors that weighed on
margins were mainly related to inflation and supply chain
constraints. We experienced a significant rise in nearly all of
our input costs, including raw materials, components, wages,
freight and insurance. While we were disciplined managing
the price of our equipment as demonstrated through the
three price increases we implemented throughout the
year, timing to the plant floor made it challenging to get
ahead of the higher costs. Furthermore, supply chain issues
exacerbated the adverse effects of inflation as they led to
production constraints, which slowed the turnover of our
backlog.

Lower production rates also caused a significant amount
of operational inefficiencies and led to unabsorbed fixed
costs. All in, these two factors pressured our margins as
we progressed through the year. The positive is we do
not believe any of these factors have caused a permanent
structural change to our business. We expect our margins
will fully recover as supply chain issues ease and our
production rates recover. Supply chain challenges have
forced us to significantly increase the number of multi-
sourced components. Maneuvering through challenges like
we experienced in 2021 leads to a stronger operation and
a more capable management team—provided you have
the right people. We are confident we have the right people
managing the Company, therefore we are certain to emerge
a stronger company. We are now better prepared to resume
our growth strategy more effectively in the future.

Record Backlog
At the end of 2021, total backlog finished up 249.6% to
a record $260.2 million. Excluding BasX Solutions, organic
backlog was up 200.7% to $223.8 million, also a record.
Organic bookings in the year grew 55%, making 2021 one of the
best years in our Company's history. These growth rates well
outpaced the industry, implying we are gaining market share.
This reassures us that our strategy is effective. We measure our
total addressable market as being $30 billion in size, which is
approximately 50 times the size of our Company. Thus, we
think the strategy that drove the backlog in 2021 will continue
to lead to robust growth in the future.

Winning Growth Strategy
AAON’s growth strategy is built on one core foundation,
supported by five major pillars. The core foundation, which
extends back to when the company was created 34 years
ago, is based on designing and manufacturing customized
HVAC equipment that is premier in quality, performance
and energy efficiency. AAON has always primarily focused
on designing and building HVAC equipment that was
best-in-class. Now, with the market demanding higher
quality equipment due to decarbonization and indoor air
quality trends,, we are positioned to transition from being a
niche player to a mainstream player in the nonresidential
HVAC market.

2019202120202018201720162015201420132012Backlog (in $ millions)$44$45$49$49$49$81$152$143$74$260is supported by five pillars. The first
This foundation
pillar is innovation. Historically, AAON has led the industry in
innovation. In 2021, we introduced several new products that
we believe are game changers, including air-sourced heat
pump rooftop units that are operable down to zero degree
Fahrenheit, the first equipment of its kind on the market
with such capabilities. We currently have a full pipeline of
new product development and we will continue to make this
a top priority in our growth strategy. The second pillar is
related to lower cost of ownership. AAON’s equipment
is engineered to have the longest useful life span that
is operable at the highest energy efficiency and is the
easiest to service and maintain. Third, we continuously focus
on operational productivity. To build highly customized,
high-quality equipment with premium materials and
components for a competitive price, we must operate at
higher levels of productivity than our peers. To do so, we
utilize a lot of technology and automation in our operations.
Going forward, we will continue to focus and invest in ways to
improve our operational productivity. The fourth pillar is
associated with strengthening our sales channel. Over the
last several years, we have made it much more of a priority
to support our channel partners through providing useful
marketing tools, blueprints to success, HVAC education
and various other ways of support. Finally, the fifth pillar is
related to parts and service. This is another area that we
have focused a lot more on compared to five years ago.
Through investing in a talented parts sales team, we grew
our parts sales 26.3% in 2021 to a record $41.1 million,
which made up a record 7.7% of net sales. AAON does not
directly manage services for its end-users, but we think it is
important we make sure our customers are in good hands
in the field. By working with our channel partners, we are
ensuring our customers have available technicians with
expertise of AAON equipment to service their equipment
when needed.

Overall, we believe we have constructed a sound growth
strategy that positions us to take market share and grow sales
organically in the double digits for the next several years.

AAON's National Sales Event
In October 2021, AAON invested approximately $1 million to
host a national sales meeting with its entire network of sales
channel partners. The event, which was the first of its kind
since 2017, was an opportunity to connect with all of its reps
in one room to communicate the Company’s long-term vision
to ensure all understand what we expect of them and that
all know they are greatly appreciated and are integral to our
company’s success. It was also an opportunity to share what
we are doing to support their businesses more, display new
marketing tools we are investing in to help their success,
introduce several new products and showcase our new
manufacturing facility in Longview, Texas. One strategy we
have implemented since my arrival to AAON five-plus years
ago is working closer with our channel partners and investing
more in ways to support them more. Historically, AAON’s
approach to ensuring success of their channel partners was
building great products. However, we have learned we can do
more to help improve their market penetration.

Sales & Marketing. For most of AAON’s history, the Company
did not focus a lot of capital on marketing. Most of the
company’s success was associated with the engineering
and quality of its products. With a well-rounded portfolio
of premium products and a total addressable market that
is 50 times the size of our Company, we think investing
in marketing and ways to support our sales channel will
accelerate our market penetration. One way we demonstrated
this new investment was by introducing a new state of the art
showroom trailer at the national sales meeting in October.
This showroom trailer is a class 8 truck with a 53-foot trailer
that expands to a 1,000 sq. ft. showroom when parked.
The showroom showcases AAON equipment, displays
AAON controls and has
interactive technology to help
customers understand our full product portfolio. In addition
to the showroom trailer, we are sharing the best practices
that our most successful channel partners use with the
rest of our channel partners. Being at our centralized
position, we have a good sense on what these best
practices are and are making it more of a focus to communicate

AAON Mobile Experience Marketing Trailer

"This showroom trailer is a class 8 truck with a 53-foot trailer
that expands to a 1,000 sq. ft. showroom when parked."

what everyone should be doing to maximize success.
Another example in how we are supporting of channel partners
is we are providing educational classes for our reps. Having a
more educated sales channel of our highly sophisticated,
customized equipment that is used for thousands of different
applications will help improve market penetration. Finally, we
are in the midst of hiring a new Director of Marketing. This
new hire will help catapult our marketing efforts even further
over the next several years.

introduced several new game-
New Products. AAON
changing products at the October event. First, we introduced
our next generation water-source heat pump called the ProFit.
The ProFit is designed to be a “drop-in” replacement for most
existing water-source heat pumps. Our original generation,
which we call the EcoFit, is an advanced design and is very
attractive for the new construction market. However, the
design differed from many of the existing units in the field,
making it incompatible for a “drop-in” replacement application.

As such, since introducing the EcoFit in 2015, we have mainly
competed in the new construction market, which makes up
only about 25% of the entire $500 million water-source heat
pump market. Now with the ProFit, we can target the entire
market, and as a result we expect growth will accelerate. Our
water-source heat pump sales, which made up $41 million
in 2021, have grown at a four-year CAGR of 27%. Another
product announcement we made was the redesign of our
air-sourced heat pump fueled rooftop units with operable
capabilities down to zero degree Fahrenheit, making us the first
company in the market to perfect such capabilities. To date,
most air-sourced heat pump fueled equipment on the market
was operable only down to about 30 degrees Fahrenheit,
excluding a large percentage of the North America market.
Heat pump technology is attractive though due to it being fully
electric and its high energy efficiency. We think this product
introduction is a game changer. In 2021, we introduced this
air-source heat pump technology in our rooftop units of two
to 10 tons of capacity. By the end of 2022, we expect our

entire rooftop product
line will be offered with this
technology. The third notable product we introduced was our
is our
next generation RN D-Box rooftop unit, which
rooftop series with capacity in the range of 26 to 70 tons.
Historically, this is one of our core rooftop products, making
up 22%-23% of net sales in 2020-2021. This next generation
D-Box incorporates two refrigeration systems instead of
four, comes with higher capacity, and is designed to be built
with the highest performing compressor technology and
reheat configuration available on the market. All in, this new
product comes with an average IEER that is 38% higher than
the previous generation, making it the most efficient unit of its
capacity on the market.

Investing in Growth
For decades, we have worked diligently to earn a reputation
as one of the most technologically innovative manufacturers
of the highest quality and best performing products in
the nonresidential HVAC industry. To accomplish this and
maintain our leadership, it requires consistent reinvestment
in the Company. As such, we make it a priority to continue
to focus on capital investments that help us grow strategically
and research and development to maintain
leadership
in innovation.

Capital Investments. In 2021, capital expenditures totaled
$55.4 million, or 10.4% of net sales. At the beginning of
the year, we planned to spend over $70 million, but factors
such as supply chain constraints forced us to push some of the
into 2022. Nevertheless,
originally planned
we were able to complete our expanded footprint at our
Longview, Texas facility in 2021. This facility, which generated

investments

RN Series D Cabinet

ProFit Water-Source Heat Pumps

EcoFit Water-Source Heat Pumps

approximately 12.5% of net sales in 2021, manufactures our
air handling and condensing units, as well as our in-house
manufactured coils. Prior to 2021, the location consisted
of a 263,000 sq. ft. building. The expansion nearly doubled
capacity to 487,000 sq. ft. We expect this new capacity will
help accelerate volume, reduce production times and improve
overall efficiency. Sales at Longview grew organically 19.8%
in 2021 and it would have been better if it was not for supply
chain constraints. This achievement would not have been
possible without this expansion. We anticipate this new
capacity will facilitate robust growth for the next several
years. Backlog at Longview at the end of 2021 was up 165.5%
from a year ago.

The other part our annual capital investment was associated
with expanding production capacity at our primary Tulsa,
Oklahoma facility and upgrading company IT systems. To
absorb the growth we have seen in our backlog, we must
continue to build capacity and the necessary IT infrastructure.
This planning includes the recently acquired BasX Solutions,
which is growing even quicker than the legacy AAON
business. Therefore, we will continue with an aggressive
capital investment spending plan. In 2022, we forecast a total
capital expenditure budget of $100.4 million.

invest

Research & Development. Innovation is the foundation
that AAON was built on and that is the same foundation the
company sits on still today. We pride ourselves on leading
the commercial HVAC market in revolutionary innovative
HVAC equipment. As such, we make a concerted effort to
in research & development to help
aggressively
maintain this leadership. In 2021, AAON invested $16.6
million in research and development. As a percent of sales,
this investment was 3.1%, which compares to some of our
larger peers spending on average 2.1% of their equipment
sales. A lot of our investment in 2021 went towards the
new products we introduced at our national sales meeting in
October. In addition, we will be introducing more air-sourced
heat pump fueled rooftop units in 2022, of which some
of our 2021 R&D budget went towards. We also have a
healthy pipeline of other projects that we focused on in
2021, including early research on incorporating new low
global warming potential refrigerants into the designs of our
equipment to adhere to upcoming AHRI requirements.

Our Norman Asbjornson Innovation Center (“NAIC”) research
and development laboratory facility that opened in 2019
continues to significantly enhance our R&D capabilities for
new products. This is a 65-foot tall 134,000 sq. ft. state-
of-the-art facility with many unique capabilities, which to
our knowledge exists nowhere else in the world. The facility
enables AAON to lead the industry in the development of the
most technologically advanced, most energy efficient HVAC
equipment for nonresidential buildings. Furthermore, it allows
us to more efficiently and effectively meet and maintain AHRI
(Air-Conditioning Heating and Refrigeration Institute) and
Department of Energy certifications. Lastly, the NAIC is a
valuable marketing asset as it allows us to give our customers
the ability to view products performance and testing.

Norman Asbjornson Innovation Center

BasX Solutions Office

leader

industry

BasX Solutions Acquisition
On December 10, 2021, AAON closed on the acquisition
of BasX Solutions, making it AAON’s first acquisition of
substantial size in 20 years. Headquartered in Redmond,
Oregon, BasX Solutions
in the
is an
manufacturing of high performance data center cooling
solutions, cleanroom systems, custom HVAC systems and
modular solutions. BasX’s products are highly engineered
and customized for critical applications where the cost of
failure can be significant. Most attractively, BasX supplies
equipment to sectors that are growing substantially, including
data centers driven by a build-out of cloud-based infrastructure
and cleanrooms used in the semiconductor, pharmaceutical,
medical and indoor agriculture sectors. Another reason we
found this acquisition to be so attractive was related to revenue
synergies. In fact, revenue synergies have already begun to
transpire just three months into ownership of the business.
Together with the end-market demand and the revenue
synergies, we think BasX can grow sales at a CAGR of at least
15% over the next several years. In 2021, BasX generated pro
forma net sales of $81 million. We also foresee cost synergies
related to material/component procurement, productivity
improvements and vertical integration opportunities. Together
with volume growth and these cost synergies, we expect the
business will be able to expand EBITDA margins from mid-
teens to 20%-plus, in line with AAON’s legacy business. All
in, we anticipate BasX will accelerate AAON’s organic sales and
earnings growth, making the acquisition a compelling return
on investment for AAON shareholders.

Custom Air Handling Units

Modular Clean Rooms

Data Center Cooling Systems

Sustainability
At AAON, we strive to conduct our business in a socially
responsible and ethical manner with a focus on environmental
stewardship, diversity and inclusion, team member safety and
community engagement. We comply with industry regulations
and requirements while pursuing responsible economic
growth and profitability. We also have begun reporting our
sustainability status and goals in a much more extensive way.
In 2021, we published our 2020 Sustainability ESG Report,
which was the most thorough annual sustainability report
we published to date. This report included historical scope
one and two emissions, diversity and inclusion statistics,
sustainability targets, as well as other information.

AAON is a leading designer and manufacturer of the most
energy efficient HVAC products
the nonresidential
is vital to the environment since
HVAC market, which
approximately 40% of energy consumed by commercial
buildings in the U.S. is associated with heating, ventilation and
air-conditioning. Our innovative designs substantially help our
customers reduce their carbon footprint while reducing their
cost of building management and maintenance. Many of the
HVAC units we produce are uniquely designed with two-stage
compressors and high efficiency evaporator and condenser
coils and variable speed fans, leading to an AHRI Certified
performance of up to 19.15 SEER and 20.2 IEER, compared to
the industry ASHRAE 90.1 minimum requirement of 12-14
SEER/IEER. Moreover, in 2021, the company introduced fully
electric air-sourced heat pump powered rooftop units with
operable capabilities down to zero degree Fahrenheit, making
us the first company in the market to perfect such capabilities.
In our 2020 Sustainability ESG Report, we stated we are
targeting our total electric-powered equipment as a percent
of sales will rise to 80% by 2030, from approximately 20% in
2020.

AAON also has an ongoing focus to reduce its own operational
carbon footprint. In the last couple years, we invested in new
overhead doors and a new HVAC system, replaced Metal
Halide lighting with LED lighting, set goals around energy
conservation, implemented lean manufacturing processes as
well as many other initiatives to help reduce our energy usage.
In 2021, we established a goal to reduce our greenhouse gas
emissions by 10% by 2025. We also stated we will target a
10% increase in our hazardous material recycling rate. AAON
participates in the non-profit organization Sustainable Tulsa’s
Scor3card, which is a sustainability tracking and assessment
tool for organizations who want to track and improve their
sustainability plans. AAON achieved Platinum level in the 2021
and 2020 Sustainable Tulsa Scor3card verification program.
This follows the Company achieving Gold in 2019 and Bronze
in 2018 and 2017.

At AAON, a diverse and inclusive workplace is also integral
to our business strategy and critical to our success. We are

the success of our channel partners. We continued to invest
aggressively in the company to increase our capacity, improve
our operations and maintain a healthy pipeline of research and
development. Finally, we completed the historic acquisition
of BasX Solutions. All of these initiatives will help us leverage
the secular market demand trends, enabling us to gain
significant market share over the next several years.

In 2022, we anticipate performance will be much better
than the prior year. While we are still facing challenges with
inflation and the supply chain early in the year, we have
learned how to better overcome these challenges and the
external factors are beginning to abate. Our backlog is strong
and production rates have begun to accelerate. We anticipate
sales and earnings in 2022 will be up significantly. Long-term,
we are the most optimistic we have been in years. We target
annual organic sales growth in the double digits, 30%-plus
gross margins and SG&A expenses that grow slower than
sales. Overall, the prospects for AAON are bright.

To our stakeholders, we cannot achieve these results without
your support and commitment. We continue to benefit from
the total cooperation and dedicated service of our employees
and independent sales representation.

To our shareholders, we are honored to have each of you with
us as we maintain the lead in pursuing growth.

committed to hiring, retaining and promoting a diverse
workforce while advancing a workplace culture of inclusion,
which team members are valued for their ideas, identities,
experiences and talents. In 2021, we hired a new Director of
Administration who is bringing a wide range of best practices
to Human Resources, helping us continue to progress in
diversity and inclusion. At the end of 2021, 69% of our total
workforce was non-white and 28% was female. AAON also
employs individuals from over 32 countries. AAON participates
in the Tulsa Chamber’s Mosaic Diversity and Inclusion Index
and was named a 2021 Top Inclusive Workplace.

Outlook
Our 2021 sales and earnings performance was disappointing
and was not reflective of how we view the potential of our
Company. However, our backlog finished the year up 249.6%
and we completed a historic acquisition that is performing
extremely well in early days of ownership. We have never been
as optimistic on the long-term outlook of the company as we
are currently.

As external factors like supply chain issues ease, we expect
performance will improve significantly. Our industry is in
the early stages of benefiting from major secular demand
trends related to decarbonization and indoor air quality. These
market trends are leading to building owners demanding
higher quality HVAC equipment that is more energy efficient
and provides higher quality indoor air ventilation. For decades,
AAON has led the industry in designing and manufacturing
this type of equipment for the most competitive price. Up
until now, AAON has been considered a niche player in a
market. However, as the market shifts with these trends, we
plan to take AAON from being a niche player to a mainstream
player in the nonresidential HVAC industry.

In 2021, we continued to lead in innovation, demonstrated by
the several new revolutionary products we introduced. We also
progressed on prior efforts of strengthening our sales channel
by investing in new tools and ways of support to help improve

"In 2022, we anticipate performance will be much better
than the prior year. While we are still facing challenges with
inflation and the supply chain early in the year, we have
learned how to better overcome these challenges and the
external factors are beginning to abate. Our backlog is strong
and production rates have begun to accelerate."

INNOVATION1988
August
AAON, an Oklahoma
corporation, was founded.

September
Purchase of John Zink Air
Conditioning Division.

1989
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.

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

1990
December
Listed on NASDAQ Small Cap -
Symbol “AAON”.

1991
December
Formed AAON Coil Products, a Texas
Corporation, as a subsidiary to
AAON, Inc. (Nevada) and purchased
coil making assets of Coil Plus.

1992
Spring
AAON Coil Products purchased,
renovated and moved into a 110,000
square foot plant in Longview, Texas.

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

1993
NOVEMBER
Listed on the NASDAQ National
Market System.

1994
January
Introduced a desiccant heat
recovery wheel option available on
all AAON rooftop units.

March
Purchased property with 26,000
square foot building adjacent
to AAON Coil Products plant in
Longview, Texas.

Issued a 10% Stock Dividend

1995
September
Completed expansion of
the Tulsa facility to 332,000
square feet.

1996
December
Purchased 40 acres with 457,000
square foot plant and 22,000 square
foot office space located across from
Tulsa facility.

1997
April
AAON received U.S. patent for
Blower Housing assembly.

1998
October
U.S. patent granted to AAON for air
conditioner with energy recovery
heat wheel.

November
AAON yearly shipments exceed
$100 million.

Received U.S. patent for Dimple
Heat Exchanger Tube.

1999
Spring
Completed Tulsa, Oklahoma and
Longview, Texas plant additions
yielding a total exceeding one
million square feet.

Timeline of Success2003
May
Purchased the assets of Air Wise, of
Mississauga, Ontario, Canada.

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

October
AAON listed in Forbes’
200 Best Small Companies.

2004
April
AAON received U.S. Patent for
the De-Superheater for
Evaporative-Cooled Conditioning

September
AAON received U.S. Patent for DPAC.

November
Introduction of light commercial/
residential product lines.

2005
August
AAON received U.S. Patent for
Plenum Fan Banding.

2000
Fall
Our manufacturers representative
business grew to more than 100
offices, contributing approximately
60% of net sales.

2001
July
AAON added as a member of the
Russell 2000® Index
Fall
Expanded rooftop product line to
230 tons.

Introduced evaporative-cooled
condensing energy savings feature
September
3-for-2 stock split

October
AAON listed in Forbes’ 200 Best
Small Companies

2002
June
3-for-2 stock split

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

October
AAON listed in Forbes’
Magazine’s “Hot Shots 200
Up & Comers.”

AAON listed in Forbes’ 200 Best
Small Companies.

2006
April
AAON introduced factory engineered
and assembled packaged mechanical
room, which includes a boiler and all
piping and pumping accessories.

June
Initiation of a semi-annual cash
dividend for AAON shareholders.

2007
March
Modular Air Handler products
extended to 50,000 cfm.
August
3-for-2 stock split.
October
AAON Listed in Forbes’ 200 Best
Small Companies.
December
AAON rings closing bell at NASDAQ.

2008
October
AAON rings opening bell
at NASDAQ.

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

AAON listed in Forbes’ 200 Best
Small Companies.

Timeline of Success2009
Summer
AAON increased dividend payment
by 13%.

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

National Society of Professional
Engineers Award AAON 2009
Product of the Year.

Fall
AAON added to Standard & Poor’s
Small Cap 600 Index.

National Society of Professional
Engineers Award AAON 2009
Product of the Year - D-PAC

AAON listed in Forbes’ 200 Best
Small Companies.

2010
July
AAON RQ Series win ACHR News
Dealer Design award.

October
AAON RN Series rooftop unit
named 2010 Product of the Year
- Silver by Consulting-Specifying
Engineer Magazine.

AAON LC Series Chiller product
named 2010 Product of the Year -
Bronze by Consulting-Specifying
Engineer Magazine.

AAON Listed in Forbes’ 200 Best
Small Companies

2011
Summer
National Society of Professional
Engineers awarded RQ Series High
Efficiency Rooftop Unit - Product
of the Year.

3-for-2 stock split.

AAON Geothermal RQ Series wins
Silver in ACHR News Dealer Design
Competition. Single Zone VAV
rooftop units win Honorable
Mention in ACHR News Dealer
Design Competition.

October

AAON Geothermal RQ Series product
named 2011 Product of the Year -
Silver by Consulting-Specifying
Engineer magazine.

2012
Spring
Industry introduction of light
commercial geothermal heat pump
self-contained unit product line.

July
AAON SB Series Self-Contained
Unit Wins ACHR News Dealer
Design Award - Gold

September
Consulting-Specifying Engineer
magazine awarded RN Series
E-Cabinet Product of the Year -
Bronze.
December
AAON yearly shipments exceed
$300 million.

2013
May
Opening of AAON Parts &
Supply Store.
AAON increases dividend
payment by 25%

3-for-2 stock split

September
25th Anniversary

AAON rings opening bell
at NASDAQ.

Consulting-Specifying Engineer
magazine awarded SB Series
Product of the Year - Bronze.

December
AAON named top Tulsa area
stock value.

2014
June
3-for-2 stock split

July
AAON LN Series Chiller wins ACHR
New Dealer Design Award - Bronze

September
AAON donates $3 Million to A
Gathering Place for Tulsa.

2015
May
AAON increases dividend payment
by 20%

June
AAON receives Gold Dealer
Design Award in the Ventilation
category.

September
AAON Low Leakage Dampers
voted “Product of the Year”
by Consulting-Specifying
Engineer magazine.

2018
March
WattMaster Controls, Inc.
Acquisition

May
AAON increase dividend payment
by 23%

July
RN Series with Two-Stage
Compressors wins ACHR News Dealer
Design Award - Bronze

August
AAON Water-Source Heat Pumps
AHRI Performance Certified

September
30th Anniversary

October
AAON rings opening bell at NASDAQ

2019
June
AAON Opens Second Parts & Supply
Store in Tulsa

August
AAON Breaks Ground on New Facility
in Longview

October
AAON Opens Norman Asbjornson
Innovation Center

December
AAON Honored as One of Oklahoma
Magazine’s Great Companies to
Work For

2020
May
Founder Norman H Asbjornson
Transitions to Executive Chairman.
Gary D. Fields assumes new role as
CEO.
November
AAON Achieves Platinum Level
in Scor3card Verification Program
and receives Bellmon Award from
Sustainable Tulsa

December
AAON RN Series with Variable Speed
Compressors voted “Most Valuable
Product” and LF Chiller Controller
named “Product of the Year” by
Consulting-Specifying Engineer
magazine.

2021
August
AAON achieves Platinum Level in
Sustainable Tulsa Scor3card Program
for the second straight year.

October
AAON introduces new low ambient
air-source heat pump rooftop
units and next generation ProFit
water-source heat pump.

November
AAON RZ Series Rooftop Unit named
“Product of the Year” by readers
of Consulting-Specifying Engineer
magazine.

December
BasX Solutions acquisition closed.

2016
January
AAON received U.S. Patent for the
Low Leakage Dampers

February
AAON Breaks Ground on New
"Norman Asbjornson Innovation
Center" Research and Development
Laboratory

July
AAON LZ Series Packaged Outdoor
Mechanical Room wins ACHR News
Dealer Design Award- Gold

September
Consulting-Specifying Engineer
magazine awarded LZ Series Outdoor
Mechanical Room Product of the
Year - Gold, Chiller category.

Consulting-Specifying Engineer
magazine awarded RN Series
Horizontal Configuration Rooftop Unit
Product of the Year - Gold, HVAC/R
category.

November
AAON increases dividend payment
by 18%

2017
April
First WV Series small packaged
vertical water-source heat pump
comes off the production line.

July
AAON products received Dealer
Design Awards from ACHR News.

September
AAON V3 Series, Touchscreen
Controller, and WH Series voted
Products of the Year by
Consulting-Specifying Engineer
magazine.

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

FORM 10-K

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

☒

For the fiscal year ended December 31, 2021

☐ 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)

87-0448736

(IRS Employer

Identification No.)

2425 South Yukon Ave., Tulsa, Oklahoma

74107

(Address of principal executive offices) (Zip Code)

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

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

AAON

NASDAQ

Securities registered pursuant to Section 12(g) of the Act: None

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

☐ Yes ☒ 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 ☒ 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.

☒ Yes ☐ No

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).
☒ Yes ☐ No

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).

Large accelerated filer

Non-accelerated filer

☒ Accelerated filer
☐ Smaller reporting company
Emerging growth company

☐
☐
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards provided pursuant to Section
13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of
the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15
U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

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

☐ Yes ☒ 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, 2021 was $2,682.9 million based upon the closing price reported for such date on the Nasdaq Global Select
Market.

As of February 23, 2022, registrant had outstanding a total of 52,529,320 shares of its $.004 par value Common
Stock.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of registrant’s definitive Proxy Statement to be filed in connection with the 2022 Annual Meeting of
Stockholders to be held May 12, 2022, incorporated herein by reference in Part III of this Annual Report on Form
10-K to the extent stated herein.

TABLE OF CONTENTS

Page
Number

Item Number and Caption

PART I

Business.

1A. Risk Factors.

1B. Unresolved Staff Comments.

Properties.

Legal Proceedings.

4. Mine Safety Disclosure.

PART II

5. Market for Registrant’s Common Equity, Related Stockholder Matters and

Issuer Purchases of Equity Securities.

Reserved.

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

Operations.

7A. Quantitative and Qualitative Disclosures About Market Risk.

Financial Statements and Supplementary Data.

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, and Director Independence.

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, (4) general economic, market or business conditions, and
(5) the correction of certain of our previously issued consolidated financial statements, which may affect investor
confidence and raise reputational issues.

PART I

Item 1. Business.

Overview

AAON, Inc., a Nevada corporation, (“AAON Nevada”) was incorporated on August 18, 1987. Our operating
subsidiaries include AAON, Inc., an Oklahoma corporation ("AAON Oklahoma"), AAON Coil Products, Inc., a
Texas corporation ("AAON Coil Products"), and BasX, Inc. (dba BasX Solutions, formerly BasX, LLC), an Oregon
corporation ("BasX"). Unless the context otherwise requires, references in this Annual Report to “AAON”, the
“Company”, “we”, “us”, “our”, or “ours” refer to AAON Nevada and our subsidiaries.

We are engaged in the engineering, manufacturing, marketing, and sale of premium air conditioning and heating
equipment consisting of standard, semi-custom, and custom rooftop units, data center cooling solutions, cleanroom
systems, chillers, packaged outdoor mechanical rooms, air handling units, makeup air units, energy recovery units,
condensing units, geothermal/water-source heat pumps, coils, and controls.

Business Segments

The Company conducts its business through three business segments: AAON Oklahoma, AAON Coil Products, and
BasX.

AAON Oklahoma: AAON Oklahoma designs, manufactures, sells, and services standard, semi-custom, and custom
heating, ventilation, and air conditioning ("HVAC") systems, designs and produces controls solutions for all of our
HVAC units, and sells retail parts to customers through our two retail part stores in Tulsa, Oklahoma. Through our
Norman Asbjornson Innovation Center ("NAIC") research and development laboratory facility in Tulsa, Oklahoma,
the Company is able to test units under various environmental conditions. AAON Oklahoma includes the operations
of our Tulsa, Oklahoma and Parkville, Missouri facilities, our NAIC research and development laboratory facility
and two retail parts locations.

AAON Coil Products: AAON Coil Products designs and manufactures a selection of our standard, semi-custom, and
custom HVAC systems. In addition, AAON Coil Products designs and manufactures various heating and cooling
coils to be used in HVAC systems, mostly for the benefit of AAON Oklahoma and AAON Coil Products. AAON
Coil Products consists of operations at our Longview, Texas facilities.

BasX: BasX provides product development design and manufacturing of custom engineered air handling systems
including high efficiency data center cooling solutions, cleanroom HVAC systems, commercial/industrial HVAC
systems, and modular solutions. Additionally, BasX designs and manufactures cleanroom environmental control
systems to support hospital surgical suites, pharmaceutical process facilities, semiconductor and electronics
manufacturing, laboratory and isolation and modular cleanrooms for facility flexibility. BasX consists of operations
at our Redmond, Oregon facility.

For more information on our business segments' financial position and results of operations, refer to Note 23,
"Segments," of the notes to consolidated financial statements.

Business and Marketing Strategy

Our products serve the commercial, industrial, data center cooling solutions, and cleanroom new construction and
replacement markets within the HVAC equipment industry. Our business strategy involves mass customization that
uses flexible computer-aided manufacturing systems to produce standard, semi-custom, and custom equipment and
combines the low unit costs of mass production processes with the flexibility of individual customization. Through
a collaborative effort with our independent representative sales offices, we design and manufacture the precise semi-
custom product offering that best serves the customer's needs.

Our marketing strategy focuses on customers and markets that demand HVAC equipment with higher performance,
greater energy efficiency, and best indoor air quality. We manufacture equipment with more capabilities than the
standard offerings found in the HVAC equipment industry. We further focus on developing a company culture
focused upon customer satisfaction, reducing product delivery channel time and cost, and continuing with the goal
of product and manufacturing technology leadership and innovation. Our product mix, with a heavy investment in
research and development, has an emphasis on energy efficiency, environment, and indoor air quality.

Products - AAON Oklahoma and AAON Coil Products

Our rooftop and condensing unit markets primarily consist of units installed on commercial or industrial structures
of generally less than ten stories in height. Our air handling units, self-contained units, geothermal/water-source heat
pumps, chillers, and coils are suitable for all sizes of commercial and industrial buildings.

The size of these markets is determined primarily by the number of commercial and industrial building completions
and replacement demand from existing buildings. The replacement market consists of products installed to replace
existing units/components that are worn or damaged and products to upgrade certain components, such as low
leakage dampers, high efficiency heat exchangers and modern controls components. Currently, close to two-thirds of
the industry’s market consists of replacement units.

The commercial and industrial new construction market is subject to cyclical fluctuations in that it is generally tied
to housing starts and the general economy, but has a lag factor of six to 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 2021 combined sales of $530.4 million at AAON Oklahoma and AAON Coil Products, we estimate
that we have approximately a 10% share of the greater than five ton rooftop market and a 2% share of the less than
five ton market. During 2021, approximately 60% of our sales were generated from the renovation and replacement
markets and 40% from new construction. The ratio of sales for new construction vs. replacement to particular
customers is related to various factors. Generally, the cyclicality of the new construction market impacts this ratio
the most over an economic cycle.

To date, our sales have been primarily to the domestic market. Foreign sales accounted for approximately $14.8
million, $11.7 million, and $14.8 million of our net sales in 2021, 2020, and 2019, respectively. As a percentage of
net sales, foreign sales accounted for approximately 3%, 2%, and 3% of our net sales in each of those years,
respectively.

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 and cooling 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, makeup air units, energy recovery units, rooftop units, geothermal/water-source heat pumps,
and controls.

We offer three groups of rooftop units: the RQ Series, consisting of five cooling sizes ranging from two to six tons;
the RN Series, offered in 28 cooling sizes ranging from six to 140 tons; and the RZ Series, which is offered in 15
cooling sizes ranging from 45 to 261 tons.

We also offer the SA, SB and M2 Series as indoor packaged, water-cooled or geothermal/water-source heat pump
self-contained units with cooling capacities of three to 70 tons.

