AAON
Annual Report 2023

Plain-text annual report

2 0 2 3 A N N U A L R E P O R T Pushing boundaries since 1988. 35 years of industry-defining innovation. aaon.com Engineered and built in America. OK | TX | MO | OR 2023 Annual Report 2023 Annual Report 2023 Annual Report About AAON AAON is a leader in HVAC solutions for commercial and industrial indoor environments. Product Family Air Handling Units INDOOR AND OUTDOOR (800–72,000 CFM) Air-Source Heat Pumps (2–70 TONS) Condensers and Condensing Units (2–70 TONS) Controls Custom Air Handling Units –BASX Our industry-leading approach to designing and manufacturing highly configurable equipment to meet exact needs creates a premier ownership experience with greater efficiency, performance, and long-term value. Data Center and Cleanroom Units –BASX Geothermal and Water- Source Heat Pumps (2–70 TONS) Self-Contained Units (3–70 TONS) Rooftop Units (2–240 TONS)  2023 marked our 35th anniversary as a company, and it lined up with some outstanding achievements. Most notably, we surpassed $1.0 billion in sales for the first time in company history.” —Gary Fields, CEO 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–BASIC2 EARNINGS PER SHARE–DILUTED 2 Balance Sheet ($000 except per share data) WORKING CAPITAL CURRENT ASSETS NET FIXED ASSETS Financial Highlights 2023 2022 2021 2020 2019 1,168,518 888,788 534,517 514,551 469,333 399,020 237,572 137,830 155,849 119,425 227,494 126,761 69,253 101,836 67,011 (4,843) 46,468 (2,627) (132) 88 35,106 30,343 25,634 223,154 124,533 69,182 101,975 177,623 100,376 58,758 79,009 2.19 2.13 1.26 1.24 0.75 0.73 1.01 0.99 66 22,766 67,031 53,711 0.69 0.68 282,205 203,549 131,312 161,218 131,521 408,954 349,116 218,080 220,251 187,549 369,947 304,745 258,062 223,340 178,094 ACCUMULATED DEPRECIATION 283,485 245,026 224,146 203,125 179,242 CASH AND CASH EQUIVALENTS 287 5,451 2,859 79,025 26,797 TOTAL ASSETS CURRENT LIABILITIES LONG-TERM DEBT 941,436 813,903 650,180 449,008 371,424 126,749 145,567 50,522 77,453 86,768 46,406 59,033 56,028 6,363 6,320 STOCKHOLDERS' EQUITY 735,224 560,714 466,170 350,865 290,140 STOCKHOLDERS' EQUITY PER DILUTED SHARE2 8.83 6.91 5.78 4.41 3.67 Cash Flow Data ($000) OPERATIONS INVESTMENTS FINANCING 158,895 61,318 61,183 128,814 97,925 (109,311) (76,213) (158,719) (61,273) (37,046) (46,510) 17,357 18,735 (29,626) (18,500) NET INCREASE (DECREASE) IN CASH 3,074 2,462 (78,801) 37,915 42,379 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 34.1% 27.4% 20.2% 19.1% 15.2% 28.0% 1.2 3.2 34.7 26.7% 19.5% 13.7% 14.0% 11.3% 45.2% 0.9 2.4 40.5 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 25.4% 19.9% 15.8% 14.3% 11.4% 28.0% 2.0 3.3 48.4 1 = (Cash, cash equivalents and restricted cash + investments + receivables) / current liabilities 2 Reflects three-for-two stock split effective August 16, 2023. Timeline 1988 AAON, an Oklahoma corporation, was founded. Purchase of John Zink Air Conditioning Division. 1989 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. 1990 Listed on NASDAQ Small Cap—Symbol “AAON”. 1991 Formed AAON Coil Products, a Texas Corporation, as a subsidiary to AAON, Inc. (Nevada) and purchased coil making assets of Coil Plus. 2018 AAON acquires WattMaster Controls, Inc. 2015 AAON Low Leakage Dampers voted “Product of the Year” by Consulting Specifying Engineer magazine. 2012 2010 AAON yearly shipments exceed $300 million. AAON RQ Series win ACHR News Dealer Design award. AAON RN Series rooftop unit named 2010 Product of the Year—Silver by Consulting-Specifying Engineer Magazine. 2019 AAON breaks ground on new facility in Longview, Texas. AAON opens Norman Asbjornson Innovation Center. 2020 Founder Norman H. Asbjornson Transitions to Executive Chairman. Gary D. Fields assumes new role as CEO. AAON exceeds $500 million in sales. AAON RN Series with Variable Speed Compressors voted “Most Valuable Product”. 2021 AAON introduces new low ambient air-source heat pump rooftop units. AAON introduces the AAON Mobile Experience tour trailer. AAON RZ Series Rooftop Unit named “Product of the Year” by readers of Consulting- Specifying Engineer magazine. AAON acquires BASX Solutions. 2022 AAON Zero Degree Cold Climate AirSource Heat Pumps win ACHR Dealer Design award. AAON exceeds $880 million in sales. 1992 AAON acquires Coils Plus, Inc. and renovates the 110,000 square foot plant in Longview, Texas. 1993 Listed on the NASDAQ National Market System. 1995 Completed expansion of the Tulsa facility to 332,000 square feet. 1996 Purchased 40 acres with 457,000 square foot plant and 22,000 square foot office space located across from the Tulsa facility. 2003 Started production of polyurethane foam-filled double-wall construction panels for rooftop and chiller products using newly purchased manufacturing equipment. 2001 Introduced evaporative- cooled condensing energy savings feature. 1999 1998 Completed Tulsa, Oklahoma and Longview, Texas plant additions yielding a total exceeding one million square feet. AAON yearly shipments exceed $100 million. Received U.S. patent for Dimple Heat Exchanger Tube. 2023 Grand opening of the Customer Exploration Center. AAON Longview announces new expansion plans for 230,000 square foot facility. AAON launches Alpha Class. AAON exceeds $1 billion in sales. From the Chief Executive Officer Executing Another Year of Record Performance Last year was a special year for AAON in that it was the Company’s 35th anniversary since being founded in 1988. Moreover, it was the first year that the Company surpassed $1.0 billion in sales. Surpassing this milestone required one of the strongest years of performance in AAON’s history. Organic sales grew 31.5%, including an increase in volume of 14.5%. The Company’s core packaged rooftop business, which made up 68.8% of total sales in 2023, realized even more unit volume growth. This compared to the U.S. market which realized a 6.0% increase in units five tons and greater, the comparable tonnage category of our rooftop portfolio. The Company clearly continued to gain market share, a reflection of successful planning and execution of strategy. Last year also marked a strong year of profitability. Gross margin expanded 740 basis points to 34.1% and net income grew 77.0% to a record level for the second straight year. REMAINING TRUE TO OUR FOUNDING PRINCIPLES Thirty-five years ago, our founder, Norm Asbjornson, created AAON with one mission, manufacturing the best HVAC equipment in the world for the best value. This mission remains true today. Through a unique semi-custom design and manufacturing process which evolved over decades, AAON is providing the highest performing, most energy efficient equipment there is on the market. No other market competitor offers a solutions-based configurable portfolio of rooftop equipment that helps contractors and building owners maximize performance and efficiency as does AAON. Furthermore, continuous improvements in operational efficiencies have resulted in AAON products being the most cost competitive in Company history. We made great strides in this over the past two years. The price premium of AAON equipment versus alternative equipment in the market has never been smaller than it is today. This has made the AAON value proposition of the total cost of ownership immensely more compelling, allowing the Company to continue to gain share. Incremental investments made in 2023, including product development, sales & marketing, information technology and leadership, position us to accelerate share gains in the next several years. AAON’S EVOLUTION CONTINUES Since 2017, AAON has undergone significant changes in leadership, from both a structural and personnel standpoint. Today, the organization is managed by executive and senior leadership teams with layers of leaders below that have goals, responsibilities, structure and succession planning. These changes were critical to position the Company for long-term sustainable growth. In 2023, we took the next step in this evolution when we announced in November several changes in senior management. Along with promoting Matt Tobolski to President and COO of AAON, we established several new global roles to manage our four geographical MATT TOBOLSKI, PRESIDENT AND COO locations more efficiently, both in respect to productivity and growth. LEADING IN CLIMATE SOLUTIONS AND INNOVATION The commercial HVAC market that AAON competes in is currently undergoing significant change driven by shifts in demand and increased regulations. These changes create challenges for most of the industry, and particularly for companies focused on mass production of basic equipment. Our unique design and manufacturing process which focuses on performance and energy efficiency, insulates AAON from the impact of shifts in the market related to energy efficiency, decarbonization and electrification as well as regulations focused on environmentally friendly equipment. In fact, these changes are a benefit to AAON as our products excel when the customer is focused on performance. Leading up to the higher minimum energy efficiency standards that the Department of Energy put into effect starting January 1, 2023, AAON’s product portfolio fully met those standards years in advance, while most of the industry did not fully meet the minimum efficiency standards until the second half of 2022. Similarly, well ahead of the EPA’s new regulation requiring manufacturers to utilize a lower Global Warming Potential (GWP) refrigerant, AAON began accepting orders of equipment with lower GWP refrigerant on January 1, 2024. We are proud to lead the way as the only manufacturer to our knowledge currently accepting orders for equipment with lower GWP refrigerant. At the same time, AAON continues to innovate. In 2023, AAON introduced its newly branded Alpha Class heat pump rooftop units. Alpha Class is a fully electric heat pump operable down to zero degrees Fahrenheit. This product is significant in that it is the first viable climate solution to fulfilling electrification demands in the commercial rooftop market. Today, no other competitor has a heat pump on the market that is operable much lower than These changes are a benefit to AAON as our products excel when the customer is focused on performance. 25–30 degrees. The Company has always led the industry through NEWLY BRANDED ALPHA CLASS innovation and expects to continue to push boundaries through innovation and climate solutions into the future. LEVERAGING THE CORE THROUGH OUR SALES CHANNEL Historically, AAON excelled in developing the most advanced HVAC equipment for the best value. While we have always valued our independently owned and operated sales channel, our investment in additional resources to help channel partners penetrate the market has been lacking. We see this as a significant opportunity and are now making such investments. In 2023, we began establishing a marketing department equipped with the resources to educate our sales channel and end-users of AAON’s value proposition. In addition, we finished construction of our Exploration Center last year. This facility showcases our equipment alongside market alternatives, and has quickly proved to be a valuable resource in the marketing of our equipment. We are also investing in more capacity to train our sales representatives and additional resources to help build out our channel partners’ parts and services businesses. All of these investments are made with the intent of leveraging a premier product that has a superior value. LOOKING FORWARD AAON has a superior product offering and world class sales channel. This combination provides the Company with a strong foundation. Leveraging this with certain investments and strategies will result in further share gains in 2024 and beyond. Given the advancements we are making relative to the market, we will accomplish this while also being a leading contributor in reducing the carbon footprint of commercial buildings. The Company has never been more well managed than it is currently and we have never been more optimistic of the future than we are today. 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 representatives. To our stockholders, we are honored to have each of you with us and look forward to delivering the returns that will justify your continued ownership. 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, 2023 or ☐ 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). 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). 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). 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 Large accelerated filer Large accelerated filer Large accelerated filer Non-accelerated filer Non-accelerated filer Non-accelerated filer Non-accelerated filer ☒ Accelerated filer ☐ Smaller reporting company Emerging growth company ☒ Accelerated filer ☒ Accelerated filer ☒ Accelerated filer ☐ Smaller reporting company ☐ Smaller reporting company ☐ Smaller reporting company Emerging growth company Emerging growth 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. ☐ 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. ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended 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 transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 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 Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of 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 the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 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. ☒ U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ 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 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. ☒ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ period pursuant to §240.10D-1(b). ☐ Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act.) Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act.) Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act.) Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act.) ☐ Yes ☒ No ☐ Yes ☒ No ☐ Yes ☒ No ☐ 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, 2023 was $4,193.6 million based upon the closing price reported for such date on the Nasdaq Global Select Market. 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, 2023 was $4,193.6 million based upon the closing price reported for such date on the Nasdaq Global Select Market. 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, 2023 was $4,193.6 million based upon the closing price reported for such date on the Nasdaq Global Select Market. 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, 2023 was $4,193.6 million based upon the closing price reported for such date on the Nasdaq Global Select Market. As of February 23, 2024, registrant had outstanding a total of 81,581,679 shares of its $.004 par value Common Stock. As of February 23, 2024, registrant had outstanding a total of 81,581,679 shares of its $.004 par value Common Stock. As of February 23, 2024, registrant had outstanding a total of 81,581,679 shares of its $.004 par value Common Stock. As of February 23, 2024, registrant had outstanding a total of 81,581,679 shares of its $.004 par value Common Stock. DOCUMENTS INCORPORATED BY REFERENCE DOCUMENTS INCORPORATED BY REFERENCE DOCUMENTS INCORPORATED BY REFERENCE DOCUMENTS INCORPORATED BY REFERENCE Portions of registrant’s definitive Proxy Statement to be filed in connection with the 2024 Annual Meeting of Stockholders to be held May 21, 2024, incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Portions of registrant’s definitive Proxy Statement to be filed in connection with the 2024 Annual Meeting of Stockholders to be held May 21, 2024, incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Portions of registrant’s definitive Proxy Statement to be filed in connection with the 2024 Annual Meeting of Stockholders to be held May 21, 2024, incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Portions of registrant’s definitive Proxy Statement to be filed in connection with the 2024 Annual Meeting of Stockholders to be held May 21, 2024, 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 1. Business. 1A. Risk Factors. 1B. Unresolved Staff Comments. 2. 3. 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. 6. Reserved. 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 7A. Quantitative and Qualitative Disclosures About Market Risk. 8. 9. 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. Signatures 2 10 14 15 16 16 17 19 20 32 33 70 70 72 72 72 72 72 72 73 75 Forward-Looking Statements This Annual Report on Form 10-K (or statements otherwise made by the Company or on the Company’s behalf from time to time in other reports, filings with the Securities and Exchange Commission (“SEC”), news releases, conferences, website postings, presentations or otherwise) includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not historical facts are forward-looking statements and involve risks and uncertainties. For all of these forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “confident”, “outlook”, “project”, “should”, “will”, and variations of such words and other words of similar meaning or 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. Important factors that could cause results to differ materially from those in the forward-looking statements include, among others: • market conditions and customer demand for our products; • • the timing and extent of changes in raw material and component prices; naturally-occurring events, pandemics, and other disasters causing disruption to our manufacturing operations, product deliveries and production capacity; the impact caused by inflationary cost pressures, national or global health issues, such as the coronavirus pandemic (“COVID-19”), any variants or similar outbreaks (including the response thereto) and their effects on, among other things, demand for our products, supply chain disruptions, our liquidity and financial position, results of operations, stock price, payment of dividends, our ability to secure new orders, our ability to convert backlog to revenue and impacts to the operations status of our facilities; natural disasters and extreme weather conditions, including, without limitation, their effects on locations where our products are manufactured; the effects of fluctuations in the commercial/industrial new construction market; the timing of introduction and market acceptance of new products; the timing and extent of changes in interest rates, as well as other competitive factors during the year; general economic, market or business conditions; creditworthiness of our customers and their access to capital; changing technologies; the material failure, interruption of service, compromised data or information technology security, phishing emails, cybersecurity breaches or other impacts to our information technology and related systems and networks (including any of the foregoing of third-party vendors and other contractors who provide information technology or other services); costs and results of litigation, including trial and appellate costs; economic, market or business conditions in the specific industry and market in which our businesses operate; future levels of capital expenditures, research and development and indebtedness, including, without limitation, our ability to reduce indebtedness and risks associated with the same; legal, regulatory, and environmental issues, including, without limitation, compliance of our products with mandated standards and specifications; and integration of acquired businesses and our ability to realize synergies and cost savings. • • • • • • • • • • • • • • 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. Except as required by federal securities laws, we undertake no obligation to update any forward-looking statement to reflect events, occurrences or developments after the date on which such statement is made. For a discussion of risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, please see Item 1A “Risk Factors” included in this Annual Report on Form 10-K, and as otherwise disclosed from time to time in our other filings with the SEC. 1 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., 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. AAON is a lead producer in heating, ventilation, and air conditioning ("HVAC") systems for commercial and industrial indoor environments. We are engaged in the engineering, manufacturing, and selling of premium heating, ventilation, and air conditioning equipment consisting primarily of semi-custom and custom rooftop units, data center cooling solutions, cleanroom systems, 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 engineers, manufactures, and sells, semi-custom, and custom HVAC systems, designs and manufactures controls solutions, and sells retail parts to customers through retail part stores and online. AAON Oklahoma includes the operations of our Tulsa, OK and Parkville, MO manufacturing facilities, two retail locations, and the Norman Asbjornson Innovation Center ("NAIC") research and development laboratory accredited by the Air Movement and Control Association International, Inc. ("AMCA"). With the NAIC, a world-class research and development ("R&D") laboratory in Tulsa, OK, our products are continuously tested under a variety of extreme environmental conditions to ensure they deliver the ultimate performance, efficiency, and value. Also located in Tulsa, OK, our cutting-edge Customer Exploration Center showcases the engineering, design attributes and premium build quality of our equipment side-by-side the market alternatives. AAON Coil Products: AAON Coil Products engineers and manufactures a selection of our semi-custom, and custom HVAC systems as well as a variety of heating and cooling coils to be used in HVAC systems, mostly for the benefit of AAON Oklahoma, AAON Coil Products, and BASX. AAON Coil Products consists of operations at our Longview, TX manufacturing facilities. BASX: BASX engineers, manufactures, and sells an array of custom, high-performance cooling solutions for the rapidly growing hyperscale data center market, ventilation solutions for cleanroom environments in the bio- pharmaceutical, semiconductor, medical and agriculture markets, and highly custom, air handlers and modular solutions for a vast array of markets. BASX consists of operations at our Redmond, OR manufacturing facilities. For more information on our business segments' financial position and results of operations, refer to Note 22, "Segments," of the notes to consolidated financial statements. Business and Marketing Strategy Our products serve the commercial, industrial, data center, and cleanroom markets within the HVAC equipment industry. Our business strategy involves mass semi-customization leveraging flexible computer-aided manufacturing systems to produce highly configurable equipment. We differentiate from other HVAC manufacturers by combining the low unit costs of mass production processes with the flexibility of individual customization. Through a collaborative effort with our network of independent sales representatives, we engineer and manufacture products and systems that best serve the buyer's unique needs and applications. Our go-to-market strategy is centered around customers and markets that demand HVAC equipment with extraordinary performance and durability, greater energy efficiency, and best overall value. We manufacture equipment with more configurability than other "standard" offerings found in the HVAC equipment industry and we do not manufacture equipment that has not been pre-specified by our customers with an emphasis on high customer satisfaction and reduced product delivery channel time. 2 Since day one, AAON has been dedicated to manufacturing and product leadership with innovation through research and development with a specific emphasis on energy performance, durability, efficiency, and indoor air quality. As a result of our strategy to engineer and manufacture innovative HVAC products of the highest performance, efficiency, and value, we are naturally committed to meeting regulatory and 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"); the AMCA and the International Organization for Standardization ("ISO"). To date, our sales have been primarily derived from the domestic market. Foreign sales accounted for approximately $39.9 million, $27.6 million, and $14.8 million of our net sales in 2023, 2022, and 2021, respectively. As a percentage of net sales, foreign sales accounted for approximately 3.4%, 3.1%, and 3.0% of our net sales in each of those years, respectively. Products - AAON Oklahoma and AAON Coil Products Our rooftop and condensing units are primarily installed on commercial or industrial structures. Our air handling units, self-contained units, geothermal/water-source heat pumps, 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. The commercial and industrial new construction markets are subject to cyclical fluctuations in that they generally lag behind the housing market. The housing market, in turn, is influenced by cyclical factors such as interest rates, inflation, consumer spending habits, employment rates, the state of the economy and other macroeconomic factors. When new construction is down, we emphasize the replacement market. The ratio of sales for new construction versus replacement is related to various factors. Generally, the cyclicality of the new construction market impacts this ratio the most over an economic cycle. We purchase certain components, fabricate sheet metal and tubing and then assemble and test the finished products. Our primary finished product consists of a single unit system that generates heating and cooling in a self-contained cabinet, referred to in the industry as “unitary product”. Our other finished products are 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. When configured as Air-Source Heat Pumps ("ASHP"), the RQ and RN Series (2 to 50 tons), are capable of operating in ambient outside temperatures as low as zero degrees Fahrenheit. Known as the AAON Alpha Class, our omni-climate ASHPs are a critical solution that meet the increasing demand for building decarbonization. Utilizing variable speed technology, these innovative ASHPs provide energy-efficient heating and cooling throughout the year in virtually any climate. In addition to our legendary RTUs, we 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 condensing unit, the CF Series, is available from two to 70 tons and can be configured as an Alpha Class ASHP. Our air handling units consist of the indoor 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. 