Our small packaged geothermal/water-source heat pump units consist of the WH Series horizontal configuration and
WV Series vertical configuration, from one-half to 12 1/2 tons, with options specifically for the replacement market
and the new construction market. The replacement systems are designed to be installation friendly for most
competitor water source heat pump models.

We manufacture an LF Series air-cooled chiller covering a range of four to 55 tons.

We offer two groups of condensing units: the CB Series, two to five tons and the CF Series, two to 70 tons.

Our air handling units consist of the indoor F1, H3, and V3 Series and the modular M2 Series, as well as air
handling unit configurations of the RQ, RN, RZ, and SA Series units.

AAON is committed to designing and manufacturing innovative HVAC products of the highest quality, efficiency,
and performance. As such, we are committed to meeting certification standards of the relevant standard setting
bodies, including the Air-Conditioning, Heating, and Refrigeration Institute (“AHRI”); the American National
Standards Institute ("ANSI"); American Society of Heating, Refrigeration and Air-Conditioning Engineers
("ASHRAE"); and the International Organization for Standardization ("ISO").

Our energy recovery option applicable to our RQ, RN, RZ, and SB units, as well as our H3, V3, and M2 Series air
handling units, responds 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.

Our air-cooled chillers (LF Series) are certified with the AHRI in accordance with AHRI Standard 550/590. Our
RN, RQ, M2, and SB Series, including our water-source heat pump products (WH, and WV Series), are AHRI
certified in accordance with ANSI/AHRI/ASHRAE/ISO 13256.

Our unitary products (RQ, RN, and CB Series) are certified with AHRI and the US Department of Energy to ANSI/
AHRI 210/240 up to 5 tons capacity and ANSI/AHRI 340/360 up to 63 tons capacity.

Performance characteristics of our products range in cooling capacity from one-half to 261 tons and in heating
capacity from 7,200 to 4,500,000 British Thermal Units ("BTUs"). Many of our units far exceed these minimum
standards and are among the highest efficiency units currently available.

A typical commercial building installation requires one 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.

Our water-source heat pump products recover otherwise wasted energy and employ it to cool, heat, and provide
dehumidification to a building, making it one of the most efficient and environmentally friendly systems. AAON
packaged rooftop units with two stage compressors are optimized with high efficiency evaporator and condenser
coils and variable speed fans, leading to an AHRI Certified performance up to 20.3 SEER and 22.5 IEER. AAON
H3/V3 Series energy recovery wheel air handling units provide energy efficient 100% outside air ventilation by
recovering energy that would otherwise be exhausted from a building.

AAON designs and produces controls solutions for all of our HVAC units including rooftop units, air handlers,
chillers, and water-source heat pumps. We provide factory-developed and tested controls options for variable air
volume systems associated with those units and other HVAC related equipment.

We offer several controls options: the Orion Controller, Pioneer Gold, Pioneer Silver, terminal block for field
installed controls, and factory installed customer provided controls. Most of our controls are Underwriters
Laboratories category ZPVI2 compliant and BACnet Testing Laboratories certified which ensures our products meet
internationally recognized standards for safety, traceability, conformance, and production quality. Our economizer
function is California Title 24 certified to minimize energy consumption. AAON’s proven sequences of operation
optimize the performance of our HVAC units.

Out of the box, our controls are user-friendly and configurable to provide a variety of HVAC unit application
options, but we are also able to customize our controls to meet customers’ unique requirements. We have controls
solutions that enhance AAON’s unique features and capabilities.

Products - BasX

The acquisition of BasX brings the Company exposure to attractive end-markets into which the Company has
historically had minimal exposure. The products BasX manufactures are highly engineered and customized
products, fully complementing our existing business.

BasX data center cooling solutions are focused on providing highly configurable, purpose-built equipment with a
focus on efficiency, speed of deployment, and quality. High-performance air-cooled chiller solutions are provided
with indirect airside economization and optional adiabatic assisted cooling, and are designed to integrate with high
performance computing systems requiring direct to chip cooling. White space process cooling solutions include fan
coil walls, computer room air handling ("CRAH") units, overhead fan coils, in-row coolers, and chilled water air
handlers. Packaged solutions include coupled economizing chillers with integrated air handling units, direct
evaporative coolers, and packaged direct expansion ("DX") solutions with airside economizers.

BasX cleanroom products are built to provide environmental control serving critical processes and high-fidelity
control for precise industry requirements. Process cooling solutions include recirculation air handling units and
make up air handling units including integration of piping systems and controls. Environmental control solutions
include modular cleanroom environments, fan filter units, filtered ceiling grids with integral flush mount lighting,
pressurized plenums with integral ceiling grids, and hospital surgical suites.

BasX custom air handling products are primarily used in commercial, industrial, healthcare, and institutional
facilities employing chilled water cooling, packaged direct expansion, heating hot water, indirect gas direct heat,
humidification, dehumidification, filtration, and integrated controls. BasX manufactures plenum fans for integration
into air handling units as well as for replacement applications. BasX offers integrated sound performance solutions.

Air Quality Products

The Coronavirus Disease 2019 ("COVID-19") pandemic has fueled a great deal of concern over best practices in the
design and operation of building HVAC systems. In order to mitigate the spread of COVID-19, influenza, and other
similar type respiratory diseases, we have done a great deal of research on what affects the transmission of these
diseases and how AAON HVAC systems can be best designed. The American Society of Heating, Refrigeration
and Air-Conditioning Engineers ("ASHRAE"), a professional association with a goal of advancing HVAC systems
designs and construction, established an Epidemic Task Force in 2020 and determined several recommendations to
mitigate the spread of the virus, including humidity control, air filtration, increased outdoor air ventilation, and air
disinfection.

Humidity control - AAON continues to lead the market in developing energy efficient humidity control with the use
of variable capacity compressors and modulating hot gas reheat. Designing HVAC systems with superior humidity
control allows building management to maintain ASHRAE’s recommended ambient relative humidity levels of
40%-60%, the ideal level to inactivate viruses in the air and on surfaces.

Air Filtration - AAON standardizes a design that uses a backward curved fan wheel, which can accommodate higher
airflow required for the ASHRAE recommended MERV 13 filtration, the minimum filter level for virus mitigation,
with very little reconfiguration. Prior to 2020, a vast majority of commercial buildings used filtration levels of
MERV 4 to MERV 8, which has always been acceptable for filtering out typical particulates in the air stream.

Outdoor Air Ventilation - AAON’s innovative use of energy recovery wheels and energy recovery plates combined
with its superior humidity control design can help building management follow outdoor ventilation air
recommendations while limiting an increase of energy usage and maintaining recommended humidity levels.

Air Disinfection - AAON has basic design characteristics that allow for an easy installation of ultraviolet lighting
equipment. In addition to this equipment offered as options in new AAON units sold, AAON has basic design
characteristics that allow for easy installation in AAON units already used in the field.

Overall, AAON is well positioned to accommodate the heightened demand for features that can help mitigate virus
transmission and improve indoor air quality. The features that ASHRAE recommends require premium designs and
configurations that are standard in AAON units. As a result, we are able to incorporate air quality features into our
units, at a minimal price premium and with no delivery delay.

Representatives

As of December 31, 2021, we employ a sales staff of 65 individuals and utilize approximately 64 independent
manufacturer representatives’ organizations (“Representatives”) having 128 offices to market our products in the
United States and Canada. We also have one international sales organization, which utilizes 28 distributors in other
countries. Sales are made directly to the contractor or end user, with shipments being made from our Tulsa,
Oklahoma, Longview, Texas, Parkville, Missouri, or Redmond, Oregon facilities to the job site.

Historically, our products and sales strategy focused on niche markets. However, secular market trends related to the
pandemic and indoor air quality, decarbonization and energy efficiency, and higher energy prices, have positioned
the Company to focus on a wider spectrum of the nonresidential HVAC equipment industry. The targeted markets
for our equipment are customers seeking products of higher performance and better quality than those 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
Representatives' sales offices, as well as our two Tulsa, Oklahoma AAON operated retail parts stores, to serve the
local markets. We also have factory service organizations at each of our facilities. Additionally, a number of the
Representatives we utilize have their own service organizations, which, in connection with us, provide the necessary
warranty work and/or normal service to customers.

Warranties

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, including controls; 18 months for data center cooling solutions and cleanroom systems; five 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 ten years on gas-fired heat exchangers in our historical RL
products (if applicable). Our warranty policy for the RQ series covers parts for two years from date of unit shipment.
Our warranty policy for the WH and WV Series geothermal/water-source heat pumps covers parts for five years
from the date of installation.

The Company also sells extended warranties on parts for various lengths of time ranging from six months to ten
years. Revenue for these separately priced warranties is deferred and recognized on a straight-line basis over the
separately priced warranty period.

Major Customers

One customer, Texas AirSystems, accounted for 10% or more of our sales during 2021, 2020, and 2019. No other
customer accounted for more than 10% of our sales during 2021, 2020, and 2019.

Backlog

Our backlog as of February 1, 2022 was approximately $347.6 million, compared to approximately $103.8 million
as of February 1, 2021. The current backlog consists of orders considered by management to be firm and our goal is
to fill orders within approximately 60 to 90 days after an order is deemed to become firm; however, the orders are
subject to cancellation by the customers in which case, cancellation charges apply up to the full price of the
equipment.

Competition

At AAON Oklahoma and AAON Coil Products, we compete primarily with Lennox (Lennox International, Inc.),
Trane (Trane Technologies plc), York International (Johnson Controls International plc), Carrier (Carrier Global
Corporation), and Daikin (Daikin Industries). At BasX, we compete primarily with Vertiv (Vertiv Holdings Co.),
STULZ (STULZ Air Technology Systems, Inc.), Munters, Silent Aire (Johnson Controls Internations plc), Nortek
(Nortek Air Management), and Engineered Air.

All of these competitors are substantially larger and have greater resources than we do. Our products compete on the
basis of total value, quality, function, serviceability, efficiency, availability of product, reliability, product line
recognition, and acceptability of sales outlets. Historically, our premium equipment was sold at a higher average
price compared to most of the competition. In the replacement market and other owner-controlled purchases, we
have been successful at taking market share due to the total value proposition and lower cost of ownership our
products provide to building owners over the life span of the equipment. In the new construction market where the
contractor is the purchasing decision maker, we were often at a competitive disadvantage because of the emphasis
placed on initial cost. However, due to operational efficiency improvements we have made over the last several
years, we have been able to manage pricing so that the cost of our semi-custom equipment is more comparable to the
standard equipment market. As a result, the value proposition of our higher quality equipment is more attractive,
making us more competitive in both the new construction and replacement markets.

Resources

Sources and Availability of Raw Materials

The most important materials we purchase are steel, copper, and aluminum. We also purchase from other
manufacturers certain components, including coils, 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 price fluctuations on these materials by entering into cancellable and non-
cancellable fixed price contracts with our major suppliers for periods of six to 18 months. We expect to receive
delivery of raw materials from our fixed price contracts for use in our manufacturing operations.

We have not been significantly impacted by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the
“Dodd-Frank Act”) that contains provisions to improve transparency and accountability concerning the supply of
certain minerals, known as “conflict minerals”, originating from the Democratic Republic of Congo and adjoining
countries.

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 May - October, 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 $100.0 million
and had a $40.0 million outstanding balance at December 31, 2021. Borrowings available under the revolving credit
facility at December 31, 2021, were $58.2 million. We believe that we will have sufficient funds available to meet
our working capital needs for the foreseeable future.

Research and Development

Our products are engineered for performance, flexibility, and serviceability. This has become a critical factor in
competing in the 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.

AAON self-sponsors our Research and Development (“R&D”) activities, rather than needing to be customer-
sponsored. R&D activities have involved the RQ, RN, and RZ (rooftop units), F1, H3, SA, V3, and M2 (air handling
units), LF (chillers), CB and CF (condensing units), SA and SB (self-contained units), and WH and WV (water-
source heat pumps), as well as component evaluation and refinement, development of control systems and new
product development. R&D expenses incurred were approximately $16.6 million, $17.4 million, and $14.8 million
in 2021, 2020, and 2019, respectively.

Our NAIC research and development laboratory facility that opened in 2019, includes many unique capabilities,
which, to our knowledge, exist nowhere else in the world. A few features of the NAIC include supply, return, and

outside sound testing at actual load conditions, testing of up to a 300 ton air conditioning system, up to a 540 ton
chiller system, and 80 million BTU/hr of gas heating test capacity. Environmental application testing capabilities
include -20 to 140°F testing conditions, up to 8 inches per hour rain testing, up to 2 inches per hour snow testing,
and up to 50 mph wind testing. We believe we have the largest sound-testing chamber in the world for testing
heating and air conditioning equipment and are not aware of any similar labs that can conduct this testing while
putting the equipment under full environmental load. The unique capabilities of the NAIC will enable AAON to lead
the industry in the development of quiet, energy efficient commercial and industrial heating and air conditioning
equipment.

The NAIC currently houses twelve testing chambers. These testing chambers allow AAON to meet and maintain
AHRI and U.S. Department of Energy ("DOE") certification and solidify the Company’s industry position as a
technological leader in the manufacturing of HVAC equipment. Current voluntary industry certification programs
and government regulations only go up to 63 tons of air conditioning as that is the largest environmental chamber
currently available for testing outside of our facility. The NAIC contains both a 100 ton and a 540 ton chamber,
allowing us to uniquely prove to customers our capacity and efficiency on these larger units.

The NAIC was designed to test units well beyond the standard AHRI rating points and allows us to offer testing
services on AAON equipment throughout our range of product application. This capability is vital for critical
facilities where the units must perform properly and allows our customers to verify the performance of our units in
advance, rather than after installation. These same capabilities will enable AAON to develop a new extended range
of operation equipment and prove its capabilities.

In 2021, we invested in our first Electronic Prototype Lab at our Parkville, Missouri, location. This lab allows the
AAON Controls Engineering team to experiment with new technology and create its own prototypes. A pick-and-
place machine gives us the ability to place the latest components quickly, accurately, and reliably. The Electronic
Prototype Lab allows AAON to increase speed to market and incorporate cutting-edge technology into our controls
offering.

Patents, Trademarks, Licenses, and Concessions

We do not consider any patents, trademarks, licenses, or concessions to be material to our business operations, other
than those described below.

We hold several patents that relate to the design and use of our products. We consider these patents important, but
no single patent is material to the overall conduct of our business. We proactively obtain patents to further our
strategic intellectual property objectives. We own certain trademarks we consider important in the marketing of our
products and services, and we protect our marks through national registrations and common law rights. Our patents
have legal terms of 20 years with expiration dates ranging from 2022 to 2039.

The Company’s trademarks, certain of which are material to its business, are registered or otherwise legally
protected in the U.S.

Seasonality

Sales of our products are moderately seasonal with the peak period being May-October of each year due to timing of
construction projects being directly related to warmer weather.

Environmental & Regulatory Matters

Laws concerning the environment that affect or could affect our 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.

Since our founding in 1987, AAON has maintained a commitment to design, develop, manufacture, and deliver
heating and cooling products to perform beyond all expectations and to demonstrate AAON’s quality and value to
our customers. AAON equipment is designed with energy efficiency in mind, without sacrificing premium features

and options. In addition to our high standard of product performance, is a commitment to sustainability for our
employees, our stockholders, and our customers. At AAON, we strive to conduct our business in a socially
responsible and ethical manner with a focus on environmental stewardship, team member safety and community
engagement. We comply with industry regulations and requirements while pursuing responsible economic growth
and profitability.

In 2021, we published our third annual environmental, social, and governance ("ESG") report highlighting
sustainability practices, achievements, and long-term targets related to greenhouse gas emissions, hazardous waste
recycling, and non-fossil fuel consuming products. AAON also participates in a sustainability benchmarking
initiative (Sustainable Tulsa Scor3card) through which we monitor and report in the material areas of energy,
material management, water, community stewardship, transportation, communication, and health. AAON achieved
Platinum level in this program in 2021. We have an active ESG committee and an internal sustainability committee
that provides education opportunities, communications and recommendations to the company on a regular basis.

In the area of energy efficiency and conservation, AAON Oklahoma and AAON Coil Products have transitioned to
over 95% LED lighting in our facilities leading to considerable cost savings and reduced energy consumption. BasX
is installing LED lights into any new fixtures in their current leased facility and working towards retrofitting old
fixtures to LED. The Company participates in an energy demand response program through the public utility
provider to reduce demand during peak hours. Approximately one-quarter of AAON’s energy portfolio is currently
derived from renewable sources, and the Company’s Scope 1 and 2 emissions (emissions that occur from sources
that are controlled or owned by an organization and emissions associated with the purchase of electricity, steam,
heat, or cooling) are being tracked as part of the Scor3card sustainability benchmarking initiative. Energy efficiency
has been a priority not only in product development, but also in capital investments which include the acquisition of
new, energy efficient equipment for the production floor, new high-speed overhead facility doors, the installation of
new HVAC equipment, building control systems, the application of heat and light reflective material to production
facilities, along with other behavioral-based energy efficiency changes. We are tracking our energy usage intensity
before and after these updates.

In the area of material management, we focus on recycling, reducing, reusing and sourcing more environmentally-
friendly materials into our processes. AAON recycled over 13,793 tons and 11,741 tons of metal in 2021 and 2020,
respectively. Through our partnership with a waste to energy facility, we successfully diverted over 460 tons and
556 tons of waste from landfills in 2021 and 2020, respectively. Our facilities also recycle paper, wood, and
cardboard where available. We continue to innovate ways to reduce and reuse shipping packaging between facilities
and identify new opportunities to reduce or reuse items in our production and administrative areas.

Human Capital Resources

Our employees are not represented by unions or other collective bargaining agreements. Management considers its
relations with our employees to be good. The following table represents the number of our direct employees and
contract personnel we employed on each respective date:

As of
February 22, 2022

As of
February 23, 2021

As of
February 21, 2020

AAON Oklahoma

AAON Coil Products
BasX1

Total employees

1,979

574

328

2,881

1,778

490

—

2,268

1,889

401

—

2,290

1 BasX was acquired by the Company on December 10, 2021.

We believe our employees are key to achieving our business objectives. In the early stages of the COVID-19
pandemic, we put COVID-19 prevention protocols in place to minimize the spread of COVID-19 in our workplaces.
These protocols, which remain in place, meet or exceed state and local mandates.

Our key human capital measures include employee safety, turnover, absenteeism, and production. We frequently
benchmark our compensation practices and benefits programs against those of comparable industries and in the
geographic areas where our facilities are located. We believe that our compensation and employee benefits are
competitive and allow us to attract and retain skilled and unskilled labor throughout our organization. Some of our
notable health, welfare, and retirement benefits include:

•
•
•
•
•

Employee medical plan (with 175% employer health saving plan match)
401(k) Plan (with 175% employer match)
Profit sharing bonus plan
Tuition assistance program
Paid time off

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 Securities Exchange Act of 1934, as amended, will be available free of charge through our Internet
website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
The information on our website is not a part of, or incorporated by reference into, this annual report on Form 10-K.

Copies of any materials we file with the SEC can also be obtained free of charge through the SEC’s website at http://
www.sec.gov, at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, or by calling the
SEC at 1-800-732-0330.

Item 1A. Risk Factors.

The following risks and uncertainties may affect our performance and results of operations. The discussion below
contains “forward-looking statements” as outlined in the Forward-Looking Statements section above. Our ability to
mitigate risks may cause our future results to materially differ from what we currently anticipate. Additionally, the
ability of our competitors to react to material risks will affect our future results.

Risks Related to the Covid-19 Pandemic

Our business, results of operations, financial condition, cash flows, and stock price can be adversely affected
by pandemics, epidemics, or other public health emergencies, such as COVID-19.

Our business, results of operations, financial condition, cash flows, and stock price can be adversely affected by
pandemics, epidemics, or other public health emergencies, such as COVID-19. In March 2020, the World Health
Organization characterized COVID-19 as a pandemic, and the President of the United States declared the
COVID-19 outbreak a national emergency. The outbreak has resulted in governments around the world
implementing increasingly stringent measures to help control the spread of the virus, including quarantines, “shelter
in place” and “stay at home” orders, travel restrictions, business curtailments, school closures, vaccination or testing
mandates and other measures. In addition, governments and central banks in several parts of the world have enacted
fiscal and monetary stimulus measures to counteract the impacts of COVID-19.

We are considered a critical infrastructure industry, as defined by the U.S. Department of Homeland Security.
Although we have continued to operate our facilities to date consistent with federal guidelines and state and local
orders, the outbreak of COVID-19 and any preventive or protective actions taken by governmental authorities may
have a material adverse effect on our operations, supply chain, customers, and transportation networks, including
business shutdowns or disruptions. While we do continue to operate, during 2021 we experienced price increases in
our raw materials, especially copper and steel, which appear to be a result of COVID-19, as well supply chain
challenges related to certain manufacturing parts.

The extent to which COVID-19 may adversely impact our business depends on future developments, which are
highly uncertain and unpredictable, depending upon the severity and duration of the outbreak and the effectiveness
of actions taken globally to contain or mitigate its effects. Any resulting financial impact cannot be estimated
reasonably at this time, but may materially adversely affect our business, results of operations, financial condition,
and cash flows. Even after the COVID-19 pandemic has subsided, we may experience materially adverse impacts to
our business due to any resulting economic recession or depression. Additionally, concerns over the economic

impact of COVID-19 have caused extreme volatility in financial and other capital markets which may adversely
impact our stock price and our ability to access capital markets. To the extent the COVID-19 pandemic adversely
affects our business and financial results, it may also have the effect of heightening many of the other risks described
in this Annual Report, such as those relating to our products and financial performance.

Risks Related to Our Business

Our business can be hurt by economic conditions.

Our business is affected by a number of economic factors, including the level of economic activity in the markets in
which we operate. Sales in the commercial and industrial new construction markets correlate 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 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 could impact our sales volume and profitability.

Our results of operations and financial condition could be negatively impacted by the loss of a major
customer.

From time to time in the past we derived a significant portion of our sales from a limited number of customers, and
such concentration may continue in the future. In 2021, 2020, and 2019, one customer, Texas AirSystems,
accounted for more than 10% of our sales. The loss of, or significant reduction in sales to, a major customer could
have a material adverse effect on our results of operations, financial condition and cash flow. Further, the addition
of new major customers in the future could increase our customer concentration risks as described above.

Our results of operations and financial condition could be negatively impacted by the loss of a major third-
party representative.

We are dependent on our third-party representatives to market and sell our products. If such relationships were
terminated for any reason, it could materially and adversely affect our ability to generate revenues and profits.
Certain of our competitors with greater financial resources than us could target our third-party representatives for
exclusive sales channels. We may not be able to secure additional third-party representatives who will effectively
market our products in certain geographical areas. In addition, adding new representatives requires additional
administrative efforts and costs. If we are unable to establish new representative relationships or continue current
relationships, our business, financial condition, and results of operations could be materially and adversely affected.

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 depend on our senior leadership team and the loss of our chief executive officer or one or more key
employees or an inability to attract and retain highly skilled employees could adversely affect our business.

Our success depends largely upon the continued services of our officers and senior leadership team. In particular,
our chief executive officer, Gary D. Fields, is critical to our vision, strategic direction, culture, and overall business
success. Furthermore, Mr. Fields' extensive industry knowledge and sales-channel experience would be difficult to
replace. We also rely on our senior leadership team in the areas of research and development, marketing,
production, sales, and general and administrative functions. From time to time, there may be changes in our senior
leadership team resulting from the hiring or departure of senior leadership team members, which could disrupt our
business. While we have have a robust succession plan in place for each one of our officers and senior leadership
team members, the loss of one or more could have a serious adverse effect on our business.

We do not maintain key-man insurance for Gary D. Fields or any other member of our senior leadership team. Other
than the employment agreements negotiated with certain employees of BasX, we do not have employment
agreements with our officers or senior leadership team members that require them to continue to work for us for any
specified period and, therefore, they could terminate their employment with us at any time. The employment
agreements with the employees of BasX guarantee certain compensation, such as salary and benefits, and
employment terms. We do not believe the terms or conditions of these agreements are outside the standard
expectation of another employee at a similar level.

Operations may be affected by natural disasters, especially since most of our operations are performed at a
single location.

Natural disasters such as tornadoes, ice storms and fires, as well as accidents, acts of terror, infection, and other
factors beyond our control could adversely affect our operations. Our facilities are in areas where tornadoes are
likely to occur, and the majority of our operations are at our Tulsa facilities. With the acquisition of BasX in 2021,
we now have operations in an area that is, historically, effected by wild fires. The effects of natural disasters and
other events could damage our facilities and equipment and force a temporary halt to manufacturing and other
operations, and such events could consequently cause severe damage to our business. We maintain insurance against
these sorts of events at AAON Oklahoma and AAON Coil Products with $100 million of total coverage with a per
occurrence deductible of $2.5 million and BasX with $20 million of total cover with a per occurrence deductible of
$5 thousand; however, this is not guaranteed to cover all the losses and damages incurred. Furthermore, we may
experience increases in our insurance premium costs in relation to these matters that may have a material adverse
effect upon our business, liquidity, financial condition, or results of operations.

If we are unable to hire, develop or retain employees, it could have an adverse effect on our business.

We compete to hire new employees and then seek to train them to develop their skills. We may not be able to
successfully recruit, develop, and retain the personnel we need. Unplanned turnover or failure to hire and retain a
diverse, skilled workforce, could increase our operating costs and adversely affect our results of operations.

Variability in self-insurance liability estimates could impact our results of operations.

We self-insure for employee health insurance and workers’ compensation insurance coverage up to a predetermined
level, beyond which we maintain stop-loss insurance from a third-party insurer for claims over $225,000 and
$750,000 for employee health insurance claims and workers’ compensation insurance claims, respectively. Our
aggregate exposure varies from year to year based upon the number of participants in our insurance plans. We
estimate our self-insurance liabilities using an analysis provided by our claims administrator and our historical
claims experience. Our accruals for insurance reserves reflect these estimates and other management judgments,
which are subject to a high degree of variability. If the number or severity of claims for which we self-insure
increases, it could cause a material and adverse change to our reserves for self-insurance liabilities, as well as to our
earnings.

Risks Related to Our Brand and Product Offerings

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, 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.

We 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 achieve new technological advances in the HVAC industry. Our inability to continue to
successfully develop and market new products or our inability to implement 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. Furthermore, our continued investment in new product development may render certain legacy products
and components obsolete resulting in increased inventory obsolescence expense that may have a material adverse
effect upon our financial condition or results of operations.

Risks Related to Material Sourcing and Supply

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. Occasionally, we enter into cancellable and non-cancellable contracts
on terms from six to 18 months 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-cancellable fixed price contracts.

Historically, we have attempted to limit the impact of price fluctuations on commodities by entering into non-
cancellable fixed price contracts with our major suppliers for periods of six to 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 using hedge accounting since they meet the normal purchases and sales exemption.

Risks Related to Electronic Data Processing and Digital Information

Our business is subject to the risks of interruptions by cybersecurity attacks.

We depend upon information technology infrastructure, including network, hardware and software systems to
conduct our business. Despite our implementation of network and other cybersecurity measures, our information
technology system and networks could be disrupted due to technological problems, a cyber-attack, acts of terrorism,
severe weather, a solar event, an electromagnetic event, a natural disaster, the age and condition of information
technology assets, human error, or other reasons. To date, we have not experienced a material impact to our business
or operations resulting from cyber-security or other similar information attacks, but due to the ever-evolving attack
methods, as well as the increased amount and level of sophistication of these attacks, our security measures may not
be adequate to protect against highly targeted sophisticated cyber-attacks, or other improper disclosures of
confidential and/or sensitive information. Additionally, we may have access to confidential or other sensitive
information of our customers, which, despite our efforts to protect, may be vulnerable to security breaches, theft, or
other improper disclosure. Any cyber-related attack or other improper disclosure of confidential information could
have a material adverse effect on our business, as well as other negative consequences, including significant damage
to our reputation, litigation, regulatory actions, and increased cost.

Risks Related to Governmental Regulation and Policies

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.

We are subject to potentially extreme governmental regulations and policies.

We always face the possibility of new governmental regulations, policies and trade agreements which could have a
substantial or even extreme negative effect on our operations and profitability. Several intrusive component part
governmental regulations are in process. If these proposals become final rules, the effect would be the regulation of
compressors and fans in products for which the Department of Energy does not have current authority. This could
affect equipment we currently manufacture and could have an impact on our product design, operations, and
profitability.

The Dodd-Frank Wall Street Reform and Consumer Protection Act contains provisions to improve transparency and
accountability concerning the supply of certain minerals, known as “conflict minerals”, originating from the
Democratic Republic of Congo and adjoining countries. As a result, in August 2012, the SEC adopted annual
disclosure and reporting requirements for those companies who use conflict minerals in their products. Accordingly,
we began our reasonable country of origin inquiries in fiscal year 2013, with initial disclosure requirements
beginning in May 2014. There are costs associated with complying with these disclosure requirements, including for
due diligence to determine the sources of conflict minerals used in our products and other potential changes to
products, processes or sources of supply as a consequence of such verification activities. The implementation of
these rules could adversely affect the sourcing, supply, and pricing of materials used in our products. As there may
be only a limited number of suppliers offering “conflict free” conflict minerals, we cannot be sure that we will be
able to obtain necessary conflict minerals from such suppliers in sufficient quantities or at competitive prices. Also,
we may face reputational challenges if we determine that certain of our products contain minerals not determined to
be conflict free or if we are unable to sufficiently verify the origins for all conflict minerals used in our products
through the procedures we may implement.

Our operations could be negatively impacted by new legislation as well as changes in regulations and trade
agreements, including tariffs and taxes. Unfavorable conditions resulting from such changes could have a material
adverse effect on our business, financial condition and results of operations.

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 subject to state and local
tax examinations for which we do not expect any major assessments.

We are subject to international regulations that could adversely affect our business and results of operations.

Due to our use of representatives in foreign markets, we are subject to many laws governing international relations,
including those that prohibit improper payments to government officials and commercial customers, and restrict
where we can do business, what information or products we can supply to certain countries and what information we
can provide to a non-U.S. government, including but not limited to the Foreign Corrupt Practices Act, U.K. Bribery
Act and the U.S. Export Administration Act. Violations of these laws, which are complex, may result in criminal
penalties or sanctions that could have a material adverse effect on our business, financial condition and results of
operations.

Changes in legislation or government regulations or policies could adversely effect on our results of
operations.

Our sales, gross margins and profitability could be directly impacted by changes in legislation or government
regulations or policies. Specifically, changes in environmental and energy efficiency standards and regulations
related to global climate change are being implemented to curtail the use of hydrofluorocarbons which are used in
refrigerants that are essential to many of our products. Our inability or delay in developing or marketing products
that match customer demand while also meeting applicable efficiency and environmental standards may negatively
impact our results.

We expect to start transitioning to a new refrigerant with lower global warming potential for our HVAC systems in
2023 and must be fully compliant under current governmental regulations by 2025. We expect to incur costs
associated with this transition related to the purchase of the new refrigerant as well as additional sensors and

detectors on our HVAC systems. In addition, we expect to incur cost to our facilities, specifically costs to store and
use the new refrigerant in production; however, we do not expect these costs to be significant. Due to the increased
flammability of the new refrigerant, the insurance industry may require higher premiums for companies once the
conversion begins. Furthermore, due to the expected increased demand of the newer refrigerants as well as the older
hydrofluorocarbon refrigerants (as they are phased out), we expect to see increased manufacturing costs related to
purchases of refrigerants and could see higher costs for future warranty claims.

Future legislation or regulations relating to environmental policies, product certification, product liability, taxes,
amount and availability of tax incentives and other matters, may impact the results of each of our operating
segments and our consolidated results.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

As of December 31, 2021, we own all of our Tulsa, Oklahoma, and Longview, Texas, facilities, consisting of
approximately two million square feet of space for office, manufacturing, research and development, warehouse,
assembly operations, and parts sales. We believe that our facilities are well maintained and are in good condition and
suitable for the conduct of our business. Our Parkville, Missouri and Redmond, Oregon facilities were leased as of
December 31, 2021, and as further described below.

Our manufacturing areas are heavy industrial type buildings, with some coverage by overhead 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 cart-type and roller-type conveyor lines with variable line speed adjustment,
which are motor driven. Subassembly areas and production line manning are based upon line speed.

AAON Oklahoma

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, a 940,000 sq. ft. manufacturing/warehouse building and a 70,000 sq. ft. office building located on
an approximately 79-acre tract of land across the street from the original facility (2440 South Yukon Avenue), and a
40,000 sq. ft. building used as warehouse space, acquired in 2021, on located on a 6-acre tract (collectively, the
“Tulsa facilities”).

In addition to a retail parts store location at our Tulsa facilities, we also own a 13,500 sq. ft. stand alone building
(7,500 sq. ft. warehouse and 6,000 sq. ft. office) which is utilized as an additional retail parts store to provide our
customers more accessibly to our products. The stand alone parts store building is on approximately one acre and is
located at 9528 E 51st St in Tulsa, Oklahoma.

Our Tulsa location is also home to our engineering research and development laboratory, the Norman Asbjornson
Innovation Center. The three-story 134,000 square foot stand alone facility is both an acoustical and a performance
measuring laboratory. This facility currently consists of twelve test chambers, allowing AAON to meet and
maintain industry certifications. This facility is located West of the 940,000 sq. ft. manufacturing/warehouse
building at 2425 South Yukon Avenue.