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 RN, RQ, M2, and SB Series, are AHRI certified in accordance with ANSI/AHRI/ASHRAE/ISO 13256. Our unitary products (RQ and RN Series) are certified with AHRI and the US Department of Energy to ANSI/AHRI 210/240 up to five tons capacity and ANSI/AHRI 340/360 up to 63 tons capacity. 3 Performance characteristics of our products range in cooling capacity from two to 261 tons and in heating capacity from 7,200 to 4,500,000 British Thermal Units ("BTUs"). Many of our products far exceed these minimum standards and are among the highest efficiency products currently available in the market. 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 packaged RTUs with two stage or variable speed compressors are optimized with high efficiency evaporator and condenser coils and variable speed fans, leading to an AHRI Certified performance up to 20.3 seasonal energy efficiency ratio ("SEER") and 22.5 integrated energy efficiency ratio ("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. In addition to the equipment we manufacture, we design and produce high-performance controls solutions that enhances our equipment’s unique features and capabilities. Our controls division provides factory-developed and tested control options for Variable Air Volume, Make-Up Air, Single Zone VAV, Constant Volume, and Zoning systems associated with our products and other HVAC related equipment. We offer several controls options: the Orion Controller, factory installed customer provided controls, and terminal block for field installed 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. Our 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, in addition, we are able to customize our controls to meet customers’ unique requirements. Products - BASX The products BASX manufactures are highly engineered and customized products, fully complementing our legacy 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 also offers integrated sound performance solutions. Air Quality Products The 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 - We continue 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 - We standardized a design that uses a backward curved fan wheel, which can accommodate higher airflow and static pressure 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 4 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 - Our 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. AAON has been the leader in Dedicated Outdoor Air Systems ("DOAS") for many years. On October 31st, 2022, the US Department of Energy ("DOE") released their final ruling concerning DX-DOAS. These are systems that condition primarily fresh outside air streams to maintain space comfort and air quality. Starting May 1, 2024 the DOE will begin regulating the efficiency of dedicated outdoor air units separately from other comfort cooling systems. AAON perceives this as an advantage because our equipment is designed for higher energy efficiency and superior part load and dehumidification performance than competitors who focus on the initial sale price of their equipment or do not participate in the certification programs offered by AHRI. Air Disinfection - Our basic design characteristics allow for an easy installation of ultraviolet lighting equipment. In addition to this equipment offered as options in new units sold, our basic design characteristics allow for easy installation in units already used in the field. Overall, we are 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 our 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, 2023, we employ a sales staff of 82 individuals and utilize approximately 59 independent manufacturer representatives’ organizations (“Representatives”) having 139 offices to market our products primarily in the United States and Canada. 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 and applications. However, market trends related to the COVID-19 pandemic and indoor air quality, decarbonization and energy efficiency, and higher energy prices, have positioned us 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 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. We have a program focused on increasing service capabilities across our North America Representative network, by assisting Representatives with business plans, providing training, and creating a cohesive network of service organizations to better meet the operational and maintenance needs of our customer base. 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. 5 Major Customers For the years-ended December 31, 2023, 2022, and 2021, Texas AirSystems accounted for approximately 13.8%, 12.4%, and 11.7% of our sales, respectively. Through portfolio groups, Meriton has an ownership interest in Texas AirSystems and certain other of our sales representatives. The aggregate sales percentages through Meriton- affiliated groups that are in addition to Texas AirSystems’ sales for the years-ended December 31, 2023, 2022 and 2021 accounted for an additional 2.3%, 1.4% and 2.7%, respectively. Two other similar groups, Ambient and Hobbs/Insight, share common ownership of some of our other sales representatives through portfolio groups and for the year-ended December 31, 2023, aggregate sales through their portfolio groups accounted for approximately 11.5% and 10.2% of our sales, respectively. Sales through the portfolio groups of either Ambient or Hobbs/Insight did not account for 10% or more of our sales for any years-ended prior to December 31, 2023. Backlog Our backlog as of February 1, 2024 was approximately $507.7 million. Management considers the orders that make up the backlog to be firm commitments with minimal risk of cancellation. This is consistent with historical trends as we rarely receive cancellations, even during recessionary times. Nonetheless, orders are subject to cancellation, in which case, cancellation charges apply up to the full price of the equipment. After an order is deemed firm and is entered into the backlog, lead times to fulfill orders for AAON Oklahoma and AAON Coil Products is generally around 11 weeks. Orders for BASX product, including orders built at AAON Coil Products' Longview location are typically placed months in advance of requested delivery to secure production for those projects. As a result, portions of the backlog do not turn over within our 11 week lead time. Competition Our AAON Oklahoma and AAON Coil Products product offerings primarily compete with Lennox (Lennox International, Inc.), Trane (Trane Technologies plc), York International (Johnson Controls International PLC), Carrier (Carrier Global Corporation), and Daikin (Daikin Industries). Our BASX product offerings primarily compete with Vertiv (Vertiv Holdings Co.), STULZ (STULZ Air Technology Systems, Inc.), Munters, Silent Aire (Johnson Controls International PLC), Nortek (Nortek Air Solutions), and Engineered Air. All of our publicly traded 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 made over the last several years, 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 now 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 contracts with our major suppliers for periods of six to 18 months. We expect to receive delivery of raw materials from our contracts for use in our manufacturing operations. 6 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 and expected supply chain restraints. Our working capital requirements are generally met by cash flow from operations and a bank revolving credit facility, which currently permits borrowings up to $200.0 million and had a $38.3 million outstanding balance at December 31, 2023. Borrowings available under the revolving credit facility at December 31, 2023, were $159.4 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. We self-sponsor our R&D activities, rather than needing to be customer-sponsored. R&D activities have involved the RQ, RN, and RZ (rooftop units), H3, SA, V3, and M2 (air handling units), CF (condensing units), and the SA and SB (self-contained units), as well as component evaluation and refinement, development of control systems and new product development. R&D expenses incurred were approximately $43.7 million, $46.8 million, and $16.6 million in 2023, 2022, and 2021, respectively. The significant increase for the year ended December 31, 2022 was related to the inclusion of a full year of operations of BASX (Note 4) as well as our commitment to product performance and innovation. Our NAIC research and development laboratory facility 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. The NAIC carries accreditation from AMCA for standards AMCA 210 (aerodynamic performance rating) & AMCA 300 (reverberant room sound testing). Environmental application testing capabilities include -20 to 130°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 us 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 us to meet and maintain AHRI and 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. The NAIC contains both a 100 ton and a 300 ton chamber, allowing us to uniquely prove to customers our capacity and efficiency on these larger units. The NAIC was designed to test products well beyond the standard AHRI rating points and allows us to offer testing services on our 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 have allowed AAON to develop low ambient air source heat pump products that are unique in being able to address the growing need for these type units that address electrification initiatives and commitments. Our Parkville, Missouri location is home to our new Electronics Prototyping Lab ("Lab") featuring a fully functional SMD (Surface Mount Device) production line. The production line incorporates automated pick-and-place equipment able to quickly and accurately place devices as small as 0.1mm by 0.2mm, the same technology scale used in cell phones. The production line also includes a profiled reflow oven to assure reliability in the finished prototypes. The Lab has allowed us to increase our speed to market and incorporate cutting-edge technology into our control designs. In addition, it allows our Controls Engineering team to utilize their hardware and software development skills to outpace our competitors in responding to market changes and upsets. 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. 7 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 2023 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 Historically, sales of our products were moderately seasonal with the peak period being May-October of each year due to timing of construction projects being directly related to warmer weather. However, in recent years, given the increase in demand of our products and increase in our backlog, sales has become more constant throughout the year. 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, we have maintained a commitment to design, develop, manufacture, and deliver heating and cooling products to perform beyond all expectations and to demonstrate our quality and value to our customers. Our 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. 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 2023, we published our fifth annual environmental, social, and governance ("ESG") report sharing our approach in the material areas of stakeholder engagement, innovation and efficiency, environmental responsibility, climate change, occupational health and safety, talent attraction and retention, diversity and inclusion, community engagement and investment, corporate governance and ethics and compliance. The report also highlights achievements and long-term targets related to greenhouse gas emissions, hazardous waste recycling, and non-fossil fuel consuming products. We participate in a sustainability benchmarking initiative, the Sustainability Alliance Scor3card, through which we monitor and report in the material areas of energy, material management, water, community stewardship, transportation, communication, and health. We achieved Platinum level in this program in 2023 and 2022. Our ESG committee provides oversight for ESG activities, ESG report development and an internal grassroots sustainability committee provides education opportunities, communications and recommendations to the Company on a regular basis. We are committed to environmental responsibility and continue to make progress toward reducing greenhouse gas ("GHG") emissions, increasing paint byproduct recycling from our facilities and increasing the percentage of non- fossil fuel powered units we produce. Our approach toward emissions reduction and climate change includes product solutions for our customers and improvements to our own facilities. Approximately 36% of our 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. We opted into an additional percentage of renewable energy at our Tulsa, Oklahoma facilities in 2022, continued to invest and partner on projects that reduce GHG emissions globally and have begun the transition to the lower global warming potential R-454B refrigerant. We continue to develop and manufacture non-fossil fuel consuming units to provide the most sustainable commercial HVAC equipment in the market and announced the zero degree cold air-source heat pump in 2022 as a critical solution that meets the increasing demand for building decarbonization in cold climates. In the area of energy efficiency and conservation, our Tulsa, Oklahoma and Longview, Texas facilities have transitioned to nearly 100% LED lighting in our facilities leading to considerable cost savings and reduced energy consumption. Our Redmond, Oregon facilities are installing LED lights into any new fixtures in their current facility and working towards retrofitting old fixtures to LED. We participate in an energy demand response program through 8 the public utility provider to reduce demand during peak hours. Energy efficiency has been a priority not only in product development, but also in overall 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. We also opened the Customer Exploration Center in 2023, a net-zero facility powered by solar and geothermal energy. In the area of material management, we focus on recycling, reducing, reusing and sourcing more environmentally- friendly materials into our processes. At our Tulsa, Oklahoma and Longview, Texas facilities, we recycled over 13,678 tons, 14,928 tons, and 13,793 tons of metal in 2023, 2022, and 2021, respectively. Also, through our partnership with a waste to energy facility, we successfully diverted over 694 tons, 668 tons, and 460 tons of waste from landfills in 2023, 2022, and 2021, respectively. We have identified paint product recycling partners at both our Tulsa, Oklahoma and Longview, Texas facilities. We 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 As of As of February 20, 2024 February 22, 2023 February 23, 2022 AAON Oklahoma AAON Coil Products BASX Total employees 2,663 586 607 3,856 2,474 681 511 3,666 1,979 574 328 2,881 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 Paid parental leave • • • • • • • Military pay • • • Short-term and long-term disability Identity theft protection Group life insurance 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. 9 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. 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 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 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. During 2023, 2022, and 2021 we experienced some price increases in our components and raw materials, which appear to be a result of COVID-19 and subsequent inflation, as well as supply chain challenges related to certain manufacturing parts. Even though 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 one or more major customers. 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. The loss of, or significant reduction in sales to significant customers (or a related portfolio group of customers) 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 or impaired 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 10 additional administrative efforts and costs. If we are unable to establish new representative relationships or continue current relationships, or terminate and replace our third-party representatives, 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. An excess of or significant claim(s) could lead to the cancellation of our polices and the loss of and inability to find additional insurance carriers. 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 ("CEO"), 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 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, Oklahoma facilities. With the acquisition of BASX in 2021, we now have operations in an area that is, historically, impacted 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; however, this is not guaranteed to cover all the losses and damages incurred. Furthermore, we may experience significant 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 certain 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. 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 11 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, manufacturing lead-times, 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. 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 contracts. Historically, we have attempted to limit the impact of price fluctuations on commodities by entering into non- cancellable contracts with our major suppliers for periods of six to 18 months. We expect to receive delivery of raw materials from our contracts for use in our manufacturing operations. These contracts are not accounted for using hedge accounting since they meet the normal purchases and sales exemption. The use of such contracts could cause us to forego the economic benefits we would otherwise realize if prices were to change in our favor. Additionally, should there be a downturn in the market, we could be committed to purchase more materials than necessary for our production and carry excess inventory which could result in additional costs to the business. 12 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. We are reliant on information technology. We are reliant on information technology in all aspects of our business, operated and maintained by the Company as well as under control of third parties. If we do not invest sufficient capital in a timely manner to acquire, develop, or implement new information technologies or maintain or upgrade current information technologies, we could suffer outages as well as be at a competitive disadvantage within our industry which could have a material adverse effect upon our financial condition and results of operations. 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. 13 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 affect 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 are transitioning to a new refrigerant with lower global warming potential for our HVAC systems 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. As with any significant regulatory change, delays or other changes to implementation timing could also have a negative impact on our operations and profitability. Additionally, regulations that reduce or eliminate the use of fossil fuels such as natural gas and propane may reduce or eliminate sales of gas fired equipment for which AAON holds a strong market position. This will result in a shift to more air- and water-cooled heat pump type units to provide space heating. This shift in product line could affect production productivity material costs and aftermarket warranty costs. 