Our operations in Parkville, Missouri, are conducted in a leased plant/office at 8500 NW River Park Drive,
containing 51,000 sq. ft. We believe that the leased facility is well maintained and in good condition and suitable for
the conduct of our business.

AAON Coil Products

Our plant and office facilities in Longview, Texas, consist of a 263,000 sq. ft. building (256,000 sq. ft. of
manufacturing/warehouse space and 7,000 sq. ft. of office space) located on a 13-acre tract of land at 203-207 Gum
Springs Road and a 222,000 sq. ft. building (210,000 sq. ft. of manufacturing/warehouse space and 12,000 sq. ft. of
office space) located on an approximately 22-acre tract of land at 201 Ford Lane. The facilities at Gum Springs and
Ford Lane are directly adjacent to each other.

BasX

Our operations in Redmond, Oregon, are conducted in a leased plant/office at 3500 SW 21st Place, containing
approximately 194,000 sq. ft. (169,000 sq. ft. of manufacturing/warehouse space and 25,000 sq. ft. of office space).
We believe that the leased facility is well maintained and in good condition and suitable for the conduct of our
business.

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 has been threatened against us, or, to the best of our knowledge, is contemplated.

Item 4. Mine Safety Disclosure.

Not applicable.

PART II

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

Market Information - Our common stock is quoted on the NASDAQ Global Select Market under the symbol
“AAON”. As of the close of business on February 23, 2022, there were 955 holders of record of our common stock.

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.

Our recent dividends are as follows:

Declaration Date

May 20, 2019

November 6, 2019
May 15, 2020
November 10, 2020
May 17, 2021
November 9, 2021

Record Date

June 3, 2019

November 27, 2019
June 3, 2020
November 27, 2020
June 3, 2021
November 26, 2021

Payment Date

July 1, 2019

December 18, 2019
July 1, 2020
December 18, 2020
July 1, 2021
December 17, 2021

Dividend per Share

$0.16

$0.16
$0.19
$0.19
$0.19
$0.19

The following is a summary of our share-based compensation plans as of December 31, 2021:

EQUITY COMPENSATION PLAN INFORMATION

(a)
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights

(b)
Weighted-average
exercise price of
outstanding options,
warrants and rights

(c)
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))

159,782

863,882

20.19

39.01

—

3,973,680

Plan category

The 2007 Long-Term
Incentive Plan

The 2016 Long-Term
Incentive Plan

Repurchases during the fourth quarter of 2021, which include repurchases from our open market, 401(k) and
employee repurchase programs, were as follows:

ISSUER PURCHASES OF EQUITY SECURITIES

(a)
Total
Number
of Shares
(or Units

Period

Purchased)

October 2021

November 2021

December 2021

19,426 $

15,372

43,385

Total

78,183 $

(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

68.98

76.44

78.37

75.66

19,426

15,372

43,385

78,183

—

Comparative Stock Performance Graph

The following performance graph compares our cumulative total shareholder return, the NASDAQ Composite and a
peer group of publically traded U.S. industrial manufacturing companies in the air conditioning, ventilation, and
heating exchange equipment markets from December 31, 2016 through December 31, 2021. Our peer group includes
Lennox International, Inc., Trane Technologies plc (formerly Ingersoll-Rand plc), Johnson Controls International
plc, Carrier Global Corporation (formerly United Technologies Corporation), and Vertiv (Vertiv Holding Co.). The
graph assumes that $100 was invested at the close of trading December 31, 2016, with reinvestment of dividends.
This table is not intended to forecast future performance of our Common Stock.

Comparison of Five Year Cumulative Total Return
Assumes Initial Investment of $100
December 31, 2021

400

350

300

250

200

150

100

2016

2017

2018

2019

2020

2021

AAON Inc.

NASDAQ

Peer Group (Notes 1 - 3 see below)

1On March 2, 2020, Trane Technologies PLC (formerly known as Ingersoll-Rand plc) spun off its industrial assets,
which made up over 50% of the company’s sales. Thus, historical stock performance prior to the divestiture is not
fully representative of the current company’s assets.

2On April 3, 2020, Carrier Global Corporation was spun off from its parent company, United Technologies
Corporation. We have included Carrier's cumulative total shareholder return from April 3, 2020 through
December 31, 2021 assuming $100 was invested at the close of trading on April 3, 2020.

3With its initial public offering in 2018, the first trading date for Vertiv Holdings Co. was July 30, 2018. We have
included Vertiv's shareholder return from July 30, 2018 through December 31, 2021 assuming $100 was invested at
the close of trading on July 30, 2018.

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.

Item 6. Reserved.

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

Overview

The following discussion should be read in conjunction with the other sections of this Annual Report on Form 10-K,
including the consolidated financial statements and related notes contained in Item 8, Financial Statements and
Supplementary Data.

Description of the Company

We engineer, manufacture, market, and sell premium air conditioning and heating equipment consisting of standard,
semi-custom, and custom rooftop units, data center cooling solutions, cleanroom systems, chillers, packaged outdoor
mechanical rooms, air handling units, makeup air units, energy recovery units, condensing units, geothermal/water-
source heat pump, coils, and controls. These products are marketed and sold to retail, manufacturing, educational,
lodging, supermarket, data centers, medical and pharmaceutical, and other commercial industries. We market our
products to all 50 states in the United States and certain provinces in Canada.

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 rise in architectural billings and nonresidential building construction starts
signal a 2022 recovery in nonresidential building construction after experiencing a downturn in 2021. Furthermore,
general economic growth combined with pent-up demand from customers that delayed replacing old equipment is
driving accelerated replacement demand. However, both the new construction and replacement markets are cyclical.
If the domestic economy were to slow or enter a recession, this 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.
Sales in the replacement markets are driven by various factors, including general economic growth, the Company’s
new product introductions, fluctuations in the average age of existing equipment in the market, government
regulations and stimulus, changes in market demand between more customized higher performing HVAC equipment
and lower priced standard equipment, as well as many other factors. When new construction is down, we emphasize
the replacement market. The replacement market in 2021 improved compared to 2020, while the new construction
market was a bit slower.

We sell our products to property owners and contractors mainly through a network of independent manufacturers’
representatives. This go-to-market strategy is unique compared to most of our larger competitors in that most control
their sales channel. We value the independent sales channel as we think it is a more effective way of attacking
market share. Although we concede full control of the sales process with this strategy, the entrepreneurial aspect of
the independent sales channel attracts the most talent and provides greater financial incentives for its salespeople.
Furthermore, the independent sales channel sells different types of equipment from various manufacturers, allowing
it to operate with more of a solutions-based mindset, as opposed to an internal sales department of a manufacturing
company that is incentivized to only sell its equipment regardless if it is the best solution for the end customer. We
also have a small internal sales force that supports the relationships between the Company and our sales channel
partners. BasX sells highly customized products for unique applications for a more concentrated customer base and
an internal sales force is more effective for such products. In total, our internal sales force makes up 65 individuals.
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 six to 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.

The principal components of cost of sales 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. We also purchase from other manufacturers certain components, including coils,
compressors, motors, and electrical controls.

The price levels of our raw materials fluctuate given that the market continues to be volatile and unpredictable as a
result of the uncertainty related to the U.S. economy and global economy. For the year ended December 31, 2021,
the prices for copper, galvanized steel, and stainless steel increased approximately 35.3%, 50.9%, and 45.4%,
respectively, and aluminum decreased approximately 4.5%, from 2020. For the year ended December 31, 2020, the
prices for copper, galvanized steel and stainless steel increased approximately 0.6%, 12.2%, 8.5%, and 12.8%,
respectively, from 2019. We occasionally increase the price of our equipment to help offset any inflationary
headwinds. In 2021, given the unusual amount of inflation in our materials, we implemented three price increases.

We also attempt to limit the impact of price fluctuations on these materials by entering into cancellable and non-
cancellable fixed price contracts with our major suppliers for periods of six to 18 months. We expect to receive
delivery of raw materials from our fixed price contracts for use in our manufacturing operations.

Consolidated Results of Operations

Net Sales

Cost of Sales

Gross Profit

Selling, general and administrative expenses

(Gain) loss on disposal of assets and insurance recoveries

Years Ended December 31,

2021

2020

2019

(in thousands)

534,517

514,551

469,333

396,687

137,830

68,598

(21)

358,702

155,849

60,491

(6,478)

349,908

119,425

52,077

337

Income from operations

69,253

101,836

67,011

The following are highlights of our results of operations, cash flows, and financial condition:

•
•
•

•

Our backlog is at a record level due primarily to strong end-market demand.
Organic bookings were up approximately 55% compared to 2020.
On December 10, 2021, we completed the acquisition of BasX bringing the Company exposure to
attractive end-markets into which the Company has historically had minimal exposure.
Sales in 2021 grew year-over-year 3.9% to $534.5 million driven mainly by price increases.

Beginning in the fourth quarter of 2021, we report our financial results based on three reportable segments: AAON
Oklahoma, AAON Coil Products, and BasX, which are further described in Item 1, due to the acquisition of BasX
and internal leadership reporting changes. The Company's chief decision maker ("CODM"), our CEO, allocates
resources and assesses the performance of each operating segment using information about the operating segment's
net sales and income from operations. The CODM does not evaluate operating segments using asset or liability
information.

Segment Operating Results for the Years Ended December 31, 2021 and 2020

For the years ended December 31,

2021

Percent of
Sales2

2020

Percent of
Sales2

$ Change

%
Change

(in thousands)

Net Sales3

AAON Oklahoma

463,845

86.8 % $

458,957

89.2 % $

4,888

AAON Coil Products
BasX1

66,589

4,083

12.5 %

55,594

10.8 %

10,995

0.8 %

—

4,083

—

Net sales

534,517

514,551

19,966

3.9 %

Cost of Sales3
AAON Oklahoma

AAON Coil Products
BasX1
Cost of sales

Gross Profit3
AAON Oklahoma

AAON Coil Products
BasX1
Gross profit

336,977

72.6 %

318,858

69.5 % $

18,119

56,514

3,196

84.9 %

39,844

71.7 %

16,670

78.3 %

—

3,196

—

396,687

74.2 % $

358,702

69.7 % $

37,985

10.6 %

126,868

27.4 % $

140,099

30.5 % $

(13,231)

(9.4) %

10,075

15.1 %

15,750

28.3 %

(5,675)

(36.0) %

887

21.7 %

—

887

—

137,830

25.8 % $

155,849

30.3 % $

(18,019)

(11.6) %

1.1 %

19.8 %

5.7 %

41.8 %

1 BasX was acquired on December 10, 2021. We have included the results of BasX's operations in our consolidated
financial statements as of December 11, 2021.
2 Cost of sales and gross profit for each segment are calculated as a percentage of the respective segment's net sales. Total
cost of sales and total gross profit are calculated as a percentage of total net sales.
3 Presented after intercompany eliminations.

Total net sales increased $20.0 million or 3.9%, due primarily to price increases that totaled of approximately $26.3
million put into place over the last year that were realized during 2021. The acquisition of BasX in December 2021
added $4.1 million to net sales for the short period in December. AAON Coil Products saw a 16.5% increase in
units sold, or approximately $9.7 million, due to the increase in capacity with the completion of the new
manufacturing building at our Longview, Texas facility in early 2021. Those increases were offset by a total
decrease in volumes of approximately $10.8 million due to challenges in COVID-19 related absenteeism, supply
chain issues for certain parts, and challenges hiring additional production labor to achieve higher production rates.
Additionally, our plants were shut down for several days in January 2021 for planned maintenance and in February
2021 for weather that resulted in lost volume of approximately $18.1 million. Part sales and other increased $9.6
million or 20.5%.

As shown in the table below, we've experienced increases in the cost of our raw materials. We put multiple price
increases in place during the year to counteract the increased cost of material; however, it took time for those price
increases to work through our backlog and be realized. For this reason, we started to see erosion in our gross profit.
In the second and third quarters, we encountered challenges in hiring additional production labor, resulting in
unfavorable labor and overhead efficiencies, including the Company's ability to absorb certain fixed costs. In order
to attract new employees, we increased starting wages for our production workforce by 7.0% in July 2021. In order
to retain our existing employees, we also put a cost of living increase of 3.5% in place in October 2021 for all
employees below the Director level. The second half of the year was also impacted by various part shortages. This
caused us to rearrange production schedules, incur delays and inefficiencies in production, and incur more expensive
freight costs. All these things combined with lower production volumes resulted in poor absorption of overhead
which caused declines in our gross profit.

Raw Material Costs

Twelve month average raw material cost per pound as of December 31:

2021

2020

% Change

Copper

Galvanized Steel

Stainless Steel

Aluminum

4.94

0.83

2.05

1.93

3.65

0.55

1.41

2.02

35.3 %

50.9 %

45.4 %

(4.5) %

Selling, General and Administrative Expenses

Years Ended December 31,

Percent of Sales

2021

2020

2021

2020

(in thousands)

6,351

8,526

23,458

5,543

1,616

2,924

3,010

7,245

738

9,187

6,621

11,593

20,159

5,341

823

1,999

1,066

2,514

2,115

8,260

1.2 %

1.6 %

4.4 %

1.0 %

0.3 %

0.5 %

0.6 %

1.4 %

0.1 %

1.7 %

1.3 %

2.3 %

3.9 %

1.0 %

0.2 %

0.4 %

0.2 %

0.5 %

0.4 %

1.6 %

Warranty

Profit Sharing

Salaries & Benefits

Stock Compensation

Advertising

Depreciation

Insurance

Professional Fees

Donations

Other

Total SG&A $

68,598

60,491

12.8 %

11.8 %

Our profit sharing expenses decreased due to decreased earnings in 2021. Salaries & benefits increased due to
increases in salaries and bonuses. Professional fees increased mostly due to the transaction costs associated with the
acquisition of BasX (Note 4) of $4.4 million. Donations decreased due to the contribution of approximately $1.3
million to Winifred, Montana Public Schools in recognition of Norman H. Asbjornson's transition from CEO to
Executive Chairman during 2020.

Gain/Loss on Disposals of Assets and Insurance Proceeds

December 31, 2020. The received proceeds will be used in future periods to make improvements to the current roof
at our plant and office facilities in Tulsa, Oklahoma to extend the overall useful life.

Income Taxes

Years Ended December 31,

2021

2020

Effective Tax Rate
2020
2021

(in thousands)

Income tax provision

10,424

22,966

15.1 %

22.5 %

On May 21, 2021, the State of Oklahoma enacted House Bill 2960, effectively reducing the corporate income tax
rate in Oklahoma from 6% to 4%. As a result of these changes, the Company adjusted its state deferred tax assets
and liabilities in the second quarter of 2021 using the newly enacted rate for the periods when they are expected to
be realized resulting in a benefit of $0.8 million.

During the year ending December 31, 2021, the Company recorded an excess tax benefit of $5.4 million as
compared to $3.2 million during 2020, an increase of 68.8%. The increase was primarily due to timing of stock
option exercises as a result of our high stock price during the three months ended March 31, 2021 and three months
ended December 31, 2021.

Segment Operating Results for the Years Ended December 31, 2020 and 2019

For the years ended December 31,

2020

Percent of
Sales1

2019

Percent of
Sales1

$ Change

% Change

(in thousands)

Net Sales2
AAON Oklahoma

$ 458,957

89.2 % $ 418,669

89.2 % $

40,288

AAON Coil Products

55,594

10.8 %

50,664

10.8 %

4,930

Net sales

$ 514,551

$ 469,333

45,218

Cost of Sales2
AAON Oklahoma

$ 318,858

69.5 %

311,441

74.4 % $

AAON Coil Products

39,844

71.7 %

38,467

75.9 %

$ 358,702

69.7 % $ 349,908

— %

74.6 % $
— %

7,417

1,377

8,794

$ 140,099

30.5 % $ 107,228

25.6 % $

32,871

AAON Coil Products

15,750

28.3 %

12,197

24.1 %

3,553

Gross profit

$ 155,849

30.3 % $ 119,425

25.4 % $

36,424

Cost of sales

Gross Profit2
AAON Oklahoma

9.6 %

9.7 %

9.6 %

2.4 %

3.6 %

2.5 %

30.7 %

29.1 %

30.5 %

1 Cost of sales and gross profit for each segment are calculated as a percentage of the respective segment's net sales. Total
cost of sales and total gross profit are calculated as a percentage of total net sales.
2 Presented after intercompany eliminations.

Total net sales increased $45.2 million or 9.6%, mostly due to the increase of rooftop sales from AAON Oklahoma.
AAON Oklahoma saw a increase in rooftop units volumes of 8.8%, or approximately $30.6 million, due in part to
our increased sheet metal production from the additional Salvagnini machines that were placed into operation
allowing increased production and from price increases put in place over the last year. Part sales and other decreased
$3.4 million or 6.9%.

As shown below, our average raw material prices increased during the year. However, the Company had increased
its inventory levels in 2019 and early 2020 at lower prices and was able to benefit from these lower priced raw
materials as the inventory was consumed in 2020. The Company improved its labor and overhead efficiencies with
our new sheet metal machines that were placed into service in the last quarter of 2019 and early 2020, eliminating
any bottlenecks in our sheet metal production. The Company's headcount was also down compared to 2019,
resulting in a higher production output per employee.

Raw Material Costs

Twelve month average raw material cost per pound as of December 31:

2020

2019

% Change

Copper

Galvanized Steel

Stainless Steel

Aluminum

3.65

0.55

1.41

2.02

3.63

0.49

1.30

1.79

0.6 %

12.2 %

8.5 %

12.8 %

Selling, General and Administrative Expenses

Years Ended December 31,

Percent of Sales

2020

2019

2020

2019

(in thousands)

6,621

11,593

20,159

5,341

823

1,999

1,066

2,514

2,115

8,260

8,047

7,448

13,394

6,690

818

1,524

805

2,738

1,137

9,476

1.3 %

2.3 %

3.9 %

1.0 %

0.2 %

0.4 %

0.2 %

0.5 %

0.4 %

1.6 %

1.7 %

1.6 %

2.9 %

1.4 %

0.2 %

0.3 %

0.2 %

0.6 %

0.2 %

2.0 %

Warranty

Profit Sharing

Salaries & Benefits

Stock Compensation

Advertising

Depreciation

Insurance

Professional Fees

Donations

Other

Total SG&A $

60,491

52,077

11.8 %

11.1 %

The Company experienced a decrease in warranty claims paid of 15.6% in 2020. Our profit sharing expenses
increased due to higher earnings in 2020. Salaries and benefits increased due to additional bonuses and employee
incentives. Stock compensation was lower in 2020 because the valuation of the Company-wide equity grant awarded
in March 2020 was less than the grant awarded in March 2019. Donations increased due to the contribution of
approximately $1.3 million to Winifred, Montana Public Schools in recognition of Norman H. Asbjornson's
transition from CEO to Executive Chairman.

Gain/Loss on Disposals of Assets and Insurance Proceeds

On April 22, 2020, our plant and office facilities in Tulsa, Oklahoma experienced hail related weather damage and
we filed a property insurance claim which carried a $500,000 deductible. We did not experience any significant
structural damage or any operational interruption as a result of this weather event. In November 2020, we reached a
final settlement with our insurance carrier, resulting in a net cumulative gain of $6.4 million for the year ended
December 31, 2020. The received proceeds will be used in future periods to make improvements to the current roof
at our plant and office facilities in Tulsa, Oklahoma to extend the overall useful life.

Income Taxes

Years Ended December 31,

Effective Tax Rate

2020

2019

2020

2019

(in thousands)

Income tax provision

22,966

13,320

22.5 %

19.9 %

Upon completion of the Company's 2018 tax return in 2019, the Company recorded additional benefit due to higher
than expected research and development credit of $0.6 million. Additionally in 2019, the Company determined it
could take advantage of an additional 1% tax credit in Oklahoma for years in which the Company's location was
deemed to be within an enterprise zone. The additional Oklahoma Credit for being in an enterprise zone, or
otherwise allowable under Oklahoma law, resulted in a benefit of $1.2 million.

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.

Working Capital - Our unrestricted cash and cash equivalents decreased $76.2 million from December 31, 2020 to
December 31, 2021 primarily due to the use of available cash on hand to fund the acquisition of BasX (Note 4). As
of December 31, 2021, we had $3.5 million in cash and cash equivalents and restricted cash.

Revolving Line of Credit - Our revolving credit facility (“Revolver”), as amended and restated, provides for
maximum borrowings of $100.0 million. As of December 31, 2021, we had a $40.0 million balance outstanding
under the Revolver. We have one standby letter of credit totaling $1.8 million as of December 31, 2021 and
2020. Borrowings available under the Revolver at December 31, 2021, were $58.2 million. The Revolver expires on
November 24, 2026.

Any outstanding loans under the Revolver bear interest at the daily compounded secured overnight financing rate
("SOFR") plus the applicable margin. Applicable margin, ranging from 1.25% - 1.75%, is determined quarterly
based on the Company's leverage ratio. The Company is also subject to letter of credit fees, ranging from 1.25% -
1.75%, and a commitment fee, ranging from 0.10% - 0.20%. The applicable fee percentage is determined quarterly
based on the Company's leverage ratio. At December 31, 2021, the weighted average interest rate of the Revolver
was 1.3%. Fees associated with the unused portion of the committed amount are included in interest expense on our
consolidated statements of income and were not material for the year ended December 31, 2021.

If SOFR cannot be determined pursuant to the definition, as defined by the Revolver agreement, any outstanding
effected loans will be deemed to have been converted into alternative base rate ("ABR") loans. ABR loans would
bear interest at a rate per annum equal to the highest of (a) the Prime Rate in effect on such day, (b) the Federal
Funds Rate in effect on such day plus 0.50%, or (c) daily simple SOFR for a one-month tenor in effect on such day
plus 1.00%.

At December 31, 2021, we were in compliance with our financial covenants, as defined by the Revolver. These
covenants require that we meet certain parameters related to our leverage ratio. At December 31, 2021, our leverage
ratio was 0.42 to 1.0, which meets the requirement of not being above 3 to 1.

New Market Tax Credit Obligation - On October 24, 2019, the Company entered into a transaction with a
subsidiary of an unrelated third-party financial institution (the “Investor”) and a certified Community Development
Entity under a qualified New Markets Tax Credit (“NMTC”) program pursuant to Section 45D of the Internal
Revenue Code of 1986, as amended, related to an investment in plant and equipment to facilitate the expansion of
our Longview, Texas manufacturing operations (the “Project”). In connection with the NMTC transaction, the
Company received a $23.0 million NMTC allocation for the Project and secured low interest financing and the
potential for future debt forgiveness related to the expansion of its Longview, Texas facilities.

Upon closing of the NMTC transaction, the Company provided an aggregate of approximately $15.9 million to the
Investor, in the form of a loan receivable, with a term of twenty-five years, bearing an interest rate of 1.0%. This
$15.9 million in proceeds plus capital contributed from the Investor was used to make an aggregate $22.5 million
loan to a subsidiary of the Company. This financing arrangement is secured by equipment at the Company's
Longview, Texas facilities, and a guarantee from the Company, including an unconditional guarantee of NMTCs.

Stock Repurchase - The Board has authorized three stock repurchase programs for the Company.

The Company may purchase shares on the open market from time to time, up to a total of 5.7 million shares. The
Board must authorize the timing and amount of these purchases and all repurchases are in accordance with the rules
and regulations of the SEC allowing the Company to repurchase shares from the open market.

Our open market repurchase programs are as follows:

Agreement Execution Date
May 16, 2018 1
March 5, 2019 1

March 13, 2020

Authorized Repurchase $

Expiration Date

$15 million

$20 million

March 1, 2019

March 4, 2020
** 2

1 The 2018 and 2019 purchase authorizations were executed under 10b5-1 programs.

2 Expiration Date is at Board's discretion. The Company is authorized to effectuate repurchases of the Company's
common stock on terms and conditions approved in advance by the Board.

The Company also has a stock repurchase arrangement by which employee-participants in our 401(k) savings and
investment plan are entitled to have shares in AAON, Inc. stock in their accounts sold to the Company. The
maximum number of shares to be repurchased is contingent upon the number of shares sold by employee-
participants.

Lastly, the Company repurchases shares of AAON, Inc. stock from certain of its directors and employees for
payment of statutory tax withholdings on stock transactions. All other repurchases from directors or employees are
contingent upon Board approval. All repurchases are done at current market prices.

Our repurchase activity is as follows:

2021

2020

2019

(in thousands, except share and per share data)

Program
Open market
401(k)

Directors and
employees
Total

Total $
— $ — $

297,772 20,876

$ per share
—
70.11

Total $

$ per share

Total $

103,689 $ 4,987 $
438,921 25,073

48.10
57.12

5,799 $

200 $

419,963 19,386

$ per share
34.46
46.16

22,526
1,590
320,298 $ 22,466 $

70.59
70.14

23,272

1,169
565,882 $ 31,229 $

50.23
55.19

28,668

1,207
454,430 $ 20,793 $

42.11
45.76

Inception to Date
(in thousands, except share and per share data)
$ per share
Total $

Program

Open market
401(k)

Shares
4,205,255 $
8,204,432

Directors and employees
Total

2,027,727
14,437,414 $

74,793 $
165,876

22,341
263,010 $

17.79
20.22

11.02
18.22

Our recent dividends are as follows:

Declaration Date
May 20, 2019
November 6, 2019
May 15, 2020
November 10, 2020
May 17, 2021
November 9, 2021

Record Date
June 3, 2019
November 27, 2019
June 3, 2020
November 27, 2020
June 3, 2021
November 26, 2021

Payment Date
July 1, 2019
December 18, 2019
July 1, 2020
December 18, 2020
July 1, 2021
December 17, 2021

Dividend per Share
$0.16
$0.16
$0.19
$0.19
$0.19
$0.19

Based 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 2022 and the foreseeable future.

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.

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.

Operating Activities

Net Income

Income statement adjustments, net

Changes in assets and liabilities:

Accounts receivable

Income tax receivable

Inventories

Contract assets

Prepaid expenses and other

Accounts payable

Contract liabilities
Deferred revenue

Accrued liabilities and donations

Net cash provided by operating activities

Investing Activities

Capital expenditures

Insurance proceeds
Cash paid in business combination, net of cash acquired

Purchases of investments

Maturities of investments and proceeds from called investments

Other

Net cash used in investing activities

Financing Activities

Borrowings under revolving credit facility

Proceeds from financing obligation, net of issuance costs

Payment related to financing costs

Stock options exercised

Repurchase of stock

Employee taxes paid by withholding shares

Cash dividends paid to stockholders
Net cash provided by (used in) financing activities

Cash Flows from Operating Activities

2021

2020

2019

(in thousands)

58,758 $

79,009 $

46,566

44,793

(9,737)

(1,136)

(45,955)

1,886

1,374

10,899

(229)
447

(1,690)

61,183

19,859

(3,815)

(9,726)

—

(2,364)

(2,155)

—
1,010

2,203

128,814

53,711

42,440

(13,412)

5,129

2,557

—

(329)

280

—
425

7,124

97,925

(55,362)

(67,802)

(37,166)

—

6,417

(103,430)

—

112

—

(6,000)

6,000

120

(158,719)

(61,273)

(37,046)

40,000

—

21,148

(20,876)

(1,590)

—

21,418

(30,060)

(1,169)

(19,947)
18,735 $

(19,815)
(29,626) $

—

6,614

(301)

12,625

(19,586)

(1,207)

(16,645)
(18,500)

The decrease in cash flows from receivables was due to the increase in sales in the fourth quarter of 2021 as
compared to 2020, as a result of the planned Company shutdown during the last week of December 2020. The
decrease in cash flows from inventory is a result of increased costs of materials and some larger purchases made in
the year to help deter supply chain issues and long lead times. The increase in cash flows from accounts payable is
primarily driven by the timing of payments.

Cash Flows from Investing Activities

Cash flows from investing activities increased in 2021 as compared to 2020 and 2019 primarily due to the cash paid
for the acquisition of BasX (Note 4) in December 2021. This increase is offset by decreased capital expenditures in
2021 compared to 2020 and insurance proceeds received in November 2020. The capital expenditures for 2020

relate to the completion of our Longview facility expansion as well as the addition to and replacement of sheet metal
manufacturing equipment.

Our capital expenditure program for 2022 is estimated to be approximately $100.4 million. 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

Cash flows from financing activities is historically affected by the timing of stock options exercised by our
employees and repurchases of the Company's stock. However, in 2021, the increase in cash from financing activities
is primarily related to borrowings under our revolving credit facility to manage our working capital needs after our
available cash on hand was used to fund the BasX acquisition.

Our stock buyback program and dividends paid were $22.5 million and $19.9 million for the year ended December
31, 2021, respectively. We expect to continue the buyback program as well as paying semi-annual dividends at
historical rates. The future costs of the buyback program could fluctuate based on market conditions including our
published stock price and buyback transaction volume.

Commitments and Contractual Agreements

We had no material contractual purchase agreements as of December 31, 2021.

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, results of operations or cash flows and we accrue
and/or disclose loss contingencies as appropriate. We have concluded that the likelihood is remote that the ultimate
resolution of any pending litigation or claims will be material or have a material adverse effect on the Company’s
business, financial position, results of operations, or cash flows.

Critical Accounting Estimates

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. We discuss these estimates with the Audit Committee of the Board of Directors
periodically.

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 and replacement parts, and for estimated shrinkage. Assumptions used to estimate inventory
reserves include future manufacturing requirements and industry trends. Evolving technology and changes in
product mix or customer demand can significantly affect the outcome of this analysis.

Warranty – A provision is made for estimated warranty costs at the time the product is shipped and revenue is
recognized. 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; 18 months for data center cooling solutions and cleanroom systems; 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 ten years on gas-fired heat exchangers in our historical RL
products (if applicable). Our warranty policy for the RQ series covers parts for two years from date of unit shipment.
Our warranty policy for the WH and WV Series geothermal/water-source heat pumps covers parts for five years
from the date of installation. 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.

Share-Based Compensation – We measure and recognize compensation expense for all share-based payment
awards made to our employees and directors, including stock options, restricted stock awards, performance stock
units ("PSUs"), and key employee awards ("Key Employee Awards") based on their fair values at the time of grant.
Compensation expense is recognized on a straight-line basis over the service period of stock options, restricted stock
awards, and PSUs. Compensation expense is recognized for the Key Employee Awards on a straight line basis over
the service period when the performance condition is determined to be probable. Forfeitures are accounted for as
they occur. The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton
option pricing model. The fair value of the PSUs is estimated on the date of grant using the Monte Carlo Model. The
use of the Black-Scholes-Merton option valuation model and the Monte Carlo Model requires the input of subjective
assumptions such as: the expected volatility, the expected term of the grant, forward-looking market conditions, risk-
free rate, and expected dividend yield for stock options. The fair value of restricted stock awards and Key Employee
Awards is based on the fair market value of AAON common stock on the respective grant dates. The fair value of
restricted stock awards is reduced for the present value of dividends.

Definite-Lived Intangible Assets

Definite-lived intangible assets include various customer relationships and intellectual property acquired in business
combinations. The fair value of customer relationships and intellectual property is estimated based on management’s
judgments and assumptions or third party valuation models. These models requires the use of subjective inputs and
assumptions such as expected useful lives, growth of existing customers, attrition of customers, future margins and
expenses, discount rates, and future revenue growth. These inputs and assumptions can be inherently uncertain and
can significantly affect the outcome of the estimates and analysis. We amortize our definite-lived intangible assets
on a straight-line basis over the estimated useful lives of the assets. Our definite-lived intangible assets have
estimated used lives of between 14 and 30 years. We evaluate the carrying value of our amortizable intangible assets
for potential impairment when events and circumstances warrant such a review.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill represents the excess of the consideration paid for the acquired businesses over the fair value of the
individual assets acquired, net of liabilities assumed. Indefinite-lived intangible assets consist of trademarks and
trade names. The fair value of trademarks and trade names is estimated based on management’s judgments and
assumptions or third party valuations. These models requires the us of subjective inputs such as royalty rate,
discount rate, and terminal value.

Goodwill and indefinite-lived intangible assets are not amortized, but instead are evaluated for impairment at least
annually. We perform our annual assessment of impairment during the fourth quarter of our fiscal year, and more
frequently if circumstances warrant.

carrying amount, the reporting unit and indefinite-lived assets are not considered impaired. If the carrying amount of
the reporting unit and indefinite-lived assets exceeds their fair value, the reporting unit and indefinite-lived assets are
considered to be impaired and the balance is reduced by the difference between the fair value and carrying amount
of the reporting unit and indefinite-lived assets.

We performed a qualitative assessment as of December 31, 2021 to determine whether it was more likely than not
that the fair value of the reporting unit and indefinite-lived assets was greater than the carrying value of the reporting
unit and indefinite-lived assets. Based on these qualitative assessments, we determined that the fair value of the
reporting unit and indefinite-lived assets was more likely than not greater than the carrying value of the reporting
unit and indefinite-lived assets.

Estimates and assumptions used to perform the impairment evaluation are inherently uncertain and can significantly
affect the outcome of the analysis. The estimates and assumptions we use in the annual impairment assessment
included macro-industry trends, market participant considerations, historical profitability, including free cash flows,
and forecasted multi-year operating results. Changes in operating results and other assumptions could materially
affect these estimates. A considerable amount of management judgment and assumptions are required in performing
the impairment tests.