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 1C. Cybersecurity Cybersecurity risk management and strategy Our cybersecurity risk management is based on recognized cybersecurity industry frameworks and standards, including those of the National Institute of Standards and Technology ("NIST"), the Center for Internet Security ("CIS"), the Computer Objectives for Information and related Technology ("COBIT"), and the International Organization for Standardization ("ISO"). We use these frameworks, together with information collected from 14 internal assessments, to develop policies for use of our information assets, access to specific intellectual property or technologies, and protection of personal information. We protect these information assets through industry-standard techniques, such as multifactor authentication and malware defenses. We also work with internal stakeholders across the company to integrate foundational cybersecurity principles throughout our organization’s operations, including employment of multiple layers of cybersecurity defenses, restricted access based on business need, and integrity of our business information. Throughout the year, we also regularly train our employees on cybersecurity awareness, confidential information protection and simulated phishing attacks. We engage third-party assessors to conduct penetration testing and measure our program to industry standard frameworks as needed. We also have standing engagements with incident response experts and external counsel. We frequently collaborate with industry experts and cybersecurity practitioners at other companies to exchange information about potential cybersecurity threats, best practices and trends. Our cybersecurity risk management is an important part of our comprehensive business continuity program and internal risk management. Our information security team periodically engages with a cross-functional group of subject matter experts and leaders to assess and refine our cybersecurity risk posture and preparedness. We practice our response to potential cybersecurity incidents through regular tabletop exercises, threat hunting and red team exercises. For more information about cybersecurity risks, see the Risk factors discussion in Item 1A of this Form 10-K. Governance of cybersecurity risk management The board of directors, as a whole, has oversight responsibility for our strategic and operational risks. The audit committee assists the board of directors with this responsibility by reviewing and discussing our risk assessment and risk management practices, including cybersecurity risks, with members of management. The audit committee, in turn, periodically reports on its review with the board of directors. Management is responsible for day-to-day assessment and management of cybersecurity risks. Our chief information officer has primary oversight of material risks from cybersecurity threats. Our chief information officer has more than 25 years of experience across various engineering, business and management roles, including leading the development and implementation of information technology strategies and roadmaps for manufacturing automation. Our chief information officer assesses our cybersecurity readiness through internal assessment tools as well as third- party control tests, vulnerability assessments, audits and evaluation against industry standards. We have governance and compliance structures that are designed to elevate issues relating to cybersecurity to our chief information officer, such as potential threats or vulnerabilities. We also employ various defensive and continuous monitoring techniques using recognized industry frameworks and cybersecurity standards. Our chief information officer meets with the audit committee periodically to review our information technology systems and discuss key cybersecurity risks. In addition, the chief financial officer reviews with the audit committee at least annually our risk management program, which includes cybersecurity risks, and is also reported to the board. Item 2. Properties. Our manufacturing areas are heavy industrial type buildings, with some coverage by overhead cranes, containing manufacturing equipment designed for sheet metal fabrication, metal stamping and tube forming. The manufacturing equipment contained in the facilities consists primarily of automated sheet metal fabrication equipment, supplemented by presses and tube bending equipment. Assembly lines consist of cart-type and roller-type conveyor lines with variable line speed adjustment. Subassembly areas and production line manning are based upon line rates set by production management. We own and lease our properties and facilities, as further described below. We believe that all of our facilities are well maintained and are in good condition and suitable for the conduct of our business. AAON Oklahoma Our plant and office facilities in Tulsa, Oklahoma, consist of a 342,000 square foot building (327,000 square feet of manufacturing/warehouse space and 15,000 square feet of office space) located on a 12-acre tract of land at 2425 South Yukon Avenue. Additionally we own a 940,000 square foot manufacturing/warehouse building and a 70,000 square foot 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 square foot building used as warehouse space located on a 6-acre tract. 15 In 2023, we acquired an additional 17-acre tract of land adjacent to the east side of the current 12-acre tract. We also lease a 198,000 square foot warehouse space which is used for additional inventory storage in Tulsa, Oklahoma. In addition to a retail parts store location at our Tulsa facilities, we also own a 13,500 square foot stand alone building (7,500 square foot warehouse and 6,000 square foot office) which is utilized as an additional retail parts store to provide our customers more accessibility 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 NAIC. 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 square foot manufacturing/warehouse building at 2440 South Yukon Avenue. In 2023, we opened our Exploration Center at our Tulsa location. The Exploration Center is a 28,000 square foot facility located adjacent to the NAIC. The Exploration Center provides an immersive and educational experience of our products, solutions and our people and also serves as an event hub for our stakeholders, including our customers, employees, representatives and investors. The Exploration Center adds a dimension of customer engagement that showcases our products and our competitors' products and allows our customers to interact with our employees. Our operations in Parkville, Missouri, are conducted in a leased plant/office at 8500 NW River Park Drive. This location is home to our Controls design and manufacturing facilities. In October 2022, we modified the existing lease to increased our manufacturing and office space to approximately 86,000 square feet. During mid-2023, we began utilizing this additional space for manufacturing operations. AAON Coil Products Our plant and office facilities in Longview, Texas, consist of a 263,000 square foot building (256,000 square feet of manufacturing/warehouse space and 7,000 square feet of office space) located on a 13-acre tract of land, a 222,000 square foot building (210,000 square feet of manufacturing/warehouse space and 12,000 square feet of office space) located on an approximately 22-acre tract of land, and a 5,000 square foot building utilized as a retail parts store which we lease to a Representative of the Company. All of these facilities are located on Gum Springs Road. In January 2023, we purchased additional real property and improvements consisting of 64,000 square feet of warehouse space located on a 10-acre tract of land at 115 Kodak Boulevard in Longview, Texas. In April 2023, we broke ground on an expansion to our 222,000 square foot building. The expansion consists of 237,500 square feet of office and manufacturing space that will be dedicated to unit production. We expect that we will be able to utilize this space in late 2024. BASX Our operations in Redmond, Oregon, are conducted in a plant/office at 3500 SW 21st Place, containing approximately 194,000 square feet (169,000 square feet of manufacturing/warehouse space and 25,000 square feet of office space) on a 13-acre tract of land. In August 2022, we purchased additional real property of approximately one-acre adjacent to the plant/office at 3500 SW 21st Place, to facilitate future growth of our operations. In the third quarter of 2023, we broke ground on an approximate 30,000 square foot fabrication facility residing on the one-acre tract of land. We expect to be in operation in this facility in late 2024. We lease several properties near our main Redmond, Oregon location. In the aggregate, these properties contain approximately 104,500 square feet of additional warehouse space. Additionally, we lease an office of approximately 4,000 square feet located at 1725 Blankenship Road, West Linn, Oregon. Item 3. Legal Proceedings. See Note 18 of the Consolidated Financial Statements. Item 4. Mine Safety Disclosure. Not applicable. 16 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, 2024, there were 1,030 holders of record of our common stock. Dividends - At the discretion of the Board of Directors, we pay cash dividends. Board approval is required to determine the date of declaration and amount for each cash dividend payment. Our cash dividends for the three years ended December 31, 2023 are as follows: Declaration Date1 May 17, 2021 Record Date June 3, 2021 Payment Date July 1, 2021 November 9, 2021 November 26, 2021 December 17, 2021 May 18, 2022 June 3, 2022 July 1, 2022 November 8, 2022 November 28, 2022 December 16, 2022 March 1, 2023 May 18, 2023 March 13, 2023 March 31, 2023 June 9, 2023 June 30, 2023 August 18, 2023 September 8, 2023 September 29, 2023 November 10, 2023 November 29, 2023 December 18, 2023 Dividend per Share2 $0.13 Annualized Dividend per Share2 $0.26 $0.13 $0.13 $0.16 $0.08 $0.08 $0.08 $0.08 $0.26 $0.26 $0.32 $0.32 $0.32 $0.32 $0.32 1 Effective with the cash dividend declared on March 1, 2023 (paid on March 31, 2023), the Company moved from semi-annual cash dividends to quarterly cash dividends. 2 Reflects three-for-two stock split effective August 16, 2023. Stock Split - On July 7, 2023, the Board of Directors declared a three-for-two stock split of the Company's common stock to be paid in the form of a stock dividend. Stockholders of record at the close of business on July 28, 2023 received one additional share for every two shares they held as of that date on August 16, 2023 (ex-dividend date August 17, 2023). Share-Based Compensation Plans - The following is a summary of our share-based compensation plans as of December 31, 2023: 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)) 161,854 1,862,571 $ $ 15.02 29.55 — 5,070,436 Plan category The 2007 Long-Term Incentive Plan The 2016 Long-Term Incentive Plan 17 Issuer Purchases of Equity Securities - Repurchases during the fourth quarter of 2023, which include repurchases from our employee repurchase program, were as follows: ISSUER PURCHASES OF EQUITY SECURITIES (a) Total Number of Shares (or Units Period Purchased) October 2023 November 2023 December 2023 Total 1,158 $ 180 348 1,686 $ (b) Average Price Paid (Per Share or Unit) (c) Total Number of Shares (or Units) Purchased as part of Publicly Announced Plans or Programs (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may yet be Purchased under the Plans or Programs 54.89 61.00 70.99 58.86 1,158 180 348 1,686 — — — — 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 1.56 million shares of AAON 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 $60.0 million, which is included in additional paid-in capital on the consolidated balance sheets. As of December 31, 2023, 0.58 million, and 0.73 million shares related to the earn-out milestones for the years ended 2022 and 2021, respectively, have been issued to the former owners of BASX as private placements exempt from registration with the SEC under Rule 506(b), which are included in common stock on the consolidated statements of stockholders' equity. Rule 10b5-1 Trading Arrangements - The following table describes contracts, instructions or written plans for the purchase or sale of our securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). Name and Title of Director or Officer Stephen E. Wakefield Vice President and Chief Operating Officer Date of Adoption of Arrangement November 23, 2022 Duration of the Arrangement Terminated May 17, 2023 Aggregate Number of Securities to be Purchased or Sold Pursuant to the Arrangement 95,788 Stephen E. Wakefield September 13, 2023 Terminated December 27, 2023 181,000 Vice President and Chief Operating Officer 18 Comparative Stock Performance Graph The following performance graph compares our cumulative total shareholder return for the Company’s common stock for the five-year period ending on December 31, 2023, compared to an overall stock market index (the NASDAQ Composite Index) and the Company’s peer group index (S&P 600 Capital Goods Industry Group Index). We believe the S&P 600 Capital Goods Industry Group Index best represents our relative peer group based on our current business and market capitalization. The graph assumes that $100 was invested at the close of trading December 31, 2018, with the reinvestment of dividends since that date. 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, 2018 350 300 250 200 150 100 2018 2019 2020 2021 2022 2023 AAON Inc. NASDAQ S&P 600 Capital Goods Company / Index 2018 2019 2020 2021 2022 2023 AAON, Inc. $ 100 $ 142 $ 193 $ 231 $ 220 $ NASDAQ Composite Index 100 137 198 242 163 S&P 600 Capital Goods Industry Group Index $ 100 $ 130 $ 150 $ 188 $ 180 $ 326 236 249 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. 19 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Overview The following discussion summarizes the significant factors affecting the consolidated operating results, financial condition and liquidity of the Company for the year ended December 31, 2023. This 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. A detailed discussion of the year to year changes for the years ended December 31, 2022 and 2021 is not included herein and can be found in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations section of the Company's Annual Report on Form 10-K for the year ended December 31, 2022. Description of the Company AAON is a leader in HVAC solutions for commercial and industrial indoor environments. The company’s industry- leading approach to designing and manufacturing highly configurable equipment to meet exact needs creates a premier ownership experience with greater efficiency, performance, and long-term value. AAON is headquartered in Tulsa, Oklahoma, where its world-class innovation center and testing capabilities enable continuous advancement toward a cleaner and more sustainable future. We engineer, manufacture, and sell premium heating, ventilation, and air conditioning equipment consisting of semi-custom and custom rooftop units, data center cooling solutions, cleanroom systems, packaged outdoor mechanical rooms, air handling units, makeup air units, energy recovery units, condensing units, geothermal/water- source heat pumps, coils, and controls. These products are marketed and sold to a variety of vertical markets including retail, manufacturing, educational, lodging, supermarket, data centers, medical and pharmaceutical, industrial, and other commercial markets. We sell 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 uncertainty of the economy negatively impacted the commercial and industrial new construction markets in 2020 and the first half of 2021. Since mid-2021, nonresidential construction spending has been strong, recovering well beyond pre-2020 levels and finishing 2023 near record levels. Recently, however, certain leading indicators, including architectural billings and construction starts, signal a slowing in construction spending within the next 12 months. Furthermore, some economic general indicators are suggesting the general economy is slowing, which could also impact the replacement market. If the domestic economy were to slow or enter a recession, this could result in a decline in our sales volume and profitability. Sales in the commercial and industrial new construction markets generally lag the housing market, which in turn is influenced by cyclical factors such as interest rates, inflation, consumer spending habits, employment rates, the state of the economy 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, change 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. 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 increasing 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. 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, and are obtained from domestic suppliers. We also purchase from domestic manufacturers certain components, including coils, compressors, motors, and electrical controls. 20 The price levels of our raw materials fluctuate due to various economic factors within the U.S. and global economy. For the year ended December 31, 2023, the prices for copper, galvanized steel, and stainless steel decreased by approximately 4.5%, 38.9%, and 3.3%, respectively, and aluminum increased by approximately 15.5% from 2022. We attempt to limit the impact of price fluctuations on these materials by entering into cancellable and non- cancellable contracts with our major suppliers for periods of six to 18 months. We expect to receive delivery of raw materials from our contracts for use in our manufacturing operations. We occasionally increase the price of our products to help offset any inflationary headwinds. In recent years, price increases have been more frequent due to the amount of inflation the business has endured. In 2021, we implemented three price increases. In 2022, we implemented two significant price increases as well as a recurring 1% monthly price increase beginning June 1, 2022 and ending on April 1, 2023. We reinstated a recurring 1% monthly price increase on October 1, 2023 and carried that through February 1, 2024. Additionally, we continue to experience challenges in a tight labor market, especially the hiring of both skilled and unskilled production labor. We have implemented the following wage increases to remain competitive and to attract and retain employees: • • • • • • In March 2021, we awarded annual merit raises for an overall 5.0% increase to wages. In July 2021, we increased starting wages for our production workforce by 7.0%. In October 2021, we implemented a cost of living increase of 3.5% in place for all employees below our Senior Leadership Team ("SLT") which consists of officers and key members of management. In March 2022, we awarded annual merit raises for an overall 3.0% increase to wages. In October 2022, we implemented a cost of living increase of 3.5% in place for all employees below the SLT level. In March 2023, we awarded annual merit raises for an overall 3.9% increase to wages. We will continue to implement human resource initiatives to retain and attract labor to further improve productivity and production efficiencies. 21 Backlog The following table shows our historical backlog levels: December 31, 2023 December 31, 2022 (in thousands) $ 510,028 $ 548,022 While our backlog is down at December 31, 2023 compared to December 31, 2022, our bookings remain strong. The year-ended December 31, 2022 was a record year for bookings and our backlog was elevated causing us to extend lead times. Investments made in our facilities and workforce have significantly improved our capacity and operational efficiencies. Production rates are at all time highs, trimming our backlog down to a more manageable size and allowing our lead times to improve. Consolidated Results of Operations Net Sales Cost of Sales Gross Profit Selling, general and administrative expenses Gain on disposal of assets Income from operations Years Ended December 31, 2023 2022 (in thousands) $ 1,168,518 $ 888,788 769,498 399,020 171,539 651,216 237,572 110,823 (13) (12) $ 227,494 $ 126,761 The following are highlights of our results of operations, cash flows, and financial condition: • • Net sales for 2023 grew 31.5% to $1,168.5 million due to record production rates and price increases realized during the period as compared to the same period in the prior year. Overall gross margin increased 740 basis points in 2023 due to increased organic volumes for operational efficiencies and better overhead absorption. • We continue to invest in the future growth of the Company as evidenced by our $104.3 million in capital expenditures in 2023, an increase $50.3 million or 93.1% when compared to 2022 . • We completed the repurchase of $25.0 million of shares under our current share repurchase authorization. We report our financial results based on three reportable segments: AAON Oklahoma, AAON Coil Products, and BASX, which are further described in Item 1 and Item 8. 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. 22 Segment Operating Results for the Years Ended December 31, 2023 and 2022 For the years ended December 31, 2023 Percent of Sales2 2022 Percent of Sales1 $ Change % Change (in thousands) Net Sales2 AAON Oklahoma $ 897,919 76.8 % $ 663,845 74.7 % $ 234,074 AAON Coil Products BASX Net sales Cost of Sales2 AAON Oklahoma AAON Coil Products BASX 112,320 158,279 9.6 % 107,290 12.1 % 5,030 13.5 % 117,653 13.2 % 40,626 $ 1,168,518 $ 888,788 $ 279,730 $ 577,852 64.4 % 490,862 73.9 % $ 86,990 82,996 108,650 73.9 % 68.6 % 73,979 86,375 69.0 % 9,017 73.4 % 22,275 Cost of sales $ 769,498 65.9 % $ 651,216 73.3 % $ 118,282 35.3 % 4.7 % 34.5 % 31.5 % 17.7 % 12.2 % 25.8 % 18.2 % Gross Profit2 AAON Oklahoma AAON Coil Products BASX Gross profit $ 320,067 35.6 % $ 172,983 26.1 % $ 147,084 85.0 % 29,324 49,629 26.1 % 31.4 % 33,311 31,278 31.0 % (3,987) (12.0) % 26.6 % 18,351 $ 399,020 34.1 % $ 237,572 26.7 % $ 161,448 58.7 % 68.0 % 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 $279.7 million, or 31.5%, with 17.0% of the increase coming from realization of price increases and the remaining 14.5% coming from increases in organic volume. AAON Coil Products had a smaller backlog and along with inefficiencies related to implementing a new production line of BASX product at AAON Coil Products led to smaller year over year increase sales for this segment. The increase in BASX net sales is primarily related to large jobs in the data center market as a result of the revenue synergies created by being part of AAON. Gross profit as a percent of sales increased to 34.1% during 2023 as compared 26.7% in 2022. As noted above, realization of price increases has improved our margin profile along with the slowing of inflation. Additionally, most of the organic growth noted above comes from our AAON Oklahoma segment, significantly improving overhead absorption and margin performance. The increase in net sales at BASX has improved their overhead absorption, thus increasing their gross profit margin year over year. As shown in the table below, we've experienced year over year fluctuations in the cost of several raw materials. We implemented multiple price increases during 2022 and 2023 to counteract the increased cost of material. Some of the price increases have yet to be realized. Additionally, in order to retain our existing employees, we continue to award periodic raises in addition to our annual merit raises to our employees. 23 Raw Material Costs Twelve month average raw material cost per pound as of December 31: 2023 2022 % Change Copper Galvanized Steel Stainless Steel Aluminum $ $ $ $ 5.35 0.58 3.19 2.54 $ $ $ $ 5.60 0.95 3.30 2.20 (4.5) % (38.9) % (3.3) % 15.5 % Selling, General and Administrative Expenses Years Ended December 31, Percent of Sales 2023 2022 2023 2022 Warranty Profit Sharing Salaries & Benefits Stock Compensation Advertising Depreciation & Amortization Insurance Professional Fees Donations Other (in thousands) $ 16,165 $ 24,590 53,281 9,318 2,594 13,761 5,354 15,372 1,242 29,862 Total SG&A $ 171,539 $ 8,497 14,009 41,351 7,025 2,353 8,050 3,755 5,754 1,134 18,895 110,823 1.4 % 2.1 % 4.6 % 0.8 % 0.2 % 1.2 % 0.5 % 1.3 % 0.1 % 2.6 % 1.0 % 1.6 % 4.7 % 0.8 % 0.3 % 0.9 % 0.4 % 0.6 % 0.1 % 2.1 % 14.7 % 12.5 % Selling, general and administrative expenses increased $60.7 million or 54.8% during 2023 as compared to the prior year. As a percentage of sales, selling, general and administrative increased from 12.5% to 14.7%. Most of the increase is due to professional fees that increased $9.6 million due to the litigation settlement (Note 18). Profit sharing increased $10.6 million or 75.5% due to our increased operating results. Other expenses increased $11.0 million or 58.0% during year due mostly to increased travel, consulting expenses and closing costs related to the 2023 New Market Tax Credit (Note 17). Income Taxes Years Ended December 31, 2023 2022 Effective Tax Rate 2022 2023 (in thousands) Income tax provision $ 45,531 $ 24,157 20.4 % 19.4 % The Company’s estimated annual 2023 effective tax rate, excluding discrete events, was 23.8%. The increase year over year in the overall effective tax rate was primarily due the non-deductible executive compensation. In accordance with the 2017 Tax Cuts & Jobs Act, under Internal Revenue Code Section 162(m), the tax deduction for covered executives of public companies is limited to $1.0 million per individual. Because of our high stock price and timing of executive stock option exercises this resulted in an increase to the income tax provision of $3.8 million for the year ended December 31, 2023. 24 Liquidity and Capital Resources Our working capital and capital expenditure requirements are generally met through net cash provided by operations and the 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 $5.2 million from December 31, 2022 to December 31, 2023. As of December 31, 2023, we had $9.0 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 $200.0 million. As of December 31, 2023 and December 31, 2022, we had an outstanding balance under the Revolver of $38.3 million and $71.0 million, respectively. We had two standby letters of credit totaling $2.3 million as of December 31, 2023 and one standby letter of credit totaling $0.8 million as of December 31, 2022. Borrowings available under the Revolver at December 31, 2023, were $159.4 million. The Revolver expires on May 27, 2027. 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, 2023 and 2022, the weighted average interest rate of our Revolver was 6.3% and 3.0%, respectively. 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 years ended December 31, 2023 and 2022. 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, 2023, 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, 2023, our leverage ratio was 0.15 to 1.0, which meets the requirement of not being above 3 to 1. 2019 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 “2019 Investor”) and a certified Community Development Entity under a qualified New Markets Tax Credit (“2019 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 “2019 Project”). In connection with the 2019 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 2019 Project. Upon closing of the 2019 NMTC transaction, the Company provided an aggregate of approximately $15.9 million to the 2019 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 2019 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 the NMTCs. 2023 New Markets Tax Credit - On April 25, 2023, the Company entered into a transaction with a subsidiary of an unrelated third-party financial institution (the “2023 Investor”) and a certified Community Development Entity under a qualified New Markets Tax Credit (“2023 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 “2023 Project”). In connection with the 2023 NMTC transaction, the Company received a $23.0 million NMTC allocation for the 2023 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 2023 NMTC transaction, the Company provided an aggregate of approximately $16.7 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 $16.7 million in proceeds plus capital contributed from the 2023 Investor was used to make an aggregate 25 $23.8 million loan to a subsidiary of the Company. This financing arrangement is secured by a guarantee from the Company, including an unconditional guarantee of the NMTCs. The net proceeds from the closing of the 2023 NMTC is included in restricted cash on our consolidated balance sheets required to be used for the 2023 Project. 2024 New Markets Tax Credit - On February 27, 2024, the Company entered into a transaction with a subsidiary of an unrelated third-party financial institution (the “2024 Investor”) and a certified Community Development Entity under a qualified New Markets Tax Credit (“2024 NMTC”) program pursuant to Section 45D of the Internal Revenue Code of 1986, as amended, related to an investment in real estate to facilitate the current expansion of our Longview, Texas manufacturing operations (the “Project”). In connection with the 2024 NMTC transaction, the Company received a $15.5 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 2024 NMTC transaction, the Company provided an aggregate of approximately $11.0 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 $11.0 million in proceeds plus capital contributed from the Investor was used to make an aggregate $16.0 million loan to a subsidiary of the Company. This financing arrangement is secured by a guarantee from the Company, including an unconditional guarantee of NMTCs. Stock Repurchase - The Board has authorized stock repurchase programs for the Company. The Company may purchase shares on the open market from time to time. 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 Authorized Repurchase $ March 13, 2020 November 3, 2022 $20 million $50 million Expiration Date November 9, 2022 **1, 2 1 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. 2 As of December 31, 2023, there is approximately $25.0 million remaining under the current stock repurchase program. The remaining amount available is subject to a Board authorized 10b5-1 plan requiring certain market conditions and requirements. The Company also had a stock repurchase arrangement by which employee-participants in our 401(k) Plan were entitled to have shares in AAON, Inc. stock in their accounts sold to the Company. The 401(k) Plan was amended in June 2022 to discontinue this program. No additional shares have been purchased by the Company under this arrangement since June 2022. Lastly, the Company repurchases shares of AAON, Inc. stock from certain of its 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. 26 Our repurchase activity is as follows: Program Shares1 402,873 $ Open market 401(k) Employees Total 1 Reflects three-for-two stock split effective August 16, 2023. — 21,904 424,777 $ 2023 2022 (in thousands, except share and per share data) Total $ $ per share1 62.08 — 59.44 61.94 25,009 $ — 1,302 26,311 $ Shares1 183,168 $ 155,904 25,842 364,914 $ Total $ $ per share1 37.25 37.93 39.43 37.69 6,823 $ 5,913 1,019 13,755 $ Program Inception to Date (in thousands, except share and per share data) Shares1 Total $ $ per share1 6,893,924 $ Open market 12,462,552 401(k) 3,089,337 Directors and employees Total 22,445,813 $ 1 Reflects three-for-two stock split effective August 16, 2023. 106,625 $ 171,789 24,662 303,076 $ 15.47 13.78 7.98 13.50 Dividends - At the discretion of the Board of Directors, we pay cash dividends. Board approval is required to determine the date of declaration and amount for each cash dividend payment. Our recent dividends are as follows: Declaration Date1 Record Date Payment Date May 18, 2022 June 3, 2022 July 1, 2022 November 8, 2022 November 28, 2022 December 16, 2022 March 1, 2023 March 13, 2023 March 31, 2023 May 18, 2023 June 9, 2023 June 30, 2023 August 18, 2023 September 8, 2023 September 29, 2023 November 10, 2023 November 29, 2023 December 18, 2023 Dividend per Share2 Annualized Dividend per Share2 $0.13 $0.16 $0.08 $0.08 $0.08 $0.08 $0.26 $0.32 $0.32 $0.32 $0.32 $0.32 1 Effective with the cash dividend declared on March 1, 2023 (paid on March 31, 2023), the Company moved from semi-annual cash dividends to quarterly cash dividends. 2 Reflects three-for-two stock split effective August 16, 2023. On July 7, 2023, the Board of Directors declared a three-for-two stock split of the Company's common stock that was paid in the form of a stock dividend. Stockholders of record at the close of business on July 28, 2023 received one additional share for every two shares they held as of that date on August 16, 2023 (ex-dividend date August 17, 2023). All share and per share information has been updated to reflect the effects of this stock split. 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 2024 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. 27 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 provided by financing activities for the years indicated. Operating Activities Net Income Income statement adjustments, net Changes in assets and liabilities: Accounts receivable Income taxes Inventories Contract assets Prepaid expenses and other long-term assets Accounts payable Contract liabilities Extended warranties Accrued liabilities and other long-term liabilities Net cash provided by operating activities Investing Activities Capital expenditures Cash paid for building (Note 4) Cash paid in business combination, net of cash acquired Acquisition of intangible assets Other Net cash used in investing activities Financing Activities Borrowings under revolving credit facility Payments under revolving credit facility Proceeds from financing obligation, net of issuance costs Payment related to financing costs Principal payments on financing lease Stock options exercised Repurchase of stock Employee taxes paid by withholding shares Cash dividends paid to stockholders Net cash (used in) provided by financing activities 2023 2022 (in thousands) $ 177,623 $ 58,166 100,376 38,516 (9,978) (11,302) (16,226) (30,043) (1,048) (18,316) (7,667) 2,600 15,086 158,895 (104,294) — — (5,197) 180 (56,306) 18,195 (71,409) (9,402) (2,367) 11,574 13,882 1,314 16,945 61,318 (54,024) (22,000) (249) — 60 (109,311) (76,213) 597,111 225,758 (629,787) (194,754) 6,061 (398) — 33,259 (25,009) (1,302) (26,445) (46,510) $ $ — — (115) 23,140 (12,737) (1,018) (22,917) 17,357 Cash Flows from Operating Activities The Company currently manages cash needs through working capital as well as drawing on its line of credit. Collections and payments cycles are on a normal pattern and fluctuate due to timing of receipts and payments. In early 2022, the Company began increasing the purchase of inventory to take advantage of favorable pricing opportunities and also to mitigate the impact of future supply chain disruptions on our operations. Payment terms for BASX jobs typically require upfront cash to fund the job resulting in cash inflows related to our contract liabilities and cash inflows fluctuate due to job timing and scheduling. 28 The decrease in cash flows from income taxes is primarily due to the 2017 Tax Cuts & Jobs Act, which requires research and development expenses incurred after December 31, 2021 to be capitalized and amortized over 5 years. This defers our current period income tax deduction which increased our income tax payments due at the end of 2022. Cash Flows from Investing Activities The capital expenditures increase during 2023 related to our continued investment in our production capabilities. Purchases during 2023 relate to additional sheet metal and other machinery for both replacement and growth, additional production and warehouse space in Longview, Texas, additional office space in Tulsa, Oklahoma, additional land in Tulsa, Oklahoma for future growth, and a partial interest in an airplane. The cash paid for building is related to the purchase of the BASX office and manufacturing facility in May 2022 (Note 4). Our capital expenditure program for 2024 is estimated to be approximately $125.0 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 The change in cash from financing activities in 2023 is primarily related to borrowings under our revolving credit facility to manage our working capital needs, especially strategic purchases of inventory to avoid supply chain delays and the funding of certain capital expenditures, offset by repayments we were able to make due to our increased operating results and financial condition. Furthermore, cash flows from financing activities is historically affected by the timing of stock options exercised by our employees. Stock options exercised increased due to the increase in the number of employee options exercised and increase in our average stock price during 2023 as compared to the previous period. Additionally, we repurchased approximately 424,777 shares for approximately $26.3 million during 2023 (Note 16). Effective with the cash dividend declared on March 1, 2023 (paid on March 31, 2023), the Company moved from semi-annual cash dividends to quarterly cash dividends. Commitments and Contractual Agreements We are occasionally party to short-term, cancellable and occasionally non-cancellable, 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. In 2023, the Company executed a five-year purchase commitment for refrigerants. In 2023, the Company made payments of $10.1 million on this contract. Estimated minimum future payments are $11.9 million, $9.1 million, $10.5 million, and $11.2 million for 2024, 2025, 2026, and 2027, respectively. We had no other material contractual purchase obligations as of December 31, 2023. 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. See Note 18 of the Consolidated Financial Statements for additional information with respect to specific legal proceedings. 29 Critical Accounting Estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and the Company's discussion and analysis of its financial condition and operating results require 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 - Raw material or component inventory typically transfers from one stage of manufacturing to another where it accumulates additional costs directly incurred with the production of finished goods, including estimated standard labor and overhead costs. Labor and overhead costs associated with the manufacturing of our products are capitalized into inventory on an estimated standard basis. These include certain direct and indirect costs such as compensation, manufacturing, and facility costs associated with manufacturing support functions. We continually monitor our labor and overhead standard costs to ensure that standard costs reasonably reflects our actual costs and make manual adjusts the value of inventory accordingly. Our manual adjustments from standard to actual labor and overhead costs contain uncertainties that require management to make assumptions and to apply judgment regarding a number of factors, including inventory turns, supply usage, manufacturing efficiencies, and historical production costs. 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 Accrual – 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. 30 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. 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 reporting 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. We performed a qualitative assessment as of December 31, 2023 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. 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 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to SEC's Disclosure Update and Simplification Initiative. The new guidance is intended to update a variety of disclosure requirements. The effective date for each amendment will be the date on with the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective. Early adoption is prohibited. Upon adoption, this ASU is not expected to have a material impact on the Company's financial statements and related disclosures. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280). The new guidance improves reportable segment disclosures primarily through enhanced disclosures about significant segment expenses and by requiring current annual disclosures to be provided in interim periods. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Upon adoption, this ASU is not expected to have a material impact on the Company's financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740). The new guidance is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Upon adoption, this ASU is not expected to have a material impact on the Company's financial statements and related disclosures. 31 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 cancellable and non-cancellable contracts with our major suppliers for periods of six to 18 months to manage this exposure. Interest Rate Risk We are exposed to changes in interest rates related to our outstanding debt. As of December 31, 2023, we had an outstanding balance of $38.3 million. For each one percentage point increase in the interest rate applicable to our outstanding debt, our annual income before taxes would decrease by approximately $0.4 million. 32 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 34 35 36 37 38 39 33 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, 2023 and 2022, the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, 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, 2023, 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, 2024 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 Critical audit matters 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. We determined that there are no critical audit matters. /s/ GRANT THORNTON LLP We have served as the Company’s auditor since 2004. Tulsa, Oklahoma February 28, 2024 34 Assets Current assets: Cash and cash equivalents Restricted cash Accounts receivable, net 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 markets tax credit obligations 1 Commitments and contingencies (Note 18) Stockholders’ equity: AAON, Inc. and Subsidiaries Consolidated Balance Sheets December 31, 2023 2022 (in thousands, except share and per share data) $ 287 $ 8,736 138,108 213,532 45,194 3,097 408,954 15,438 205,841 391,366 40,787 653,432 283,485 369,947 68,053 81,892 11,774 816 $ 941,436 $ $ 27,484 $ 85,508 13,757 126,749 38,328 12,134 16,807 12,194 5,451 498 127,158 198,939 15,151 1,919 349,116 8,537 169,156 342,045 30,033 549,771 245,026 304,745 64,606 81,892 7,123 6,421 813,903 45,513 78,630 21,424 145,567 71,004 18,661 11,508 6,449 — 322 98,735 461,657 560,714 813,903 Preferred stock, $.001 par value, 5,000,000 shares authorized, no shares issued Common stock, $.004 par value, 100,000,000 shares authorized, 81,508,381 and 80,137,776 issued and outstanding at December 31, 2023 and 2022, respectively2 Additional paid-in capital Retained earnings2 Total stockholders’ equity Total liabilities and stockholders’ equity 1 Held by variable interest entities (Note 17) 2 Reflects three-for-two stock split effective August 16, 2023. 612,835 735,224 941,436 $ 326 122,063 — $ The accompanying notes are an integral part of these consolidated financial statements. 35 AAON, Inc. and Subsidiaries Consolidated Statements of Income Years Ended December 31, 2022 (in thousands, except share and per share data) 2021 2023 Net sales Cost of sales Gross profit Selling, general and administrative expenses Gain on disposal of assets Income from operations Interest expense, net Other income, net Income before taxes Income tax provision Net income Earnings per share: Basic1 Diluted1 Cash dividends declared per common share1: Weighted average shares outstanding: Basic1 Diluted1 1 Reflects three-for-two stock split effective August 16, 2023. $ $ $ $ $ 1,168,518 $ 769,498 399,020 171,539 (13) 227,494 (4,843) 503 223,154 45,531 177,623 $ 888,788 $ 651,216 237,572 110,823 (12) 126,761 (2,627) 399 124,533 24,157 100,376 $ 2.19 $ 2.13 $ 0.32 $ 1.26 $ 1.24 $ 0.29 $ 534,517 396,687 137,830 68,598 (21) 69,253 (132) 61 69,182 10,424 58,758 0.75 0.73 0.25 81,156,114 83,295,290 79,582,480 81,145,610 78,606,298 80,593,484 The accompanying notes are an integral part of these consolidated financial statements. 36 AAON, Inc. and Subsidiaries Consolidated Statements of Stockholders’ Equity 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 Balance at December 31, 2021 Net income Stock options exercised and restricted stock awards granted Share-based compensation Stock repurchased and retired Contingent consideration (Note 4) Dividends Balance at December 31, 2022 Net income Stock options exercised and restricted stock awards granted Share-based compensation Stock repurchased and retired Dividends Common Stock Shares1 Amount1 Paid-in Capital Retained Earnings1 Total (in thousands) 78,337 $ — 935 — (480) — — 78,792 — 1,711 — (365) — — 80,138 — 1,795 — (425) — 317 $ — 2 — (1) — — 318 — 5 — (1) — — 322 — 7 — (3) — 5,161 $ — 21,146 345,387 $ 58,758 — 350,865 58,758 21,148 11,812 (22,465) 66,000 — 81,654 — 23,135 13,700 (13,754) (6,000) — 98,735 — 33,252 16,384 (26,308) — — — (19,947) 384,198 100,376 — — — — (22,917) 461,657 177,623 — — — — (26,445) 11,812 (22,466) 66,000 (19,947) 466,170 100,376 23,140 13,700 (13,755) (6,000) (22,917) 560,714 177,623 33,259 16,384 (26,311) (26,445) Balance at December 31, 2023 81,508 $ 326 $ 122,063 $ 612,835 $ 735,224 1Reflects three-for-two stock split effective August 16, 2023. The accompanying notes are an integral part of these consolidated financial statements. 37 AAON, Inc. and Subsidiaries Consolidated Statements of Cash Flows 2023 Years Ended December 31, 2022 (in thousands) 2021 $ 177,623 $ 100,376 $ 58,758 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 (Recoveries of) provision for credit losses on accounts receivable, net of adjustments Provision for excess and obsolete inventories, net of write-offs Share-based compensation Gain on disposition of assets Foreign currency transaction (gain) loss Interest income on note receivable Deferred income taxes Changes in assets and liabilities: Accounts receivable Income taxes Inventories Contract assets Prepaid expenses and other long-term assets Accounts payable Contract liabilities Extended warranties Accrued liabilities and other long-term liabilities Net cash provided by operating activities Investing Activities Capital expenditures Cash paid for building (Note 4) Cash paid in business combination, net of cash acquired Proceeds from sale of property, plant and equipment Acquisition of intangible assets Principal payments from note receivable Net cash used in investing activities Financing Activities Borrowings under revolving credit facility Payments under revolving credit facility Proceeds from financing obligation, net of issuance costs Payments related to financing costs Principal payments on financing lease Stock options exercised Repurchase of stock Employee taxes paid by withholding shares Dividends paid to stockholders Net cash (used in) provided by financing activities Net increase (decrease) 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 $ 46,468 82 324 (154) 1,633 16,384 (13) (10) (21) (6,527) (9,978) (11,302) (16,226) (30,043) (1,048) (18,316) (7,667) 2,600 15,086 158,895 (104,294) — — 129 (5,197) 51 (109,311) 597,111 (629,787) 6,061 (398) — 33,259 (25,009) 35,106 43 324 (72) 2,740 13,700 (12) 41 (22) (13,332) (56,306) 18,195 (71,409) (9,402) (2,367) 11,574 13,882 1,314 16,945 61,318 (54,024) (22,000) (249) 12 — 48 (76,213) 225,758 (194,754) — — (115) 23,140 (12,737) (1,302) (26,445) (46,510) 3,074 5,949 9,023 $ (1,018) (22,917) 17,357 2,462 3,487 5,949 $ 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) 40,000 — — — — 21,148 (20,876) (1,590) (19,947) 18,735 (78,801) 82,288 3,487 The accompanying notes are an integral part of these consolidated financial statements. 