Contingent Consideration - As part of a business combination, we agreed to issue shares of the Company's common
stock based on certain milestones in accordance with the acquisition agreement. This contingent consideration is
valued at fair value on the acquisition date and is included in goodwill and additional paid-in capital on the
consolidated balance sheets.

The fair value of the contingent consideration was determined using the Option Pricing Method through a Monte
Carlo simulation, as this model is appropriate for contingent considerations for which the payoff structure is
nonlinear. The use of this model requires the input of subjective inputs and assumptions such as: future earnings, the
expected volatility of future earnings, risk-free rate, discount rate, and future stock performance. These inputs and
assumptions can be inherently uncertain and can significantly affect the outcome of the estimates and analysis.

New Accounting Pronouncements

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of
accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification.

We consider the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be
either not applicable or are expected to have minimal impact on our consolidated financial statements and notes
thereto.

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805), Accounting for Contract
Assets and Contract Liabilities from Contracts with Customers which requires contract assets and contract liabilities
acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in
accordance with ASC 606, Revenue from Contracts with Customers. Generally, this new guidance will result in the
acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree.
Historically, such amounts were recognized by the acquirer at fair value in acquisition accounting. The guidance
should be applied prospectively to acquisitions occurring on or after the effective date. The guidance is effective for
years beginning after December 15, 2022, including interim periods within those years. Early adoption is permitted,
including in interim periods, for any financial statements that have not yet been issued. We adopted this standard at
the beginning of the fourth quarter of 2021. Upon adoption, this update did not have a material effect on our
consolidated financial position or result of operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

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 six to 18 months to
manage this exposure.

Item 8. Financial Statements and Supplementary Data.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248)

Consolidated Balance Sheets

Consolidated Statements of Income

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders
AAON, Inc.

Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of AAON, Inc. (a Nevada corporation) and
subsidiaries (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of income,
stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2021, and the
related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present
fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the
results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, 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) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2021, based on
criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (“COSO”), and our report dated February 28, 2022 expressed an
unqualified opinion.

Basis for opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion.

Critical audit matters
The critical audit matters communicated below are matters arising from the current period audit of the financial
statements that were communicated or required to be communicated to the audit committee and that: (1) relate to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion
on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below,
providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Inventory – manual inventory adjustments

As described in Note 2 to the financial statements, the Company reports inventory using the first in, first out
(“FIFO”) method, which involves manual adjustments recorded to the general ledger such as inventory variance,
inventory allowance and labor and overhead adjustments, which had the potential to be larger or require more
judgment during the year ended December 31, 2021, where the Company experienced changes in the prices of
certain raw materials due to the COVID-19 pandemic. These manual adjustments have been identified as a critical
audit matter.

The principal considerations for our determination such manual inventory adjustments as a critical audit matter are
these manual adjustments require substantial use of management estimates and requires the Company to have
effective inventory valuation processes. Significant management judgments and estimates utilized to determine
manual inventory adjustments are subject to estimation uncertainty and require significant auditor subjectivity in
evaluating the reasonableness of those judgments and estimates.

Our audit procedures related to the manual inventory adjustments included the following, among others.

• We tested the design and operating effectiveness of controls over inventory valuation, including the
standard cost updates in the accounting system and the completeness and accuracy of the inputs to the
inventory variance calculation and any related adjustments.

• We recalculated the Company’s standard costing of inventory which approximated FIFO by obtaining

FIFO buildups and inspected underlying documents for a sample of raw materials.

• We assessed the reasonableness of management’s inventory reserve by recalculating the reserve using

management’s inputs, and evaluated those inputs for reasonableness.

• We tested labor and overhead rate changes by recalculating the rates used and tested any adjustments

recorded to the general ledger.

BasX, LLC Acquisition

As described in Note 4 to the financial statements, the Company acquired a controlling interest in BasX, LLC
(“BasX”) in December 2021 and the assets acquired, the liabilities assumed and contingent consideration payable
were estimated and recorded at fair value as of the transaction date, for which the Company utilized a valuation
specialist. We identified the estimation of the fair value of the intangible assets acquired and contingent
consideration payable in the acquisition of BasX as a critical audit matter.

The principal considerations for our determination that the estimation of the fair value of the intangible assets
acquired and contingent consideration payable in the acquisition of BasX as a critical audit matter are that there was
a high degree of estimation uncertainty due to significant judgments with respect to the selection of the valuation
methodologies applied, the assumptions used to estimate the future revenues and cash flows, including revenue
growth rates and forecasted costs, discount rates, royalty rates, and obsolescence of intellectual property. This
required an increased extent of effort when performing audit procedures to evaluate the reasonableness of
management’s estimates and assumptions related to the fair value of the intangible assets acquired and contingent
consideration payable, including the need to involve valuation specialists.

Our audit procedures responsive to the estimation of the fair value of the intangible assets acquired and contingent
consideration payable for the acquisition of BasX included the following procedures, among others.

• We tested the design and operating effectiveness of controls relating to management’s review of the
assumptions used to develop the future revenues and cash flows, the reconciliation of future revenues and
cash flows prepared by management to the data used in the third-party valuation report, and the
aforementioned valuation inputs and methodologies applied.
Utilized a valuation specialist to evaluate:

•

◦

The methodologies used and whether they were acceptable for the underlying assets or operations
by performing an independent calculation.
The appropriateness of the royalty rates attributed to both intellectual property and trademarks and
the obsolescence of intellectual property using our understanding of BasX’s business and
historical financial results, intellectual property and trademarks and the Company’s future plans.
The appropriateness of the discount rates by recalculating the weighted average costs of capital.
The qualifications of the Company’s valuation specialist based on their credentials and experience.
Tested the revenue growth rates and forecasted costs of BasX by comparing such items to the historical
operating results of the acquired entity and by assessing the likelihood or capability of the acquired entity to
undertake activities or initiatives underpinning significant drivers of growth in the forecasted period.

◦
◦

•

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2004.

Tulsa, Oklahoma
February 28, 2022

AAON, Inc. and Subsidiaries

Consolidated Balance Sheets

Assets

Current assets:

Cash and cash equivalents
Restricted cash

Accounts receivable, net of allowance for credit losses of $549 and $506,
respectively
Income tax receivable
Inventories, net
Contract assets
Prepaid expenses and other

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

Intangible assets, net
Goodwill
Right of use assets
Other long-term assets
Total assets

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable
Accrued liabilities
Contract liabilities
Total current liabilities
Revolving credit facility, long-term
Deferred tax liabilities
Other long-term liabilities
New market tax credit obligation (a)
Commitments and contingencies (Note 19)
Stockholders’ equity:

December 31,

2021

2020

(in thousands, except share and
per share data)

2,859 $
628

79,025
3,263

70,780
5,723
130,270
5,749
2,071
218,080

5,016
135,861
318,259
23,072
482,208
224,146
258,062
70,121
85,727
16,974
1,216
650,180 $

29,020 $
50,206
7,542
86,768
40,000
31,993
18,843
6,406

47,387
4,587
82,219
—
3,770
220,251

4,072
122,171
281,266
18,956
426,465
203,125
223,340
38
3,229
1,571
579
449,008

12,447
46,586
—
59,033
—
28,324
4,423
6,363

—

209
5,161
345,495
350,865
449,008

Preferred stock, $.001 par value, 5,000,000 shares authorized, no shares issued
Common stock, $.004 par value, 100,000,000 shares authorized, 52,527,985 and
52,224,767 issued and outstanding at December 31, 2021 and 2020, respectively
Additional paid-in capital
Retained earnings
Total stockholders’ equity
Total liabilities and stockholders’ equity

210
81,654
384,306
466,170
650,180 $

—

(a) Held by variable interest entities (Note 18)

The accompanying notes are an integral part of these consolidated financial statements.

AAON, Inc. and Subsidiaries

Consolidated Statements of Income

Net sales

Cost of sales

Gross profit

Selling, general and administrative expenses

(Gain) loss on disposal of assets and insurance recoveries

Income from operations

Interest (expense) income, net

Other income (expense), net

Income before taxes

Income tax provision

Net income

Earnings per share:

Basic

Diluted

Cash dividends declared per common share:

Weighted average shares outstanding:

Basic

Diluted

Years Ended December 31,

2021

2020

2019

(in thousands, except share and per share data)

534,517 $

514,551 $

396,687

137,830

68,598

(21)

69,253

(132)

69,182

10,424

358,702

155,849

60,491

(6,478)

101,836

101,975

22,966

58,758 $

79,009 $

1.12 $

1.09 $

0.38 $

1.51 $

1.49 $

0.38 $

469,333

349,908

119,425

52,077

337

67,011

(46)

67,031

13,320

53,711

1.03

1.02

0.32

52,404,199

53,728,989

52,168,679

53,061,169

52,079,865

52,635,415

The accompanying notes are an integral part of these consolidated financial statements.

AAON, Inc. and Subsidiaries
Consolidated Statements of Stockholders’ Equity

Balance at December 31, 2018

51,991 $

208 $

— $

249,235 $

249,443

Common Stock

Amount

Paid-in
Capital

Retained
Earnings

Total

(in thousands)

Net income

Stock options exercised and restricted

stock awards granted

Share-based compensation

Stock repurchased and retired

Dividends

Balance at December 31, 2019

Net income

Stock options exercised and restricted

stock awards granted

Share-based compensation

Stock repurchased and retired

Dividends

Balance at December 31, 2020

Net income

Stock options exercised and restricted

stock awards granted

Share-based compensation

Stock repurchased and retired

Contingent consideration (Note 4)

Dividends

—

542

—

(454)

—

52,079

—

712

—

(566)

—

52,225

—

623

—

(320)

—

(2)

—

208

—

(2)

—

209

—

(1)

—

12,623

11,799

(20,791)

—

3,631

—

21,415

11,342

(31,227)

—

5,161

—

21,146

11,812

(22,465)

66,000

53,711

—

(16,645)

286,301

79,009

—

(19,815)

345,495

58,758

—

(19,947)

53,711

12,625

11,799

(20,793)

(16,645)

290,140

79,009

21,418

11,342

(31,229)

(19,815)

350,865

58,758

21,148

11,812

(22,466)

66,000

(19,947)

Balance at December 31, 2021

52,528 $

210 $

81,654 $

384,306 $

466,170

The accompanying notes are an integral part of these consolidated financial statements.

AAON, Inc. and Subsidiaries
Consolidated Statements of Cash Flows

2021

Years Ended December 31,
2020
(in thousands)

2019

58,758 $

79,009 $

53,711

Operating Activities

Net income
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization
Amortization of debt issuance costs
Amortization of right of use assets
Provision for credit losses on accounts receivable, net of adjustments
Provision for excess and obsolete inventories
Share-based compensation
(Gain) loss on disposition of assets and insurance recoveries
Foreign currency transaction gain
Interest income on note receivable
Deferred income taxes
Changes in assets and liabilities:

Accounts receivable
Income tax receivable
Inventories
Contract assets
Prepaid expenses and other
Accounts payable
Contract liabilities
Deferred revenue
Accrued liabilities and donations

Net cash provided by operating activities

Investing Activities

Capital expenditures
Cash paid in business combination, net of cash acquired
Proceeds from sale of property, plant and equipment
Insurance proceeds
Investment in certificates of deposits
Maturities of certificates of deposits
Principal payments from note receivable
Net cash used in investing activities

Financing Activities

Borrowings under revolving credit facility
Proceeds from financing obligation, net of issuance costs
Payment related to financing costs
Stock options exercised
Repurchase of stock
Employee taxes paid by withholding shares
Dividends paid to stockholders
Net cash provided by (used in) financing activities

Net (decrease) increase in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, beginning of year
Cash, cash equivalents and restricted cash, end of year

30,343
43
73
43
629
11,812
(21)
(1)
(24)
3,669

(9,737)
(1,136)
(45,955)
1,886
1,374
10,899
(229)
447
(1,690)
61,183

(55,362)
(103,430)
19
—
—
—
54
(158,719)

25,634
43
—
153
1,108
11,342
(6,478)
(12)
(24)
13,027

19,859
(3,815)
(9,726)
—
(2,364)
(2,155)
—
1,010
2,203
128,814

(67,802)
—
60
6,417
—
—
52
(61,273)

40,000
—
—
21,148
(20,876)
(1,590)
(19,947)
18,735
(78,801)
82,288
3,487 $

—
—
—
21,418
(30,060)
(1,169)
(19,815)
(29,626)
37,915
44,373
82,288 $

22,766
7
—
91
1,454
11,799
337
(27)
(25)
6,038

(13,412)
5,129
2,557
—
(329)
280
—
425
7,124
97,925

(37,166)
—
69
—
(6,000)
6,000
51
(37,046)

—
6,614
(301)
12,625
(19,586)
(1,207)
(16,645)
(18,500)
42,379
1,994
44,373

The accompanying notes are an integral part of these consolidated financial statements.

AAON, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2021

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, AAON Coil Products, Inc., a Texas corporation, and BasX, Inc.
(dba BasX Solutions), an Oregon corporation (collectively, the “Company”). The consolidated financial statements
include our accounts and the accounts of our subsidiaries.

We are engaged in the engineering, manufacturing, marketing, and sale of premium air conditioning and heating
equipment consisting of standard, semi-custom, and custom rooftop units, data centers cooling solutions, cleanroom
systems, chillers, packaged outdoor mechanical rooms, air handling units, makeup air units, energy recovery units,
condensing units, geothermal/water-source heat pumps, coils, and controls.

Recent Developments

On December 10, 2021, we closed on the acquisition of all of the issued and outstanding equity ownership of BasX,
LLC, doing business as BasX Solutions ("BasX") (Note 4). We have included the results of BasX’s operations in our
consolidated financial statements beginning December 11, 2021.

On December 29, 2021, BasX, LLC converted to a C-Corporation, BasX, Inc., and is subject to income tax.

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 (“U.S. GAAP”). The accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated.

Our financial statements consolidate all of our affiliated entities in which we have a controlling financial interest.
Because we hold certain rights that give us the power to direct the activities of two variable interest entities ("VIEs")
(Note 18) that most significantly impact the VIEs economic performance, combined with a variable interest that
gives us the right to receive potentially significant benefits or the obligation to absorb potentially significant losses,
we have a controlling financial interest in those VIEs.

Impact of COVID-19 Pandemic

In March 2020, the World Health Organization characterized the coronavirus ("COVID-19") a pandemic, and the
President of the United States declared the COVID-19 outbreak a national emergency. The rapid spread of the
pandemic and the continuously evolving responses to combat it have had an increasingly negative impact on the
global economy.

Our manufacturing operations are considered a critical infrastructure industry, as defined by the U.S. Department of
Homeland Security, as such, the decrees issued by national, state, and local governments in response to the
COVID-19 pandemic have had minimal impact on our operations except for higher than normal employee
absenteeism in our manufacturing facilities. Notable absenteeism occurred the latter part of June 2020 at our Tulsa,
OK facilities which resulted in reduced shipments and longer lead times in the second quarter 2020. Additionally,
our Longview, TX facility suffered from COVID-19 related absenteeism during the quarter ending September 30,
2021, which reduced the production of coils that were needed to complete units at both our Longview, TX and
Tulsa, OK facilities.

We had continuous operations during the years ended December 31, 2021 and December 31, 2020, except for events
unrelated to COVID-19 described below. Additional precautions have been taken to social distance workers that

work in close environments and we have facilitated voluntary on-site COVID-19 vaccine clinics. The Company
utilizes sanitation stations and performs additional cleaning and sanitation throughout the day.

We witnessed increases in some of our raw material prices, especially in copper and steel, which appear to be an
effect of COVID-19, and we continue to make strategic purchases of materials when we see opportunities. We have
managed the increase in the cost of raw materials through price increases for our products which began to be
realized in late 2021. Although we have experienced some supply chain challenges related to specific manufacturing
parts, due to our strong vendor relationships as well as our favorable liquidity position, we have experienced
minimal disruption to our supply chain due to COVID-19.

Additionally, we continue to experience challenges in a tight labor market, especially the hiring of both skilled and
unskilled production labor. In July 2021, we increased starting wages for our production workforce by 7.0%. We
also have put a cost of living increase of 3.5% in place in October 2021 for all employees below the Director level.
We will continue to implement human resource initiatives to retain and attract labor to further improve productivity
and production efficiencies.

The magnitude of the impact of COVID-19 remains unpredictable and we, therefore, continue to anticipate potential
supply chain disruptions, increased employee absenteeism and additional health and safety costs related to the
COVID-19 pandemic that could unfavorably impact our business. However, COVID-19 has had no significant
impact on our planned cash outflows for raw materials, dividend payments, or capital expenditures.

Although these disruptions and costs are expected to be temporary, there is significant uncertainty around the
duration and overall impact to our business operations. We are continually monitoring the progression of the
pandemic, including new COVID-19 variants, and its potential effect on our financial position, results of operations
and cash flows.

Planned Plant Maintenance

During the fourth quarter of 2020, we made the strategic decision to shut down our Tulsa, OK and Longview, TX
manufacturing facilities to perform planned and necessary maintenance during the last week of December 2020 as
well several days in early January 2021. Although we lost several production days due to this shut down, we do not
believe that the impact of the shut down had a material adverse effect on the results of our operations, financial
position and cash flows as of and for the year ending December 31, 2021.

Impact of February 2021 Weather

In February 2021, record-breaking winter storms affected Oklahoma and Texas, causing sustained below freezing
temperatures, hazardous driving conditions, rolling blackouts, water main breaks, and a host of other weather related
issues. In addition to significant absenteeism as a result of employees being unable to travel to and from work due
to inadequate transportation and/or hazardous road conditions, the Company made the decision to shut down the
Tulsa, OK and Longview, TX plants for several days. This decision was based on the expected employee
absenteeism as well as the expected rolling blackouts caused by the increased demand on the electrical and natural
gas power grids. Although we lost several production days in mid-February 2021, we do not believe that the impact
of this weather event had a material adverse effect on the results of our operations, financial position and cash flows
as of and for the year ending December 31, 2021.

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.

The Company’s cash and cash equivalents are held in a few financial institutions in amounts that exceed the
insurance limits of the Federal Deposit Insurance Corporation. However, management believes that the Company’s
counterparty risks are minimal based on the reputation and history of the institutions selected.

Certificates of Deposit

We held no certificates of deposit at December 31, 2021 and 2020.

Restricted Cash

Restricted cash held at December 31, 2021 consist of bank deposits and highly liquid, interest-bearing money market
funds held for the purpose of the Company's qualified New Markets Tax Credit program (Note 18) to benefit an
investment in plant and equipment to facilitate the expansion of our Longview, Texas manufacturing operations.

The Company’s restricted cash is held in a financial institutions in amounts that exceed the insurance limits of the
Federal Deposit Insurance Corporation. However, management believes that the Company’s counterparty risks are
minimal based on the reputation and history of the institutions selected.

Accounts and Note Receivable

We adopted ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), as amended, as of January 1,
2020. The ASU requires a financial asset (or a group of financial assets) measured at amortized cost to be presented
at the net amount expected to be collected, which would include accounts receivable. The measurement of expected
credit losses is based on relevant information about past events, including historical experience, current conditions,
and reasonable and supportable forecasts that affect the collectibility of the reported amount. The adoption of this
ASU did not have a material effect on our financial statements.

Accounts and note receivable are stated at amounts due from customers, net of an allowance for credit losses. We
generally do not require that our customers provide collateral; however, our billings and customer payment terms
can vary based on product type as a way to manage collections risk. The Company determines its allowance for
credit losses 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 ninety days past negotiated
credit terms. Past due accounts are generally written-off against the allowance for credit losses 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 3%, 2%, and 3% of revenues for the years ended December 31, 2021, 2020, and 2019,
respectively.

One customer, Texas AirSystems LLC, accounted for more than 10% of our sales during 2021, 2020, and 2019. No
other customer accounted for more than 10% of our sales during 2021, 2020, and 2019. No customers accounted for
more than 10% of our accounts receivable balance at December 31, 2021. Two customers, Texas AirSystems LLC
and Johnson Barrow Inc., accounted for more than 10% of our accounts receivable balance at December 31, 2020.

Inventories

Inventories are valued at the lower of cost or net realizable value using the first-in, first-out (“FIFO”) or average cost
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; except for property, plant, and equipment acquired in a business combination which is recorded at fair
value. 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

3 - 40 years

3 - 20 years

3 - 15 years

On April 22, 2020, our plant and office facilities in Tulsa, Oklahoma experienced hail related weather damage and
we filed a property insurance claim which carried a $500,000 deductible. We did not experience any significant
structural damage or any operational interruption as a result of this weather event. In November 2020, we reached a
final settlement with our insurance carrier, resulting in a net cumulative gain of $6.4 million, which is included in
the consolidated statements of income. The received proceeds will be used in future periods to make improvements
to the current roof at our plant and office facilities in Tulsa, Oklahoma to extend the overall useful life.

Business Combinations

The Company applies the acquisition method of accounting for business acquisitions. The results of operations of
the businesses acquired by the Company are included as of the respective acquisition date. The acquisition-date fair
value of the consideration transferred, including the fair value of any contingent consideration, is allocated to the
underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition.
To the extent the acquisition-date fair value of the consideration transferred exceeds the fair value of the identifiable
tangible and intangible assets acquired and liabilities assumed, such excess is allocated to goodwill. The Company
may adjust the preliminary purchase price allocation, as necessary, as it obtains more information regarding asset
valuations and liabilities assumed that existed but were not available at the acquisition date, which is generally up to
one year after the acquisition closing date. Acquisition related expenses are recognized separately from the business
combination and are expensed as incurred.

Fair Value Financial Instruments and Measurements

The carrying amounts of cash and cash equivalents, receivables, accounts payable, and accrued liabilities
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.

We adopted ASU No. 2018-13, Fair Value Measurements (Topic 820), as amended, as of January 1, 2020. The ASU
includes additional disclosure requirements for unrealized gains and losses for Level 3 fair value measurements and
significant observable inputs used to develop Level 3 fair value measurements. There was not a material impact to
financial statements upon adoption. Fair value is defined as the price that would be received to sell an asset or paid
to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.
Fair value is based upon assumptions that market participants would use when pricing an asset or liability. We use
the following fair value hierarchy, which prioritizes valuation technique inputs used to measure fair value into three
broad levels:

•

Level 1: Quoted prices in active markets for identical assets and liabilities that we have the ability to access
at the measurement date.
Level 2: Inputs (other than quoted prices included within Level 1) that are either directly or indirectly
observable for the asset or liability, including (i) quoted prices for similar assets or liabilities in active
markets, (ii) quoted prices for identical or similar assets or liabilities in inactive markets, (iii) inputs other
than quoted prices that are observable for the asset or liability, and (iv) inputs that are derived from
observable market data by correlation or other means.
Level 3: Unobservable inputs for the asset or liability including situations where there is little, if any,
market activity for the asset or liability. Items categorized in Level 3 include the estimated fair values of

property, plant and equipment, intangible assets, contingent consideration, and goodwill acquired in a
business combination.

The fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority
to unobservable inputs (Level 3). In some cases, the inputs used to measure fair value might fall into different levels
of the fair value hierarchy. The lowest level input that is significant to a fair value measurement determines the
applicable level in the fair value hierarchy. Assessing the significance of a particular input to a fair value
measurement requires judgment, considering factors specific to the asset or liability.

Definite-Lived Intangible Assets

Our definite-lived intangible assets include various trademarks, service marks, and technical knowledge acquired in
business combinations (Note 4). We amortize our definite-lived intangible assets on a straight-line basis over the
estimated useful lives of the assets. We evaluate the carrying value of our amortizable intangible assets for potential
impairment when events and circumstances warrant such a review.

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

Intellectual property

Customer relationships

Goodwill and Indefinite-Lived Intangible Assets

30 years

14 years

Goodwill represents the excess of the consideration paid for the acquired businesses over the fair value of the
individual assets acquired, net of liabilities assumed. At December 31, 2021, approximately $19.7 million of
goodwill Indefinite-lived intangible assets consist of trademarks and trade names and are also subject to at least
annual impairment testing. Goodwill and indefinite-lived intangible assets are not amortized, but instead are
evaluated for impairment at least annually. We perform our annual assessment of impairment during the fourth
quarter of our fiscal year, and more frequently if circumstances warrant.

To perform this assessment, we first consider qualitative factors to determine whether it is more likely than not that
the fair value of the reporting unit and indefinite-lived intangible assets exceeds their carrying amount. If we
conclude that it is more likely than not that the fair value of a reporting unit and indefinite-lived assets does not
exceed their carrying amount, we calculate the fair value for the report unit and indefinite-lived assets and compare
the amount to their carrying amount. If the fair value of a reporting unit and indefinite-lived asset exceeds their
carrying amount, the reporting unit and indefinite-lived assets are not considered impaired. If the carrying amount of
the reporting unit and indefinite-lived assets exceeds their fair value, the reporting unit and indefinite-lived assets are
considered to be impaired and the balance is reduced by the difference between the fair value and carrying amount
of the reporting unit and indefinite-lived assets.

Estimates and assumptions used to perform the impairment evaluation are inherently uncertain and can significantly
affect the outcome of the analysis. The estimates and assumptions we use in the annual impairment assessment
included market participant considerations and future forecasted operating results. Changes in operating results and
other assumptions could materially affect these estimates. A considerable amount of management judgment and
assumptions are required in performing the impairment tests.

Contingent Consideration

As part of a business combination, we agreed to issue shares of the Company's common stock based on certain
milestones in accordance with the acquisition agreement. This contingent consideration is valued at fair value on the
acquisition date and is included in additional paid-in capital on the consolidated balance sheets.

Impairment of Long-Lived Assets

We 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.

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, 2021, 2020, and 2019 research and development costs
amounted to approximately $16.6 million, $17.4 million, and $14.8 million, respectively.

Advertising

Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2021, 2020, and
2019 was approximately $1.6 million, $0.8 million, and $0.8 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, 2021, 2020, and 2019 shipping and handling fees amounted to approximately $14.4 million,
$14.3 million, and $14.4 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. Excess tax benefits and deficiencies are reported as an income tax benefit
or expense on the statement of income and are treated as discrete items to the income tax provision in the reporting
period in which they occur. We establish accruals for unrecognized 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.

Share-Based 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, restricted stock,
and performance stock units ("PSUs"). In conjunction with the acquisition of BasX (Note 4), we awarded
performance awards to key employees ("Key Employee Awards") of BasX.

The fair values of stock options are estimated at the date of grant using the Black-Scholes-Merton option valuation
model. The fair value of the PSUs is estimated on the date of grant using the Monte Carlo Model. The use of the
Black-Scholes-Merton option valuation model and the Monte Carlo Model requires the input of subjective
assumptions such as: the expected volatility, the expected term of the grant, expected market performance, risk-free
rate, and expected dividend yield for stock options. The fair value of restricted stock awards and Key Employee
Awards is based on the fair market value of AAON common stock on the respective grant dates. The fair value of
restricted stock awards is reduced for the present value of dividends. The Key Employee Awards do not accrue
dividends.

Share-based compensation expense is recognized on a straight-line basis over the service period of the related share-
based compensation award. Historically, stock options and restricted stock awards, granted to employees, vest at a
rate of 20% per year. Restricted stock awards granted to directors historically vest one-third each year or, if granted
on or after May 2019, vest over the shorter of directors' remaining elected term or one-third each year. As of March
2021, all new grants of stock options and restricted stock awards, granted to employees, vest at a rate of 33.3% per
year. Forfeitures are accounted for as they occur.

Historically, if the employee or director is retirement eligible (as defined by the Long Term Incentive Plans) or
becomes retirement eligible during service period of the related share-based compensation award, the service period
is the lesser of 1) the grant date, if retirement eligible on grant date, or 2) the period between grant date and
retirement eligible date. All share-based compensation awards granted on or after March 1, 2020 to retirement
eligible employees or directors contain a one-year employment requirement (minimum service period) or the entire
award is forfeited. Forfeitures are accounted for as they occur.

The PSUs cliff vest on December 31, 2023. Share-based compensation expense is recognized on a straight-line
basis over the service period of PSUs. The PSUs are subject to several service and market conditions, as defined by
the PSU agreement, which allows the holder to retain a pro-rata amount of awards as a result of certain termination
conditions, retirement, change in common control, or death. Forfeitures are accounted for as they occur.

The Key Employee Awards cliff vest on December 31, 2023. Share-based compensation expense is recognized on a
straight-line basis over the service period of the Key Employee Awards when it is probable that the performance
conditions will be satisfied. The Key Employee Awards are subject to several service and performance conditions,
as defined by the Key Employee Award agreement, which allows the holder to retain an amount of the awards as a
result of certain termination conditions or change in common control. Forfeitures are accounted for as they occur.

Derivative Instruments

In the course of normal operations, the Company occasionally enters into contracts such as forward priced physical
contracts for the purchase of raw materials that qualify for and are designated as normal purchase or normal sale
contracts. Such contracts are exempted from the fair value accounting requirements and are accounted for at the time
product is purchased or sold under the related contract. The Company does not engage in speculative transactions,
nor does the Company hold or issue financial instruments for trading purposes.

Revenue Recognition

Due to the highly customized nature of many of the Company’s products and each product not having an alternative
use to the Company without significant costs to the Company, the Company recognizes revenue over time as
progress is made toward satisfying the performance obligations of each contract. The Company has formal
cancellation policies and generally does not accept returns on these units. As a result, many of the Company’s
products do not have an alternative use and therefore, for these products we recognize revenue over the time it takes
to produce the unit. The Company measures a contract’s progress on the basis of the ratio that costs incurred bear to
estimated total costs using the input method because, in the Company’s view, such method best depicts the progress
toward completion.

Contract costs include direct materials, direct labor, installation, freight and delivery, commissions and royalties.
Other costs not related to contract performance, such as indirect labor and materials, small tools and supplies,
operating expenses, field rework and back charges are charged to expense as incurred. Provisions for estimated
losses on contracts in progress are made in the period in which such losses are determined. Changes in job
performance, job conditions, and estimated profitability, including those arising from contract penalty provisions
and final contract settlements, may result in revisions to costs and income, and are estimated and recognized by the
Company throughout the life of the contract. The aggregate of costs incurred and income recognized on
uncompleted contracts in excess of billings is shown as a contract asset within our consolidated balance sheets, and
the aggregate of billings on uncompleted contracts in excess of related costs incurred and income recognized is
shown as a contract liability within out consolidated balance sheets.

For all other products that are part sales or standardized units, the Company recognizes revenue, presented net of
sales tax, when it satisfies the performance obligation in its contracts. As the primary performance obligation in
such a contract is delivery of the requested manufactured equipment, we satisfy the performance obligation when the

control is passed to the customer, generally at time of shipment. 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. Sales of our products are moderately seasonal with the peak period being May-
October of each year.

The Company also sells extended warranties on parts for various lengths of time ranging from six months to 10
years. Revenue for these separately priced warranties is deferred and recognized on a straight-line basis over the
separately priced warranty period.

Representatives and Third Party Products

We are responsible for billings and collections resulting from all sales transactions, including those initiated by our
independent manufacturer representatives (“Representatives”). Representatives are national companies that are in
the business of providing heating, ventilation, and air conditioning (“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. These other related 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. 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 that
is negotiated by the Representative with the end user customer. 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. The Company is considered the principal for the equipment we design and manufacture and records
that revenue gross. The Company has no control over the Third Party Products to the end customer and the
Company is under no obligation related to the Third Party Products. Amounts related to Third Party Products are not
recognized as revenue but are recorded as a liability and are included in accrued liabilities on the consolidated
balance sheets.

The Representatives’ fee and Third Party Products amounts (“Due to Representatives”) are paid only after all
amounts associated with the order are collected from the customer. The amount of payments to our representatives
was $43.9 million, $50.0 million, and $46.1 million for each of the years ended December 31, 2021, 2020, and 2019,
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 U.S. GAAP 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, 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 as needed, but at a minimum on a quarterly basis. The most
significant estimates include, but are not limited to: revenue recognition, business combinations, the allowance for
credit losses, inventory reserves, warranty accrual, workers compensation accrual, medical insurance accrual, share-
based compensation, and income taxes. Actual results could differ materially from those estimates.

3. Revenue Recognition

The following tables show disaggregated net sales by reportable segment (see Note 23) by major source, net of
intercompany sales eliminations. As the BasX segment was not applicable during the years ended December 31,
2020 and 2019, this segment has been excluded from the tables.