38 AAON, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2023 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., 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, packaged outdoor mechanical rooms, air handling units, makeup air units, energy recovery units, condensing units, geothermal/water-source heat pumps, coils, and controls. Inflation and Labor Market In late 2021 and throughout 2022, we witnessed increases in our raw material and component prices. Due to our favorable liquidity position, we continued to make strategic purchases of materials when we see opportunities. We continue to manage the increase in the cost of raw materials through price increases for our products. We have also experienced supply chain challenges related to specific manufacturing parts, which we have managed through our strong vendor relationships as well as expanding our list of vendors. Additionally, we continue to experience challenges in a tight labor market, especially the hiring of both skilled and unskilled production labor. We have implemented the following wage increases to remain competitive and to attract and retain employees: • • • • • • In March 2021, we awarded annual merit raises for an overall 5.0% increase to wages. In July 2021, we increased starting wages for our production workforce by 7.0%. In October 2021, we implemented a cost of living increase of 3.5% in place for all employees below our Senior Leadership Team ("SLT"), which consists of officers and key members of management. In March 2022, we awarded annual merit raises for an overall 3.0% increase to wages. In October 2022, we implemented a cost of living increase of 3.5% in place for all employees below the SLT level. In March 2023, we awarded annual merit raises for an overall 3.9% increase to wages. We will continue to implement human resource initiatives to retain and attract labor to further improve productivity and production efficiencies. Despite efforts to mitigate the impact of inflation, supply chain issues and the tight labor market, future disruptions, while temporary, could negatively impact our consolidated financial position, results of operations and cash flows. First Quarter 2021 Planned Maintenance and Adverse Weather 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. 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. 39 WH Series and WV Series Water Source Heat Pump Units As part of the normal course of business, management continually monitors the profitability of the Company's various product series offerings. During the third quarter of 2022, management made the decision to no longer produce our small packaged geothermal/water-source heat pump units consisting of the WH Series horizontal configuration and WV Series vertical configuration, from one-half to 12 1/2 tons ("WH/WV"). These WH/WV units were produced solely out of the AAON Oklahoma facility. Production of the remaining WH/WV backlog was completed during the second quarter 2023. Change in Estimate During the first quarter of 2022, a review of the Company's useful lives for certain sheet metal manufacturing equipment at our Longview, Texas facilities resulted in a change in estimate that increased the useful lives from between ten and twelve years to fifteen years. This determination was based on recent and estimated future production levels as well as management's knowledge of the equipment and historical and future use of the equipment. The change in estimate was made prospectively and resulted in a decrease to depreciation expense within cost of sales on our consolidated statements of income of $1.8 million during the year ended December 31, 2022. We do not believe the impact of these events had a material adverse effect on our consolidated financial position, results of operations and cash flows. 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 intercompany accounts and transactions have been eliminated. Our financial statements also 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 five variable interest entities ("VIEs") (Note 17) 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. 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 (Note 4). On December 29, 2021, BASX, LLC converted to a C- Corporation, BASX, Inc. ("BASX"), and is subject to income tax. We have included the results of BASX’s operations in our consolidated financial statements beginning December 11, 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. Restricted Cash Restricted cash held at December 31, 2023 and December 31, 2022 consists of bank deposits and highly liquid, interest-bearing money market funds held for the purpose of the Company's qualified New Markets Tax Credit programs (Note 17) 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 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. 40 Accounts and Note Receivable 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 3.4%, 3.1%, and 3.0% of revenues for the years ended December 31, 2023, 2022, and 2021, respectively. For the years-ended December 31, 2023, 2022, and 2021, Texas AirSystems accounted for approximately 13.8%, 12.4%, and 11.7% of our sales, respectively. Through portfolio groups, Meriton has an ownership interest in Texas AirSystems and certain other of our sales representatives. The aggregate sales percentages through Meriton- affiliated groups that are in addition to Texas AirSystems’ sales for the years-ended December 31, 2023, 2022 and 2021 accounted for an additional 2.3%, 1.4% and 2.7%, respectively. Two other similar groups, Ambient and Hobbs/Insight, share common ownership of some of our other sales representatives through portfolio groups and for the year-ended December 31, 2023, aggregate sales through their portfolio groups accounted for approximately 11.5% and 10.2% of our sales, respectively. Sales through the portfolio groups of either Ambient or Hobbs/Insight did not account for 10% or more of our sales for any years-ended prior to December 31, 2023. As of December 31, 2023 and 2022, Texas AirSystems accounted for approximately 13.5% and 12.3%, of our accounts receivable balance, respectively. The aggregate percentages through Meriton-affiliated groups that are in addition to Texas AirSystems’ accounts receivable as of December 31, 2023 and 2022, accounted for an additional 2.0% and 3.2%, respectively. Two other similar groups, Ambient and Hobbs/Insight, aggregate percentages through their portfolio groups accounted for approximately 16.8% and 11.5% of our accounts receivable as of December 31, 2023, respectively. Accounts receivables of the portfolio groups did not account for 10% or more of our accounts receivable as of December 31, 2022, except for Ambient's aggregate percentage of approximately 10.9%. 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. 41 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 and leasehold improvements Machinery and equipment Furniture and fixtures Business Combinations 3 - 40 years 3 - 20 years 3 - 15 years 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. 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 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. Software Development Costs We capitalize costs incurred to purchase or develop software for internal use. Internal-use software development costs are capitalized during the application development stage. These capitalized costs are reflected in intangible assets, net on the consolidated balance sheets and are amortized over the estimated useful life of the software. The useful life of our internal-use software development costs is generally 1-6 years. 42 Definite-Lived Intangible Assets Our definite-lived intangible assets include various trademarks, service marks, and technical knowledge acquired in business combinations (Note 4) or asset acquisition. 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 6 - 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. Goodwill at December 31, 2023 is expected to be tax deductible in future periods. Indefinite-lived intangible assets consist of trademarks, trade names, and internal-use software. 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 reporting 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. We performed a qualitative assessment as of December 31, 2023 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 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. 43 The changes in the carrying amount of goodwill were as follows: Balance, beginning of period Additions due to acquisitions Decreases due to acquisition adjustments (Note 4) Balance, end of period Years Ended December 31, 2023 2022 (in thousands) $ 81,892 $ 85,727 — — 81,892 — (3,835) 81,892 The acquisition adjustments were recorded during the first quarter of 2022. The revisions were the result of the finalization of our preliminary estimates and third party valuation models related to the acquisition of BASX (Note 4) in 2021. The impact of such revisions on consolidated net income were not significant. 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, 2023, 2022, and 2021 research and development costs amounted to approximately $43.7 million, $46.8 million, and $16.6 million, respectively. The significant increase for the year ended December 31, 2022 was related to the inclusion of a full year of operations of BASX (Note 4), as well as our commitment to product performance and innovation. Advertising Advertising costs are expensed as incurred and included in selling, general, and administrative expenses on our consolidated statement of income. Advertising expense for the years ended December 31, 2023, 2022, and 2021 was approximately $2.6 million, $2.4 million, and $1.6 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, 2023, 2022, and 2021 shipping and handling fees amounted to approximately $29.0 million, $24.4 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. 44 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 and PSUs 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, vested at a rate of 20% per year. Restricted stock awards granted to directors historically vest over the shorter of directors' remaining elected term or one-third each year. Beginning 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 at the end of their respective service period. 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. 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 45 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 our 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. Historically, sales of our products were moderately seasonal with the peak period being May-October of each year due to timing of construction projects being directly related to warmer weather. However, in recent years, given the increases in demand of our product and increases in our backlog, sales has become more constant throughout the year. 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. 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 $59.2 million, $39.1 million, and $43.9 million for each of the years ended December 31, 2023, 2022, and 2021, respectively. 46 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. Leases New leases entered into by the Company are assessed at lease inception for proper lease classification. At December 31, 2023 and 2022, all of our leases are classified as operating leases. 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, 2023 and 2022, and the rent expense for these short-term leases is not significant. 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 an amount equal to the lease payments over a similar term in a similar economic environment. 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. 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. Use of Estimates The preparation of consolidated 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, inventory valuation, inventory reserves, warranty accrual, workers' compensation accrual, medical insurance accrual, income taxes, useful lives of property, plant, and equipment, estimated future use of leased property, share-based compensation, revenue percentage of completion and estimated costs to complete. Actual results could differ materially from those estimates. 47 3. Revenue Recognition The following tables show disaggregated net sales by reportable segment (Note 22) by major source, net of intercompany sales eliminations. Rooftop Units Condensing Units Air Handlers Outdoor Mechanical Rooms Cleanroom Systems Data Center Cooling Solutions Water-Source Heat Pumps Part Sales Other AAON Oklahoma Year Ended December 31, 2023 AAON Coil Products BASX (in thousands) $ $ 804,254 61 — 208 — — 3,128 66,413 23,855 897,919 $ $ — 42,739 44,040 298 — 8,247 12,770 6 4,220 112,320 $ $ — — 17,790 — 45,191 93,052 — 1,277 969 158,279 $ $ Total 804,254 42,800 61,830 506 45,191 101,299 15,898 67,696 29,044 1,168,518 AAON Oklahoma Year Ended December 31, 2022 AAON Coil Products BASX (in thousands) Rooftop Units Condensing Units Air Handlers Outdoor Mechanical Rooms Cleanroom Systems Data Center Cooling Solutions Water-Source Heat Pumps Part Sales Other $ 579,363 $ — $ 302 — 612 — — 11,529 52,927 19,112 46,287 47,442 855 — — 8,797 — 3,909 — — 14,434 — 47,020 53,522 — 671 2,006 Total $ 579,363 46,589 61,876 1,467 47,020 53,522 20,326 53,598 25,027 $ 663,845 $ 107,290 $ 117,653 $ 888,788 AAON Oklahoma Year Ended December 31, 2021 AAON Coil Products BASX1 (in thousands) Total Rooftop Units Condensing Units Air Handlers Outdoor Mechanical Rooms Cleanroom Systems Data Center Cooling Solutions Water-Source Heat Pumps Part Sales Other $ $ 398,461 762 — 820 — — 10,831 41,127 11,844 $ — 25,989 26,589 464 — — 10,343 1 3,203 $ — — 95 — 2,288 1,688 — — 12 $ 463,845 $ 66,589 $ 4,083 $ 398,461 26,751 26,684 1,284 2,288 1,688 21,174 41,128 15,059 534,517 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. Other sales include freight, extended warranties and miscellaneous revenue. 48 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, LLC and $2.0 million payable to key employees of BASX, LLC 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 (Note 16). The Company funded the 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, LLC, to acquire the principal real property and improvements utilized by BASX for an additional $22.0 million, in cash, subject to customary closing conditions and adjustments. The Company closed this real estate transaction on May 31, 2022, which terminated the related lease (Note 5). 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. We incurred $4.4 million in transaction fees related to the acquisition which are included in selling, general, and administrative expenses on our consolidated statement of income for the year ended December 31, 2021. Pro Forma Results of Operations (unaudited) The operations of BASX have been included in our consolidated statements of income since the closing date on December 10, 2021. The following unaudited pro forma consolidated results of operations for the year ended December 31, 2021 are presented as if the combination had been made on January 1, 2021 and reflects the three-for- two stock split effective August 16, 2023. (unaudited) Year ended December 31, 2021 (in thousands, except per share data) Revenues Net income Earnings per share: Basic Dilutive $ $ $ 611,158 63,491 0.80 0.78 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. 49 5. Leases The Company has lease arrangements for certain administrative, manufacturing and warehousing facilities and equipment. All leases are classified as operating leases. Balance Sheet Classification 2023 2022 December 31, Right-of-use assets Current lease liability Right of use assets Accrued liabilities Noncurrent lease liability Other long-term liabilities (in thousands) $ 11,774 $ 2,021 10,201 7,123 1,254 5,993 Since 2018, the Company has leased the manufacturing, engineering and office space used by our operations in Parkville, Missouri. In October 2022, the Parkville, Missouri lease was amended to expand our manufacturing and office space from 51,000 square feet to 86,000 square feet. The amended lease will provide for 31,000 square feet of additional manufacturing and engineering space and for 4,000 square feet of additional office space. The amended lease extends the lease term through December 31, 2032. Through the acquisition of BASX (Note 4), we acquired various leases for plant/office space and equipment, which were classified as operating leases. Through May 2022, BASX's manufacturing and office facility in Redmond, Oregon was leased from a related party (Note 21). On May 31, 2022, we completed the real estate transaction discussed in Note 4 and the associated operating lease was terminated. In November 2022, the Company entered into a lease arrangement for additional storage facilities in Tulsa, Oklahoma to support our operations. The lease will add an additional 198,000 square feet to our operations. In January 2024, we amended the lease for an additional 157,550 square feet for operations and parts distribution. The amended lease term will expire November 30, 2029. We also lease several properties near our Redmond location. In the aggregate, these leases contain approximately 104,500 square feet of additional warehouse space. These leases have expiring terms from February 2025 to November 2033. In July 2023, the Company entered into a lease agreement with a start date of September 1, 2023, for land and approximately 72,000 square feet of facilities in Redmond, Oregon to support our manufacturing operations. The lease term is approximately five years with additional renewal options. Total undiscounted future lease payments are as follows: 2024 2025 2026 2027 2028 Thereafter (in thousands) $ 2,647 2,329 1,353 1,393 1,339 6,254 50 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 Provisions for expected credit losses, net of adjustments Accounts receivable written off, net of recoveries Balance, end of period 7. Inventories December 31, 2023 2022 (in thousands) $ $ 138,431 $ 127,635 (323) (477) 138,108 $ 127,158 Years Ended December 31, 2023 2022 2021 (in thousands) 477 $ 549 $ (142) (12) 359 (431) 323 $ 477 $ $ $ 506 43 — 549 Inventories are valued at the lower of cost or net realizable value. Cost is determined by the first-in, first-out (“FIFO”) method. 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. 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, 2023 2022 (in thousands) $ 211,259 $ 194,159 5,523 2,910 219,692 (6,160) 3,501 5,806 203,466 (4,527) $ 213,532 $ 198,939 Years Ended December 31, 2023 2022 2021 (in thousands) 4,527 $ 1,787 $ 5,480 (3,847) 2,852 (112) 6,160 $ 4,527 $ $ $ 3,261 629 (2,103) 1,787 We continuously evaluate our inventory parts and write off inventory when no alternative use can be found. During the third quarter of 2022, we made the decision to no longer produce our small packaged geothermal/water-source heat pump units consisting of the WH Series horizontal configuration and WV Series vertical configuration. As a result, we have increased our provision for excess and obsolete inventory and written off certain related components and parts that cannot be used in other products or sold through our parts business. 51 8. Intangible Assets Our intangible assets consist of the following: Definite-lived intangible assets Intellectual property Customer relationships Capitalized internal-use software Less: Accumulated amortization Total, net Indefinite-lived intangible assets Trademarks Total intangible assets, net December 31, 2023 2022 (in thousands) $ 12,450 $ 47,547 3,323 (9,838) 53,482 6,295 47,547 — (3,807) 50,035 14,571 $ 68,053 $ 14,571 64,606 On April 27, 2022, the Company entered into a purchase and sale agreement with a third-party manufacturer to purchase certain assets to design and manufacture fan wheels for the purchase price of $6.5 million. As of December 31, 2023, approximately $5.5 million is included intangible asset (intellectual property) and approximately $1.0 million is included in property, plant and equipment, respectively, on our consolidated balance sheets. Amortization expense recorded in cost of sales is as follows: Amortization expense $ 5,331 $ 3,599 $ 246 Total future amortization expense for finite-lived intangible assets was estimated as follows: Years Ended December 31, 2023 2022 2021 (in thousands) 2024 2025 2026 2027 2028 Thereafter Total future amortization expense Internal-use software projects in process Total (in thousands) 5,367 4,651 4,651 4,651 4,560 29,081 52,961 521 53,482 $ $ 52 9. Supplemental Cash Flow Information Supplemental disclosures: Interest paid Income taxes paid, net Non-cash investing and financing activities: Non-cash capital expenditures 10. Warranties Years Ended December 31, 2023 2022 2021 (in thousands) $ 4,817 $ 2,412 $ 63,376 19,293 — 7,891 287 1,919 (3,714) The Company has product warranties with various terms from one year from the date of first use or 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, 2023 2022 2021 (in thousands) Balance, beginning of period $ 15,682 $ 13,769 $ Payments made Provisions Assumed in business combination (Note 4) Balance, end of period Warranty expense: (11,274) 16,165 — (6,584) 8,497 — 13,522 (6,734) 6,351 630 $ $ 20,573 $ 15,682 $ 13,769 16,165 $ 8,497 $ 6,351 53 11. Accrued Liabilities and Other Long-Term Liabilities Accrued liabilities were comprised of the following: Warranty Due to representatives Payroll Profit sharing Workers' compensation Medical self-insurance Customer prepayments Donations, short-term Accrued income taxes Employee vacation time Extended warranties, short-term Lease liability, short-term Other Total Other long-term liabilities were comprised of the following: Lease liability Extended warranties Donations and other Total 12. Revolving Credit Facility December 31, 2023 2022 (in thousands) 20,573 $ 14,428 18,829 7,596 338 1,460 2,621 381 1,170 10,315 2,387 2,021 3,389 85,508 $ 15,682 15,545 11,901 5,451 367 1,178 3,750 637 12,472 6,329 1,330 1,254 2,734 78,630 $ $ December 31, 2023 2022 (in thousands) $ 10,201 $ 6,082 524 5,993 4,539 976 $ 16,807 $ 11,508 On November 24, 2021, we amended our revolving credit facility to provide for maximum borrowings of $100.0 million, with an option to increase to $200.0 million. On May 27, 2022, we amended our $100.0 million Amended and Restated Loan Agreement dated November 24, 2021 ("Revolver"), to provide for maximum borrowings of $200.0 million. As of December 31, 2023 and December 31, 2022, we had an outstanding balance under the Revolver of $38.3 million and $71.0 million, respectively. We have two standby letters of credit totaling $2.3 million as of December 31, 2023 and one standby letter of credit totaling $0.8 million as of December 31, 2022. Borrowings available under the Revolver at December 31, 2023, were $159.4 million. The Revolver expires on May 27, 2027. 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, 2023, 2022, and 2021, the weighted average interest rate of our Revolver was 6.3%, 3.0%, and 1.3%, respectively. 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 years ended December 31, 2023, 2022, and 2021, respectively. 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%. 54 At December 31, 2023, we were in compliance with our financial covenants as defined by the Revolver. These covenants included a financial covenant that we meet certain parameters related to our leverage ratio. At December 31, 2023, our leverage ratio was 0.15 to 1.0, which meets the requirement of not being above 3 to 1. 13. Income Taxes The provision for income taxes consists of the following: Current Deferred Income tax provision Years Ended December 31, 2023 2022 2021 (in thousands) $ $ 52,058 $ 37,489 $ (6,527) (13,332) 6,755 3,669 45,531 $ 24,157 $ 10,424 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 (Note 14) Return to provision Non-deductible executive compensation Research and development tax credits Other Effective tax rate Years Ended December 31, 2023 2022 2021 21.0 % 3.9 % (1.4) % (4.0) % 0.2 % 1.7 % (1.2) % 0.2 % 20.4 % 21.0 % 4.1 % — % (2.4) % (0.3) % — % (2.1) % (0.9) % 19.4 % 21.0 % 1.8 % 1.0 % (7.8) % — % — % (1.1) % 0.2 % 15.1 % 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%. This resulted in a benefit of $0.8 million included in the table above under State income taxes, net of Federal benefit, for the year ending December 31, 2021. We have historically earned investment tax credits from the state of Oklahoma’s manufacturing property investment program. We use the flow-through method to account for investment tax credits earned on eligible tangible asset expenditures. Under this method, the investment tax credits are recognized as a reduction to our Oklahoma income tax expense in the year they are used. As part of our expansion projects in Oklahoma, we identified a separate, more advantageous Oklahoma credit program (not income tax related) which will cause us to discontinue our accumulation of credits for Oklahoma’s manufacturing property investment program after the 2022 tax year. The Company had investment tax credit carryforwards with a valuation allowance reserved against them as we did not have sufficient taxable income to utilize the carryforwards, in part because we generated more credit each year than we were able to utilize. Because the Company will not generate additional excess credits after our 2022 tax year, we will be able to use our credit carryforwards against future taxable income and the related valuation allowance was reversed resulting in a one-time benefit of $3.1 million to the income tax provision for the year ended December 31, 2023. As of December 31, 2023, we have investment tax credit carryforwards of approximately $3.1 million. These credits have estimated expirations from the year 2039 through 2043. In accordance with the 2017 Tax Cuts & Jobs Act, under Internal Revenue Code Section 162(m), the tax deduction for covered executives of public companies is limited to $1.0 million per individual. Because of the increase in our stock price and timing of executive stock option exercises this resulted in an increase to the income tax provision of $3.8 million for the year ended December 31, 2023. 55 We also earn research and development tax credits as defined under Section 41 of the Internal Revenue Code. To qualify for the research and development tax credits, we perform annual studies that identify, document, and support eligible expenses related to qualified research and development activities. Eligible expenses include but are not limited to supplies, materials, contractor expenses and internal employee wages. 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, 2023 2022 (in thousands) Deferred income tax assets (liabilities): Allowance for credit losses and inventory reserves $ 1,724 $ Warranty accrual Other accruals Share-based compensation Research & development expenses 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 5,462 3,989 8,560 18,647 2,306 1,673 42,361 — 42,361 (54,495) (54,495) $ (12,134) $ 1,337 4,184 4,814 7,440 11,265 3,115 2,339 34,494 (3,115) 31,379 (50,040) (50,040) (18,661) In accordance with the 2017 Tax Cuts & Jobs Act, under Internal Revenue Code Section 174, research and development expenses incurred after December 31, 2021 are required to be capitalized and amortized over 5 years. The amortization requirements for tax purposes is a mid-year convention, meaning that the tax amortization is 10% in the year of acquisition, 20% in the following 4 years, and 10% in the final year. 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., state and foreign income tax jurisdictions. We are subject to U.S. income tax examinations for the tax years 2020 to present, and to non-U.S. income tax examinations for the tax years 2019 to present. In addition, we are subject to state and local income tax examinations for tax years 2019 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. 14. Share-Based Compensation As discussed in Note 16, the Company declared a three-for-two stock split effective August 16, 2023. All share and per share information has been updated to reflect the effect of this stock split. On May 22, 2007, our stockholders adopted a Long-Term Incentive Plan (as amended, “LTIP”) which provided an additional 5.0 million shares that could be granted in the form of stock options, stock appreciation rights, restricted stock awards, performance units, and performance awards. 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 (“2016 Plan”) which provides for approximately 13.4 million shares, comprised of 5.1 million new shares provided for under the 2016 Plan, approximately 0.6 million shares that were available for issuance under the previous LTIP that are now authorized 56 for issuance under the 2016 Plan, approximately 3.9 million shares that were approved by the stockholders on May 15, 2018, and an additional 3.8 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 the years ended December 31, 2023, 2022, and 2021 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) 2023 2022 2021 $ 0.32 $ 0.25 $ 37.89 % 4.39 % 4.0 36.07 % 2.31 % 4.0 $ 0.32 $ 0.25 $ 38.25 % 4.41 % 3.0 37.49 % 2.35 % 3.0 0.25 35.78 % 0.51 % 4.0 0.25 38.67 % 0.32 % 3.0 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, 2023: Range of Exercise Prices Number of Shares Weighted Average Remaining Contractual Life Weighted Average Exercise Price Intrinsic Value (in thousands) $13.95 - 27.58 $28.28 - 37.07 $37.09 - 69.62 Total 1,340,919 478,793 204,713 2,024,425 4.23 $ 6.54 7.30 5.09 $ 24.46 $ 31.04 48.00 28.39 $ 66,278 20,509 5,291 92,078 57 A summary of option activity under the plans is as follows: Options Outstanding at December 31, 2022 Granted Exercised Forfeited or Expired Outstanding at December 31, 2023 Exercisable at December 31, 2023 Weighted Average Exercise Price 30.14 61.14 29.10 34.80 33.09 28.39 Shares 4,560,520 $ 329,173 (1,142,640) (127,468) 3,619,585 $ 2,024,425 $ The total pre-tax compensation cost related to unvested stock options not yet recognized as of December 31, 2023 is $8.3 million and is expected to be recognized over a weighted-average period of 1.1 years. The total intrinsic value of options exercised during the years ended December 31, 2023, 2022, and 2021 was $39.0 million, $16.0 million, and $22.6 million, respectively. The cash received from options exercised during the year ended December 31, 2023, 2022, and 2021 was $33.3 million, $23.1 million, and $21.1 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. At December 31, 2023, unrecognized compensation cost related to unvested restricted stock awards was approximately $4.6 million which is expected to be recognized over a weighted average period of 1.3 years. A summary of the unvested restricted stock awards is as follows: Restricted stock Unvested at December 31, 2022 Granted Vested Forfeited Unvested at December 31, 2023 PSUs Weighted Average Grant Date Fair Value Shares 217,168 $ 75,499 (99,309) (6,274) 187,084 $ 33.34 59.67 32.76 39.64 44.07 We have awarded performance restricted stock units ("PSUs") to certain officers and employees under our 2016 Plan. Unlike our restricted stock awards, these PSUs are not considered legally outstanding and do not accrue dividends during the vesting period. These PSUs vest based on the level of achievement with respect to the Company's 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 three years. At the end of the measurement period, each award will be converted into AAON 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, 2023 is $4.3 million and is expected to be recognized over a weighted average period of approximately 1.5 years. 58 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 years ended December 31, 2023 and 2022, using a Monte Carlo Model: Expected dividend rate Expected volatility Risk-free interest rate Expected life (in years) 2023 2022 2021 $ 0.32 $ 0.25 $ 32.71 % 4.66 % 2.80 37.60 % 2.00 % 2.80 0.25 39.10 % 0.28 % 2.80 The expected term of the PSUs is based on their remaining performance period. 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, 2022 Granted Vested Forfeited Unvested at December 31, 20231, 2 Shares Weighted Average Grant Date Fair Value $ 93,982 58,130 — — 152,112 $ 36.62 84.42 — — 54.88 1 Consists of 22,222 PSUs cliff vesting December 31, 2023, 71,760 PSUs cliff vesting December 31, 2025, and 58,130 PSUs cliff vesting December 31, 2026. 2 The 22,222 PSUs cliff vesting December 31, 2023 were approved by the Compensation Committee and issued to holders in February 2024. Key Employee Awards 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 AAON common stock. The fair value of Key Employee Awards was based on the fair market value of AAON common stock on the grant date. All pre-tax compensation cost has been recognized as of December 31, 2023. A summary of the unvested Key Employee Awards is as follows: Unvested at December 31, 2022 Granted Vested Forfeited Unvested at December 31, 2023 Shares Weighted Average Grant Date Fair Value 39,899 — — — 39,899 $ $ 53.45 — — — 53.45 59 Summary of Share-based Compensation A summary of share-based compensation is as follows for the years ended December 31, 2023, 2022, and 2021: Grant date fair value of awards during the period: (in thousands) 2023 2022 2021 Options PSUs Restricted stock Key employee awards Total Share-based compensation expense: Options PSUs Restricted stock Key employee awards Total Income tax benefit related to share-based compensation: Options Restricted stock Total 15. Employee Benefits Defined Contribution Plan - 401(k) $ 5,259 $ 6,522 $ 4,907 4,505 — 2,275 3,671 — 7,010 1,622 2,517 1,572 $ 14,671 $ 12,468 $ 12,721 2023 2022 2021 (in thousands) $ 8,810 $ 8,585 $ 2,561 3,977 1,036 958 3,105 1,052 8,724 525 2,519 44 $ 16,384 $ 13,700 $ 11,812 2023 2022 2021 (in thousands) 8,138 $ 2,715 $ 720 241 8,858 $ 2,956 $ $ $ 4,571 837 5,408 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 6.0% deferral rate and currently contributing employees deferral rates will be increased to 6.0% unless their current rate is above 6.0% 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 2023, 2022, and 2021. The Company matches 175.0% up to 6.0% 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 $ 18,264 $ 15,475 $ 9,724 Years Ended December 31, 2023 2022 2021 (in thousands) 60 Profit Sharing Bonus Plans We maintain a discretionary profit sharing bonus plan under which approximately 10.0% of pre-tax profit from AAON Oklahoma and AAON Coil Products 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 Coil Products 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. BASX has a separate employee incentive program ("EIP"), under which 5.0% of BASX's pre-tax profit, plus certain add backs, is paid ratably to eligible employees based on days-of-pay during the fiscal year. Eligible employees are regular full-time and part-time employees who have worked during the year and are still employed when the EIP payment is made following the end of the fiscal year, excluding members of BASX's senior leadership team and any employee paid commissions or royalties. Years Ended December 31, 2023 2022 2021 (in thousands) Profit sharing bonus plan and employee incentive plan expense $ 24,590 $ 14,009 $ 8,526 Employee Medical Plan At AAON Oklahoma and AAON Coil Products, we self-insure for our employees' health insurance, and make medical claim payments up to certain stop-loss amounts. We estimate our self-insurance liabilities using an analysis provided by our claims administrator and our historical claims experience. 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. In addition, the Company matches 175.0% of a participating AAON Oklahoma and AAON Coil Products employee's allowed contributions to a qualified health saving account to assist employees with our heath insurance plan deductibles. BASX is insured for healthcare coverage through a third party. 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 Plans. In addition, the Company contributes certain amounts for BASX's employees enrolled in a high deductible plan to a qualified health savings account to assist employees with health insurance plan deductibles. Medical claim payments Health saving account contributions Years Ended December 31, 2023 2022 2021 (in thousands) $ 14,759 $ 10,459 $ 4,961 3,862 9,640 3,482 61 16. Stockholders’ Equity Stock Repurchase The Board has authorized one active stock repurchase programs for the Company. The Company may purchase shares on the open market from time to time. 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 Authorized Repurchase $ Expiration Date November 9, 2022 **1, 2 March 13, 2020 $20 million November 3, 2022 $50 million 1 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. 2 As of December 31, 2023, there is approximately $25.0 million remaining under the current stock repurchase program. The remaining amount available is subject to a Board authorized 10b5-1 plan requiring certain market conditions and requirements. The Company repurchases shares of AAON stock from 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. Lastly, the Company also had a stock repurchase arrangement by which employee-participants in our 401(k) Plan were entitled to have shares of AAON stock in their accounts sold to the Company. The 401(k) Plan was amended in June 2022 to discontinue this program. No additional shares have been purchased by the Company under this arrangement since June 2022. Our repurchase activity is as follows: 2023 2022 2021 (in thousands, except share and per share data) Program Shares1 Total $ $ per share1 Shares1 Total $ $ per share1 Shares1 Total $ $ per share1 Open market 402,873 $ 25,009 $ 62.08 183,168 $ 6,823 $ 37.25 — $ — $ — 401(k) — — — 155,904 5,913 37.93 446,658 20,876 Employees 21,904 1,302 59.44 25,842 1,019 39.43 33,789 1,590 Total 424,777 $ 26,311 $ 1 Reflects three-for-two stock split effective August 16, 2023. 61.94 364,914 $ 13,755 $ 37.69 480,447 $ 22,466 $ 46.74 47.06 46.76 Our repurchase activity since Company inception, including our current authorized stock repurchase programs are as follows: Program Open market 401(k) Inception to Date (in thousands, except share and per share data) $ per share1 Total $ Shares1 6,893,924 $ 106,625 $ 12,462,552 171,789 15.47 13.78 7.98 13.50 3,089,337 Directors & employees Total 22,445,813 $ 1 Reflects three-for-two stock split effective August 16, 2023. 24,662 303,076 $ Dividends At the discretion of the Board of Directors, we pay cash dividends. Board approval is required to determine the date of declaration and amount for each cash dividend payment. 62 Our cash dividends for the three years ended December 31, 2023 are as follows: Declaration Date1 May 17, 2021 Record Date June 3, 2021 Payment Date July 1, 2021 November 9, 2021 November 26, 2021 December 17, 2021 May 18, 2022 June 3, 2022 July 1, 2022 November 8, 2022 November 28, 2022 December 16, 2022 March 1, 2023 May 18, 2023 March 13, 2023 March 31, 2023 June 9, 2023 June 30, 2023 August 18, 2023 September 8, 2023 September 29, 2023 November 10, 2023 November 29, 2023 December 18, 2023 Dividend per Share2 Annualized Dividend per Share2 $0.13 $0.13 $0.13 $0.16 $0.08 $0.08 $0.08 $0.08 $0.26 $0.26 $0.26 $0.32 $0.32 $0.32 $0.32 $0.32 1 Effective with the cash dividend declared on March 1, 2023 (paid on March 31, 2023), the Company moved from semi-annual cash dividends to quarterly cash dividends. 2 Reflects three-for-two stock split effective August 16, 2023. We paid cash dividends of $26.4 million, $22.9 million, and $19.9 million in 2023, 2022, and 2021, respectively. Stock Split On July 7, 2023, the Board of Directors declared a three-for-two stock split of the Company's common stock to be paid in the form of a stock dividend. Stockholders of record at the close of business on July 28, 2023 received one additional share for every two shares they held as of that date on August 16, 2023 (ex-dividend date August 17, 2023). Cash was paid in lieu of fractional shares (approximately $0.5 million). All share and per share information has been updated to reflect the effects of this stock split. The retroactive effect of the stock split resulted in approximately $0.1 million reclass between common stock and retained earnings within stockholders' equity on the consolidated balance sheet. Contingent Shares Issued in BASX Acquisition As discussed above, the Company declared a three-for-two stock split effective August 16, 2023. All share and per share information has been updated to reflect the effect of the stock split. 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 1.56 million shares of AAON 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 $60.0 million, which is included in additional paid-in capital on the consolidated balance sheets. As of December 31, 2023, 0.58 million and 0.73 million shares related to the earn-out milestones for the years ended 2022 and 2021, respectively, have been issued to the former owners of BASX as private placements exempt from registration with the SEC under Rule 506(b), which are included in common stock on the consolidated statements of stockholders' equity. No additional shares have been issued subsequent to December 31, 2023. 63 17. New Markets Tax Credit 2019 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 “2019 Investor”) and a certified Community Development Entity under a qualified New Markets Tax Credit (“2019 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 “2019 Project”). In connection with the 2019 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 2019 Project. Upon closing of the 2019 NMTC transaction, the Company provided an aggregate of approximately $15.9 million to the 2019 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 2019 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 the NMTCs. This transaction also includes a put/call feature either of which can be exercised at the end of the seven-year compliance period. The 2019 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 2019 Investor's interest of $6.5 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. 2023 New Markets Tax Credit On April 25, 2023, the Company entered into a transaction with a subsidiary of an unrelated third-party financial institution (the “2023 Investor”) and a certified Community Development Entity under a qualified New Markets Tax Credit (“2023 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 “2023 Project”). In connection with the 2023 NMTC transaction, the Company received a $23.0 million NMTC allocation for the 2023 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 2023 NMTC transaction, the Company provided an aggregate of approximately $16.7 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 $16.7 million in proceeds plus capital contributed from the 2023 Investor was used to make an aggregate $23.8 million loan to a subsidiary of the Company. This financing arrangement is secured by a guarantee from the Company, including an unconditional guarantee of the NMTCs. The net proceeds from the closing of the 2023 NMTC is included in restricted cash on our consolidated balance sheets required to be used for the 2023 Project. This transaction also includes a put/call feature either of which can be exercised at the end of the seven-year compliance period. The 2023 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 2023 Investor's interest of $5.7 million is recorded in New market tax credit obligation on the consolidated balance sheets. The Company incurred approximately $0.4 million of debt issuance costs related to the above transactions, which are being amortized over the life of the transaction. The 2019 Investor and the 2023 Investor are each subject to 100 percent recapture of the 2019 and 2023 NMTC, respectively, 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 2019 NMTC arrangements and 2023 NMTC arrangements, respectively. Noncompliance with applicable requirements could result in the 2019 and/or 2023 Investor’s projected tax benefits not being realized and, therefore, require the Company to indemnify the 2019 Investor and 2023 Investor for any loss or recapture of the 2019 NMTC and 2023 NMTC, respectively, 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. 64 The 2019 Investor and 2023 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 2019 Investor and 2023 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. 2024 New Markets Tax Credit On February 27, 2024, the Company entered into a transaction with a subsidiary of an unrelated third-party financial institution (the “2024 Investor”) and a certified Community Development Entity under a qualified New Markets Tax Credit (“2024 NMTC”) program pursuant to Section 45D of the Internal Revenue Code of 1986, as amended, related to an investment in real estate to facilitate the current expansion of our Longview, Texas manufacturing operations (the “Project”). In connection with the 2024 NMTC transaction, the Company received a $15.5 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 2024 NMTC transaction, the Company provided an aggregate of approximately $11.0 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 $11.0 million in proceeds plus capital contributed from the Investor was used to make an aggregate $16.0 million loan to a subsidiary of the Company. This financing arrangement is secured by 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 2024 Investor is subject to 100 percent recapture of the 2024 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 2024 NMTC arrangement. Noncompliance with applicable requirements could result in the 2024 Investor’s projected tax benefits not being realized and, therefore, require the Company to indemnify the 2024 Investor for any loss or recapture of the 2024 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. 18. Commitments and Contingencies Havtech Litigation On January 24, 2022, one of the Company’s former independent sales representative firms, Havtech, LLC (and its affiliate, Havtech Parts Division, LLC, collectively “Plaintiffs”), filed a complaint (the “Complaint”) in the Circuit Court for Howard County, Maryland (Havtech, LLC, et al., v. AAON, Inc., et al.). The Complaint challenged the Company’s termination of its business relationship with Plaintiffs. The Company removed the action to the United States District Court for the District of Maryland (Northern Division) and moved to dismiss the Complaint. Plaintiffs’ First Amended Complaint (“First Amended Complaint”) was entered by the court on July 28, 2022. The First Amended Complaint asserts that the Company improperly terminated Plaintiffs and seeks damages alleged to be no less than $48.6 million, plus fees and costs. The Company filed its Answer to First Amended Complaint on January 31, 2023. 