Year Ended December 31, 2021

AAON Oklahoma

AAON Coil
Products

BasX1

Total

398,461

—

(in thousands)

Rooftop Units

Condensing Units

Air Handlers

Outdoor Mechanical Rooms

Cleanroom Systems

Data Center Cooling Solutions

Water-Source Heat Pumps

Part Sales

Other

762

—

820

—

10,831

41,127

11,844

25,989

26,589

464

—

10,343

3,203

—

—
2,288

1,688

—

398,461

26,751

26,684

1,284
2,288

1,688

21,174

41,128

15,059

463,845

66,589

4,083

534,517

Year Ended December 31, 2020

AAON Oklahoma

AAON Coil
Products

BasX1

Total

(in thousands)

Rooftop Units

Condensing Units

Air Handlers

Outdoor Mechanical Rooms

Water-Source Heat Pumps

Part Sales

Other

400,946

900

—

2,355

10,663

32,561

11,532

458,957

—

20,249

23,931

487

8,390

—

2,537

55,594

—

400,946

21,149

23,931

2,842

19,053

32,561

14,069

514,551

Year Ended December 31, 2019

AAON Oklahoma

AAON Coil
Products

BasX1

Total

Rooftop Units

Condensing Units

Air Handlers

Outdoor Mechanical Rooms

Water-Source Heat Pumps

Part Sales

Other

349,427

865

—

1,134

21,076

33,331

12,836

(in thousands)

—

17,610

24,265

509

4,371

—

3,909

—

349,427

18,475

24,265

1,643

25,447

33,331

16,745

$
1 BasX was acquired by the Company on December 10, 2021, as such, the only applicable period presented for
BasX is December 11, 2021 through December 31, 2021.

418,669

50,664

—

469,333

Other sales include freight, extended warranties and miscellaneous revenue.

4. Business Combination

On November 18, 2021, the Company entered into a membership interest purchase agreement (the “MIPA
Agreement”) to acquire of all of the issued and outstanding equity ownership of BasX, LLC, an Oregon limited
liability company, doing business as BasX Solutions. We closed this transaction on December 10, 2021 for a
purchase price of (i) $100.0 million payable in cash (not including working capital adjustments), and (ii) up to
$80.0 million in the aggregate of contingent consideration payable in shares of the Company's stock, par value
$0.004 per share (the "Shares").

The $80.0 million of contingent consideration payable consists of $78.0 million payable to the former owners of
BasX and $2.0 million payable to key employees of BasX whom are now employed by the Company. The potential
future issuance of the Shares is contingent upon BasX meeting certain post-closing earn-out milestones during each
of 2021, 2022, and 2023 under the terms of the MIPA Agreement. The Company funded the BasX acquisition cash
portion of the purchase price and related transaction costs with cash on hand.

Additionally, as a condition to closing, the Company entered into a real estate purchase agreement with BasX
Properties, LLC, an affiliate of BasX, to acquire the principal real property and improvements utilized by BasX for
an additional $22.0 million, subject to customary closing conditions and adjustments. The Company expects this real
estate transaction to close by the end of the first quarter of 2022.

BasX specializes in the design, engineering and manufacturing of custom, energy efficient cooling solutions for the
rapidly growing hyperscale data center market. BasX also designs and manufactures custom solutions for cleanroom
environments for the bio-pharmaceutical, semiconductor, medical and agriculture markets, as well as custom, energy
efficient air handlers and modular solutions for a vast array of markets. The acquisition of BasX brings the Company
exposure to attractive end-markets into which the Company has historically had minimal exposure. The products
BasX manufactures are highly engineered, customized products, fully complimenting AAON's existing business.

We incurred $4.4 million in transaction fees related to the acquisition of BasX which are included in selling, general,
and administrative expenses on our consolidated statement of income. We have included the results of BasX’s
operations in our consolidated financial statements beginning December 11, 2021.

We applied pushdown accounting, allowable under ASC 805 "Business Combinations," to "pushdown" our stepped-
up basis in the assets acquired and liabilities assumed to BasX's subsidiary financial statements. The decision to
apply pushdown accounting is irrevocable. Goodwill was calculated and recognized consistent with acquisition
accounting, resulting in the pushdown of $82.5 million in goodwill as of December 31, 2021.

The following table presents the allocation of the consideration paid to the assets acquired and liabilities assumed,
based on their fair values as of December 10, 2021, in the acquisition of BasX described above, which was still
preliminary at December 31, 2021. The provisional amounts are subject to change as the Company continues to
evaluate the information required to complete the valuation through the measurement period. We expect to complete
our valuation in the first quarter of 2022.

(in thousands)

13,699

2,725

7,635

341

13,169

15,611

70,329

82,498

(9,388)

(3,807)

(7,771)

(15,611)

(66,000)

103,430

Accounts receivable

Inventories

Contract assets

Prepaid expenses and other

Property, plant and equipment

Right of use assets

Intangible assets

Goodwill

Accounts payable

Accrued liabilities

Contract liabilities

Lease liabilities

Contingent Consideration - shares of AAON

Consideration paid

The Company recognized the following definite and indefinite-lived intangible assets as part of the acquisition of
BasX:

Definite-lived intangible assets

Intellectual property

Customer relationships

Indefinite-lived intangible assets

Trademarks

Total intangible assets acquired

(in thousands)

6,479

48,684

55,163

15,166

70,329

Goodwill is the excess of the consideration paid for the acquired businesses over the fair value of the individual
assets acquired, net of liabilities assumed. Goodwill represents a premium paid to acquire the skilled workforce and
expanded market opportunities. Goodwill of $16.5 million is tax deductible upon close of the acquisition. Future
additional amounts of goodwill related to the contingent consideration may become tax deductible in the future if the
earn out provisions of the MIPA are achieved.

Pro Forma Results of Operations (unaudited)

The operations of BasX have been included in our statements of income since the closing date on December 10,
2021. The following unaudited pro forma consolidated results of operations for the years ended December 31, 2021
and 2020 are presented as if the combination had been made on January 1, 2020.

(unaudited)

Years ended December 31,

2021

2020

(in thousands, except per share data)

611,158 $

63,491

562,563

80,507

1.21 $

1.18 $

1.54

1.52

Revenues

Net income

Earnings per share:

Basic

Dilutive

These unaudited pro forma results include adjustments necessary in connection with the acquisition.

The unaudited consolidated pro forma financial information was prepared in accordance with GAAP and is not
necessarily indicative of the results of operations that would have occurred if the acquisition had been completed on
the date indicated, nor is it indicative of the future operating results of the Company.

The unaudited pro forma results do not reflect events that either have occurred or may occur after the acquisition
date, including, but not limited to, the anticipated realization of operating synergies in subsequent periods. These
results also do not give effect to certain charges that the Company expects to incur in connection with the
acquisition, including, but not limited to, additional professional fees and employee integration.

5. Leases

We adopted ASU No. 2016-02, Leases (Topic 842), as amended, as of January 1, 2019, using the transition method,
which became effective upon the date of adoption. The transition method allows entities to initially apply the new
leases standard at the adoption date (January 1, 2019) and recognizes a cumulative-effect adjustment to the opening
balance of retained earnings in the period of adoption. In addition, we elected the package of practical expedients
permitted under the transition guidance within the new standard, which among other things, allowed us to carry
forward the historical lease classification. We have also elected the short-term lease measurement and recognition
exemption which does not require balance sheet presentation for short-term leases.

All of our leases are classified as operating leases. As our leases do not provide an implicit interest rate, we use our
incremental borrowing rate based on the information available at the commencement date in determining the present
value of lease payments. Our incremental borrowing rate represents the interest rate which we would pay to borrow,
on a collateralized basis, an amount equal to the lease payments over a similar term in a similar economic
environment.

We have entered into various short-term operating leases with an initial term of twelve months or less. These leases
are not recorded on our consolidated balance sheets as of December 31, 2021 or 2020, and the rent expense for these
short-term leases is not significant.

The Company’s leases generally require us to pay for insurance, taxes, utilities, and other operating costs. These
payments are not included in the right-of-use asset or lease liability and are expensed as incurred.

Through the acquisition of BasX (Note 4), we acquired various leases for plant/office space and equipment. We also
lease the plant/office space used by our operations in Parkville, MO. Expense related to these leases is recognized on
straight-line basis over the lease term. Certain of our leases contain escalating lease payments based on predefined
increases. Most leases contain options to renew or terminate. Right-of-use assets and lease liabilities reflect only the
options which the Company is reasonably certain to exercise.

At December 31, 2021, we had operating lease right-of-use assets of $17.0 million and current and noncurrent
operating lease obligations of $1.6 million and $15.5 million within accrued liabilities and other long-term liabilities,
respectively, on our consolidated balance sheets. At December 31, 2020, we had operating lease right-of-use assets
of $1.6 million and current and noncurrent operating lease obligations of $0.2 million and $1.4 million within
accrued liabilities and other long-term liabilities, respectively, on our consolidated balance sheets.

6. Accounts Receivable

Accounts receivable and the related allowance for credit losses are as follows:

Accounts receivable

Less: Allowance for credit losses

Total, net

Allowance for credit losses:

Balance, beginning of period

December 31,

2021

2020

(in thousands)

71,329 $

47,893

(549)

(506)

70,780 $

47,387

Years Ended December 31,

2021

2020

2019

(in thousands)

506 $

353 $

264

Provisions (recoveries) for expected credit losses, net of

adjustments

Accounts receivable written off, net of recoveries

—

153

—

Balance, end of period

549 $

506 $

(2)

353

7. Inventories

The components of inventories and the related changes in the allowance for excess and obsolete inventories are as
follows:

Raw materials

Work in process

Finished goods

Less: Allowance for excess and obsolete inventories

Total, net

Allowance for excess and obsolete inventories:

Balance, beginning of period

Provisions for excess and obsolete inventories

Inventories written off

Balance, end of period

December 31,

2021

2020

(in thousands)

124,480 $

76,238

3,049

4,528

132,057

(1,787)

130,270 $

2,088

7,154

85,480

(3,261)

82,219

Years Ended December 31,

2021

2020

2019

(in thousands)

3,261 $

2,644 $

629

(2,103)

1,108

(491)

1,787 $

3,261 $

1,210

1,454

(20)

2,644

8. Intangible Assets

Our intangible assets consist of the following:

Definite-lived intangible assets

Intellectual property

Customer relationships

Less: Accumulated amortization

Total, net

Indefinite-lived intangible assets

Trademarks

Total intangible assets, net

December 31,

2021

2020

(in thousands)

6,479 $

48,684

(208)

54,955

700

—

(662)

15,166

70,121 $

—

Amortization expense recorded in cost of sales is as follows:

Years Ended December 31,

2021

2020

2019

(in thousands)

Amortization expense

246 $

234 $

234

Excluding the impact of any future acquisitions, the Company anticipates amortization expense to be $3.7 million
for each of the years ended 2022 through 2026.

9. 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 C$1.1 million, 15 year note has
an interest rate of 4.0% and is payable to us monthly, and has a C$0.6 million balloon payment due in October
2025. Interest payments are recognized in interest income. The current and long-term portions of this note receivable
are included in other prepaid expenses and other and other long-term assets, respectively, on our balance sheet.

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, 2021 and 2020, there was no
impairment.

10. Supplemental Cash Flow Information

Supplemental disclosures:

Interest paid

Income taxes paid, net

Non-cash investing and financing activities:

Non-cash capital expenditures

Years Ended December 31,

2021

2020

2019

(in thousands)

— $

7,891

13,754

—

2,172

(3,714)

2,843

863

11. Warranties

The Company has warranties with various terms from 18 months for parts, data center cooling solutions, and
cleanroom systems to 25 years for certain heat exchangers. The Company has an obligation to replace parts if
conditions under the warranty are met. 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.

Changes in the warranty accrual are as follows:

Warranty accrual:

Years Ended December 31,

2021

2020

2019

(in thousands)

Balance, beginning of period

13,522 $

12,652 $

Payments made

Provisions

Assumed in business combination (Note 4)

Balance, end of period

Warranty expense:

(6,734)

6,351

630

(5,751)

6,621

—

11,421

(6,816)

8,047

—

13,769 $

13,522 $

12,652

6,351 $

6,621 $

8,047

12. Accrued Liabilities and Other Long-Term Liabilities

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

Warranty
Due to representatives
Payroll
Profit sharing
Workers' compensation
Medical self-insurance
Customer prepayments
Donations, short-term
Employee vacation time
Operating lease liability, short-term
Other
Total

At December 31, other long-term liabilities were comprised of the following:

Long-term operating lease obligation
Long-term donations

Extended warranties

Total

December 31,

2021

2020

(in thousands)
13,769 $
7,995
8,423
1,489
308
1,943
5,931
438
4,362
1,580
3,968
50,206 $

13,522
8,296
8,155
2,902
594
1,546
5,067
570
3,321
202
2,411
46,586

December 31,

2021

2020

(in thousands)

15,467

334

3,042

18,843

1,369

496

2,558

4,423

13. Revolving Credit Facility

On November 24, 2021, we amended our revolving credit facility (“Revolver”), to provide for maximum borrowings
of $100.0 million, with an option to increase to maximum borrowing of $200.0 million. As of December 31, 2021,
we had a $40.0 million balance outstanding under the Revolver. We have one standby letter of credit totaling $1.8
million as of December 31, 2021 and 2020. Borrowings available under the Revolver at December 31, 2021, were
$58.2 million. The Revolver expires on November 24, 2026.

Any outstanding loans under the Revolver bear interest at the daily compounded secured overnight financing rate
("SOFR") plus the applicable margin. Applicable margin, ranging from 1.25% - 1.75%, is determined quarterly
based on the Company's leverage ratio. The Company is also subject to letter of credit fees, ranging from 1.25% -
1.75%, and a commitment fee, ranging from 0.10% - 0.20%. The applicable fee percentage is determined quarterly
based on the Company's leverage ratio. At December 31, 2021, the weighted average interest rate of our the
Revolver was 1.3%. Fees associated with the unused portion of the committed amount are included in interest
expense on our consolidated statements of income and were not material for the year ended December 31, 2021.

The previous revolving credit facility allowed for maximum borrowings of $30.0 million with an interest rate of
LIBOR plus 2.0%. There were no fees associated with the unused portion of committed amounts under the previous
revolving credit facility. As of December 31, 2020, we had no balance outstanding under our previous revolving
credit facility. At December 31, 2020, the weighted average interest rate of our revolving credit facility was 2.6%.

On January 18, 2022, we updated our standby letter of credit to $820,000. As of February 28, 2022, we had
$55,000,000 of outstanding borrowings under our Revolver.

14. Income Taxes

The provision for income taxes consists of the following:

Current

Deferred

Total

Years Ended December 31,

2021

2020

2019

(in thousands)

6,755 $

9,939 $

3,669

13,027

7,282

6,038

10,424 $

22,966 $

13,320

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

The 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

Change in valuation allowance

Excess tax benefits related to share-based compensation

Return to provision

Oklahoma amended tax returns

Other

Years Ended December 31,

2021

2020

2019

21.0 %

1.8 %

1.0 %

(7.8) %

— %

(0.9) %

15.1 %

21.0 %

5.3 %

— %

(3.2) %

0.1 %

— %

(0.7) %

22.5 %

21.0 %

5.2 %

— %

(2.6) %

(1.4) %

(1.3) %

(0.9) %

20.0 %

We earn investment tax credits from the state of Oklahoma’s investment tax credit program for generally 1% of the
qualified assets to be taken over 5 years. We use the flow-through method of accounting for the investment tax
credits. We have credit carryforwards totaling $3.7 million that have estimated expirations starting in 2035.

Upon completion of the Company's 2018 tax return in 2019, the Company recorded additional benefit due to higher
than expected research and development credit of $0.6 million. Additionally in 2019, the Company determined it
could take advantage of an additional 1% tax credit in Oklahoma for years in which the Company's location was
deemed to be within an enterprise zone. The additional Oklahoma credit for being in an enterprise zone, or otherwise
allowable under Oklahoma law, resulted in a benefit of $1.2 million.

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 are as follows:

December 31,

2021

2020

(in thousands)

Deferred income tax assets (liabilities):

Accounts receivable and inventory reserves

625 $

Warranty accrual

Other accruals

Share-based compensation

Intangibles

Oklahoma investment credit carryforward

Other, net

Valuation allowance

Net deferred income tax assets

Property & equipment

Total deferred income tax liabilities

Net deferred income tax liabilities

3,675

1,406

7,568

993

3,404

3,119

20,790

(3,404)

17,386

(49,379)

(31,993) $

1,052

3,776

1,044

4,102

(33)

—

2,608

12,549

—

12,549

(40,873)

(28,324)

Realization of deferred tax assets, including the associated credit carryforwards, is dependent upon generating
sufficient taxable income in the appropriate tax jurisdiction. We believe that it is more likely than not that we may
not realize the benefit of our Oklahoma investment tax credit carryforward and, accordingly, have established a
valuation allowance against this deferred tax asset.

The amount of income tax that we pay annually is dependent on various factors, including the timing of certain
deductions. These deductions can vary from year to year and, consequently, the amount of income taxes paid in
future years will vary from the amounts paid in prior years.

We file income tax returns in the U.S. and state tax returns jurisdictions. We are subject to U.S. examinations for tax
years 2018 to present. In addition, we are subject to state and local income tax examinations for tax years 2017 to
present. The Company continues to evaluate its need to file returns in various state jurisdictions. Any interest or
penalties would be recognized as a component of income tax expense.

15. Share-Based Compensation

On May 22, 2007, our stockholders adopted a Long-Term Incentive Plan (as amended, “LTIP”) which provided an
additional 3.3 million shares that could be granted in the form of stock options, stock appreciation rights, restricted
stock awards, performance units and performance awards, in addition to the shares from the previous plan, the 1992
Plan. Since inception of the LTIP, non-qualified stock options and restricted stock awards have been granted with a
five year vesting schedule. 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.

On May 24, 2016, our stockholders adopted the 2016 Long-Term Incentive Plan (as amended, “2016 Plan”) which
provides for approximately 8.9 million shares, comprised of 3.4 million new shares provided for under the 2016
Plan, approximately 0.4 million shares that were available for issuance under the previous LTIP that are now
authorized for issuance under the 2016 Plan, approximately 2.6 million shares that were approved by the
stockholders on May 15, 2018, and an additional 2.5 million shares that were approved by the stockholders on May
12, 2020.

Under the 2016 Plan, shares can be granted in the form of stock options, stock appreciation rights, restricted stock
awards, performance awards, dividend equivalent rights, and other awards. Under the 2016 Plan, the exercise price
of shares granted may not be less than 100% of the fair market value at the date of the grant. The 2016 Plan is

administered by the Compensation Committee of the Board of Directors or such other committee of the Board of
Directors as is designated by the Board of Directors (the “Committee”). Membership on the Committee is limited to
independent directors. The Committee may delegate certain duties to one or more officers of the Company as
provided in the 2016 Plan. The Committee determines the persons to whom awards are to be made, determines the
type, size and terms of awards, interprets the 2016 Plan, establishes and revises rules and regulations relating to the
2016 Plan and makes any other determinations that it believes necessary for the administration of the 2016 Plan.

Options

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, 2021, 2020, and
2019 using a Black Scholes-Merton Model:

Directors and SLT1:

Expected dividend yield

Expected volatility

Risk-free interest rate

Expected life (in years)

Employees:

Expected dividend yield

Expected volatility

Risk-free interest rate

Expected life (in years)

2021

2020

2019

0.38

0.33

35.78 %

0.51 %

4.00

31.63 %

0.64 %

5.00

0.38

0.32

38.67 %

0.32 %

3.00

31.39 %

0.67 %

5.00

0.32

29.54 %

2.40 %

5.00

0.32

29.54 %

2.38 %

5.00

1 Senior Leadership Team ("SLT") consists of officers and key members of management.

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.

The following is a summary of stock options vested and exercisable as of December 31, 2021:

Range of

Exercise

Prices

$8.17 - 40.87

$41.37 - 41.37

$42.42 - 79.81

Number

538,335

361,231

124,098

Total

1,023,664

Weighted
Average

Remaining

Contractual

Life

Weighted

Average

Exercise

Price

Intrinsic

Value

(in thousands)

4.84 $

6.37

8.17

5.79 $

30.32 $

41.37

45.60

36.07 $

26,440

13,748

4,198

44,386

The following is a summary of stock options vested and exercisable as of December 31, 2020:

Range of

Exercise

Prices

Number

Weighted
Average

Remaining

Contractual

Life

Weighted

Average

Exercise

Price

Intrinsic

Value

(in thousands)

$7.18 - 36.95

$37.00 - 40.87

$41.37 - 66.98

Total

543,646

1,978

194,697

740,321

5.33 $

7.09

7.87

6.00 $

28.33 $

38.50

41.59

31.85 $

20,820

4,875

25,751

The following is a summary of stock options vested and exercisable as of December 31, 2019:

Range of

Exercise

Prices

Number

Weighted
Average

Remaining

Contractual

Life

Weighted

Average

Exercise

Price

Intrinsic

Value

(in thousands)

$7.18 - 34.10

$34.15 - 40.87

$41.37 - 50.68

Total

451,077

86,122

1,750

538,949

5.44 $

7.82

1.81

5.81 $

23.47 $

36.33

41.59

21.58 $

11,702

1,126

12,842

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

Options

Outstanding at December 31, 2020

Granted

Exercised

Forfeited or Expired

Outstanding at December 31, 2021

Exercisable at December 31, 2021

Weighted
Average
Exercise

Price

39.00

72.95

35.54

48.44

42.88

36.07

3,752,945 $

368,501

(595,057)

(160,920)

3,365,469 $

1,023,664 $

The total pre-tax compensation cost related to unvested stock options not yet recognized as of December 31, 2021 is
$17.2 million and is expected to be recognized over a weighted-average period of 2.25 years.

The total intrinsic value of options exercised during the years ended December 31, 2021, 2020, and 2019 was $22.6
million, $15.5 million, and $8.1 million, respectively. The cash received from options exercised during the year
ended December 31, 2021, 2020, and 2019 was $21.1 million, $21.4 million, and $12.6 million, respectively. The
impact of these cash receipts is included in financing activities in the accompanying consolidated statements of cash
flows.

Restricted Stock

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 present value of dividends.

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

Restricted stock

Unvested at December 31, 2020

Granted

Vested

Forfeited

Unvested at December 31, 2021

Weighted
Average
Grant date

Fair Value

38.22

69.46

35.80

49.27

46.08

224,691 $

36,234

(91,923)

(7,777)

161,225 $

At December 31, 2021, unrecognized compensation cost related to unvested restricted stock awards was
approximately $4.3 million which is expected to be recognized over a weighted average period of 2.05 years.

PSUs

The Company has awarded performance stock units ("PSUs") to certain officers and employees under our 2016
Plan. Unlike our restricted stock awards, the PSUs are not considered legally outstanding and do not accrue
dividends during the vesting period. The PSUs vest based on the level of achievement with respect to the Company's
three year total shareholder return ("TSR") benchmarked against similar companies included in the capital goods
sector of the S&P SmallCap 600 Index. The TSR measurement period is the three years ending December 31, 2023.
At the end of the measurement period, each award will be converted into common stock at 0% to 200% of the PSUs
held, depending on overall TSR as compared to the S&P SmallCap 600 Index benchmark companies.

The total pre-tax compensation cost related to unvested PSUs not yet recognized as of December 31, 2021 is
$1.0 million and is expected to be recognized over a weighted average period of approximately 1.9 years.

The following weighted average assumptions were used to determine the fair value of the PSUs granted on the
original grant date for expense recognition purposes for PSUs granted during the year ended December 31, 2021
using a Monte Carlo Model:

Expected dividend rate

Expected volatility

Risk-free interest rate

Expected life (in years)

Year Ended

December 31, 2021

0.38

39.10 %

0.28 %

2.80

The expected term of the PSUs is based on the remaining service period ending December 31, 2023. 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.

A summary of the unvested PSUs is as follows:

Unvested at December 31, 2020

Granted

Vested

Forfeited

Unvested at December 31, 2021

Key Employee Awards

Weighted Average
Grant Date Fair Value

—

18,483

—

(1,632)

16,851

—

87.78

—

87.78

Subject to the MIPA Agreement (Note 4), the Company granted awards to key employees of BasX ("Key Employee
Awards"). Unlike our restricted stock awards under the 2016 Plan, the Key Employee Awards are not considered
legally outstanding and do not accrue dividends during the vesting period. The potential future issuance of the Key
Employee Awards is contingent upon BasX meeting certain post-closing earn-out milestones during each of the
years ending 2021, 2022, and 2023 as defined by the MIPA Agreement and continued employment with the
Company. At the end of the earn-out period, ending December 31, 2023, each eligible Key Employee Award will
vest and be converted into common stock. The fair value of Key Employee Awards is based on the fair market
value of AAON common stock on the grant date.

The total pre-tax compensation cost related to unvested Key Employee Awards not yet recognized as of December
31, 2021 is $1.5 million and is expected to be recognized over a weighted average period of approximately 2.0
years.

A summary of the unvested Key Employee Awards is as follows:

Unvested at December 31, 2020

Granted

Vested

Forfeited

Unvested at December 31, 2021

Weighted Average
Grant Date Fair Value

—

26,599

—

26,599

—

80.18

—

80.18

Summary of Share-based Compensation

A summary of share-based compensation is as follows for the years ended December 31, 2021, 2020, and 2019:

Grant date fair value of awards during the period:

(in thousands)

2021

2020

2019

Options

Restricted stock

PSUs

Key employee awards

Total

Share-based compensation expense:

Options

Restricted stock

PSUs

Key employee awards

Total

Income tax benefit related to share-based compensation:

Options

Restricted stock

Total

16. Employee Benefits

Defined Contribution Plan - 401(k)

7,010 $

12,615 $

2,517

1,622

1,572

3,316

—

20,442

4,631

—

12,721 $

15,931 $

25,073

2021

2020

2019

(in thousands)

8,724 $

8,312 $

2,519

525

3,030

—

9,145

2,654

—

11,812 $

11,342 $

11,799

2021

2020

2019

(in thousands)

4,571 $

2,698 $

837

519

5,408 $

3,217 $

1,197

575

1,772

We sponsor a defined contribution plan (the “Plan”). Eligible employees may make contributions in accordance with
the Plan and IRS guidelines. In addition to the traditional 401(k), eligible employees are given the option of making
an after-tax contribution to a Roth 401(k) or a combination of both. The Plan provides for automatic enrollment and
for an automatic increase to the deferral percentage at January 1st of each year and each year thereafter. Eligible
employees are automatically enrolled in the Plan at a 6% deferral rate and currently contributing employees deferral
rates will be increased to 6% unless their current rate is above 6% or the employee elects to decline the automatic
enrollment or increase. Administrative expenses are paid for by Plan participants. The Company paid no
administrative expenses for the years ended 2021, 2020, and 2019.

The Company matches 175% up to 6% of employee contributions of eligible compensation. Additionally, Plan
participant forfeitures are used to reduce the cost of the Company contributions.

Contributions, net of forfeitures, made to the defined
contribution plan

9,724 $

9,091 $

7,034

Years Ended December 31,

2021

2020

2019

(in thousands)

Profit Sharing Bonus Plan

We maintain a discretionary profit sharing bonus plan under which approximately 10% of pre-tax profit from
consolidated AAON Oklahoma and AAON Texas is paid to eligible employees on a quarterly basis in order to
reward employee productivity. Eligible employees are regular full-time employees of AAON Oklahoma or AAON
Texas who are actively employed and working on the first and last days of the calendar quarter and who were
employed full-time for at least three full months prior to the beginning of the calendar quarter, excluding the
Company's senior leadership team.

Years Ended December 31,

2021

2020

2019

(in thousands)

Profit sharing bonus plan expense

8,526 $

11,593 $

7,448

Employee Medical Plan

We self-insure for our employees' health insurance. Eligible employees are regular full-time employees who are
actively employed and working. Participants are expected to pay a portion of the premium costs for coverage of the
benefits provided under the Plan. We estimate our self-insurance liabilities using an analysis provided by our claims
administrator and our historical claims experience. In addition, the Company matches 175% of a participating
employee's allowed contributions to a qualified health saving account to assist employees with our heath insurance
plan deductibles.

Years Ended December 31,

2021

2020

2019

(in thousands)

9,640 $

9,060 $

3,482

3,476

5,898

3,265

Medical claim payments

Health saving account payments

17. Stockholders’ Equity

Stock Repurchase

The Board has authorized three stock repurchase programs for the Company. The Company may purchase shares on
the open market from time to time, up to a total of 5.7 million shares. The Board must authorize the timing and
amount of these purchases and all repurchases are in accordance with the rules and regulations of the SEC allowing
the Company to repurchase shares from the open market.

Our open market repurchase programs are as follows:

Agreement Execution Date
May 16, 2018 1
March 5, 2019 1

March 13, 2020

Authorized Repurchase $

Expiration Date

$15 million

$20 million

March 1, 2019

March 4, 2020
** 2

1 The 2018 and 2019 purchase authorizations were executed under 10b5-1 programs.
2 Expiration Date is at Board's discretion. The Company is authorized to effectuate repurchases of the Company's
common stock on terms and conditions approved in advance by the Board.

The Company also has a stock repurchase arrangement by which employee-participants in our 401(k) savings and
investment plan are entitled to have shares of AAON, Inc. stock in their accounts sold to the Company. The
maximum number of shares to be repurchased is contingent upon the number of shares sold by employee-
participants.

Our repurchase activity is as follows:

2021

2020

2019

(in thousands, except share and per share data)

Program

Total $

$ per share

Total $

$ per share

Total $

$ per share

Open market

— $ — $

—

103,689 $ 4,987 $

48.10

5,799 $

200 $

34.46

297,772 20,876

70.11

438,921 25,073

57.12

419,963 19,386

46.16

22,526

1,590

70.59

23,272

1,169

50.23

28,668

1,207

Total

320,298 $ 22,466 $

70.14

565,882 $ 31,229 $

55.19

454,430 $ 20,793 $

Inception to Date

(in thousands, except share and per share data)

Program

Total $

$ per share

Open market

401(k)

Directors & employees
Total

4,205,255 $

74,793 $

8,204,432

165,876

2,027,727
14,437,414 $

22,341
263,010 $

17.79

20.22

11.02
18.22

42.11

45.76

401(k)
Directors &
employees

Subsequent to December 31, 2021 and through February 23, 2022, the Company repurchased 5,120 shares
for $0.4 million from employees for payment of statutory tax withholdings on stock transactions and 37,923 shares
for $2.4 million from our 401(k) savings and investment plan.

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.

Our recent dividends are as follows:

Declaration Date
May 20, 2019
November 6, 2019
May 15, 2020
November 10, 2020
May 17, 2021
November 9, 2021

Record Date
June 3, 2019
November 27, 2019
June 3, 2020
November 27, 2020
June 3, 2021
November 26, 2021

Payment Date
July 1, 2019
December 18, 2019
July 1, 2020
December 18, 2020
July 1, 2021
December 17, 2021

Dividend per Share
$0.16
$0.16
$0.19
$0.19
$0.19
$0.19

We paid cash dividends of $19.9 million, $19.8 million, and $16.6 million in 2021, 2020, and 2019, respectively.

Contingent Shares Issued in BasX Acquisition

On December 10, 2021, we closed on the acquisition of BasX (Note 4). Under the MIPA Agreement, we committed
to $78.0 million in the aggregate of contingent consideration to the former owners of BasX, which is payable in
approximately 1,037,000 shares of the Company's stock, par value $0.004 per share. The shares do not accrue
dividends.

Under the MIPA Agreement, the potential future issuance of the shares is contingent upon BasX meeting certain
post-closing earn-out milestones during each of the years ended 2021, 2022, and 2023. We estimated the fair value
of contingent consideration related to these shares to be approximately $66.0 million, which is included in additional
paid-in capital on the consolidated balance sheets. As of February 28, 2022, the Company has not issued any shares
related to the contingent consideration to the former owners of BasX.

18. New Markets Tax Credit

On October 24, 2019, the Company entered into a transaction with a subsidiary of an unrelated third-party financial
institution (the “Investor”) and a certified Community Development Entity under a qualified New Markets Tax
Credit (“NMTC”) program pursuant to Section 45D of the Internal Revenue Code of 1986, as amended, related to an
investment in plant and equipment to facilitate the expansion of our Longview, Texas manufacturing operations (the
“Project”). In connection with the NMTC transaction, the Company received a $23.0 million NMTC allocation for
the Project and secured low interest financing and the potential for future debt forgiveness related to the Project.

Upon closing of the NMTC transaction, the Company provided an aggregate of approximately $15.9 million to the
Investor, in the form of a loan receivable, with a term of twenty-five years, bearing an interest rate of 1.0%. This
$15.9 million in proceeds plus capital contributed from the Investor was used to make an aggregate $22.5 million
loan to a subsidiary of the Company. This financing arrangement is secured by equipment at the Company's
Longview, Texas facilities and a guarantee from the Company, including an unconditional guarantee of NMTCs.

This transaction also includes a put/call feature that either of which can be exercised at the end of the seven-year
compliance period. The Investor may exercise its put option or the Company can exercise the call, both of which
could serve to trigger forgiveness of a portion of the debt. The value attributable to the put/call is nominal. The
Investor's interest of $6.3 million is recorded in New market tax credit obligation on the consolidated balance sheets.
The Company incurred approximately $0.3 million of debt issuance costs related to the above transactions, which
are being amortized over the life of the transaction.

The Investor is subject to 100 percent recapture of the NMTC it receives for a period of seven years, as provided in
the Internal Revenue Code and applicable U.S. Treasury regulations in the event that the financing facility of the
Borrower under the transaction (AAON Coil Products, Inc.) becomes ineligible for NMTC treatment per the Internal
Revenue Code requirements. The Company is required to be in compliance with various regulations and contractual
provisions that apply to the NMTC arrangement. Noncompliance with applicable requirements could result in the
Investor’s projected tax benefits not being realized and, therefore, require the Company to indemnify the Investor for
any loss or recapture of the NMTC related to the financing until such time as the recapture provisions have expired
under the applicable statute of limitations. The Company does not anticipate any credit recapture will be required in
connection with this financing arrangement.