65 On September 28, 2023, the parties attended a court ordered settlement conference and agreed to resolve the case for $7.5 million. A settlement agreement was entered into on October 25, 2023 and the case has been dismissed with prejudice. The settlement of $7.5 million has been included in selling, general and administrative expenses on our consolidated statement of income. The final payment was made on October 26, 2023. Other Matters The Company is involved from time to time in claims and lawsuits incidental to our business arising from various matters, including alleged violations of contract, product liability, warranty, environmental, regulatory, personal injury, intellectual property, employment, tax and other laws. 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 do not believe these matters will have a material adverse effect on our business, financial position, results of operations or cash flows. 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. In 2023, the Company executed a five-year purchase commitment for refrigerants. In 2023, the Company made payments of $10.1 million on this contract. Estimated minimum future payments are $11.9 million, $9.1 million, $10.5 million, and $11.2 million for 2024, 2025, 2026, and 2027, respectively. We had no other material contractual purchase obligations as of December 31, 2023. 19. 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. 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 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to SEC's Disclosure Update and Simplification Initiative. The new guidance is intended to update a variety of disclosure requirements. The effective date for each amendment will be the date on with the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective. Early adoption is prohibited. Upon adoption, this ASU is not expected to have a material impact on the Company's financial statements and related disclosures. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280). The new guidance improves reportable segment disclosures primarily through enhanced disclosures about significant segment expenses and by requiring current annual disclosures to be provided in interim periods. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Upon adoption, this ASU is not expected to have a material impact on the Company's financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740). The new guidance is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Upon adoption, this ASU is not expected to have a material impact on the Company's financial statements and related disclosures. 66 20. Earnings Per Share Basic net income per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share assumes the conversion of all potentially dilutive securities and is calculated by dividing net income by the sum of the weighted average number of shares of common stock outstanding plus all potentially dilutive securities. Dilutive common shares consist primarily of stock options and restricted stock awards. The following table sets forth the computation of basic and diluted earnings per share: Numerator: Net income Denominator: 2023 2022 (in thousands, except share and per share data) 2021 $ 177,623 $ 100,376 $ 58,758 Basic weighted average shares3 Effect of dilutive shares related to stock based compensation1, 3 Effect of dilutive shares related contingent consideration2, 3 Diluted weighted average shares3 81,156,114 1,972,380 166,796 83,295,290 79,582,480 1,264,175 298,955 81,145,610 78,606,298 1,952,547 34,639 80,593,484 Earnings per share: Basic3 Dilutive3 Anti-dilutive shares: $ $ 2.19 $ 2.13 $ 1.26 $ 1.24 $ 0.75 0.73 Shares3 314,108 1 Dilutive shares related to stock options, restricted stock, PSUs and Key Employee Awards (Note 14) 2 Dilutive shares related to contingent shares issued to former owners of BASX (Note 4) 3 Reflects three-for-two stock split effective August 16, 2023. 908,221 456,045 21. Related Parties The following is a summary of transactions and balances with affiliates: Sales to affiliates Payments to affiliates Due from affiliates Due to affiliates Years Ended December 31, 2023 2022 2021 (in thousands) $ 7,860 $ 1,476 5,789 $ 1,318 3,752 185 December 31, 2023 2022 $ (in thousands) 994 $ 145 432 — The nature of our related party transactions is as follows: • • • • 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. The Company purchases some supplies from entities controlled by two of the Company’s board members and a member of the Company's executive management team. The Company periodically makes part sales and makes payments to a board member related to a consulting agreement. The Company periodically rents space partially owned by the CEO/President for various Company meetings. 67 • • The Company purchases flight time for use of an aircraft partially owned by two members of the Company's executive management team. From December 10, 2021 through May 31, 2022, the Company leased a manufacturing and office facility in Redmond, Oregon from an entity in which certain members of BASX management had an ownership interest. This facility was purchased 100% by the Company on May 31, 2022. 22. Segments 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. 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 engineers, manufactures, and sells, semi-custom, and custom HVAC systems, designs and manufactures controls solutions, and sells retail parts to customers through retail part stores and online. AAON Oklahoma includes the operations of our Tulsa, OK and Parkville, MO manufacturing facilities, two retail locations, and the Norman Asbjornson Innovation Center ("NAIC") research and development laboratory accredited by the Air Movement and Control Association International, Inc. ("AMCA"). With the NAIC, a world-class research and development ("R&D") laboratory in Tulsa, OK, our products are continuously tested under a variety of extreme environmental conditions to ensure they deliver the ultimate performance, efficiency, and value. Also located in Tulsa, OK, our cutting-edge Customer Exploration Center showcases the engineering, design attributes and premium build quality of our equipment side-by-side the market alternatives. AAON Coil Products: AAON Coil Products engineers and manufactures a selection of our semi-custom, and custom HVAC systems as well as a variety of heating and cooling coils to be used in HVAC systems, mostly for the benefit of AAON Oklahoma, AAON Coil Products, and BASX. AAON Coil Products consists of operations at our Longview, TX manufacturing facilities. BASX: BASX engineers, manufactures, and sells an array of custom, high-performance cooling solutions for the rapidly growing hyperscale data center market, ventilation solutions for cleanroom environments in the bio- pharmaceutical, semiconductor, medical and agriculture markets, and highly custom, air handlers and modular solutions for a vast array of markets. BASX consists of operations at our Redmond, OR manufacturing facilities. 68 The following table summarizes certain financial data related to our segments. Transactions between segments are recorded based on prices negotiated between the segments. The Gross Profit amounts shown below are presented after elimination entries. Net Sales AAON Oklahoma External sales Inter-segment sales AAON Coil Products External sales Inter-segment sales BASX1 External sales Inter-segment sales Eliminations Net sales Gross Profit AAON Oklahoma AAON Coil Products BASX1 Gross profit Years Ended December 31, 2023 2022 2021 (in thousands) $ 897,919 $ 663,845 $ 463,845 4,324 3,251 2,504 112,320 38,831 158,279 1,480 (44,635) 107,290 30,932 117,653 79 66,589 24,250 4,083 — (34,262) (26,754) $ 1,168,518 $ 888,788 $ 534,517 $ 320,067 $ 172,983 $ 126,868 29,324 49,629 33,311 31,278 10,075 887 $ 399,020 $ 237,572 $ 137,830 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. Long-lived assets AAON Oklahoma AAON Coil Products BASX Total long-lived assets Intangible assets and goodwill AAON Oklahoma AAON Coil Products BASX Total intangible assets and goodwill December 31, 2023 2022 (in thousands) $ $ $ $ 248,556 $ 83,169 49,996 381,721 $ 10,282 $ — 139,663 149,945 $ 213,731 68,013 35,578 317,322 3,229 — 143,269 146,498 69 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None. 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, 2023. Based upon the evaluation, our principal executive and principal financial officers have concluded that our disclosure controls and procedures were effective at December 31, 2023 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. 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, 2023. The effectiveness of the Company’s internal control over financial reporting as of December 31, 2023 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. (c) Changes in Internal Control over Financial Reporting There have been no changes in internal control over financial reporting that occurred during the fourth quarter of 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 70 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, 2023, 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, 2023, 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, 2023, and our report dated February 28, 2024 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. 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. 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. /s/ GRANT THORNTON LLP Tulsa, Oklahoma February 28, 2024 71 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 21, 2024. 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 21, 2024. 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 21, 2024. 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 21, 2024. 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 2023, 2022, or 2021. 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 21, 2024. 72 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) (A) (B) Amended and Restated Articles of Incorporation (ii) Amended and Restated Bylaws (i) (4.1) (4.2) (4.16) (10.1) (10.2) (10.3) (21) (23) (31.1) (31.2) (32.1) (32.2) (97.1) (99.1) Amended and Restated Loan Agreement (dated November 24, 2021) and related documents (iii) First Amendment to the Amended and Restated Loan Agreement (dated May 27, 2022) and related documents (viii) 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 Executive Officer Compensation Recovery Policy Membership Interest Purchase Agreement - Acquisition of BASX, LLC (dated November 18, 2021) (vii) (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) 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. 73 (iv) (v) (vi) (vii) (viii) 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. Incorporated herein by reference to exhibits to our Annual Report on Form 10-K for the fiscal year ended December 31, 1991, and to our Form S-8 Registration Statement No. 333-52824. Incorporated herein by reference to our Form S-8 Registration Statement No. 333-151915, Form S-8 Registration Statement No. 333-207737. Incorporated herein by reference to exhibits to our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Incorporated herein by reference to the exhibits to our Form 8-K dated May 27, 2022. 74 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, 2024 By: /s/ Gary D. Fields Gary D. Fields, Chief Executive Officer AAON, INC. 75 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, 2024 Dated: February 28, 2024 Dated: February 28, 2024 Dated: February 28, 2024 Dated: February 28, 2024 Dated: February 28, 2024 Dated: February 28, 2024 Dated: February 28, 2024 Dated: February 28, 2024 Dated: February 28, 2024 Dated: February 28, 2024 /s/ Gary D. Fields Gary D. Fields Chief Executive Officer 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 Director /s/ Angela E. Kouplen Angela E. Kouplen 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 76 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, 2024, 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.” 77 LIST OF SUBSIDIARIES OF AAON, INC. Exhibit 21 Jurisdiction of Organization Oklahoma Texas Oregon Subsidiary AAON, Inc. AAON Coil Products, Inc. BasX, Inc. 78 Exhibit 23 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We have issued our reports dated February 28, 2024, 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, 2023. 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. 333-226512, and File No. 333-241538). /s/ GRANT THORNTON LLP Tulsa, Oklahoma February 28, 2024 79 I, Gary D. Fields, certify that: CERTIFICATION Exhibit 31.1 1. 2. 3. 4. 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: a) b) c) d) 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 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): a) b) 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, 2024 /s/ Gary D. Fields Gary D. Fields Chief Executive Officer 80 I, Rebecca A. Thompson, certify that: CERTIFICATION Exhibit 31.2 1. 2. 3. 4. 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: a) b) c) d) 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 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): a) b) 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, 2024 /s/ Rebecca A. Thompson Rebecca A. Thompson Chief Financial Officer 81 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, 2023, 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, 2024 /s/ Gary D. Fields Gary D. Fields Chief Executive Officer 82 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, 2023, 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, 2024 /s/ Rebecca A. Thompson Rebecca A. Thompson Chief Financial Officer 83  The Company has never been more well managed than it is currently and we have never been more optimistic of the future than we are today.” —Gary Fields, CEO AAON Officers and Board AAON, INC. OFFICERS positions and ages as of March 22, 2024 Gary Fields 64 Chief Executive Officer Matt Tobolski 40 President and Chief Operating Officer Doug Wichman 36 Vice President and President, AAON Coil Products Dave Benson 66 Vice President and President, BASX Xerxes Gazder 59 Chief Information Officer Chris Eason 42 Chief Accounting Officer Rebecca Thompson 45 Vice President, Finance, Chief Financial Officer, and Treasurer Casey Kidwell 45 Vice President, Administration Stephen Wakefield 47 Vice President and Executive Vice President, AAON Oklahoma Rob Teis 54 Vice President, Business Technology AAON, INC. BOARD OF DIRECTORS positions and ages as of March 22, 2024 Norman H. Asbjornson 88 Founder, Retired, Chief Executive Officer and Executive Chairman AAON Caron A. Lawhorn 63 Retired, Senior Vice President and Chief Financial Officer ONE GAS, INC. David R. Stewart 68 Chief Administrative Officer and Trustee OKLAHOMA ORDNANCE WORKS AUTHORITY Gary D. Fields 64 Chief Executive Officer AAON Angela E. Kouplen 50 Senior Vice President and Chief Human Resources Officer ONE GAS, INC. Stephen O. LeClair 55 Chairman and Chief Executive Officer CORE & MAIN, INC. A.H. McElroy II 61 President and Chief Executive Officer MCELROY MANUFACTURING, INC. Bruce Ware 48 Corporate Vice President and Group Head Joint Venture Capital Raising DAVITA, INC. TRANSFER AGENT AND REGISTRAR Issuer Direct One Glenwood Avenue, Suite 1001 Raleigh, NC 27603 AUDITORS Grant Thornton LLP 6120 South Yale Avenue, Suite 1400 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 The AAON Team We are changing the world because of the great people that work here. GARY ABBE ANGEL ACEDO LUIS ACEDO CHUCHON RAUL ACEDO ZELAYARAN KEYLA ACEVES CHRISTOPHER ACKLEY MIRIAN ACOSTA MA ACOSTA DE AGUAYO ALFREDO ACOSTA JIMENEZ ANDRES ACOSTA LUJAN ANDRES ACUNA BRIAN ACUNA RAQUEL ACUNA SEGURA DAKOTA ADAMS DAVID ADAMS DERRICK ADAMS GARY ADAMS JAMILAH ADAMS PAUL ADAMS REBECCA ADAMS RUSTY ADAMS RYAN ADAMS WILLIAM ADAMS JOHN ADAMS AARON ADKINS ASLAM AFGHAN HAZRAT AFGHAN NIKWALI AFGHAN NOOR AKBER KHAN AFGHAN SHABA NOOR AFGHAN YOLIMAR AGELVIS ARELLANO AGRIPPA AGRIPPA MARIE AGUERO JOSE AGUILAR YAHIR AGUIRRE CESAR AGUIRRE JUAN AGUIRRE-RODRIGUEZ CAMERON AHERN AHMAD AHMADI ZEESHAN AHMED BERNY AIEN EMINE AITOMY ARLEEN AIZAWA HARRY AIZAWA HENRY AIZAWA BROWN AKIN EMILY AKIN NATHANAEL AKUMA NADER AL HASHMI AUSS AL SULTAN DANIEL ALAGDON ALEXIS ALBIN ALEJANDRA ALEGRIA REYES MARIA ESTELA ALEJANDREZ MATA MAURICIO ALEMAN SANCHEZ GREGG ALEMY JOSHUA ALEXANDER JOSIAH ALEXANDER KEAJIAH ALEXANDER KESHOYN ALEXANDER ZACHARY ALEXANDER SHANNON ALFORD ANISIO ALIWIS JUSTIN ALLDREDGE CHARLES ALLEN DANIEL ALLEN JOHN-PAUL ALLEN SCOTTY ALLEN TYLER ALLEN CORBAN ALLEN CHAD ALLRUNNER ZAHIDULLAH ALMAS HEATHER ALSTON JAMES ALSTON SONIA ALTER ESPINA STEPHEN ALTSTATT LINCY ALVARADO JOSE ALVARADO NATALIE ALVARADO YACKSENDEL ALVARADO MALDONADO ADRIAN ALVARADO MONZON GEORGE ALVAREZ JEFFRY ALVAREZ MALDONADO DELAJAN AMIRI MOHAMMAD AMIRI WAISULLAH AMIRI SARAH ANDERSEN JENS ANDERSEN THOMAS ANDERSON WANDA ANDERSON WILLIAM ANDERSON MICHAEL ANDERSON JASON ANDERSON BRENT ANDERSON PERRY ANDERSON JR BRANDON ANDREW RENITA ANDREW RUSSELL ANDREWS THOMAS ANGEI JONATHAN ANGIERI WESLEY ANSELME BENJI ANTOLIN KRIS ANTOSH MARION ANTWINE WILLIAM APPELDORN SAMRA ARAIN JESUS ARAUJO LAURA ARAUJO GONZALEZ NEREIDA ARCILA MORAN JESUS ARELLANES RAMIREZ JAVIER ARELLANO FIDEL ARGUMEDO RANGEL JORGE ARIZMENDI BAKHT ARMANI JOSHUA ARMAS LUCAS ARMENTOR DAVID ARMSTRONG JERI ARMSTRONG JASON ARNOLD KIMBERLY ARNONE CONNER ARP CLARISSA ARRIAGA CLAYTON ARRINGTON GERARDO ARROYO ROSA ARROYO SANCHEZ ROGELIO ARTEAGA REINAURITH ARTEAGA BRANDON ARTHUR JULIUS ARTHUR JERMAN ASBERRY MARIA ASENCIO JOHN ASHLEY , JR DAVID ASHLOCK TIMOTHY ASIMAKIS FOSTINO ATAN PAULA AUKU CHAN MYAE AUNG MAY AUNG THIHA AUNG VUNG AUNG CHRISTOPHER AUSBORN ROBERT AUSMUS NOLA AVANT AGUSTIN AVELAR QUINTERO JACOB AVEN JOSE AVILA JOSEPH AVILA GUSTAVO AVILA GARCIA ALEXANDER AVILES ZIN AW NANG AWN ROBYN AYDELOTT THAN THAN AYE KRISTIN AYLETT ABDUL AZIZ SHAHABUDDIN AZIZI NORA BACKUS ANTHONY BADGETT EDGAR BAEZA JACOB BAIER ABEL BAKER BAKHT ALI BAKHTYAR JUAN BALANDRAN JOHN BALDWIN CHANDEL BALLARD PEDRO BALTAZAR ERICK BALTAZAR INES CLAUDIA BANDA JOVANI BANDERAS ALEX BARAJAS BLAKE BARBER MYLES BARBER JACOB BARBER JACKELINE BARBOZA CHETT BARCELONA CHETT BARCELONA JR BRYCE BARKER DAVID BARKLEY JUSTIN BARLETT LEROY BARNABAS DALLAS BARNES TERRIE BARNES JENELLE BARNES GRACE BARR ANA BARRAGAN DE ALTENEH JORDAN BARRE LITZY BARRERA ROMERO LOGAN BARRETT WENDY BARRIOS MICHELLE BARRON TERESA BARRON QURON BARRYER HANNAH BARTELS CHRISTOPHER BARTH FRANCISCO BARTOLO GAONA SHERRY BATES OLAJUWAUN BATISTE PHILIP BATTERSON JAMES BAUGH LUIS BAUTISTA JOSHUA BAWI LING MIGUEL BAZAN MICHAEL BEACH JESSICA BEALL JASON BEAN MICHAEL BEARD CAMERON BEAUDOIN ELIGIO BECERRA SHANNON BECK JOE BECK LIONEL BECKMAN BILLY BEDSWORTH MARK BEHN JR LILLIAN BELAMY LEGEN BELCHER CARLOS BELISARIO BARBARA BELL EFTON BELL JASON BELL JNAJAHA BELL LEANNA BELL ZAKEYIA BELL RUBEN BELLIDO FERRER SHAWN BENDELE JAVES BENITEZ ELVIA BENITEZ-AVILES BRYAN BENNETT DONNA BENNETT MORGAN BENNETT FRANCIS BENNETT, JR JOSEPH BENOIT SHELLIE BENSON DAVID BENSON DANIEL BENSON JARED BENTON TYUANNA BENTON MARC BERBIG CHRISTIAN BERGER KRISTOFER BERGGREN ANDREW BERGLUND LIDIA BERNAL BECERRA DAVID BERRY MICHAEL BERRY CURTIS BERRY ELLIOT BERRYHILL ANTHONY BERTON NATHANIEL BERTON ANTHONY BESECKE SERGIO BESERRA JAMMIE BETHEL DANIEL BIGBY KENNETH BIGHAM JR ROBERT BIGPOND JAMES BILBREY DAVID BILDERBACK PHILLIP BINFORD ROBERTT BISHOP BRADLEY BISHOP ETHAN BLACKMAN NICOLI BLACKWOOD MARVIN BLADES, JR JACOB BLAIR CAMDEN BLAKELY MAXIMILLIAN BLAKEMORE AUGUSTUS BLAKEMORE JOSE BLANCO WILLIAM BLANK LACRETIA BLANTON BRIAN BLANTON DAVID BLEVINS DEVON BLOOD DUSTIN BLOOD JACK BOBADILLA JAMES BOBBITT NICHOLAS BOBBITT CHANCE BODIFORD DANIEL BOELK LHING BOI THANG BOI WESTON BOISA DAMIAN BOLDEN ADELTRUDES BOND JOSHUAH BONE JOSHUA BONEY MICHAEL BONEY JOSE BONILLA CANIZALEZ ROGER BORJA BARREIRO JOSEPH BOSS CORBIN BOUGH DARRIN BOUGH KYLE BOUGIO AUSTIN BOWERS DANIEL BOWERS ALEXANDER BOWKER EUGENE BOWMAN ALICE BOYCE JOHN BOYD JUSTIN BOYD ERIK BOYNTON JOHNNY BOZMAN ROIBY BRACHO QUINONES MARC BRADBURY SHAVESHIA BRADLEY RASHARD BRADLEY DANIEL BRADLEY FRANCISCO BRAMBILA GRIFFIN BRANHAM ERIK BRANTNER JAIRO BRAVO AMANDO BRAVO ARIAS JUAN BRAVO SANCHEZ KATHLEAN BRELAND BENJAMIN BREMER PORTER BRENNAN AMANDA BRESEE MICHAEL BRESSERS SETH BRESSLER STEVEN BRIGHTWELL CRAIG BRIGHTWELL MARY ANNE BRIGHTWELL BRISA BRISENO WILLIAM BRITO QUINTON BROADNAX NICHOLAS BROCKWAY DUSTIN BROD JUSTIN BRODERICK THAD BROLLIER ARLUNDA BROOKS KYLEE BROOKS WINSTON BROSEKE BRANDON BROWN CHRISTOPHER BROWN LONNIE BROWN MICHAEL BROWN MITCHELL BROWN NATHANUAL BROWN PAIGE BROWN QUINTELLA BROWN SARAH BROWN SHELIA BROWN SHENEQUA BROWN TIMOTHY BROWN WILEY BROWN WESLY BROWNING CHRISTOPHER BROWNING JOSEPH BROYLES JERRILIUS BRUCE ZACHARY BRUMMUND CHRISTOPHER BRYANT CHRISTOPHER BRYANT DERRICK BUCHANAN CODY BUCKHANON VAN BUI JAMES BUIE JAMES BUIE AUSTIN BULLARD HAYDEN BULLINGER BAILEY BUNKERS JASON BUNNELL BLAKE BURCH NEIL BURCH BEAU BURGESS KEITH BURKES MARISA BURNES ROBYN BURNETTE THOMAS BURRELL CLIFTON BURRUS ROBERT BURT SAMUEL BUSH WAYNE BUSH ADRIAN BUTLER BRANDON BUTLER CORTNEY BUTLER LASHAWNDA BUTLER ROSA BUTLER JOSEPH BUXTON DAKOTA BYNUM JUSTIN BYRD JESSEE CABLE ELSA CABRERA JANIBAL CABUDOY ALEJANDRO CADENA MARBELLA CADENA CLEVELAND CAGE, JR KOBE CAGLE STEVEN CAGLE ANDREW CAIL JASON CALDER RAYMOND CALDERA YOSMAR CALDERA HERNANDEZ MARGARITO CALDERON CASEY CALDWELL SANDRA CALDWELL TYLER CALICO JORGE CALIXTO CODY CALL TYLER CALL JOHN CALLAHAN GUY CALLAHAN EDWARD CALLOWAY MARIA CAMACHO BRANDON CAMERON TEVIN CAMERON JEFFREY CAMPBELL TOMMY CAMPBELL ZAVEYION CAMPBELL ROBERT CAMPBELL TATIANA CAMPOS SILVA TREVIN CANADY GILDA CANNADY EDGAR CANO DEALOMONEY CANTRELL- JOHNSON MARIKIA CAPERS BILLY CARDER GUADALUPE CARDONA ANDRES DREW CARDOZA JANIA CARLIN TOVAR CHRISTOPHER CARMAN TODD CARNER WILLIAM CARNLEY MARCHELL CARPENTER RACHEL CARR LISA CARRIERO MICHAEL CARRILLO VINCENT CARSON BRIDGET CARTER KENDRIX CARTER ROBERT CARTER RICHARD CARTWRIGHT ISMAEL CARVAJAL CRISTOBAL CARVAJAL COLORADO BEATRIZ CASIANO DANIEL CASTEEL ALBA CASTILLO KAROL CASTRO LATHAN CASTRO YAGUARIN CASTRO FELICIA CASTRO MARIO CASTRO JR BRENDAN CATLETT ESTEPHANY CAVELLO GONZALEZ MARGARITO CAVELLO PENALOZA JASON CAVIN SHAWN CAVIN BRIAN CAVNER JEREMY CAVNESS HECTOR CAZARES CORNELIO CEJA GRIMALDO FRANCISCO CERVANTES LILIA CERVANTES SAVANNA CERVANTES BRYAN CHADWELL GUADALUPE CHAIREZ GALAN ZO CHAMA RICKY CHAMBLISS THOMAS CHANCE ROBERT CHANEY KEVIN CHAPMAN PATRICK CHAPMAN SANDRA CHARLES ALEEX CHATKEHOODLE CHRISTOPHER CHATMAN EDGAR CHAVEZ GREGORY CHAVEZ ERIK CHAVEZ KARI CHEE ZHENYU CHEN KEVIN CHESTNUT GENA CHIDESTER RANCE CHILDS SAW CHIT SAW HLA CHIT CASEY CHOATE CHRISTOPHER CHOATE CONNER CHOATE DEVAN CHOATE EDDIE CHOATES HEM CHONGLOI KIMBOI CHONGLOI MANGKHONGAM CHONGLOI KAREN CHRISTENSON JAMES CHRISTIAN RICHARD CHRISTIANSEN AWI CIANG LUN CIANG CING CIIN CING CIIN MAU CIIN NING CIIN NUAM CIIN CING CIN KAM CIN KHAM CIN LANG CIN LANGH CIN PAUL CIN PUM KHAN CIN THANGHAU CIN TUAN CIN VUNGH CIN AIH CING ANGELA MAN CING AWI CING CIANG CING CIIN CING CIIN