The Investor and its majority owned community development entity are considered VIEs and the Company is the
primary beneficiary of the VIEs. This conclusion was reached based on the following:

•

•
•

the ongoing activities of the VIEs, collecting and remitting interest and fees and NMTC compliance, were
all considered in the initial design and are not expected to significantly affect performance throughout the
life of the VIE;
contractual arrangements obligate the Company to comply with NMTC rules and regulations and provide
various other guarantees to the Investor and community development entity;
the Investor lacks a material interest in the underling economics of the project; and
the Company is obligated to absorb losses of the VIEs.

Because the Company is the primary beneficiary of the VIEs, they have been included in the consolidated financial
statements. There are no other assets, liabilities or transaction in these VIEs outside of the financing transactions
executed as part of the NMTC arrangement.

19. Commitments and Contingencies

We are occasionally party to short-term, cancellable and occasionally non-cancellable, 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 purchase and normal sales exemption. We had no material contractual purchase
obligations as of December 31, 2021.

20. New Accounting Pronouncements

Changes to U.S. GAAP are established by the FASB in the form of accounting standards updates (“ASUs”) to the
FASB’s Accounting Standards Codification.

21. 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.

Dilutive shares related to the contingent consideration payable to former owners of BasX (Note 4) are included in
the calculation of diluted weighted average shares once it is determinable that BasX will satisfy the post-closing
earn-out milestones under the terms of the MIPA agreement. The shares will be included in basic weighted average
share once they are legally issued and no longer contingent.

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

Numerator:

Net income

Denominator:

2021

2020

2019

(in thousands, except share and per share data)

58,758 $

79,009 $

53,711

Basic weighted average shares
Effect of dilutive shares related to stock based compensation1
Effect of dilutive shares related contingent consideration2
Diluted weighted average shares

52,404,199
1,301,698

23,092

52,168,679
892,490

—

52,079,865
555,550

—

53,728,989

53,061,169

52,635,415

Earnings per share:

Basic

Dilutive

Anti-dilutive shares:

1.12 $

1.09 $

1.51 $

1.49 $

1.03

1.02

304,029

364,787

1,868,087

1 Dilutive shares related to stock options, restricted stock, PSUs and Key Employee Awards (Note 17)

2 Dilutive shares related contingent shares issued to former owners of BasX (Note 4)

22. Related Parties

The Company purchases some supplies from an entity controlled by the Company’s Executive Chairman. The
Company sometimes makes sales to the Executive Chairman and CEO/President. Additionally, the Company sells
units to an entity owned by a member of the CEO/President's immediate family. This entity is also one of the
Company’s Representatives and as such, the Company makes payments to the entity for Third Party Products.
Through the acquisition of BasX (Note 4), at December 31, 2021, the Company leased an office in Redmond,
Oregon from an entity in which certain members of management have an ownership interest.

Following is a summary of transactions and balances with affiliates:

Sales to affiliates

Payments to affiliates

Years Ended December 31,

2021

2020

2019

(in thousands)

3,752 $

185

3,475 $

256

886

332

December 31,

2021

2020

(in thousands)

Due from affiliates

547 $

342

23. Segments

ASC 280, Segment Reporting, establishes the standards for reporting information about segments in financial
statements. In applying the criteria set forth in ASC 280, the Company has determined that it has three reportable
segments for financial reporting purposes. Management evaluates the performance of its business segments
primarily on gross profit.

Beginning in the fourth quarter of 2021, due to the acquisition of BasX and internal leadership reporting changes,
the Company reevaluated its reportable segments for disclosure purposes. The Company has conformed its segment
reporting accordingly and has reclassified comparative prior period information to reflect this change. The
Company's chief decision maker ("CODM"), our CEO, allocates resources and assesses the performance of each
operating segment using information about the operating segment's net sales and income from operations. The
CODM does not evaluate operating segments using asset or liability information.

AAON Oklahoma: AAON Oklahoma designs, manufactures, sells and services standard, semi-custom and custom
HVAC systems, designs and produces controls solutions for all of our HVAC units and sells retail parts to customers
through our two retail part stores. Through the NAIC research and development laboratory facility, AAON
Oklahoma is able test units units under various environmental conditions. AAON Oklahoma includes the operations
of both our Tulsa, Oklahoma and Parkville, Missouri facilities, our NAIC research and development laboratory
facility and two retail parts locations.

AAON Coil Products: AAON Coil Products designs and manufactures a selection of our standard, semi-custom and
custom HVAC systems. In addition, AAON Coil Products designs and manufactures various heating and cooling
coils to be used in HVAC systems, mostly for the benefit of AAON Oklahoma and AAON Coil Products. AAON
Coil Products consists of operations at our Longview, Texas facilities.

The following table summarizes certain financial data related to our segments. Transactions between segments are
recorded based on prices negotiated between the segments. The “Other and eliminations” category in the Total
Assets table below includes assets at our non-operating entity AAON, Inc., Nevada corporation, that are not
allocated to the reportable segments, as well as intercompany eliminations.

Net Sales

AAON Oklahoma

External sales

Inter-segment sales

AAON Coil Products

External sales

Inter-segment sales
BasX1
Eliminations

Net sales

Gross Profit

AAON Oklahoma

AAON Coil Products
BasX1
Gross profit

Long-lived assets

AAON Oklahoma

AAON Coil Products
BasX1

Total long-lived assets

Intangible assets and goodwill

AAON Oklahoma

AAON Coil Products
BasX1

Total intangible assets and goodwill

Years Ended December 31,

2021

2020

2019

(in thousands)

463,845

458,957

418,669

2,504

2,683

2,261

66,589

24,250

4,083

55,594

21,552

—

50,664

25,792

—

(26,754)

(24,235)

(28,053)

534,517

514,551

469,333

126,868

140,099

107,228

10,075

887

15,750

—

12,197

—

137,830

155,849

119,425

December 31,

2021

2020

(in thousands)

183,840

62,534

28,662

275,036

3,229

—

152,619

155,848

170,603

54,308

—

224,911

3,267

—

3,267

1 BasX was acquired on December 10, 2021. We have included the results of BasX's operations in our
consolidated financial statements beginning December 11, 2021.

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

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated
the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act) as of December 31, 2021.

Based upon the evaluation, our principal executive and principal financial officers have concluded that our
disclosure controls and procedures were effective at December 31, 2021 to ensure the information required to be
disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our
management, including our principal executive and principal financial officers, as appropriate, to allow timely
decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods
specified in the rules and forms of the SEC.

(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 as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Our internal control over financial
reporting is a process designed by, or under the supervision of, our principal executive and principal financial
officers, 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. GAAP.

Because 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.

On December 10, 2021, we acquired BasX, LLC ("BasX"). Management acknowledges that it is responsible for
establishing and maintaining a system of internal controls over financial reporting for BasX. We are in the process
of integrating BasX, and we therefore have excluded BasX from our December 31, 2021 assessment of the
effectiveness of internal control over financial reporting. BasX had total assets of $205.6 million as of December 31,
2021 and third party revenues of $4.1 million from December 11, 2021 to December 31, 2021, which are included in
our consolidated financial statements as of and for the year ended December 31, 2021. The impact of the acquisition
of BasX has not materially affected and is not expected to materially affect our internal control over financial
reporting. As a result of these integration activities, certain controls are being evaluated and may be changed. We
believe, however, that we will be able to maintain sufficient controls over the substantive results of our financial
reporting throughout this integration process.

In making our assessment of internal control over financial reporting, management has used the criteria issued by the
Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in the 2013 Internal Control—
Integrated Framework. Based on our assessment, our management concluded that the Company maintained
effective internal control over financial reporting as of December 31, 2021.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2021 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
2021 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.

Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of AAON, Inc. (a Nevada corporation) and subsidiaries
(the “Company”) as of December 31, 2021, based on criteria established in the 2013 Internal Control—Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our
opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2021, based on criteria established in the 2013 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) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December
31, 2021, and our report dated February 28, 2022 expressed an unqualified opinion on those financial statements.

Basis for opinion
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 (“Management’s Report”). Our
responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. 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.

Our audit of, and opinion on, the Company’s internal control over financial reporting does not include the internal
control over financial reporting of BasX, Inc., a wholly-owned subsidiary, whose financial statements reflect total
assets and revenues constituting 32 and 1 percent, respectively, of the related consolidated financial statement
amounts as of and for the year ended December 31, 2021. As indicated in Management’s Report, BasX, Inc.
(formerly BasX, LLC) was acquired during 2021. Management’s assertion on the effectiveness of the Company’s
internal control over financial reporting excluded internal control over financial reporting of BasX, Inc.

Definition and limitations of internal control over financial reporting
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.

/s/ GRANT THORNTON LLP

Tulsa, Oklahoma
February 28, 2022

Item 9B. Other Information.

None.

PART III

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 stockholders scheduled to be held on May 12,
2022.

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 Rebecca A. Thompson, or by calling (918) 382-6216.

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 stockholders scheduled to be held on May 12, 2022.

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 12, 2022.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

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 annual meeting of
stockholders scheduled to be held May 12, 2022.

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 material related party transactions and have
no preexisting material related party transactions in 2021, 2020, or 2019.

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 12, 2022.

PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a) Financial statements.

(1)

(2)

(3)

The consolidated financial statements and the report of independent registered public accounting
firm are included in Item 8 of this Form 10-K.
The consolidated financial statements other than those listed at item (a)(1) above have been
omitted because they are not required under the related instructions or are not applicable.
The exhibits listed at item (b) below are filed as part of, or incorporated by reference into, this
Form 10-K.

(b) Exhibits:

(3)

(4)

(4.16)

(10.1)

(10.2)

(10.3)

(21)

(23)

(31.1)

(31.2)

(32.1)

(32.2)

(99.1)

(A)

(B)

Amended and Restated Articles of Incorporation (ii)

Amended and Restated Bylaws (i)

Amended and Restated Loan Agreement (dated November 24, 2021) and related
documents (iii)

Description of Securities

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

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

AAON, Inc. 2016 Long-Term Incentive Plan (iv)

List of Subsidiaries

Consent of Grant Thornton LLP

Certification of CEO

Certification of CFO

Section 1350 Certification – CEO

Section 1350 Certification – CFO

Membership Interest Purchase Agreement - Acquisition of BasX, LCC (dated November
18, 2021)

(101)

(INS)

Inline XBRL Instance Document

(101)

(SCH)

Inline XBRL Taxonomy Extension Schema

(101)

(CAL)

Inline XBRL Taxonomy Extension Calculation Linkbase

(101)

(DEF)

Inline XBRL Taxonomy Extension Definition Linkbase

(101)

(LAB)

Inline XBRL Taxonomy Extension Label Linkbase

(101)

(PRE)

Inline XBRL Taxonomy Extension Presentation Linkbase

(104)

(i)

(ii)

(iii)

(iv)

Cover Page Interactive Data File (embedded within the Inline XBRL Document and
included in Exhibit 101)

Incorporated herein by reference to the exhibits to our Form 8-K dated May 15, 2020.

Incorporated herein by reference to exhibits to our Annual Report on Form 10-K for the
fiscal year ended December 31, 2014.

Incorporated herein by reference to exhibit to our Form 8-K dated November 24, 2021.

Incorporated herein by reference to our Form S-8 Registration Statement No. 333-212863
dated August 2, 2016, our Form S-8 Registration Statement No. 333-226512 dated
August 2, 2018, and our Form S-8 Registration Statement No. 333-241538 dated August
6, 2020.

(v)

(vi)

Incorporated 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.
333-52824.

Incorporated herein by reference to our Form S-8 Registration Statement No.
333-151915, Form S-8 Registration Statement No. 333-207737.

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.

SIGNATURES

Dated: February 28, 2022

By:

/s/ Gary D. Fields
Gary D. Fields, Chief Executive Officer

AAON, INC.

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: February 28, 2022

/s/ Gary D. Fields

Dated: February 28, 2022

Gary D. Fields
Chief Executive Officer, President, and Director
(principal executive officer)

/s/ Rebecca A. Thompson

Rebecca A. Thompson
Chief Financial Officer
(principal financial officer)

/s/ Christopher D. Eason

Christopher D. Eason
Chief Accounting Officer
(principal accounting officer)

/s/ Norman H. Asbjornson
Norman H. Asbjornson
Executive Chairman and Director

/s/ Angela E. Kouplen
Angela E. Kouplen
Director

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

/s/ Caron A. Lawhorn
Caron A. Lawhorn
Director

/s/ Stephen O. LeClair
Stephen O. LeClair
Director

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

/s/ David R. Stewart
David R. Stewart
Director

/s/ Bruce Ware
Bruce Ware
Director

/s/ Luke A. Bomer
Luke A. Bomer
Secretary

DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934

Exhibit 4.16

As of February 28, 2022, AAON, Inc., a Nevada corporation, (“AAON”) has one class of securities
registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our
Common Stock.

Description of Common Stock

The following description of our Common Stock is a summary based on and qualified by our Amended and
Restated Articles of Incorporation of AAON, Inc. (as further amended to date, the “Articles of Incorporation”) and
our Bylaws (as amended to date, the “Bylaws”).

Authorized Capital Shares

Our authorized capital shares consist of 100,000,000 shares of common stock, $0.004 par value per share
(“Common Stock”), and 5,000,000 shares of series preferred stock, $0.001 par value per share (“Preferred Stock”).
The outstanding shares of our Common Stock are fully paid and nonassessable.

Voting Rights

Holders of Common Stock are entitled to one vote per share on all matters voted on by the stockholders,

including the election of directors. Our Common Stock does not have cumulative voting rights.

Dividend Rights

Subject to the rights of holders of outstanding shares of Preferred Stock, if any, the holders of Common
Stock are entitled to receive dividends, if any, as may be declared from time to time by the Board of Directors in its
discretion out of funds legally available for the payment of dividends.

Liquidation Rights

Subject to any preferential rights of outstanding shares of Preferred Stock, if any, holders of Common

Stock will share ratably in all assets legally available for distribution to our stockholders in the event of dissolution.

Other Rights and Preferences

Our Common Stock has no sinking fund or redemption provisions or preemptive, conversion or exchange

rights.

Listing

The Common Stock is traded on The Nasdaq Stock Market LLC under the trading symbol “AAON.”

LIST OF SUBSIDIARIES OF AAON, INC.

Exhibit 21

Jurisdiction of Organization

Oklahoma

Texas

Oregon

Subsidiary

AAON, Inc.

AAON Coil Products, Inc.

BasX, Inc.

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our reports dated February 28, 2022, with respect to the consolidated financial statements and
internal control over financial reporting included in the Annual Report of AAON, Inc. on Form 10-K for the year
ended December 31, 2021. We consent to the incorporation by reference of said reports in the Registration
Statements of AAON, Inc. on Forms S-8 (File No. 333-151915, File No. 333-207737, File No. 333-212863, File No.
333-241538 and File No. 333-226512).

/s/ GRANT THORNTON LLP

Tulsa, Oklahoma
February 28, 2022

I, Gary D. Fields, certify that:

CERTIFICATION

Exhibit 31.1

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

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;

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;

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:

designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, 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;

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;

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;

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

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):

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

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: February 28, 2022

/s/ Gary D. Fields

Gary D. Fields
Chief Executive Officer

I, Rebecca A. Thompson, certify that:

CERTIFICATION

Exhibit 31.2

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

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: February 28, 2022

/s/ Rebecca A. Thompson

Rebecca A. Thompson
Chief Financial Officer

Exhibit 32.1

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, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I,
Gary D. Fields, Chief Executive 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: February 28, 2022

/s/ Gary D. Fields

Gary D. Fields
Chief Executive Officer

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, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I,
Rebecca A. Thompson, 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:

February 28, 2022

/s/ Rebecca A. Thompson

Rebecca A. Thompson
Chief Financial Officer

Gary Fields
Mr. Fields has served as Chief Executive Officer of AAON, Inc. (“AAON” or the “Company”) since 2020, as
President of the Company since 2016, and a director of the Company since 2015. Mr. Fields been involved
in the HVAC industry for over 35 years. From 1983 to 2012, he was an HVAC equipment sales representative
at and, from 2002 to 2012, a member of the ownership group of Texas AirSystems, the largest independent
HVAC equipment and solutions provider in the state of Texas. Mr. Fields also served as President of AAON
Coil Products, Inc. (“AAON Coil Products”) from 2018 to March 2020.

Gene Stewart
Mr. Stewart has served as Executive Vice President of AAON since 2022. Mr. Stewart most recently served
as Vice President of the Company since 2020 and President of AAON Coil Products since April 2020. From
February 2015 to present, Mr. Stewart served as co-owner and President of North Texas Farm & Garden.
Mr. Stewart previously served as the Aftermarket Business Leader – Parts and Warranty Service for the
Company from January 2013 through January 2015. Mr. Stewart was the Parts Sales and Distribution
Leader for Texas AirSystems from April 2009 through 2012 and prior to that spent over 11 years in several
positions at Trane, including Parts and LCU Equipment Business Leader from January 2006 to April 2009.

Rebecca A. Thompson
Ms. Thompson has served as Vice President, Finance, and Chief Financial Officer of AAON since 2021. Prior
to this promotion, Ms. Thompson served as Chief Accounting Officer and Treasurer of the Company since
2017, and Chief Accounting Officer of the Company since 2012. Ms. Thompson previously served as a
Senior Manager at Grant Thornton, LLP where she had 11 years of experience in the assurance division.
Ms. Thompson is a licensed certified public accountant.

Rony D. Gadiwalla
Mr. Gadiwalla has served as Vice President of Information Technology and Chief Information Officer of AAON
since 2018. He most recently served as the Company’s Director of Information Technology since 2014. Prior
to that, he held several IT roles, including Manager of Project Management Office from 2012 to 2014, and
Engineering Automation Manager from 2009 to 2012. Mr. Gadiwalla has been with the company since
2004. Mr. Gadiwalla is very knowledgeable and experienced with the company’s IT systems.

110

Company OfficersChris Eason
Mr. Eason has served as Chief Accounting Officer of AAON since 2021. Prior to this promotion,
Mr. Eason served as Controller and Financial Reporting Manager of the Company since 2018. Mr.
Eason previously served as a Senior Manager at Grant Thornton, LLP where he had over 13 years
of experience in the assurance division. Mr. Eason is a licensed certified public accountant

Stephen E. Wakefield
Mr. Wakefield has served as Chief Operating Officer of AAON since 2020 and Vice President of
Engineering of the Company since 2018. He previously served as the Company’s Director of
Engineering, and prior to that held several engineering roles, including Director of Design and
Engineering Operations from 2017 to 2018, Senior Manager of Research and Development from
2015 to 2017, and Design Engineering Manager from 2005 to 2015. Mr. Wakefield has been with
the Company since 1999. Mr. Wakefield has extensive knowledge and experience with all aspects
of the Company’s engineering and product design processes.

Doug Wichman
Mr. Wichman has served as Vice President of AAON and Executive Vice President of AAON Coil
Products since 2022. Prior to this promotion, he most recently served as AAON’s Director of
Manufacturing in Tulsa, and prior to that held several roles, including Plant Manager from 2017
to 2018 and Manufacturing Engineer from 2013 to 2017. Mr. Wichman has extensive knowledge
and experience with all aspects of AAON’s manufacturing processes.

Transfer Agent and
Registrar
Issuer Direct
One Glenwood Ave.
Suite 1001
Raleigh, NC 27603

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

General Counsel
Johnson & Jones, P.C.
Two Warren Place
6120 South Yale Avenue,
Suite 500
Tulsa, Oklahoma 74136

Common Stock
NASDAQ-AAON

Investor Relations
Joseph Mondillo
Director of Investor Relations
(617)877-6346
joseph.mondillo@AAON.com

Executive Offices
2425 South Yukon Avenue
Tulsa, Oklahoma 74107

Company OfficersBack Row (Left to Right): David Stewart, Bruce Ware, Stephen O. LeClair, Angela E. Kouplen, A.H. McElroy, II
Front Row (Left to Right): Caron A. Lawson, Norman H. Asbjornson, Gary Fields, Paul K. Lackey, Jr.

Norman H. Asbjornson
Executive Chairman
Mr. Asbjornson has served as Executive Chairman of AAON since
2020 and a director of AAON since 1989. Mr. Asbjornson also
served as President of AAON from its inception until November
2016, and Chief Executive Officer of AAON from its inception until
May 2020. Mr. Asbjornson also serves as the Chairman of the
Board of AAON Coil Products, Inc., a wholly owned subsidiary.
Mr. Asbjornson is one of the founders of the Company, and his
intimate knowledge of the HVAC industry, both from a technical
and a business perspective, brings to the Board a unique insight
into the Company’s operations in particular, as well as the
environment in which the Company operates.

Gary D. Fields President/CEO/Director

Bruce Ware
Mr. Ware was elected as a director of AAON in October 2021. Mr.
Ware brings significant experience serving in multiple executive
and leadership roles at publicly traded companies. Currently, he
serves as a Corporate Vice President and Group Head of Joint
Venture Capital Raising for DaVita Inc. DaVita is a Fortune 500
NYSE publicly traded health care services company and one of
the largest providers of kidney care services in the U.S., with
over 2,800 outpatient dialysis centers in the U.S. and over 330
outpatient dialysis centers in ten other countries.

Board of DirectorsA.H. McElroy, II
Mr. McElroy has served as a director of the Company since 2007 and
is currently Chair of the Compensation Committee. Since 1997, Mr.
McElroy has served as President, Chief Executive Officer and Chairman
of McElroy Manufacturing, Inc., a privately held manufacturer of
fusion equipment and fintube machines.

Paul K. Lackey, Jr.
Mr. Lackey has served as a director of the Company since 2007 and
is currently Chair of the Governance Committee. Mr. Lackey will
not seek reelection to the Board and will retire upon completion
of his term on May 12, 2022. Between April 2002 and October
2005, Mr. Lackey served as CEO and President of The NORDAM
Group, a privately held aerospace company. Between October
2005 and December 2008, Mr. Lackey served as the Chairman
and CEO of The NORDAM Group. Between January 2009 and
December 2011, Mr. Lackey served as the Executive Chairman of
the Board of The NORDAM Group. Since January 2012, Mr. Lackey
has served as the Chairman of the Board of The NORDAM Group.

Stephen 0. LeClair
Mr. LeClair was elected as a director of the Company in 2017.
He is a member of the Compensation Committee and Governance
Committee. Mr. LeClair has over 25 years of experience in various
executive, manufacturing, finance, sales and operational positions.
Mr. LeClair currently serves as Chief Executive Officer of Core &
Main (formerly HD Supply Waterworks), a position he has held
since 2017. In such role, he is responsible for leading the nation’s
largest distributor of water, sewer, storm and fire protection
products. Prior to his current role, he served as President of HD
Supply Waterworks from 2011 to 2017, Chief Operating Officer
of HD Supply Waterworks from 2008 to 2011, and President of
HD Supply Lumber and Building Materials from April 2007 until
its divestiture to ProBuild Holdings in 2008. Mr. LeClair joined HD
Supply in 2006 as Senior Director of Operations. Prior to joining
HD Supply, Mr. LeClair held various roles at General Electric in
2002-2005.

Caron A. Lawhorn
Ms. Lawhorn was elected as a director of the Company in 2019
and currently serves as the Audit Committee Chair. Ms. Lawhorn
is a certified public accountant, and currently serves as Senior
Vice President and Chief Financial Officer, of ONE Gas, Inc.,
a standalone one hundred percent regulated publicly traded
natural gas utility. Prior to her current role, she served as Senior
Vice President, Commercial, a position she held from ONE Gas's
separation from ONEOK in 2014. She served in the same position
at ONEOK, since 2013.

Angela E. Kouplen
Ms. Kouplen was elected as a director of the Company in 2016.
She serves as a member of the Audit Committee and Compensation
Committee. Ms. Kouplen has over 20 years of experience at
multiple energy companies, with an emphasis on information
technology, contract management, sourcing/vendor relations,
human resource management, strategy and governance. From
2012 through 2014, Ms. Kouplen served as Director - Talent
Acquisition and Leadership of WPX Energy, and from 2015 to 2016,
Ms. Kouplen served as Vice President - Information Technology of
WPX Energy. From 2016 to November 2018, Ms. Kouplen served
as Vice President of Administration and Chief Information Officer
of WPX Energy and from November 2018 to March 2021 served
as Senior Vice President of Administration and Chief Information
Officer. Since August 2021, Ms. Kouplen has served as the interim
Chief Information Officer at the University of Tulsa.

David Stewart
Mr. Stewart was elected as a director of the Company in October
2021. He brings over 40 years of professional experience to the
Board. Mr. Stewart currently serves as Chief Administrative Officer
and Trustee of the Oklahoma Ordnance Works Authority located
in Pryor, Oklahoma, an industrial public trust that owns and
operates MidAmerica Industrial Park. Mr. Stewart was appointed
to his current position in December 2012 by the former Governor
of Oklahoma, Mary Fallin. MidAmerica Industrial Park consists
of 9,000 acres and is home to over 80 companies in diverse
industries (including Google, DuPont and Chevron Phillips),
employing approximately 4,500 people. MidAmerica Industrial
Park is one of the largest industrial parks in the U.S. and top ten
in the world with on-site rail, water and electric power. Prior to
his current position, Mr. Stewart served as Chief Executive Officer
of Cherokee Nation Businesses, LLC.

113

Board of DirectorsCompany Employees

THE ONGOING SUCCESS OF OUR COMPANY CAN BE DIRECTLY
ATTRIBUTED TO OUR EMPLOYEES

GARY ABBE
SCOTT ABLA
ANGEL ACEDO
RAUL ACEDO ZELAYARAN
CHRISTOPHER ACKLEY
MIRIAN ACOSTA
MA ACOSTA DE AGUAYO
ANDRES ACOSTA-LUJAN
RAQUEL ACUNA SEGURA
ENRIQUETA ADAME
DAKOTA ADAMS
DERRICK ADAMS
JAMILAH ADAMS
JOHN ADAMS
JOSHUA ADAMS
LATOYA ADAMS
PAUL ADAMS
REBECCA ADAMS
RYAN ADAMS
AARON ADKINS
YOLIMAR AGELVIS ARELLANO
MARIE AGUERO
LEONARD AGUILAR, JR.
BERNY AIEN
ARLEEN AIZAWA
HARRY AIZAWA
EMILY AKIN
NADER AL-HASHMI
DANIEL ALAGDON
WENSA ALBERT
ALEJANDRA ALEGRIA-REYES
MAURICIO ALEMAN SANCHEZ
JIMMY ALEXANDER
SHARON ALEXANDER
THOMAS ALEXANDER
ZACHARY ALEXANDER
SHANNON ALFORD
JOSHUA ALIX-LOFTON
CHARLES ALLEN
DANIEL ALLEN
JOHN-PAUL ALLEN
SCOTTY ALLEN
STEVEN ALLEY
SONIA ALTER ESPINA
JOSE ALVARADO
NATALIE ALVARADO
YACKSENDEL ALVARADO MAL-
DONADO
ADRIAN ALVARADO MONZON
LEONARDO ALVARADO TORRES, SR.
BILLY ALVERSON, III
JENS ANDERSEN
SARAH ANDERSEN
BRENT ANDERSON
DAVID ANDERSON
DEMETRIA ANDERSON
WANDA ANDERSON
JOSEPH ANDRUS
ONSIN ANGEI
RODLY ANGEI
THOMAS ANGEI
HANSON ANINIS
WESLEY ANSELME
SAMRA ARAIN
LAURA ARAUJO GONZALEZ
CLYDE ARCHER
JESUS ARELLANES RAMIREZ

114

FIDEL ARGUMEDO RANGEL
JOSHUA ARMAS
DAVID ARMSTRONG
DEZMOND ARMSTRONG
JERI ARMSTRONG
KIMBERLY ARNONE
CONNER ARP
GERARDO ARROYO
ROSA ARROYO SANCHEZ
MARIA ARTEAGA
ROGELIO ARTEAGA
MAGI ARYANFARD
NORMAN ASBJORNSON
MARIA ASENCIO
JOHN ASHLEY, JR
DAVID ASHLOCK
MICHAEL ASHLOCK
TIMOTHY ASIMAKIS
CODY AUSBROOK
ROBERT AUSMUS
OSCAR AVELAR
JOSE AVILA
JOSEPH AVILA
GUSTAVO AVILA GARCIA
ZIN AW
SENG AWNG
ORLANDO AYALA
JASON AYDELOTTE
KRISTIN AYLETT
SHAHABUDDIN AZIZI
REZWAN BABAKARKHIL
NORA BACKUS
AMY BAGWELL ALF
JACOB BAIER
BROOKS BAILEY
ABEL BAKER
ADAM BAKER
BRYDRICK BAKER
DWIGHT BAKER
TRENITY BAKER
JUAN BALANDRAN
ANGELA BALDRIDGE
JOHN BALDWIN
CHANDEL BALLARD
PEDRO BALTAZAR
AMISS BANDA
CLAUDIA BANDA
RAMON BARAZARTE MENDOZA
MYLES BARBER
CHETT BARCELONA
DAVID BARKLEY
JUSTIN BARLETT
JAMES BARNES JR.
DAVID BARNETT
ANA BARRAGAN DE ALTENEH
LITZY BARRERA ROMERO
TERESA BARRON
CHRISTOPHER BARTH
FRANCISCO BARTOLO GAONA
SHERRY BATES
PHILIP BATTERSON
JAMES BAUGH
STUART BAUGH
JOSEPH BAWI
JOSHUA BAWI LING
JESSICA BEALL
SHANNON BECK

LIONEL BECKMAN
PHILLIP BEECHAM
MARK BEHN JR.
LEGEN BELCHER
BRANCE BELL
EFTON BELL
JASON BELL
SHAWNTRELLE BELL
ZAKEYIA BELL
RUBEN BELLIDO FERRER
ABBYGALE BENEFIELD
JAVES BENITEZ
DONNA BENNETT
FRANCIS BENNETT, JR.
JOSEPH BENOIT
BONNIE BENSON
DANIEL BENSON
DAVID BENSON
BRANSON BENTLEY
JARED BENTON
MARC BERBIG
KRISTOFER BERGGREN
CHRISTIAN BERGLOFF
IDA BERMUDEZ
LIDIA BERNAL BECERRA
DAVID BERRY
ANTHONY BERTON
NATHANIEL BERTON
SERGIO BESERRA
DANIEL BIGBY
KENNETH BIGHAM JR
JAMES BILLINGS
PHILLIP BINFORD
JESSICA BIRDWELL
BRADLEY BISHOP
ANTHONY BIXLER
DEAN BLACK
ETHAN BLACKMAN
CAMDEN BLAKELY
MAXIMILLIAN BLAKEMORE
JOSE BLANCO
DAVID BLEVINS
REBECCA BLOCK
DEVON BLOOD
DUSTIN BLOOD
JAMES BOBBITT
NICHOLAS BOBBITT
DANIEL BOELK
CHARLES BOELLSTORFF
JOSEPH BOERO
LAM BOI
LHING BOI
THANG BOI
DAMIAN BOLDEN
CONFIDENCE BOMS
ADELTRUDES BOND
JOSHUA BONEY
MICHAEL BONEY
JOSE BONILLA CANIZALEZ
ROGER BORJA BARREIRO
JOSEPH BOSS
CINDY BOSTICK
DANIEL BOWERS
LARRY BOWERS
EUGENE BOWMAN
KYLE BOWMAN
FRANCENE BOWSER

ALICE BOYCE
CHARMAINE BOYCE
JOHN BOYD
JUSTIN BOYD
LATOYA BOYD
MARC BRADBURY
BRIAN BRADFORD
ERIK BRANTNER
JUAN BRAVO SANCHEZ
KATHLEAN BRELAND
BENJAMIN BREMER
SETH BRESSLER
MATHEW BREWER
LANDON BRIDGES
KENNETH BRIEDWELL
CRYSTAL BRIGGS
CRAIG BRIGHTWELL
WENDY BRITO
QUINTON BROADNAX
JOE BROCK
NICHOLAS BROCKWAY
ARLUNDA BROOKS
KYLEE BROOKS
WINSTON BROSEKE
ARIELLE BROWN
DOMINIQUE BROWN
JAMES BROWN
JOVORIOUS BROWN
LONNIE BROWN
MITCHELL BROWN
SHENEQUA BROWN
STEVEN BROWN
JAVAN BROWN II
JOHNNY BROWN, JR.
JERRILIUS BRUCE
CHRISTOPHER BRYANT
ISAIAH BRYANT
SEQUOYAH BUCHANAN
LELAND BUDKE
VAN BUI
JAMES BUIE
ROBBIN BULLARD
HAYDEN BULLINGER
HEATHER BULLOCK
JASON BUNNELL
SCOTT BURGESS
LATISHA BURKHALTER
WHITNEY BURKS
BLAKE BURNETTE
ROBYN BURNETTE
NAKIA BURRIS
CLIFTON BURRUS
CHRISTOPHER BURTON
WAYNE BUSH
ADRIAN BUTLER
ROSA BUTLER
JOSEPH BUXTON
JESSEE CABLE
ELSA CABRERA
ISABELLE CABRERA
JANIBAL CABUDOY
ALEJANDRO CADENA
FERMIN CADENA
MARBELLA CADENA
CLEVELAND CAGE, JR.
YOSMAR CALDERA HERNANDEZ
MARGARITO CALDERON
SANDRA CALDWELL
GARRETT CALE
TYLER CALICO
JORGE CALIXTO
EDWARD CALLOWAY
MARIO CAMACHO HERNANDEZ
PETER CAMERON
TEVIN CAMERON
DAVID CAMPBELL

ROBERT CAMPBELL
RUSTI CAMPBELL
TOMMY CAMPBELL
ODESS CAMREN
CHRISTIAN CANDLER
GILDA CANNADY
MARIKIA CAPERS
BILLY CARDER
DREW CARDOZA
GINA CARGILE
ANABELL CARMACK
TODD CARNER
WILLIAM CARNLEY
MARIELYS CARPIO
LISA CARRIERO
GRACIELA CARRILLO
MICHAEL CARRILLO
WILLIE CARRINGTON
DAVID CARROLL
VINCENT CARSON
KENDRIX CARTER
KEYSHAWN CARTER
ROBERT CARTER
TIANA CARTER
ROBERT CARTWRIGHT
ISMAEL CARVAJAL
CRISTOBAL CARVAJAL COLORADO
ARACELI CARVAJAL MENDOZA
BEATRIZ CASIANO
JORGE CASTELLANOS
MARIO CASTRO JR.
GIOVANNI CAVELLO GONZALEZ
ESTEPHANY CAVELLO-GONZALEZ
MARGARITO CAVELLO-PENALOZA
SHAWN CAVIN
BRIAN CAVNER
HECTOR CAZARES
ADAN CEASAR
CORNELIO CEJA GRIMALDO
FRANCISCO CERVANTES
SAVANNA CERVANTES
BRYAN CHADWELL
FABIAN CHAIREZ HERNANDEZ
GUADALUPE CHAIREZ-GALAN
ANGEL CHALK
LARRY CHALK
RICKY CHAMBLISS
ROBERT CHANEY
TERELL CHANEY
AMBER CHAPMAN
DUSTIN CHAPMAN
PATRICK CHAPMAN
DEMOND CHASEBERRY
ALEEX CHATKEHOODLE
EDGAR CHAVEZ
GREGORY CHAVEZ
CLAY CHEATHAM
REBECCA CHEEK
ZHENYU CHEN
KEVIN CHESTNUT
ANCHENNIN CHEYPOT
RANCE CHILDS
JEFFREY CHIPPEWA
DENNIS CHISM III
CHRISTOPHER CHOATE
CONNER CHOATE
EDDIE CHOATES
TERRANCE CHOICE JR
MANGKHONGAM CHONGLOI
KAREN CHRISTENSON
AWI CIANG
LUN CIANG
MAU CIIN
NING CIIN
KHAI CIN
KHAM CIN

LANG CIN
LANGH CIN
LUAN CIN
PAUL CIN
THANGHAU CIN
TUAN CIN
VUNG CIN
VUNGH CIN
AIH CING
ANGELA MAN CING
AWI CING
CIANG CING
CIN CING
CING CING
DIM CING
DON CING
GLORY CING
LIAN HAU CING
LIAN LUN CING
LUN CING
LUN LAM CING
MAN DEIH CING
MAN LUN CING
MAN ZA CING
NANG CING
NEM CING
NGAI CING
NGOIH CING
NIANG CING
NIANG LUN CING
NIANG SAN CING
NING HAU CING
NING SAWM CING
NUAM CING
NUAM SUAN CING
SAN CING
THANG CING
THANG LAM CING
THANG ZA CING
VERONICA CING
VUNG CING
ZEN CING
ZEN NEM CING
THERESA CING KOK
DAVID CIRIACO
JUSTIN CLAIBORNE
LOURDES CLANCE
GEORGE CLARK
JASON CLARK
PATRICK CLARK
SAMUEL CLARK, JR.
NIKOLAI CLAWSON
TONYA CLEEK
JUAN CLEMENTE VALLADARES
WILLIAM CLEVELAND
CLIFTON CLINE
TERRY CLONTZ
RONNIE CLOWERS
MARK COBB
ROBBIE COBBLE
JEROMY COCKRELL
TROY COCKRUM
MADENA COFFEE
BEATRICE COLE
MICHAEL COLE
ROBERT COLE
CLAYTON COLLINS
JENNIFER COLLINS
MYRA COLLINS
AARON COLUMBUS
DAVID COMER
STEFANI COMPTON
JAMES CONAWAY
BOBBY CONDITT
DALE CONKWRIGHT
DAMON CONN
JUDE CONNOLLY

AMIEL CONTRERAS
YESENIA CONTRERAS
MARK COOK
MICHAEL COOK
RAYMOND COOK
ALAINA COOKS
ALFRED COOKS
MICHAEL COOLIDGE
SCOTT COON
DONNA COONFIELD
GREGORY COOPER
JAMES COOPER
STEPHAHN COOPER
STACEY CORDELL
CRYSTAL CORDOVA
MARIANA CORDOVA
JUSTIN CORLEY
JAMES CORNETT
MARIA CORONA
GENOVEVA CORONA
DE RIVERA
ENRIQUE CORTES
MICHAEL CORTEZ
CALEB COTTON
FRED COTTON
MEAGAN COTTON
VERNON COUSINO
CAMERON COX
DAVID COX
DUSTIN COX
KATLIN COYLE
ADRIAN CRABTREE
CARL CRABTREE
JACOB CRABTREE
KATHLEEN CRABTREE
STEPHAN CRABTREE
ZACHARY CRATES
ALBERT CRAWFORD
BRADLEY CRAWFORD
THOMAS CRAWFORD
WALTER CRAWLEY
COURTNEY CRAYNE
JACOB CRAYNE
JAKE CRISS
ZOEY CRITES
HEATH CRITTENDEN
DAVID CRONISTER
JON CROSS
TYLER CROSS
MATTHEW CROUCH
DARRELL CROW
WILFREDO CUELLAR
CHRIS CUMMINGS
ROBERT CUMMINGS
CHRISTOPHER CURTIS
KEVIN CYRUS
MARCO DABNEY
ZIRAM DAHKUM
ZAWNG DAI
CING DAL
GIN DAL
GO DAL
JOHN DAL
NENG DAL
LIAN DAL
CARRIE DAME
HENLEY DANG
JOHN DANIELS
JUSTIN DANIELS
LAQUENTIN DANIELS
TUAN DAO
JENIFUR DAVIDSON
AMANDA DAVIDSON-GOLIEN
BESSIE DAVIS
CAMERON DAVIS
CRAIG DAVIS
DARRYL DAVIS

JASON DAVIS
JERRY DAVIS
KOBE DAVIS
MARCUS DAVIS
MATTHEW DAVIS
RICHARD DAVIS
TERRANCE DAVIS
RANDALL DAVIS JR.
BILLY DAVIS, JR.
JEFFERY DAWSON
SUSAN DAWSON
DANIEL DE CASAS
EVA DE LA TORRE
YOANA DE LA TORRE
J'ME DEAN
JAMES DEATHERAGE
RICHARD DECAMP
TEARA DEGNER
RUBEN DELANY
ISMAEL DELAPAZ
MATIAS DELAPENA JR
DOREEN DELEO
JUANA DELOBO
RAQUEL DELUNA
MATTHEW DEMAREE
RUSSELL DEMOSS
BARRY DENNIS
HELEN DENNIS
MICHAEL DENNIS
JOSEPH DENTON
JASON DEREAS
JOSHUA DESHAZER
MATTHEW DESHAZER
CALEB DEVENNY
AUDENCIA DEVILLA
ROY DEVILLE
SRIJAN DHAKAL
ALEXANDER DIAZ
JONATHAN DIAZ
MELISSA DICKERSON
JUSTIN DILLON
CIANG DIM
DAW DIM
DON DIM
HAU DIM
MAN DIM
MONICA CING DIM
NIANG DIM
THANG DIM
VUNG DIM
JOHAN DINA
LIAN DING
CONG DINH
QUANG DINH
TIEN DINH
DOMINIC DIONNE
CURTIS DIXON
LADARIOUS DIXON
DANE DIXSON
KAM DO
AUSTIN DODSON
SOL DOMINGUEZ
DOMINGO DOMINGUEZ
TINOCO
NGOI DON
NIANG DON
ZAM DON
WAYNE DONATO
CIN DONG
ANGELA DONKA
MKSING DOPMUL
NANG DOPMUL
NGAILAM DOPMUL
NIANGNUAM DOPMUL
THANGMINLIAN DOPMUL
VUNGLAM DOPMUL
BROOKE DORSETT

JEREMY DOTSON
STARLENNA DOUGLAS
TIMOTHY DOWNS
JORDAN DOZIER
ROGER DRAINE
RENNEE DRAKE
DION DRANGSTVEIT
DAVID DRAPALIK
SENECA DRENNAN
CATHRYN DUBBS
LAQUETTA DUBLISKY
DOUGLAS DUBUC
SAMUEL DUELL HARRIS
THERESA DUGAN
CHRISTOPHER DUNCAN
GUY DUNN
JUSTIN DUNN
KELSON DUNN
LANIKA DUNN
MONICA DURAN GOMEZ
RALPH DURBIN
LATRAYVIS DURHAM
KYLE DURNING
MATTHEW DURRANCE
MELISSA DUWE
JUSTIN DYKMAN
CHRISTOPHER EASON
PEYTON EASTEP
KRYSTLE EDENS
DAVID EDGINGTON
TYLER EDWARDS
MARDIN EJERCITO
JOSEPHINE ELIEISAR
JOYFULL ELIEISAR
REIPIN ELIMO
CHRISTOPHER ELLERS
JAMES ELLIS
JEANNE ELLIS-RAPSON
DANA ELMER
AUSTIN EMBRY
KHAM EN THANG
TINISHA ENGLISH
KENDALL ENGRAM
ERICK EPPERSON
BENJAMIN ERNST
TILDA EROCH
STEVEN ERVIN
ENRIQUE ESCARSEGA
CARLOS ESCOBAR KANAN
BRYAN ESCOBEDO
JUWANGIU ESIWILI
DWIGHT ESKEW
JOAN ESPINA MATHEUS
LEON ESPINOZA
COLBY ESPREE
DEQUAILEN ESPY
DELIA ESTRADA
ALEXIS EVANS
JOHN EVANS
STEVE EVANS
CHAD EVERS
JOSEPH EWERS
KURTIS EWING
JESSE EWTON
MARCUS FAGGANS
ARACELY FAGLIE
RYAN FAIR
SHAWN FAIRLEY
JESSICA FARIA PORTILLO
SUSAN FARRIS
KELLY FAULKNER
AMY FEHNEL
JEFFREY FEHR
CARLOS FERREBUS RIVAS
GUSTAVO FERRER ARBAIZA
ALFRED FETTERHOFF, JR
GARY FIELDS

THOMAS FIERROS
V CHOK FILIPUS
CARLINTA FILLAS
CALVERT FILLIPUS
ANDREW FINCH
NORRIS FINCH, JR.
JESSICA FINKBINER
JEFFREY FISHER
SAMUEL FISHER
DARIAN FITTS
CHARMANIQUE FITZPATRICK
ISAAC FLAHERTY
SHAKARIAH FLAMER
CHASTINEY FLETCHER
PHILIP FLOOD
CAROLINA FLORES
EFIGENIA FLORES
GLORIA FLORES
LAURA FLORES
JOEL FLORES ROBLES
JAMES FLOYD
JON FLOYD
MARCUS FLOYD
MARK FLY
ANITA FOGLEMAN
RENA FONTENOT
AARON FORBIS
CARLOS FORD
REBECCA FORD
CAMERON FORREST
GULLIVER FORRESTER
PAUL FORTNER
CHRISTOPHER FOSTER
FREDERICK FOSTER
WYEATHA FOSTER
XAVIER FOSTER
BRANDON FOWLER
LORETTA FOWLKES
JOHNNY FOX
KENNETH FOYIL
ROBERT FRANCE-BURTON
EYLIDD FRANCO
RUBEN FRANCO GOMEZ
JOSEPH FRANK
PHILLIP FRANK
WARREN FRANKLIN
ISAIAH FRANKS
DOUGLAS FRANZ
ELVIS FRASCINI
GREGORY FRAZER
BRANDON FREEL
JOSE FREGOSO
RICKY FRENCH
ANGEL FRIAS
TIMOTHY FRIAS
BRANDON FRICK
BARRY FRIEND
ALEK FUCHIK
DENNIS FULLER
JERRY FULLER
BRANDON FULLINGTON
LUIS FUMERO PEREZ
ANDRE FURMAN
DANIEL FYFFE
RONY GADIWALLA
SARA GAITHER
CECILIO GALAN
GREGORY GALUSHA
ALEJANDRO GAMEZ GARZA
ETHAN GAMRAK
DANA GANNAWAY
BALERIANO GAONA, JR.
MARIA GARAY
FRANCISCO GARAY CORONA
MARIA GARAY LOYO
ANGEL GARCIA

JOE GARCIA
JOSE GARCIA
JOSE GARCIA
STEVEN GARCIA
YARITZA GARCIA
ISIDRO GARCIA ARRIAGA
TERESITA GARCIA DIAZ
JUAN GARCIA RAMIREZ
LESLIE GARCIA TAPIA
ROGER GARCIA TAPIA
QUINCY GARDNER
NORMA GARIBAY VILLENA
MICHAEL GARLAND, JR.
JAMES GARNER
CASON GAROUTTE
ALEXIS GARZA
JOSHUA GENTRY
CHASTON GEORGE
JAMES GEORGE
STEPHANIE GEORGE
KURSTON GERTY
GABRIEL GIACHINO
CHARLES GIBSON
JUSTIN GIBSON
KENNETH GILES
WILLIAM GILL
KAREN GILLISPIE
CHAD GLOVER
JOSE GOMEZ
JUVENTINO GOMEZ
MARIA GOMEZ
REIQUEL GOMEZ
MARIA GOMEZ MEDINA
ADRIAN GONZALEZ
IMELDA GONZALEZ
JAMES GONZALEZ
MARISELA GONZALEZ
PILAR GONZALEZ
ROBERTO GONZALEZ
ABRUM GONZALEZ ALTER
NUVIA GONZALEZ CANIZALEZ
MARIA GONZALEZ DE CAVELLO
ISMAEL GONZALEZ LOEZA
VICTOR GONZALEZ PAOLINI
LIDIA GONZALEZ RIVERA
DELFIN GONZALEZ VILLAMIZAR
DAMON GOODAY
OWEN GOODRICH
BARRY GOODSON
LATOYA GORDON
SHYNETTE GRACE
JASON GRAHAM
JERRY GRAHAM II
MARLEITTA GRAMMER
CLOTHERE GRAMMONT
BUENAVENTURA GRANADOS-
RUBIOS
DOUGLAS GRANT
MEKION GRANT
APRIL GRAUGNARD
DETROIT GRAY
DREW GRAY
ANTHONY GREEN
JONATHAN GREEN
WILLIAM GREEN III
SHEMITA GREER
KENDRA GRIDER
STARLA GRIFFIN
DAKOTA GRIGSBY
RONALD GRIMES
JOHN GRUNDMANN
RACHEL GRUNDMANN
JUAN GUERRA MEDINA
GERARDO GUERRERO
CASTELLANOS
LUIS GUEVARA

MARIA GUEVARA
RODOLFO GUEVARA
CAROLINA GUILLEN
ZACHERY GUILLORY
RONALD GUINN
VERNICE GUINN
JOHN GULDEN
AARON GUNN
BRANDON GUNTER
GILBERTO GUTIERREZ
SILVIA GUTIERREZ MENDOZA
EUGENE GUY
GEORGINA GUZMAN
LUIS GUZMAN
FRUTZEL HAGAN
SARA HAGAN-INGLE
SCOTTY HAGLER
DAMON HAIL
NGAM HAK
TIMOTHY HALBERT
REBECCA HALE
JOSHUA HALFPAP
DENNIS HALL
GENE HALL
KELLY HALL
PIERRE HALL
STEPHANIE HALL
STEPHEN HALL
DAVIN HALLFORD
ZACHARY HALSEY
G. SCOTT HAMILTON
SHELLIE HAMMERS
JEFFREY HAMMONS
ANDEREAS HAMO
CHRISTOPHER HAMON
CIN HAN
MUNG HANG
THANG HANG
LAL HANGSAWK
LAM HANGSAWK
ROBERT H HANSEN
ROBERT T HANSEN
CAITLYN HANSON
TONG HAO
CHIN HAOKIP
HOLKHOSEI HAOKIP
LHUN HAOKIP
PAO HAOKIP
COLE HARBICK
DEREK HARBIN, SR.
DANIEL HARDIN
NATALIE HARDIN
JOHN HARDT
SCOTT HARJO
BRUCE HARMAN, II
JOSHUA HARMON
JANTORIO HARPER
DAVID HARPER JR.
DONALD HARRIS
JERRY HARRIS
SHIRON HARRIS
STACEY HARRIS
BRYAN HARRISON
N-LAST HARRY
DANIEL HART
LEVI HARTLEY
JOSHUA HARTMAN
ROBI HARTMANN
JORDAN HARVEY
DUSTIN HASBROUCK
HEATHER HASKINS
ARCHIE HASS III
CING HAU
KAM HAU
THANG HAU
THANG HAU

NENG HAU LIAN
MATTHEW HAUETER
ADRIUN HAWKINS
DESTINY HAWKINS
DEVARDUUS HAWKINS
ERIC HAWKINS
JALAN HAWKINS
BILLY HAWLEY, JR.
CORY HAYES
LUCAS HAYS
JOSHUA HEAD
STEVE HEAD
RYAN HEDRICK
ANDREA HEIDT
TERRENCE HEINBERG
AUSTIN HELTON
LUKE HEMPHILL
CHAKIRIS HENDERSON
DANIEL HENDERSON
ERIC HENDERSON
SUSAN HENDERSON
MELISSA HENLEY
NATHAN HENLEY
ASTIN HENRY
KENNETH HENRY
ARMANDO HERNANDEZ
CORCINA HERNANDEZ
FELIPE HERNANDEZ
JOSE HERNANDEZ
KARI HERNANDEZ
LUIS HERNANDEZ
MARIANO HERNANDEZ
CESAR HERNANDEZ DOMINGUEZ
AMADA HERNANDEZ ESCOBEDO
OSCAR HERNANDEZ OJEDA
AXEL HERRERA BAEZ
PAOLA HERRERA REAL
JAYE HERRMANN
BRIAN HESS
MARK HESTON
DERRICK HICKMAN
MICHAEL HICKMAN
MASON HIDALGO
SAM HIGGINBOTHAM
LARRY HIGHFIELD
DONALD HILL
JUDITH HILL
MICHAEL HILL
RUSSELL HILL
SANTANYA HILL
SONYA HILL
DAVY HILL, JR.
D'ANNA HILTON
LAMONT HINES
TYSON HINTHER
DEJA HIXON
TU HKAWNG
MIN HLA
THANG HMUNG
TUANG HNIN
SIEW HO
JACOB HOBBS
STEVEN HODGE
ANDREW HODGES
TAQUISA HODNETT-SMITH
STEPHEN HOFFMAN
LENA HOGAN
SIAN HOIH
CHRISTOPHER HOLBROOKS
RICKEY HOLCOMB II
JEFFERY HOLDEN
BRANDIE HOLLAND
MARCUS HOLLAND
SEDRIC HOLLAND
ANTHONY HOLLISTER
CODY HOLT

DESIREA HOLT
LAWRENCE HONEL
ZACHERY HONEL
ANASTASIA HONN
STEPHEN HOOVER
BRANDON HOPKINS
DEREK HOPKINS
NICKILIS HOPPER
ANGELA HORELLOU
TODD HORELLOU
SHELBY HORNBERGER
STANLEY HORTON
NU HOU
MANGTHOUNG HOU KIP
SANDRA HOUSE
JERRY HOUSEMAN
MATTHEW HOUSTON
RICHARD HOUSTON
AARON HOWARD
ANTHONY HOWARD
DAVID HOWARD
MICHAEL HOWARD
DARIN HOWELL
DEVONA HOWELL
DONALD HOWELL
SAW HTOO
YEAUNG HTWE
CING NGAIH HUAI
CING ZA HUAI
DIM HUAI
JULIA HUAI
MUAN HUAI
NIAL HUAI
NUAM HUAI
SIAN HUAI
VERONICA HUAI
THANG HUAT
SCOTT HUBER
JOHNNY HUDDLESTON
DANNY HUELSENBECK
ROGELIO HUERTA FERRUSQUIA
KENNETH HUGHES
TRACY HUGHES
MATTHEW HUMMEL
JERAD HUMPHREY
LARRY HUMPHREY
KHAN HUNG
CRYSTAL HUNTER
MICHAEL HURD
RONALD HUTCHCRAFT
CRYSTAL HUTCHINGS
DUNG HUYNH
LOC HUYNH
THANH HUYNH
JESUS IDROGO BLANCO
BRANT INGALLS
JUAN INGRAM
GLADWIN INOS
JEFFRY INTY
OTILIA IOWANES
REGINALD ISAAC, SR
ERATH ISLAS
TU JA
KHAI JA KHUP
BELINDA JACKSON
JAMES JACKSON
JEFF JACKSON
MARY JACKSON
NATHAN JACKSON
CAMERON JAEGER
JAN JALALI
JOSE JAMAICA
JOSE JAMAICA CARRENO
MUSAFAR JAN
ESTHER JASUAN
MICHAEL JAUDES JR.
LUKE JEADRIK

CURTIS JENKINS
JAMES JENKINS
WADE JENKINS
DAKOTA JENNINGS
TERRIELLE JENNINGS
STEVEN JENSEN
CODY JEWELL
SAUL JIMENEZ
MICHAEL JIMENEZ LOPEZ
JAMEE JIMERSON
FREDERICK JIMMERSON
CHAITANYA JOHAR
ALEXIS JOHNSON
ARMAND JOHNSON
BRIAN JOHNSON
CALEB JOHNSON
CHARLES JOHNSON
EBONI JOHNSON
HAEGAN JOHNSON
JEREMIAH JOHNSON
JEREMY JOHNSON
JUSTIN JOHNSON
KEITH JOHNSON
KENDAL JOHNSON
KENRICK JOHNSON
LESTER JOHNSON
MICHELLE JOHNSON
ROBERT JOHNSON
RODNEY JOHNSON
TEDDY JOHNSON
TODD JOHNSON
TRISTAN JOHNSON
ZACHARY JOHNSON
BILLY JOHNSON SR
RON JOHNSTON
RODNEY JOLLEY
ANDRE JONES
CHEKESHA JONES
CLARISSA JONES
CONNIE JONES
DANNY JONES
DAVID JONES
DERRIC JONES
DUSTY JONES
ELIJAH JONES
GARON JONES
JERMONE JONES
KATHY JONES
KEVIN JONES
MATTHEW JONES
RAYMON JONES
REMIA JONES
TYLER JONES
DANNY JONES JR.
RONALD JORDAN
SEAN JORDAN
JESSICA JORDAN
AFINO JOSEPH
TJ JOSEPH
KRYSTAL JOWERS
MARTIN JUAREZ
YOLANDA JUAREZ
MARIA JUAREZ RIVERA
DERMIDIO JUEZ PEREZ
MICHAEL JULIAN
LEANDRO JUMELLES NUNEZ
LASHETIA JUSTICE
HA KA HA
NATALY KADDOURA
DAVID KAHURA
ZAM KAI
GARRETT KAISER
JASON KALE
LIAN KAM
MANG KAM
NGIN KAM
KERSON KANSOU

GO KAP
LIAN KAP
THANG KAP
SIAN KAP LIAN
JAMIE KAPULE
BRIAN KASTL
SAMUEL KASUNI
KEDATSA KAUDLEKAULE
JEFFREY KAUFMAN
ERYN KAVANAUGH
LIA KAW
TUANG KAWI
NENGLIAN KAWNGTE
TROYCE KEITH
BRADLEY KELLEY
BRANDON KELLEY
KENNETH KELLY, JR
DAKEYLON KENNEDY
GREGG KENNEDY
TRUMAN KEPLINGER II
RICHARD KERNAL
KENNETH KEYS
ABRAHAM KHAI
DAL KHAI
DAVID KHAI
EN KHAI
HANG KHAI
HAU KHAI
JOHN KHAI
KAM KHAI
KHAM CIN KHAI
KHAM KHAN KHAI
KHUAL KHAI
KHUP KHAI
KIM KHAI
MANG KHAI
NGIN KHAI
PAU KIM KHAI
PAU SIAN KHAI
PAU SUAN KHAI
PAU ZA KHAI
PAUL KHAI
PETER KHAI
THAN KHAI
THANG H KHAI
THANG KHAN KHAI
THANG KIM KHAI
THAWNG KHAI
ZAAM KHAI
ZAM KHAI
ZAM KHAI ZOMI
THURA KHAING
DONGH KHAM
GO KHAM
KAM KHAM
LIAN KHAM
MUNG KHAM
NGUN KHAM
PAU KHAM
THAWNG KHAN
THANG KHAT
CING KHAWL
CING DON KHAWL
CING KHEK
KAM DO KHEN
PETER KHEN
NIANG KHOI
DAI KHUAL
HAU KHUAL
KAM KHUAL
KHUP KHUAL
NANG KHUAL
PAU SAWM KHUAL
PAU KHAN KHUAL
PAU ZA KHUAL
THANG SIAN KHUAL
THANG LIAN KHUAL

THANG S KHUAL
CIN KHUP
DAI KHUP
KAP KHUP
LANGH KHUP
LIAN KHUP
NANG KHUP
PAU CIN KHUP
PAU LIAN KHUP
THANG GO KHUP
THANG SUAN KHUP
THAWNG KHUP
ZEN KHUP
CASEY KIDWELL
BIAK KIL
ANDREW KILGORE
CIIN SAN KIM
CIIN SAN KIM
CING KIM
DIM LIAN KIM
DIM NGAIH KIM
EDWARD KIM
MAN KIM
NANG KIM
NENG KIM
NIANG SAN KIM
NIANG SIAN KIM
NICOLAS KIM
PA KIM
THANG KIM
THANG DEIH KIM
THANG ZON KIM
ZAM KIM
JAMEKA KIMBLE
JOE KINCADE
KENOSHA KINDLE
ANANDA KING
BRANDY KING
CODY KING
JOSEPH KING
STACEY KING
KORBY KINKADE
NICOLAS KINKADE
ROGER KINKADE, JR.
MANGNEO KIPGEN
HANNA KIRK
JOSHUA KIRK
SEBASTIAN KITTERMAN
ALAN KIZER
SPENCER KIZER
ZAKARY KIZER
SEAN KIZZEE
KATHERINE KJELLAND
DANIEL KLINE
STEPHEN KLING
ROBERT KNEBEL
SPRINGER KNIGHTEN
GARY KNUDSEN
LAURA KNUDSEN
COURTNEY KNUDSON
LINDSEY KOHOUT
BUDDY KONS
JAMES KOSS
DAVID KOSTA
STEVEN KOSTA
ROBERT KRAFJACK
NEBOJSA KRESOVIC
MIKHAIL KRUPENYA
ADAM KUBICKI
RAYMOND KUHN
JAY KUS
SERLYN KUS
LIANA KUSS
SCRAM KUSS
CASSY KUYKENDALL
NICHOLAS KUYKENDALL
ALEXANDER KUZNETSOV

117

NGIN LAANG
THOMAS LABOUBE
MATTHEW LACEY
BOBBY LACY
CHARLES LADD
LANTZ LAFON
LUIS LAGUNAS
YAWSEP LAHPAI
GIANG LAI
MARK LAKE
KAP LAL
LUN LAL
ZVJEZDANA LALIC
GIN LAM
MUNG LAM
ANGELA LAMBERT
ANNETTE LAMBERT
CHAUNZE LANCASTER
CANDACE LANCE
CARTER LANDON
JEFFERY LANDRUM
MYOSHIA LANDRUM
ROADY LANDTISER
DEBORAH LANE
TRE'QUAWEN LANE
GIN LANG
PUM LANG
DO LANGH
HAU LANGH
KAP LANGH
THANG LANGH
THAWNG LANGH
MICHAEL LANTZ
HANDSOME LANWE
CAMERON LAPOLLA
DAWN LAPOLLA
DANIEL LAPRES
VIRGINIA LARRABEE
HUGH LASATER
SENG LASI
KATHRYN LAUE
SHAWN LAUSCHER
JUAN LAVEZZARI
JENNIFER LAW
DIM LAWH
MAN LAWH
JOYCE LAWRENCE
STEVE LAWRENCE, JR
JEFFREY LAWSON
RUBY LAWSON
STEPHEN LAWSON
BONG LE
LAI LE
JACOB LEACH
CHAUNAH LEATCH
PETE LEDBETTER
ALLEN LEE
PO LEE
MATTHEW LEEPER
ARIEL LEFF
GREGORY LEFFLER
MARK LEHMAN
LUN LEK
CLIFFORD LEMAY
LAURIN LEMLEY
NIANG LEN
CESAR LEON MEDRANO
ZACHARY LESTER
ROBERT LETLOW
ADUNTE LEWIS
ALICE LEWIS
ANNA LEWIS
JOSEPH LEWIS
MARQUEE LEWIS
MICHAEL LEWIS

118

CYNTHIA LEYVA
VAH LHING
AWI D LIAN
AWI NGAIH LIAN
CIN KAP LIAN
CIN SUAN LIAN
CIN ZA LIAN
CING KHAWM LIAN
CING NGAIH LIAN
CING THEIH LIAN
DO LIAN
DONG LIAN
GIN DON LIAN
GIN KHAN LIAN
GO LIAN
HUAI LIAN
ISAAC LIAN
JOSEPH LIAN
KAM LIAN
KAP LIAN
KAP NGO LIAN
KHAM LIAN
KHUAL LIAN
NANG LIAN
NIANG LIAN
NO LIAN
NOK LIAN
PA LIAN
PAU DAL LIAN
PAU MUAN LIAN
PAU NEIH LIAN
PAU SUAN LIAN
PAW LIAN
SIAN LIAN
THANG KHEN LIAN
THANG NGAIH LIAN
THANG SAWM LIAN
VI LIAN
VUM LIAN
ZAM LIAN
LAL LIANA
SAWM LIANA
MICHAEL LILLARD
PING LIN
TUNISSAH LINDSEY
KEITH LINKER
BRIAN LITTLE
SERGEI LITVINOV
ETHAN LIVELY
ANGELICA LIZARRAGA OLIVAS
JERRY LOAR
WILLIAM LOCKWOOD
MATTHEW LOEWEN
BENJAMIN LOGSDON
NICKOLAS LOGSDON
SCOTTY LOGSDON
JAMES LONDONO CORO
GERALD LONG
ALAN LONGWORTH
BENNY LONSDALE
ANGEL LOPEZ
BENJAMIN LOPEZ
JONATHAN LOPEZ
MARGARITO LOPEZ
MARIO LOPEZ
NICELT LOPEZ
RUBEN LOPEZ
THOMAS LOPEZ
JOSE LOPEZ AZUAJE
ERNESTO LOPEZ BECERRA
EDUARDO LOPEZ OLIVARES
JOSE LOPEZ OLIVARES
JEMBO LOUIS
KOLBY LOUIS
JASON LOVETT

TIMOTHY LOWE
EDGAR LOZANO
CING LUAN
DANIEL LUCAS IV
DANIJELA LUCIC
HUNTER LUDGATE
JARROD LUDLOW
QUANNAH LUDLOW
EVELYN LUGO-ORTIZ
JORGHELYS LUJAN GOMEZ
DAWN LUKE
CING N LUN
CING SAN LUN
DIM LAM LUN
HKIN LUN
KIM LUN
LIAN LUN
MAN LUN
NIANG KHAW LUN
NIANG NGAIH LUN
TUAL LUN
VAN LUN
THANG LUONG
JONATHAN LUSUN
THI LUU
JACOB LUZIER
KELLY LYBARGER
SAMUEL LYNCH, JR.
HAMSAR MABU
ASHLEY MACEDO
JORDAN MACK
RUSTIN MACKEY
LARRY MADALONE, II
DANIELA MADRID
TIMOTHY MAHAFFEY
DENA MAHAN
CORY MAHONEY
JAYDON MAHR
TAM MAI
CARLOS MALONE
JEFFREY MALY
CING MAN
LIAN MAN
ZEN MAN
TAM MANA
ALEJANDRO MANCILLA
DANIEL MANCILLA
MARIA MANCILLA
CHIN MANG
CIIN MANG
CIN MANG
CING MANG
DAL MANG
EN MANG
GIN GO MANG
GIN KHUP MANG
HAU MANG
HAU DO MANG
KAM MANG
KHAM LAM MANG
KHAM TUNG MANG
KHAN MANG
KHUP MANG
KIM MANG
LAGH MANG
LIAN MANG
LIAN KHEN MANG
LIAN NGAIH MANG
LIAN SIN MANG
LINUS MANG
NING KHAN MANG
NING SIAN MANG
PAU LIAN MANG
PAU MIN MANG
PAU SUAN MANG

PHILLIP MANG
THANG MANG
ZAM MANG
ZEN MANG
CASEY MANNING
MARQ MANNING
JAROME MAPPS
ZAU MARAN
FREDDY MARCANO
APRIL MARGWARTH
PAUL MARGWARTH
ALEXANDRU MARIN-SERGHIE
DARRYL MARKS
MARIA MARQUEZ DE-GILBREATH
MARIANA MARQUEZ MARQUEZ
CORINA MARQUEZ ORTEGA
ANA MARROQUIN
FRANCISCO MARRUFO JR
VICKEY MARS
BILLY MARSH
ERROL MARSHALL
NATHAN MARSHALL
OB MARSHALL
ANTONIO MARTIN
KERRY MARTIN
MICHAEL MARTIN
WILLIAM MARTIN
FLORENTINO MARTIN-ROMO
AMANDA MARTINEZ
ALEJANDRO MARTINEZ HAROS
HECTOR MARTINEZ MOLINA
ALICIA MARTINEZ SUAREZ
BEVERLEY MASON
DAVID MASON
JAMES MASON
SHERIDAN MASON
CRISTIE MASSEY
CRYSTAL MASTERS
MARCELINO MATA
LOVELY MATHEUS
LOVESON MATHEUS
DATRAVIAN MATHIS
ELVIN MATHIS
DONALD MATTHEWS
KENNETH MATTHEWS
ANDREW MATZKE
RON MAUCH
CIIN MAWI
HANAH MAWI
RAM MAWI
PATRICIA MAXIMO
LEONARD MAXWELL
DEVON MAY
JANIYA MAYFIELD
KEITH MAYFIELD JR
SHANE MAYHUGH
BRIDGET MCALISTER
TINA McBEATH
ROBERT McBOWMAN
BRENT MCCARTY
CHRISTOPHER KEITH MCCLAIN
CHRISTOPHER ROSS McCLAIN
FRANCIS MCCLAIN
JAWAUN MCCLAIN
RYAN McCLAIN
ROBERT McCLEARY
DIRK McCLELLAN
LARRY MCCLURE
AARON McCONNELL
MICHAEL McCONNELL
DEBRA MCCOWAN
WESLEY McCOWAN, JR.
MICHAEL McCUIN
CAMERON MCDANIEL
JAMES McELROY

NICHOLAS McELROY
CLAYTON McFALL
JEFFERY McGEE
RONNIE McGEE
ARTONIO McGILBRA
DAVID McGILL, JR
REIS MCGREW
JASON McINTIRE
PETER MCINTIRE
AIMEE MCINTOSH
DENISE McINTOSH
GLORIA MCKEE
JERIKEO MCKINLEY
BROOKE MCKNIGHT
LAMAR MCLEMORE
MICHAEL MCMILLAN
JOSIAH MEADE
GINA MEANS
JON MEDEIROS
ASHTON MEDINA
SARAH MEDINA
LUIS MEDINA MARCANO
MICHAEL MELLOTT
SOFIA MENAS
ALAN MENDEZ GOMEZ
SILVESTRE MENDEZ GONZALES
ANGELA MENDOZA
ANTONIO MENDOZA
JUSTIN MENNING
BILLY MERRELL
JOHNNY MERRELL, JR
RYAN MERRITT
HERNAN MESA SAEZ
STEVEN METCALF
JENNIFER METCALFE
KEYVIN MIDASY
CARMEN MILAM
GLENN MILAM
MICHAEL MILES
ANTONIO MILLER
CHLOE MILLER
RUTH MILLER
SHELLY MILLER
PHILIP MILLMAKER
ASHLEY MILLS
JOSEPH MILLS
TYRELL MIMS
JERRIC MINOR
ALFREDA MITCHELL
BRYCE MITCHELL
CARL MITCHELL
DALLAS MITCHELL
JOSEPH MITCHELL
PORSHA MITCHELL
ROBERT MITCHELL
JAY MODISETTE
BIASNEY MOJICA CASTANEDA
JOSUE MOJICA TORRES
CINDY MOLINA
ALEXIS MONASTERIO AGUILERA
JOSEPH MONDILLO
JOSEPH MONFORTE
OFELIA MONREAL
DINORA MONROY DE DIAZ
KARINA MONSIVAIS NAVARRO
LILIANA MONTALVO
IRIS MONTANEZ
FIORELA MONTANO
NATALIE MONTANO
BLANCA MONTOYA
JOHNNY MONTOYA
HERBERT MOORE
JOSHUA MOORE
PHILLIP MOORE
TIFFANY MOORE

TONY MOORE
ALFONSO MORAN
DYLAN MORANTES
DANIEL MOREHEAD
TONY MOREHEAD
WARD MOREHOUSE
ROY MORENO
LUKE MOREY
THOMAS MOREY
ELROY MORGAN
GARRETT MORRIS
JAMES MORROW
ADRIEN MOSLEY
TAMMY MOSS
PHILLIP MOSS, JR.
CLAYTON MOTE
LANDOLYNN MUALIA
KAM MUAN
KHUAL MUANG
MUA MUANG
ZAM MUANG
ERIC MULLINIKS
ALONZO MUMPHREY
THANG MUN
THANG MUN
BOSCO MUNG
CIN DEIH MUNG
CIN KHAN MUNG
CIN SIAN MUNG
DAII MUNG
DAL MUNG
GINDAL MUNG
HAU MUNG
HERO MUNG
JAMES MUNG
JAMESKANG MUNG
KAI MUNG
KAM MUNG
KHUAL MUNG
KHUAL KHEN MUNG
KHUP GEEL MUNG
KHUP KHAN MUNG
LANG KHAN MUNG
LIAN MUNG
NANG SIAN MUNG
NANG SUAN MUNG
NGIN MUNG
NGO MUNG
PAU KHAN MUNG
PAU LIAN MUNG
PAU SIAN MUNG
PAU SUAN MUNG
PETER MUNG
SANG MUNG
SUAN KHAN MUNG
SUAN LAM MUNG
THANG DEIH MUNG
THANG KHAN MUNG
THANG NEIH MUNG
THANG SUAN MUNG
VUM SUAN MUNG
ZO MUNG
GABRIEL MUNIZ GONZALEZ
JESUS MUNOZ
AARON MUNTZ
KEVIN MURPHY
AUDIE MURRAY
SHELTON MURRAY
TABITHA MURRAY
MA MUSHRUSH
JOHN MUTANDA
ROSY MUZIKA
CAROLYN MYERS
CING NAING
MANHNWIN NAING

SAW NAING
DIEGO NAJERA
PAU NANG
THOMAS NANG
TUN NANG
NOORY NARTIN
CARDRICO NASH
JAMES NASH
THANG NAULAK
ZAM NAULAK
MARIA NAVA
MICHAEL NAVARRETE
XAVIER NAVARRO
BAWK NAW
CLAYTON NEAL
MARIA NEI THIEM
NIANG NEL
DATRAVIOUS NELSON
ERIC NELSON
EVAN NELSON
GREG NELSON
JEFFREY NELSON
DIM NEM
DEI NENG
KHOL NENG
JOSHUA NETTEN
SETH NETTEN
CY NEWMAN
PEDRO NEWMAN TORRES
ICSHA NEWSOME
ROBERT NEZ
NUAM NGIN
ZAM NGIN
ALVIN NGIRATEBL
EN NGO
PAU NGO
A VAN NGUYEN
BAO NGUYEN
BICH NGUYEN
CAO NGUYEN
HUNG NGUYEN
HUU NGUYEN
SON NGUYEN
TAM NGUYEN
THANH NGUYEN
THI NGUYEN
TUONG NGUYEN
VIET NGUYEN
VY NGUYEN
LINDA NGUYEN MORGAN
CING NI
LA JA NI MA
CIN MAN NIANG
CIN NGAIH NIANG
CING KHAN NIANG
CING SIAN NIANG
CING TAWI NIANG
DIM HAU NIANG
DIM MAN NIANG
EN NIANG
ESTHER NIANG
ESTHER HAU NIANG
GIN NIANG
HAU NIANG
KAP NIANG
KHAN NIANG
KHEM NIANG
LAM NIANG
NEM NIANG
NGO NIANG
PUM NIANG
TUAL NIANG
VUNG DON NIANG
VUNG LAM NIANG
ZEL NIANG

JACOB NICHOLS
JUSTIN NICHOLSON
MATTHEW NICKEL
TRAVIS NIEDERHOFER
TARREN NIETO
THANG NING
ZAM NING
SUMMER NIXDORF
CING NO
JACOB NOE
BRANDON NORDSTROM
MARK NORDSTROM
WILLIE NORFLEET
CARL NORRED
ERIC NORRIS
JODY NORTHRUP
JERRY NOWEL
TUMAI NPAWT
NGIN NTEM
KIM NU
LIAN NU
SEN NU
CIIN NUAM
CING KHAN NUAM
CING SIAN NUAM
CING TUAI NUAM
CING ZA NUAM
LAWH NUAM
NING NUAM
THANG NUAM
CING NUAMBOIH
EDUARDO NUNEZ MALPICA
NGIN NUNG
KHAUNG NYWE
MICHAEL O'BRIEN
SEAN O'HEARN
AMANDA O'NEAL
ALEXANDER OFOSU
NICOLE OGDEN
WILLIAM OGDEN
UDUIHAYE OGEDENGBE
WYATT OGLE
ANTWANETTE OLIVER
ANTHONY OLIVERAS
JAMES OLSEN
ERIC OLSON
KEITH OLSON
ADEN ONEAL
JAMES ONEILL, JR
CHRISTINE ONEY
PAUL ONYENEHO
GRASITER OO
SAW OO
WAI OO
AVERY OPPEGARD
LETICIA ORONA
ELISA OROZCO
RAMON OROZCO
DAVID OSBORNE
TIMOTHY OURS
JENNIFER OVERMEYER
GO PAA
MIGUEL PABON
DAVID PACQUETTE
JOHN PAGE
CODY PALMER
JORDY PAREDES
HEIDI PARK
AARON PARKER
BILLY PARKER
GOLDIED PARKER
JAKE PARKER
JASON PARKER
MICHAEL PARKER
ROBERT PARKER

JOE PARKS III
HARRY PARRISH
MAXWELL PARTLOW
JHERMIKAL PARTNER
CODY PASEMAN
JASON PATE
CALEB PATERIK
PAUL PATTERSON
CEDRIC PATTON
CIANG PAU
CIN LIAN PAU
CIN N PAU
DAL KHAN PAU
DAL KHEN PAU
DAL SUAN PAU
DAL ZA PAU
DO PAU
EN PAU
GIN PAU
LANG PAU
MUNG PAU
NANG DIM PAU
NANG SIAN PAU
NENG PAU
PETER PAU
PUM PAU
THANG PAU
ZAM KHAN PAU
ZAM KHEN PAU
ZAM LAM PAU
TERESA PAUL
CHRISTOPHER PAULI
TRAVIS PEARSON
CORY PEDERSEN
ANTHONY PEDONE
ARTHUR PENNINGTON
RONALD PENNY, JR
RICHARD PENROSE
JONATHAN PEPPER
ANNA PEREZ
CHRISTOPHER PEREZ
DANIEL PEREZ
JOE PEREZ
LETICIA PEREZ
MARCO PEREZ
SERGIO PEREZ
HECTOR PEREZ ARIAS
CHRISTIAN PEREZ GUTIERREZ
PEDRO PEREZ PAEZ
FRANCISCO PEREZ SANCHEZ
STEPHEN PERLL
MILES PERRY
MATTHEW PESCHONG
AUSTIN PETERS
MEKALA PETERS
DAVID PETERSON
JEFFREY PETERSON
ROBERT PETERSON
TIMMY PETERSON
PAUL PETTY
DANIEL PEURIFOY
RACHEL PEWITT
KINH PHAM
KY PHAM
LINH PHAM
QUOC PHAM
CHI PHAN
PHUOC PHAN
NAW PHAW
LIANKHAN PHAWNG
SANTINO PHILLIP
ADRIANA PHILLIPS
NATHANIEL PHILLIPS
TROY PHILLIPS
CIN PI

HAU PI
HELEN PI
NIANG PI
PETER PI
SING PI
THOMAS PI
TUANG PI
DO PIANG
GOH PIANG
KHUP DAIH PIANG
KHUP LIAN PIANG
SUAN PIANG
THANG PIANG
VAN PIANG
ERIK PICARD
CHRISTOPHER PICKENS
DEVOTRICK PICKRON
UBER PINEDA
TRACY PIPKIN
MIGLANIA PIRONA GONZALEZ
GINA PITTS
HAROLD PITTS, II
CANDY PITTSER
EMILIA PLATA VASQUEZ
JONATHAN POBLANO
KEVIN POBUDA
SUSANNE POINDEXTER
TROY POINTS
BASANT POKHREL
RENU POKHREL
NICKELAS POLLARD
LAQUAISHA POLLEY
MARK POOL
RODNEY POPE
RAMONDA PORTER
ASHLEY POWELL
RUDY POWELL
MICHAEL POYNTER
NATHAN PRADMORE
JOSE PRADO
CHARLES PRECHTL
KENNETH PRENTICE, JR.
DANIEL PRESSLER, JR
ANGELICA PRICE
MICHAEL PROVENCE
CHRISTOPHER PRUETT
KHAI PU
KHAM PU
MANG PU
MUANG PU
TUANG PU
TUN PU
ALMA PUGA
KHAI PUI
THANG PUI
KAM PUM
THANG PUNO
MICHAEL PUTNAM
JOHN QUANG
CANDELARIA QUICK
BRENDA QUINTANILLA GARCIA
MARTIN RABADAN
FRANCIS RACHU
VINA RACHU
ERIC RACINE
LEE RAFFRAY
EVA RAGLAND
AMANULLAH RAHIMI
RETSIAN RAIN
BRIAN RAMBO
SUSAN RAMBO
EDGAR RAMIREZ
EVA RAMIREZ
MARTINELLY RAMIREZ
ROSA RAMIREZ AGUINAGA

ENRIQUE RAMIREZ MORALES
PATRICIA RAMIREZ NAVARR
MANUELA RAMIREZ SOBERANIS
GERMAN RAMOS ALONSO
MARCUS RAMSEY
HEIDI RAMZEL
KARLY RANCK
COURTNEY RANDALL
JEFFREY RANDALL
TIMOTHY RANEY
CHRISTIAN RANSMEIER
FARIDULLAH RASOOLI
ELBERT RATLIFF
ROBERT RATLIFF
TOMMY RATLIFF
KYLE RATZLAFF
DAKOTA RATZLOFF
RYAN RAUSCH
JOHN RAVELLI
CURTIS RAYON
THOMAS READ
DAVID RECCA
JUSTIN RED LEAF
MICHAEL REED
RHONDA REED
FREEMAN REED, JR.
CHARLES REESE
CLINTON REESE
ERIC REESE
WENDY REEVES
STEPAN REGUS
JOHN REID
LISA REID
JOSEPH REINERS
AKEMY RENCHY
RODOLFO RENTERIA
JOHN RENTKO, JR.
JAKOB RESSLER
CLARA REYES
PABLO REYES
AGUSTIN REYES, JR.
DAICHI REYNA
STACIE REYNA SALAS
JOSHUA REYNOLDS
THOMAS REYNOLDS
JAVIER REYNOSO URIETA
DANIEL RHOADES
EFFIE RHODES
JEFFREY RHODES
SKYLER RHODES
KADRON RICHARDSON
SEVERINO RICKAT
BRIAN RICKETT JR
TERRY RICKNER
RANDALL RIDENOUR
ANGELA RIDEOUT
COREY RIDER
KATHRYN RINGER
DINA RISING
CORY RISINGER
DERRICK RISINGER
HILLARY RITE
TYLER RIVAS
BRAYAN RIVAS SANCHEZ
RAMON RIVERA
SIGFREDO RIVERA
RILEY ROARK
CARL ROBERTS
BRANDON ROBERTSON
BYRON ROBINSON
DAVID ROBINSON, JR.
JEREMIAH ROBISON
BRAD RODRIGUES
ALMA RODRIGUEZ
HECTOR RODRIGUEZ

MARIA RODRIGUEZ
NELSON RODRIGUEZ
RICARDO RODRIGUEZ
BENIGNO RODRIGUEZ JR
EFRAIN RODRIGUEZ MARTINEZ
ALESHA ROESCHKE
BRIAN ROGERS
DERRICK ROGERS
DON ROGERS
DYLAN ROGERS
FRANCINE ROGERS
TONY ROGERS
LIDIA ROJAS
NELSON ROJAS
ALEXANDRA ROLSETH
TONY RONGEY
MAKINTA ROOSEVELT
ROYCE ROPER
JOSE ROSALES
JASMINE ROSBOROUGH
CORTNEY ROSE
REAGAN ROSELL
STEPHANIE ROSELL
ROBERT ROSENCUTTER
CASEY ROSS
JAYRINE ROUND
LANDYMENTA ROUND
MICHELLE ROUSSEAU
SHADE ROWBOTHAM
RICHARD ROWE, JR.
KEINICHY RUDOLPH
CARLOS RUIZ
MATEO RUIZ
MA RUIZ ORTEGA
TERENCE RUSHING
DERICK RUSSELL
KIRK SADDLER
KARINA SAENZ ACOSTA
CESAR SAENZ RODRIGUEZ
SHIR SAIL
ABELINO SALAZAR
MARIANGEL SALAZAR GONZALEZ
JORGE RAFAEL SALAZAR
MARTINEZ
JORGE SALAZAR SOARES
YSABEL SALAZAR SOARES
MARIA SALDIVAR
MIGUEL SALDIVAR
VICTOR SALDIVAR
JOSE SALDIVAR OROPEZA
DAVID SALEGO
NAEL SALEM
DIANA SALINAS
CARSON SALSBURY
TS SANA
ALEXANDER SANCHEZ
BEATRIZ SANCHEZ
CRISTAL SANCHEZ
ISELA SANCHEZ
MAYRA SANCHEZ
ANDREINA SANCHEZ BOLIVAR
TANNER SANDE
TRAVES SANDY
CIN SANG
MANG SANG
TUAN SANG
LAL SANGI
WILLIAM SANGSTER
WENCESLAO SANTIAGO
NANG SAR
ALVIN SAURES TIMOTHY
TRACEY SAVELL
ERICK SAWYER
BRYAN SCANLON
AUDREY SCHAMING

WILLIAM SCHAROSCH
CALEB SCHMELING
DALE SCHOENE
AUSTIN SCHROEDER
MARK SCOFIELD
CAMERON SCOTT
HARRY SCOTT
JERRY SCOTT
TIERRA SCOTT
RONA SEAGO
HARLEY SEAMAN
SOVATNITA SEAMAN
CATHY SECHRIST
HOU SEI
THANG TIN SEI
THONG KHO SEI
THONGKU SEI
TONG SEI
ALEXA SEIDEL
MARCUS SEIP
KAYUN SENG
ROI SENG
PHILIP SENNER
ANNETTE SERNA
JACOB SHAFER
AUSTIN SHAHAN
RODNEY SHAHAN
KODY SHARP
THOMAS SHAW
KENDON SHEFFIELD
CHANNA SHELTON
VASILIY SHEMEREKO
LARRY SHEPHERD
DEXTER SHERIDAN
BRUCE SHIPLEY
EARL SHONE
SHAWN SHOULDERS
RAYMOND SHUNOWSKI, JR
BRADLEY SHUTTS
MAW SI
CING SIAM
NAA SIAM
ZAM SIAM
CIIN SIAN
NGIN SIAN
PAU SIAN
MICHAEL SICKING
ROBERTO SILVA RUVALCABA
DOROTHY SIMMONS
JERRY SIMMONS
WILLIAM SIMONTON
DWAYNE SIMPSON
KYLEE SIMPSON
ANTHONY SING
DAAI SING
DAL SING
DO SING
PAU SING
THANG SING
THAWN SING
CHRISTOPHER SISSOM
MICHAEL SITTERLY
IAN SLATTERY
ANDREW SLAVENS
DEBI SLOAN
DAVID SMITH
GARY SMITH
GRAYHAWK SMITH
HEIDI SMITH
JEFFERY SMITH
KERRY SMITH
KYLE SMITH
MARY SMITH
NITA SMITH
RANDY SMITH

RENALDO SMITH
TONY SMITH
JAMIQUAI SMITH HALL
MARK SMITH JR
JAMES SMITH, II
DENNIS SMITH, JR
WILBERT SMITH, JR.
DAVONNA SMITLEY
BRANDY SNIDER
JEREME SNIDER
ROGER SNOW
JERRY SNYDER
JOSE SOLARES
MARIA SOLIS
NEMISIA SOLIS
VERONICA SOLIS
BRADLEY SOOTER
BENDY SOTEN
CLENT SOUTHERLAND, II
KEVIN SOUVANNASING
DENNEY SOWDER
JOHN SPAIN, III
SIERRA SPARKS
RENO SPEARMAN
MARK SPENCER
JEFFREY SPERBER
JAMESON SPIRES
JOHN SPOONER
RICHARD SPRADLING
CHRISTY STANDBERRY
MARCUS STANDBERRY
LAWANA STANE
TERRY STAPLETON
NICHOLAS STAPP
DEMETRIUS STARLING
KAVONTAE STARLING
JAMES STASZKO
JOSHUA STAUFFER
LACEY STEADMAN
MICHAEL STECK
ARREST STEPHEN
MARNINTA STEPHEN
JOHN STEPHENS
MELVIN STEPHENS
CALEB STEPHENSON
LARRY STEWART
NICHOLAS STEWART
PAMELA STEWART
DAVID STIEWE
CHARLES STINECIPHER
BRENT STOCKTON
JOEL STOCKTON
JACOB STODDARD
ALLEN STONE
DYLAN STONE
FLOYD STONE
TIMOTHY STOUT
STACEY STRATTON
ALLEN STRAUSSER
KATHRYN STRAUSSER
DAVID STRICKLAND
RACHEL STRIDER
HENRY STRONG
KENNETH STRONG
MATTHEW STUBBERT
BRYAN STURDIVANT
NATHAN STWYER
DAI SUAN
HAU SUAN
KIM SUAN
NANG SUAN
NGIN SUAN
PAU SUAN
SAWNG SUAN
THANG SUAN

ZAM SUAN
PAUL SUAN MUNG
CAROLINA SUAREZ GONZALEZ
ANSER SUDA
NU SUI
DEIH SUKZO BAWMKHAI
HAU SUM
MANG SUM
NGIN SUM
PAU SUM
WA SUM
PETER SUMMANG
LADDIE SUMTER JR.
TIMOTHY SURGEON, II
SEAN SUROWIAK
ERICK SUTTLE
CHRIS SWARR
JACK SWEET
GREGG SWENSEN
AMANDA SWIFT
CHAD SWIFT
JENNIFER SYMANSKI
JAMES TABER
ABDUL TAHORI
MOSES TALAMANTE
LAMANTE TALBERT
JEFF TALLEY
GEORGE TALUGMAR
MINH TANG
WILLIAM TANKERSLEY
KEITH TANNER
ISRAEL TAPIA
MARTIN TAPIA CARVAJAL
WHITNEY TAPP
HAROLD TARALA
ANDRE TATE
RICK TATE
LARRY TATE, JR
CING TAWI
BEVERLY TAYLOR
BRENDON TAYLOR
CLINTON TAYLOR
ERIC TAYLOR
GRANVILLE TAYLOR
JOSHUA TAYLOR
MISHAELA TAYLOR
RANDALL TAYLOR
REBECCA TAYLOR
ROSEANN TAYLOR
TIMOTHY TAYLOR
ANDREA TEAKELL
KEVIN TEAKELL
ROBERT TEIS
HANSEL TEN
JASON TENDERELLA
NGIN TENG
MERCEDES TENNYSON
CHRISTOPHER TERHUNE
JONATHAN TERRAZAS
ANDREW TERRY
SHANNON TERRY
ANTHONY TEYON
BENJAMIN THANG
CIN THANG
CIN ZAM THANG
DAI THANG
DAL THANG
DO DEIH THANG
DO KHAN THANG
GEN THANG
GIN THANG
GO THANG
HAU NEIH THANG
HAU THANG
HAU SIAN THANG

KAM KAP THANG
KAM LIAN THANG
KAM SUAN THANG
KAP THANG
KHAM KAP THANG
KHAM SUAN THANG
KHEN THANG
LAL THANG
LAM THANG
LANGH THANG
LIAN CUNG THANG
LIAN KAP THANG
MANG THANG
MANG TAWI THANG
NGIN THANG
NGOIH THANG
NGUN THANG
PAU KAP THANG
PAU KHAN THANG
PAU KIM THANG
PAU NGAIH THANG
PAU S THANG
PAU SIAN THANG
PAU SUAN THANG
PAU SUM THANG
PAU THAWN THANG
PIANG THANG
SUAN THANG
TUAN THANG
VIAL THANG
ZAM THANG
ZEN KHAW THANG
ZEN KHUA THANG
LIAN THANG LAM
GINDEIH THANGHATZAW
PETER THANGPI
SALEM THAR
KHAI THAWN
SING THAWN
SUAN THAWN
THANG KHAN THAWN
THANG LAM THAWN
NAW THEIN
KO THET
NAWSAN THIDA
BRADLEY THOMANN
CAMRYN THOMAS
MICHAEL THOMAS
SETH THOMAS
YOLANDA THOMAS
KEWAN THOMPSON
NATHANIEL THOMPSON
REBECCA THOMPSON
SHAWN THOMPSON
XAVIER THOMPSON
MYA THU
TED TIGER
KYLE TILLERY
ATSITA TIMOTHY
THAWNG TLUANG
WILLIAM TOBAR
MATTHEW TOBOLSKI
MARK TOEDTER
SIANA TONGOMI
CHRISTOPHER TOOMBS
IVAN TORRES
CARLOS TORRES SANTOS
ALEJANDRO TORRES SILVA
ARION TOTTRESS
CODY TOWNSON
NICHOLAS TOWNSON
BINH TRAN
CONG TRAN
THI KIM TRAN
THI NGUYET TRAN

121

TUONG TRAN
VAN TRAN
MASON TRASK
DYLAN TREIHAFT
LUCAS TREIHAFT
SUZANNA TREIHAFT
RUDY TREJO
DIANA TREVINO
MARK TRIBBLE
TERRY TRUITT
RICHARD TRULL
TRISHA TSO
SENG TU
TONG TU
MANG TUAL
NGIN TUAN
CIN TUANG
DAL TUANG
GIN MUAN TUANG
GIN ZA TUANG
KAM CIN TUANG
KAM K TUANG
KHAI TUANG
KHEN TUANG
NENG TUANG
PAU TUANG
SIAN TUANG
SUAN TUANG
THANG LIAN TUANG
THANG SUAN TUANG
THANG ZA TUANG
THAWNG TUANG
VUNGH TUANG
ZAM TUANG
NGIN TUN
ZAM TUN
GO TUNG
LANGH TUNG
MUNG TUNG
SUANG TUNG
THANG TUNG
MICHAEL TUNNELL
PAUL TURBE
CHARLES TURNER
DANTAVIUS TURNER
THOMAS TWARDZIK
SUEMEKA TYESKIE
JESSICA TYLER
DVONTAE TYSON
JESUS TZUL
CING UAP
HUAI UAP
NI UK
LINDSEY UNDERWOOD
PAT UNDERWOOD
PERNELL UNDERWOOD
DAVID URQUIZA
YADIRA URQUIZA
VICTOR VALDEZ
HUGO VALERA JUAREZ
STEVEN VALESKI
JULIO VALLE
NORMA VALLES
MACKENZIE VANCE
TIMOTHY VANCE
ZACHARY VANCE
TIMOTHY VANDERPOL
SEVERO VARGAS
RAFAEL VARONA
CARLO VASSALLE
BARRY VAUGHAN II
SHAWN VAWTER
TRISTIAN VEITENHEIMER

122

MYA WIN
NAW WIN
EVAN WINEGAR
THOMAS WINGO
DYLAN WINN
VINCENT WINTON
RASHAUNA WISE
LI WO
CORA WOLFE
BRITTANY WOMACK
EMILY WOOD
RONALD WOOD
TYLER WOOD
TREVORRIS WOODARD
RODNEY WOODRUFF II
ARTHUR WOODS
JAMAIL WOODS
KASEY WORTHINGTON
BENJAMIN WRIGHT
HERMAN WRITT
MADISON WULBRECHT
THOMAS WYNNE
PHIA XIONG
TOU XIONG
PATRIAL YARBROUGH
PAUL YARBROUGH
JAMES YARBROUGH JR
YIN YIN
MICHAEL YOHE
JENNY YORK
ANGEL YOUNG
JOSHUA YOUNG
KASEY YOUNG
MARC YOUNG
CALEB YOUNGPUPPY
MARK ZABALA
DOMONIC ZACHARY
JAIDEN ZACKERY
RAHMANULLAH ZADRAN
CING NGAI ZAM
CING NGAIH ZAM
EN ZAM
DAVID ZAMORA
NICHOLAS ZAMORA
FATIMA ZAPATA
ISAAC ZAPATA REY
CARMEN ZAVALA
MIRNA ZAVALA JUAREZ
AURORA ZAVALETA
SAW ZAW
JON ZELIS
BRIAN ZELLER
CING ZEN
JUAN ZERMENO
VIRGINIA ZERMENO
BRYAN ZIEGLER
VAI ZO
MARGARITA ZUNIGA

ANTONIO VELASCO
JAMES VELDE
JUAN VENCES
ANGEL VENEGAS
DUSTY VENEGAS
KASEY VENETOFF
SALOME VERA
GEORGE VERRETT
STEPHANIE VICKERS-REGAN
EFRAIN SANCHEZ VILLA
EFRAIN SOTELO VILLA
WIKELMAN VILLALOBOS PALMA
NATHEN VILLANUEVA
RAULITO VILLANUEVA
REINA VILLANUEVA
SELINA VIRAMONTES
MANUEL VIVANCO
TRENTON VLEISIDES
TONG VO
VAN VO
CHRISTOPHER VOIGHT
CHUAN VU
CHOU VUE
CIIN DEIH VUNG
CIIN LAM VUNG
CING HUAI VUNG
CING KHAWM VUNG
CING LAM VUNG
CING ZA VUNG
DIM VUNG
DON VUNG
HAW VUNG
KAP VUNG
MANG VUNG
MARY VUNG
NIAN VUNG
NIANG VUNG
NIANG LIAN VUNG
NIANG SIAM VUNG
NING DON VUNG
NING LANG VUNG
ZEL VUNG
MATTHEW WAGNER
BRADLEY WAITS
MARK WAKEFIELD
STEPHEN WAKEFIELD
WHITNEY WAKEFIELD
CODY WALDEN
DIANA WALKER
JOSHUA WALKER
RODERICK WALKER
VICKIE WALKER
ENEIDA WALKUP
BRANDON WALKUP JR.
BARRY WALL
AMILCAR WALLACE
BRITTNEY WALLACE
SAMANTHA WALLACE
JERRY WALLER
TODD WALLINGFORD
JUSTIN WALLIS
KELSEY WALLS
STEVIE WALLS
RYAN WALSH
HALEY WALSTON
WELDON WALSTON
STEPHANIE WALTER
ALFRED WALTERS
SHORICORE WALTERS
NEWMAN WALTON
GUOYI WANG
MARQUIS WARD
LEESA WARE

MICHAEL WARREN
ZACHARY WARREN
ANTHONY WASHINGTON
MALCOM WASHINGTON
THURMOND WASHINGTON
THERESA WATKINS
TOMORROW WATKINS
BOONE WATSON
MOHAMMAD WAZIRI
SAYED WAZIRI
ALAN WEBB
BRAYLON WEBB
ANGELINA WEBER
RONALD WELCH
TARA WELLING
IVERY WELLS JR.
JEFFERY WHEELER
MICHELLE WHEELER
WILLIAM WHEELER
DAVID WHIPKEY II
RONALD WHISENHUNT
DMARCUS WHITAKER
ALLYN WHITE
BRIAN WHITE
DAVID WHITE
EMILY WHITE
KYLE WHITE
LEAYN WHITE
MICHAEL WHITE
TIMOTHY WHITE
DAVID WHITSON
JESSICA WHITTEN
QUINN WHITTEN
STEVEN WHORTON
GORDON WICHMAN
LINDA WIGGINS
BRUCE WILBURN
RYAN WILCOX
VIRGIL WILCOX
DAMON WILDER
CHRISTOPHER WILES
JACKIE WILES
JERRY WILES
MICHAEL WILES
GAYLON WILEY
SHERICE WILFORD
BRANDON WILLADSON
ALYSHA WILLEY
ALEXIUS WILLIAMS
ALLEN WILLIAMS
ASHLEY WILLIAMS
BRANDON WILLIAMS
CHANTE WILLIAMS
CORNEL WILLIAMS
DOMINIQUE WILLIAMS
ERROL WILLIAMS
MICHAEL WILLIAMS
NICOLE WILLIAMS
NINA WILLIAMS
RODNEY WILLIAMS
ROSALIND WILLIAMS
LARRY WILLIAMS JR
TONY WILLIAMS JR.
JAMES WILLIAMSON
DUSTIN WILLIFORD
CALVIN WILLIS
CHRISTINA WILLY
DATRAY WILSON
ISAAC WILSON
JUSTIN WILSON
MALACHI WILSON
SUSAN WILSON
WESTON WILSON