CING CIN CING CING CING DIM CING DIM CING DON CING DON CING GIN CING GLORY CING HAU CING HAU CING HAU CING HUAI CING LAM CING LIAN CING LIAN CING LIAN CING LUN CING LUN CING MAN CING MAN CING MAN CING NANG CING NEM CING NEM CING NGOIH CING NIANG CING NIANG CING NIANG CING NIANG CING NING CING NING CING NUAM CING SAN CING THANG CING THANG CING VERONICA CING ZEN CING THERESA CING KOK ROMAN CIOLAC MARLA CIONI OHARA DAVID CIRIACO JUSTIN CLAIBORNE AMANDA CLAITOR LOURDES CLANCE AMY CLARK DEBORAH CLARK GEORGE CLARK JASON CLARK JAMES CLARK CHARLES CLARK MOLLY CLARK NIKOLAI CLAWSON BRYANT CLAY HOPKINS TONYA CLEEK JUAN CLEMENTE VALLADARES WILLIAM CLEVELAND JASON CLIFTON CLIFTON CLINE TERRY CLONTZ MARK COBB OLIVIA COCHRAN JEROMY COCKRELL TROY COCKRUM CORY COFFEY NATASHA COFFMAN KARINA COIRA HIRALDO GILBERT COLE MICHAEL COLE ROBERT COLE NATHAN COLE JACOB COLE DEMARIO COLEMAN ANDREW COLEMAN TYLER COLEMAN MAXIMILIAN COLLIER SCOTT COLLINGSWORTH CHRISTOPHER COLLINS CLAYTON COLLINS JENNIFER COLLINS KEVIN COLLINS MYRA COLLINS BERNIE COLMENARES AARON COLUMBUS DAVID COMER BOBBY CONDITT DALE CONKWRIGHT DAMON CONN ALEXANDREA CONNER JUDE CONNOLLY JENNIFER CONTRERAS YESENIA CONTRERAS LUIS CONTRERAS AMIEL CONTRERAS MARK COOK MICHAEL COOK RAYMOND COOK STEPHEN COOK, JR ALAINA COOKS ALFRED COOKS MICHAEL COOLIDGE SCOTT COON GREGORY COOPER JAMES COOPER SONYA COPPA STACEY CORDELL CRYSTAL CORDOVA MARIANA CORDOVA ROGELIO CORDOVA JAMES CORNETT MARIA CORONA GENOVEVA CORONA DE RIVERA CRYSTAL CORREA GONZALEZ ABIMAEL CORREA GUZMAN ENRIQUE CORTES MICHAEL CORTEZ REBECCA COSIO IMMARIA COSIO CALEB COTTON FRED COTTON MEAGAN COTTON ARMANDINA COVARRUBIAS DE GUZMAN ERIC COX ADRIAN CRABTREE JACOB CRABTREE KATHLEEN CRABTREE STEPHAN CRABTREE SHAWN CRAIG SHELBY CRAIG CHRISTINA CRAIN JERRY CRANE BRADLEY CRAWFORD RYAN CRAWFORD ZEUS CRAWFORD ROBERT CRAWFORD ALBERT CRAWFORD THOMAS CRAWFORD WALTER CRAWLEY COURTNEY CRAYNE JACOB CRAYNE TACARRA CREGGETT MARCO CRISP JAKE CRISS JOSEPH CRIST ZOEY CRITES HEATH CRITTENDEN ACIE CROCKETT SHERYL CROSS MATTHEW CROUCH DARRELL CROW TERRY CROW ZACHERY CRUMLEY JAMES CRUMPTON ERYK CRUZ-SOSA MARIA CUELLAR EDUARDO CUICAS RYAN CULBERSON CALVIN CUMMINGS CHRIS CUMMINGS ROBERT CUMMINGS CODY CUMNISKY JONATHAN CUNNINGHAM DAISY CUNNINGHAM LINDSY CUPPS JAKEVYON CURRY JUSTIN CURTIS TYLER CURTIS BRANDON CURTIS GABRIAL CUTRER GUSTAVO CUYAN KEVIN CYRUS MARCO DABNEY ZIRAM DAHKUM ZAWNG DAI MATTHEW DAJANI CING DAL GIN DAL GO DAL JOHN DAL LIAN DAL NANG DAL NENG DAL BIRESH DALBOT CODY DALTON HAU DAM HENLEY DANG STEPHEN DANGOTT DANNY DANIELS JUSTIN DANIELS LAQUENTIN DANIELS TOBIAS DANIELS KARIE DARCY RODNEY DARDEN MICHAELA DARNELL ISAAC DAS SCOTT DAVEY JENIFUR DAVIDSON AMANDA DAVIDSON-GOLIEN DAVID DAVILA JEFFERY DAVIS BAILEY DAVIS BESSIE DAVIS CAMERON DAVIS DARRYL DAVIS DIANE DAVIS JASON DAVIS JERRY DAVIS MATTHEW DAVIS TORI DAVIS TRAVIS DAVIS JEROME DAVIS BILLY DAVIS, JR RANDALL DAVIS, JR NIAZ WALI DAWLAT ZOY MERAJUDIN DAWLATZADARASHID KEVIN DAWSON JEFFERY DAWSON JORGE DE LA PAZ KRISTOPHER DE LA ROSA EVA DE LA TORRE YOANA DE LA TORRE ANDREW DE REGO JAMES DEATHERAGE RICHARD DECAMP STEVEN DECKER BRENNAN DECLUE JAY DEEN DRUE DEHOFF TUANG DEIH CING DEIH MANG RICHARD DELANCY ISMAEL DELAPAZ MATIAS DELAPENA, JR DOREEN DELEO KATHERINE DELGADO SETH DELMORE JUANA DELOBO HILDA DELUNA RAQUEL DELUNA MICAH DELZELL MATTHEW DEMAREE SETH DEMAREE RUSSELL DEMOSS KYLE DENNIS HELEN DENNIS MICHAEL DENNIS TROY DENNISON JOSEPH DENTON JASON DEREAS JOSHUA DESHAZER MATTHEW DESHAZER CALEB DEVENNY BRANDON DEVEY AUDENCIA DEVILLA ROY DEVILLE SRIJAN DHAKAL TRAVIS DIAL JONATHAN DIAZ JOSE DIAZ KAROLAYM DIAZ PEDRO JOSE DIAZ ALEXANDER DIAZ ANGEL DIAZ ADAN DIAZ KAINOA DICKSON MOSES DIFFIN CARRINGTON DIGGS, JR LARRY DILLON ABDUL RAHMAN DILSOZ 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 LUU DINH QUANG DINH TIEN DINH DOMINIC DIONNE DANE DIXSON KAM DO AUSTIN DODSON SOL DOMINGUEZ DOMINGO DOMINGUEZ TINOCO CING DON CING DON NGOI DON ZAM DON MATTHEW DONAHUE CIN DONG MKSING DOPMUL NANG DOPMUL NGAILAM DOPMUL NIANGNUAM DOPMUL THANGMINLIAN DOPMUL VUNGLAM DOPMUL SCOTT DOTSON TIMOTHY DOWNS JACOB DOWTY JORDAN DOZIER ROGER DRAINE CATHRYN DUBBS HAROLD DUBENSKY LAQUETTA DUBLISKY ADAM DUBOS BRANDON DUBUC DOUGLAS DUBUC SAMUEL DUELL HARRIS THERESA DUGAN KENNETH DULANEY THANG DUN CHRISTOPHER DUNCAN KELSON DUNN MELISSA DUNN ADRIAND DURAND RALPH DURBIN KYLE DURNING JOHN DUTKA MELISSA DUWE KEVIN DYKSTRA JACOB DYSON ROBIN DZIEDZINIEWICZ ANDREW E TRAW CHRISTOPHER EASON CARIN EBERLE KRYSTLE EDENS DAVID EDGINGTON ANDREW EDMONDSON SAVANNAH EDWARDS SEBASTIAN EDWARDS SAW EH MARDIN EJERCITO MARCUS ELAM BRITTANY ELAM BLAKE ELBERT SUSIE ELDRIDGE ANMER ELIAS ANTOLINA ELIAS JESUS ELIAS LIPSINA ELIMO REIPIN ELIMO SINTINA ELIMO SEAN ELLIOTT JAMES ELLIS JEANNE ELLIS RAPSON NOEL ELLSBURY DANA ELMER AUSTIN EMBRY GABRIEAL EMERSON CHRISTOPHER EMPEY KHAM EN THANG TAMMY ENDICOTT JORY ENGEL JACOB ENGELKES TINISHA ENGLISH RODRIGO ENRIQUEZ URIBE SANDRA ENTRALGO DELITA ERIKMWAI BENJAMIN ERNST STANLEY ERVIN STEVEN ERVIN CARLOS ESCOBAR KANAN SAHIB ESHAN JUWANGIU ESIWILI EDDY ESIWINI DWIGHT ESKEW GERARDO ESPINDOLA HERNANDEZ COLBY ESPREE DELIA ESTRADA LIZBETH ESTRADA PATRICIA ESTRADA BALTASAR ESTRADA LEONOR ESTRADA DEISI ESTRADA ALEJO MARCUS EVANS TYLER EVANS JOHN EVANS JUSTIN EVANS DEONDRA EVERITT CHAD EVERS TRISTIAN EVEY KURTIS EWING JESSE EWTON TROY EZELL M REEN EZRA JOSHUA FAGANS ARACELY FAGLIE SHAWN FAIRLEY MUHAMMAD FAIZI MOHAMMAD FAIZY BRANDON FAREK JESSICA FARIA PORTILLO JAQUAN FARMER BRANDON FARRELL EMILY FARRIS SUSAN FARRIS KELLY FAULKNER AMY FEHNEL JEFFREY FEHR LAUREN FERGUSON DIANA FERNANDEZ GILBERT FERNANDEZ LUCIA FERNANDEZ MARCOS FERNANDEZ WILLIAM FERRELL GUSTAVO FERRER ARBAIZA ALFRED FETTERHOFF, JR DELOMONTA FIELDS GARY FIELDS ADRIAN FIELDS THOMAS FIERROS CARLINTA FILLAS ANDREW FINCH JESSICA FINKBINER KRYSTAL FISCHER BRITTNEY FISHER JEFFREY FISHER JONATHON FISHER SAMUEL FISHER TOBY FISHER ALYSSA FLESHMAN JOHN FLETCHER III TYLER FLINT PHILIP FLOOD DELLARIE FLOOD ARCELIA FLORENTINO CAROLINA FLORES EFIGENIA FLORES GLORIA FLORES LAURA FLORES ROLANDO FLORES ROBERT FLORES HECTOR FLORES GLADYS FLORES ERIK FLORES BANDA JOEL FLORES ROBLES MARCUS FLOYD JAMES FLOYD CODY FLUHARTY MARK FLY ALEX FONSECA ELIZABETH FOOTT CARLOS FORD DEJUAN FORD REBECCA FORD TALISHIA FOREMAN GULLIVER FORRESTER DEVANTE FORSHEE CHRISTOPHER FOSTER FREDERICK FOSTER JAKE FOSTER WYEATHA FOSTER BRODY FOSTER STEVEN FOWKE BRANDON FOWLER JOHN FOWLER JOSEPH FOWLER DANIEL FRANCIS EYLIDD FRANCO RUBEN FRANCO GOMEZ PHILLIP FRANK CAROLYN FRANKLIN WARREN FRANKLIN DOUGLAS FRANZ KYLE FRAZIER BRANDON FREEL JOSE FREGOSO RICK FRENCH RICKY FRENCH ANGEL FRIAS TIMOTHY FRIAS BRANDON FRICK BARRY FRIEND TIMOTHY FRUEHLING JOHN FRY BERNARD FULLBRIGHT JONAH FULLERTON BRANDON FULLINGTON LUIS FUMERO LUIS FUMERO PEREZ COLLIN FURLON ANDRE FURMAN DANIEL FYFFE LATOYA GAINES SARA GAITHER WILLIAM GAITHER- DOUBLEHEAD CECILIO GALAN DELANO GALBREATH GREGORY GALUSHA ASHLEY GALUSHA GILBERTO GALVAN INO JAVIER GAMEZ ALEJANDRO GAMEZ GARZA SARAH GAMMON BALERIANO GAONA JR MARIA GARAY FRANCISCO GARAY CORONA ANGEL GARCIA DAVID GARCIA ESTEBAN GARCIA JOE GARCIA JOSE GARCIA RICARDO GARCIA ROSA GARCIA STEVEN GARCIA YARITZA GARCIA JOSE GARCIA CODY GARCIA ISIDRO GARCIA ARRIAGA GRACIELA GARCIA LOPEZ JUAN GARCIA RAMIREZ LESLIE GARCIA TAPIA QUINCY GARDNER ZAIDA GARIBAY NORMA GARIBAY VILLENA MICHAEL GARLAND, JR JAMES GARNER KASSONDRA GARNER EUGENE GARNER CASON GAROUTTE MARCUS GARRETT MICHAEL GATLIN BETTINA GAUT BRYAN GAYLOR FAITH GAYLOR CORBETT GAYTAN XERXES GAZDER CHASTON GEORGE JAMES GEORGE KURSTON GERTY GABRIEL GIACHINO KEITH GIANELLA DEWAYNE GIBBS ROBERT GIBLER CHARLES GIBSON SAMANTHA GIBSON DILLON GIESCHEN JOSE GIL KENNETH GILES WILLIAM GILL JENNA GLOVER SUAN GO VUNGH GO FRANKLIN GODFREY LADIAMOND GODLOCK ROBERT GOFF ZAFAR GOJAR JACOB GOLIEN MARIA GOMEZ REIQUEL GOMEZ MARIA GOMEZ MEDINA DOMINIC GONZALES SAMUEL GONZALES SHELBY GONZALES JOHANNA GONZALES ORTEGA MARK GONZALEZ ADRIAN GONZALEZ IMELDA GONZALEZ JAMES GONZALEZ MARISELA GONZALEZ PILAR GONZALEZ ROBERTO GONZALEZ LETICIA GONZALEZ SONIA GONZALEZ IRVIN GONZALEZ ABRUM GONZALEZ ALTER MARIA GONZALEZ DE CAVELLO MA REFUGIO GONZALEZ HERNANDEZ ISMAEL GONZALEZ LOEZA VICTOR GONZALEZ PAOLINI CYNTHIA GONZALEZ QUINTERO GRISELDA GONZALEZ RAMIREZ LIDIA GONZALEZ RIVERA DANIEL GONZALEZ SANCHEZ DELFIN GONZALEZ VILLAMIZAR DAMON GOODAY AARON GOODMAN MICHAEL GOODSON LATOYA GORDON KEVIN GOREE ASHLEY GRAHAM JASON GRAHAM JOSEPH GRAHAM JESSTON GRAHAM MARLEITTA GRAMMER CLOTHERE GRAMMONT BUENAVENTURA GRANADOS RUBIOS DOUGLAS GRANT APRIL GRAUGNARD IRIS GRAVES DANIEL GRAVON ERIC GRAY ARLENE GREEN GAGE GREEN JONATHAN GREEN LARRY GREEN WILLIAM GREEN, III CHRISTOPHER GREENE SHEMITA GREER KENDRA GRIDER STARLA GRIFFIN CINDY GRIFFITH ADAM GROSS DANIEL GROSS WILLIAM GROW RAY GRUBER JOHN GRUNDMANN RACHEL GRUNDMANN CARLOS GUARDADO LILLIEANA GUDINO MARCOS GUERERE JUAN GUERRA MEDINA GERARDO GUERRERO CASTELLANOS LUIS GUEVARA MARIA GUEVARA RODOLFO GUEVARA CAROLINA GUILLEN BRANDON GUINN VERNICE GUINN CING GUITE MIR GULAMZOI JOHN GULDEN STEVEN GUNN ANDREW GUNSCH CARLOS GUTIERREZ GUADALUPE GUTIERREZ GONZALEZ SILVIA GUTIERREZ MENDOZA EUGENE GUY DIEGO GUZMAN GEORGINA GUZMAN LUIS GUZMAN LUIS ALBERTO GUZMAN LAU STANLEY HA SCOTTY HAGLER LONNIE HAIGLER NGAM HAK TIMOTHY HALBERT JOSEPH HALBERT HELTON JULIAN HALE REBECCA HALE KEITH HALEY JOSHUA HALFPAP MUHAMMAD HALIMI DENNIS HALL GREGORY HALL KELLY HALL ROBERT HALL STEPHANIE HALL STEPHEN HALL GENE HALL MASON HALL STEPHANIE HALL BERGMAN ZACHARY HALSEY DANIEL HALTERMAN TOLOVE HAM FARIDULLAH HAMDERD AJ HAMELAI FLORENCE HAMELAI G SCOTT HAMILTON THOMAS HAMLIK PATRICIA HAMLIN JEFFREY HAMMONS ANDEREAS HAMO MARIANO HAMO CHRISTOPHER HAMON SHYANNA HANDSCHUMACHER SHYANNA HANDSCHUMACHER JASON HANEY ANDREW HANG MUNG HANG PAUN HANG THANG HANG LAL HANGSAWK LAM HANGSAWK ROBERT HANSEN DEBBIE HANSEN CHRIS HANSHEW CAITLYN HANSON TONG HAO CHIN HAOKIP HOLKHOSEI HAOKIP LAM HAOKIP LHUN HAOKIP PAO HAOKIP VAHNEILHING HAOKIP CHRISTOPHER HARDEE LAURA HARDEE DANIEL HARDIN NATALIE HARDIN JOHN HARDT SCOTT HARJO OKSANA HARKUSHA JERRY HARRIS LINSLEY HARRIS RICHARD HARRIS SIERRA HARRIS STACEY HARRIS STEVEN HARRIS TERRY HARRIS DEMETRIOUS HARRISON N LAST HARRY BRENTON HARTLEY LEVI HARTLEY RUSTY HARTLEY SARA HARTLEY JOSHUA HARTMAN JORDAN HARVEY DUSTIN HASBROUCK HEATHER HASKINS COREY HASSELL CHAUNCEY HATTEN ZAM HATZAW ANNA HAU CIN HAU CING HAU CING HAU CING HAU KAM HAU THANG HAU THANG HAU THANG HAU ZAM HAU NENG HAU LIAN MADISON HAVEL PAUL HAVENS ADRIUN HAWKINS DESTINY HAWKINS BILLY HAWLEY, JR REGION HAYDEN CORY HAYES BRENDON HAYS CHRISTOPHER HAYS LUCAS HAYS NASIM KHAN HAZRAT GUL BOBBY HEDRICK THAN HEIN REX HEISING DYLAN HELMANDOLLAR CHASE HELMICK LUKE HEMPHILL BOBBY HENDERSON CHAKIRIS HENDERSON COLLIN HENDERSON ERIC HENDERSON MATTHEW HENDERSON SUSAN HENDERSON MELISSA HENLEY KENNETH HENRY JOSHUA HENSLEY KEVIN HENSLEY SARAH HENSON KEVEN HER YER HER ASCENSION HERNANDEZ CORCINA HERNANDEZ JANET HERNANDEZ JOSE HERNANDEZ KAILA HERNANDEZ KARI HERNANDEZ LUIS HERNANDEZ MARGARITA HERNANDEZ MARIA HERNANDEZ MARIANO HERNANDEZ VICTORINO HERNANDEZ MIGUEL HERNANDEZ CHRISTIAN HERNANDEZ JUAN HERNANDEZ STEVEN HERNANDEZ CESAR HERNANDEZ DOMINGUEZ LUKE HERNDON BETANIA HERRERA RICO HERRERA AXEL HERRERA BAEZ JAYE HERRMANN EDWARD HERRMANN BRIAN HESS MARK HESTON NICKY HETHON CAMERON HETTICK COLBY HETTICK HOYET HIBBARD SAMUEL HIBBARD MICHAEL HICKMAN RUFUS HICKS JOHN HIDALGO MACEN HIGDON TYLER HIGGINS LARRY HIGHFIELD FARID HILAL JEFFERY HILBERT CARLOS HILL DONALD HILL JUDITH HILL RUSSELL HILL SANTANYA HILL SONYA HILL TAMARA HILL TAMERA HILL DAVY HILL, JR JERRY HILLBURN REGINA HILLSMAN DANNA HILTON LAMONT HINES STACI HINES TYSON HINTHER MIN HLA THANG HMUNG TUANG HNIN SIEW HO JACOB HOBBS RALPH HOBBS ANDREW HODGES TONY HODGES TAQUISA HODNETT SMITH ANDREW HOFFMAN LENA HOGAN RAMSEY HOGAN SIAN HOIH CHRISTOPHER HOLBROOKS RICKEY HOLCOMB, II MARCUS HOLLAND KIMBERLY HOLLAND-NOLEN HEATHER HOLLENBEAK GAVEN HOLLEY OLIVIA HOLLIDAY KELSEY HOLMES VICKY HOLMES LAWRENCE HONEL ZACHERY HONEL DILLON HONEYMAN ANASTASIA HONN BRYON HOOD STEPHEN HOOVER DEREK HOPKINS ANGELA HORELLOU TODD HORELLOU SHELBY HORNBERGER STANLEY HORTON NU HOU TINNER HOU KIP SANDRA HOUSE LEVI HOUSEHOLDER JERRY HOUSEMAN ALEX HOUSTON RICHARD HOUSTON ALLYANN HOWARD ANTHONY HOWARD DAVID HOWARD JAMES HOWARD LAMARCUS HOWARD MICHAEL HOWARD PHYLLIS HOWARD DARIN HOWELL DEVONA HOWELL SIRENA HOWETH SAW HTOO CIIN HUAI CING HUAI CING HUAI CING HUAI CING HUAI JULIA HUAI NIAL HUAI NUAM HUAI VERONICA HUAI ZAM HUAI ZEN HUAI THANG HUAT SCOTT HUBER MICHAEL HUDSON DAWN HUDSON BRETT HUEBNER DANIEL HUERTA CHRISTOPHER HUFF DERIAN HUGHES CAROLYN HUGHEY JERAD HUMPHREY LATARCHA HUMPHRIES KHAN HUNG CRYSTAL HUNTER DAMICO HUNTER JACOB HUNTINGTON DEKEVIAN HURD MICHAEL HURD ABDUL HUSSAINI RONALD HUTCHCRAFT JIM HUTCHINSON DUNG HUYNH LOC HUYNH THANH HUYNH JUBE HWANG BENJAMIN HYDE ETHAN IAROSSE JUAN IBARRA AUGUSTINA ICHIRO JESUS IDROGO BLANCO MARCOS IGLESIAS NANG ING TIERRA INHOFE GINEST BRADLEY IOWANES MENDINA IOWANES ANDREA IRISH OBIE IRON ALBERT IRONHEART REGINALD ISAAC, SR MAZHARUL ISLAM KERAMUDIN ISLAMUDDIN ERATH ISLAS MAIAD ISMAIL TU JA KHAI JA KHUP BELINDA JACKSON DALTON JACKSON JACE JACKSON JEFF JACKSON JENNIFER JACKSON JONATHAN JACKSON KALEB JACKSON LAMOR JACKSON MARY JACKSON TAMMY JACKSON OBERON JACKSON NATHAN JACKSON DARYL JACKSON, JR BRADLEY JAEGER CAMERON JAEGER BAILEY JAGER MAKAYLA JAGER EID WALI KHAN JALAL ZAI ZAR WALI JALAL ZAI JAN JALALI JOSE JAMAICA JOSE JAMAICA CARRENO RONDRICK JAMES DELBAR JAN MUSAFAR JAN FRANCES JARAMILLO RICKY JARAMILLO ESTHER JASUAN STEPHEN JEFFERS DENNIS JEFFERSON BILLY JENKINS CURTIS JENKINS DESIREE JENKINS WADE JENKINS DAKOTA JENNINGS TERRIELLE JENNINGS STEVEN JENSEN RICHARD JESTER CODY JEWELL MIKAYLA JIMBOY PEDRO JIMENEZ CARMEN JIMENEZ FREDERICK JIMMERSON CHAITANYA JOHAR JOANN JOHN ALEXIS JOHNSON CARDALEOUS JOHNSON CEDRIC JOHNSON CHARLES JOHNSON CHRISTIAN JOHNSON DINARI JOHNSON EBONI JOHNSON JEREMIAH JOHNSON KEITH JOHNSON MARJORIE JOHNSON MISTY JOHNSON SOPHIA JOHNSON STEVEN JOHNSON TRAYSE JOHNSON TRISTAN JOHNSON ZACHARY JOHNSON TEDDY JOHNSON ROBERT JOHNSON KENDAL JOHNSON CALEB JOHNSON TIFFNEY JOINER RODNEY JOLLEY DMARQUESS JONES BETHANY JONES CADE JONES CLARISSA JONES CONNIE JONES CRISSANA JONES CRYSTAL JONES DANNY JONES DAVID JONES DAVID JONES DAVID JONES DERRIC JONES ERIC JONES ERIC JONES GARON JONES KENYATTA JONES KEVIN JONES KINESHA JONES MATTHEW JONES RAYMON JONES DAPHNE JONES JUSTIN JONES DEBRA JONES-MAXON DANNY JONES, JR JESSICA JORDAN MARY JORDAN RONALD JORDAN SEAN JORDAN BRITNI JORDAN KACY JORDAN BATES JACOB JORISHIE ABIGAIL JOSE AFINO JOSEPH JACKY JOSEPH RELEEN JOSEPH TJ JOSEPH ASHLEY JOSEPH KRYSTAL JOWERS YOLANDA JUAREZ MARTIN JUAREZ MARIA JUAREZ RIVERA DERMIDIO JUEZ PEREZ MICHAEL JULIAN LEANDRO JUMELLES NUNEZ VANCE JUSTIC-MAYFIELD CHRISTOPHER JUSTICE LASHETIA JUSTICE DAVID KAHURA ZAM KAI MUSTAFA KAIHAN MARISA KAIRIS GARRETT KAISER JASON KALE HAU KAM LIAN KAM MANG KAM NGIN KAM CLARENCE KAMP 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NING KIM PA VAN KIM SIAN KIM THANG KIM THANG KIM TUAN LIAN KIM ZAM KIM ERICA KIMBLE JOE KINCADE JESSICA KINDLE KENOSHA KINDLE BRANDY KING CODY KING ISSAC KING KORBY KINKADE NICOLAS KINKADE ROGER KINKADE JR BDWAS KINTIN MANGNEO KIPGEN CORY KISSLER MORGAN KIZER SPENCER KIZER JENNIFER KLAASSEN KATHRYN KLEINER TSOLMON KLEINERT JOHN KLENE DANIEL KLINE STEPHEN KLING JENNIFER KLINKHAMER ROBERT KNEBEL ALICIA KNOPIK CLYDE KNOX ARIELLE KNUDSEN GARY KNUDSEN LAURA KNUDSEN COURTNEY KNUDSON AYECHAN KO GEORGE KOESTER BRANDON KOHLMAN EMANUEL KOLMAN KINTU KONMAN BUDDY KONS MARTIN KOP JS KOSEMOCHEN CHUNO KOSI IVAN KOSOVAN JAMES KOSS DAVID KOSTA RONALD KOZLOWSKI ROBERT KRAFJACK JOSHUA KRAMER NICHOLAS KRAUSE NEBOJSA KRESOVIC SHOBHA KRISHNASWAMY JONATHAN KROBLIN MARIA KRUCKENBERG MIKHAIL KRUPENYA ADAM KUBICKI RAYMOND KUHN JAY KUS SIMPAT KUS DAVIS KUSS LIANA KUSS SCRAM KUSS CASSY KUYKENDALL NICHOLAS KUYKENDALL ALEXANDER KUZNETSOV AUNG KYI NGIN LAANG RONALD LABOUBE MATTHEW LACEY BOBBY LACY BLAKE LAGERS LUIS LAGUNAS GIANG LAI LAIQ LAIQ MARK LAKE KAP LAL THANG LAL THANG LAL ZVJEZDANA LALIC GIN LAM MUNG LAM ANGELA LAMBERT ANNETTE LAMBERT JEFFERY LANDRUM MYOSHIA LANDRUM ROADY LANDTISER DEBORAH LANE GIN LANG PUM LANG SUAN LANG THANG LANG COREY LANGE HAU LANGH HAWM LANGH KAMSIAN LANGH KAP LANGH THANG LANGH THAWNG LANGH KEVIN LANO SENG LAO DANIEL LAPRES JULIA LAPSHOVA AMANDA LARANCE VIRGINIA LARRABEE DAVID LARUE HUGH LASATER SENG LASI MARCO LASKEY KATHRYN LAUE SHAWN LAUSCHER JENNIFER LAW DIM LAWH MAN LAWH JUSTIN LAWRENCE STEVE LAWRENCE, JR JEFFREY LAWSON STEPHEN LAWSON JEREMY LAY ANH LE LAI LE RODNEY LEASY CATALINO LECLAIRE PETE LEDBETTER TYLER LEDFORD ALLEN LEE NATHANIEL LEE MATTHEW LEEPER ARIEL LEFF GREGORY LEFFLER KANDIS LEFFLER MARK LEHMAN LUN LEK LUN LEK CLIFFORD LEMAY LAURIN LEMLEY JAVIER LEMUS RUIZ PAUL LEVENTRY ADUNTE LEWIS ALICE LEWIS KIM LEWIS NATHAN LEWIS SARIAH LEWIS JOSEPH LEWIS CYNTHIA LEYVA DAVID LEZAMA DIM LHING VAH LHING AWI LIAN AWI LIAN CIN LIAN CIN LIAN CIN LIAN CIN LIAN CING 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LOPEZ OLIVARES JOSE LOPEZ OLIVARES FREDDY LOPEZ ORTEGA JUAN LOPEZ ZAMUDIO HEAVEN LORD CALVIN LOTT DIVAILEEN LOVER JASON LOVETT SIRIA LOZANO GRIMALDI CING LUAN DANIEL LUCAS IV DANIJELA LUCIC GRACIJELA LUCIC FRANK LUCIO JARROD LUDLOW QUANNAH LUDLOW DAKOTA LUELLEN EVELYN LUGO ORTIZ JORGHELYS LUJAN GOMEZ DAWN LUKE CING LUN CING LUN CING LUN DIM LUN DIM LUN DIM LUN HKIN LUN LIAN LUN NGAI LUN NIANG LUN NIANG LUN NIANG LUN NIANG LUN NIANG LUN NIANG LUN TUAL LUN VUUM LUN THANG LUN LORENZO LUNA ANDRES LUNA IZIK LUNA HECTOR LUNA THANG LUONG DAKOTA LUSK THI LUU JACOB LUZIER BOI LY SAMUEL LYNCH JR HAMSAR MABU JORDAN MACK RUSTIN MACKEY LARRY MADALONE, II TAZILLE MADISON DANIEL MADRID VERONICA MAGANA MARIA MAGDALENA CONTRERAS DANIEL MAGDALENO SYDNEY MAGEE DAVID MAGNATTA MISTY MAGUIRE DENA MAHAN CORY MAHONEY JAYDON MAHR TAM MAI RANDALL MAIN EMAM MALAKZAI ANTHONY MALDONADO CARLOS MALDONADO NAFES MALKYAN LARRY MALONE JAMES MALOY CHIRSTOPHER MALTOG JEFFREY MALY KHAN ZAMAN MAMOON CING MAN LIAN MAN NEM MAN NIANG MAN VUNG MAN VUNG MAN TAM MANA MARIA MANCILLA DANIEL MANCILLA ALEJANDRO MANCILLA JUAN MANCILLA CHIN MANG CIIN MANG CING MANG CING MANG DAL MANG DIM MANG DO MANG EN MANG GIN MANG GIN MANG HAU MANG HAU MANG JOHN THANG MANG KAI MANG KAM MANG KHAM MANG KHAM MANG KHAN MANG KHUP MANG KIM MANG KIM MANG LAGH MANG LIAN MANG LIAN MANG LIAN MANG LINUS MANG MAN MANG NANG MANG NANG MANG NANG MANG NGIN MANG NGO MANG NIN MANG NING MANG NING MANG NING MANG PAU MANG PAU MANG PAU MANG PHILLIP MANG THANG MANG ZAM MANG ZAM MANG ZEN MANG ZEN MANG RONALD MANGUS DEVIN MANION LESSIE MANNS SHANNA MANNS ERIKA MANTALBAN JACKELINE MARCANO JAMILKA MARCANO APRIL MARGWARTH PAUL MARGWARTH ALEXANDRU MARIN-SERGHIE DARRYL MARKS ANGEL MARQUEZ ARGUETA MARIA MARQUEZ DE GILBREATH MARIANA MARQUEZ MARQUEZ FRANCISCO MARRUFO, JR VICKEY MARS BILLY MARSH STACIE MARSH OB MARSHALL ANTONIO MARTIN DARRELL MARTIN DIANA MARTIN DORION MARTIN KERRY MARTIN MICHAEL MARTIN MICHAEL MARTIN NARWIN MARTIN RICHARD MARTIN WILLIAM MARTIN JAMES MARTIN CARLTON MARTIN DANIEL MARTINEZ DAVID MARTINEZ EDGAR MARTINEZ OBDULIA MARTINEZ PAUL MARTINEZ RICHARD MARTINEZ JAIR MARTINEZ JESUS MARTINEZ ASHTON MARTINEZ ALBERTO MARTINEZ CARLOS MARTINEZ DESIREE MARTINEZ DAVID MARTINEZ MARIA MARTINEZ AVILA ALEJANDRO MARTINEZ HAROS HECTOR MARTINEZ MOLINA MARIA MARTINS GUL MASHWANI ANGELA MASON BEVERLEY MASON CHRISTINE MASON JAMES MASON SHERIDAN MASON CRYSTAL MASTERS MARCELINO MATA SANDRA MATA ZAMKHOZANG MATE TONY MATHIAS ELVIN MATHIS NESER MATONWAAL DAICHI MATSUOKA DAIGO MATSUOKA NICOLE MATTESON ALLIAH MATTHEWS ALLISON MATTHEWS DONALD MATTHEWS KENNETH MATTHEWS ANDREW MATZKE RON MAUCH MAY MAW DON MAWI HANAH MAWI RAM MAWI VAN MAWI VUNG MAWI JOEANN MAXIE PATRICIA MAXIMO LEONARD MAXWELL ANTHONY MAYES SHANE MAYHUGH HAYDEN MAYNARD DEANDRE MCAFEE RICHARD MCANINCH TINA MCBEATH JAMES MCBRIDE CHASE MCCALL DYLAN MCCALL BRENT MCCARTY CRYSTAL MCCAWLEY CHRISTOPHER MCCLAIN CHRISTOPHER MCCLAIN FRANCIS MCCLAIN KONNER MCCLAIN KRISTOPHER MCCLAIN RYAN MCCLAIN ROBERT MCCLEARY DIRK MCCLELLAN SUMMER MCCLELLAN KENTAVIOUS MCCOLLINS WALTER MCCOMBS MICHAEL MCCONNELL DEBRA MCCOWAN WESLEY MCCOWAN, JR ALLEN MCCREARY SHELLIE MCCREARY MICHAEL MCCUIN DAREY MCCURDY CLENTON MCDANIEL ANNE MCDONALD BRAYDON MCELROY NICHOLAS MCELROY CLAYTON MCFALL DAKODA MCFARLAND JEFFERY MCGEE RONNIE MCGEE RONNIE MCGEE DARREN MCGINTY REIS MCGREW RICHI MCHENRY JASON MCINTIRE AIMEE MCINTOSH GLORIA MCKEE LAMAR MCLEMORE MICHAEL MCMILLAN CLEOPATRA MCNAMARA ALEIA MCNANEY DEVORE KEENAN MCPHETRIDGE JOSIAH MEADE ANTHONY MEANS GINA MEANS SCHUYLER MEANS ALEX MEDFORD ALEXZANDER MEDINA ASHTON MEDINA DANIELA MEDINA JULIE MEDINA SARAH MEDINA CHRISTINE MEDINA JOSE MEJIA SULANDER MELENGNA JORDAN MELTON DESTINY MENDEZ SILVESTRE MENDEZ GONZALES CAMERON MENDOZA MARVIN MENDOZA ANGELA MENDOZA JUSTIN MENNING JESUS MERCADO KEVIN MERIDETH BILLY MERRELL JOHNNY MERRELL, JR RYAN MERRITT HERNAN MESA SAEZ STEVEN METCALF JENNIFER METCALFE CALEB MEYER BRANDON MEZA SEBASTIAN MEZZANATTO ADAM MICHAUD JOSHUA MIDDLETON ANDREA MIESNER GLENN MILAM ANTONIO MILLER SHELLY MILLER CHRISTOPHER MILLER ELLA MILLIKEN PHILIP MILLMAKER ASHLEY MILLS MARKISHA MILLS JOSEPH MILLS TYRELL MIMS MIN MIN JERRIC MINOR ERNESTO MIRAMONTES ALFREDA MITCHELL BRYCE MITCHELL DALLAS MITCHELL MICHAEL MITCHELL PORSHA MITCHELL ROBERT MITCHELL JOSEPH MITCHELL JERRY MITCHELL BRYAN MITCHELL DYLAN MITTAG ROBERT MOCK JAY MODISETTE BAKHTIAR MOHAMMAD ALI MOHAMMADI HAJI MOHAMMAD MOHAMMADI BIASNEY MOJICA CASTANEDA JOSUE MOJICA TORRES LUIS MOLINA TEODORO MOLINA NAI NYAN MON JOSEPH MONDILLO JOSEPH MONFORTE OFELIA MONREAL SELENA MONREAL DINORA MONROY DE DIAZ DANIA MONSIVAIS NAVARRO KARINA MONSIVAIS NAVARRO FIORELA MONTANO NATALIE MONTANO BLANCA MONTOYA JOHNNY MONTOYA TANNER MONTOYA MAGDALENA MONTOYA TOVAR KEYLON MOORE BRANDI MOORE CLINTON MOORE CORDELL MOORE HERBERT MOORE PHILLIP MOORE TONY MOORE ARCHIE MOOYMAN ANDREA MORALES ALFONSO MORAN TONY MOREHEAD MARCINA MORELAND LUKE MOREY ELROY MORGAN BRIAN MORGAN RYEAN MORLATT JUAN MORONTA GARRETT MORRIS JOHN MORRIS LATASHA MORRIS RODNEY MORRIS JAMES MORROW CASSIE MORTON SYDNEY MORTON COLTON MOSELEY ANNETTE MOSELEY MANX MOSES BERNARD MOSS CHRIS MOSS DESMOND MOSS TAMMY MOSS PHILLIP MOSS, JR MICHAEL MOTA CLAYTON MOTE SAW EH MU KAM MUAN PASIAN MUAN THAWNG MUAN CIIN MUANG CING MUANG KAM MUANG KHUAL MUANG KHUP MUANG LING MUANG MUA MUANG THANG MUANG ZAM MUANG KENNETH MUDGE NATHAN MUILENBURG REBECCA MULHOLLAND ALONZO MUMPHREY THANG MUN THANG MUN CIN MUNG CIN MUNG CIN MUNG DAII MUNG GINDAL MUNG HANG MUNG HAU MUNG HAU MUNG HERO MUNG JACOB MUNG JAMES MUNG JAMESKANG MUNG KAI MUNG KAM MUNG KAM MUNG KAM MUNG KAP MUNG KHAI MUNG KHUAL MUNG KHUP MUNG KHUP MUNG LANG MUNG LANG MUNG LIAN MUNG NANG MUNG NANG MUNG NGIN MUNG PAU MUNG PAU MUNG PAU MUNG PAU MUNG PAU MUNG PAU MUNG PETER MUNG PUM MUNG SUAN MUNG SUAN MUNG THANG MUNG THANG MUNG THANG MUNG THAWNG MUNG TUAL MUNG VUM MUNG ZO MUNG JESUS MUNOZ AARON MUNTZ JEFFREY MURDOCK BREANNA MURO GEORGE MURPHY AUDIE MURRAY ERICA MURRAY MATTHEW MUSGROVE MA MUSHRUSH JOHN MUTANDA PHILLIP MYER CAROLYN MYERS JUSTIN MYERS TRECOL MYERS YEE MYINT KUNI MYO MASOOD NADEEM JOHN NAIL MANHNWIN NAING SAW NAING CRISTIAN NAJERA OLIVAN PAU NANG PAU NANG PAU NANG THOMAS NANG TUN NANG MYLESS NARRUHN NOORY NARTIN JAMES NASH AUSTIN NATION THANG NAULAK ZAM NAULAK FRANCISCO NAVA JOSE NAVA MARIA NAVA MARIA NAVARRETE MICHAEL NAVARRETE DARWIN NAVARRETTE JARED NAVARRO STHEFANY NAVARRO BAWK NAW KHAUNG NAW LIAN NAWL SAID NAZARMOHMAD BRANDI NEAL CLAYTON NEAL MARIA NEI THIEM NIANG NEL TREVOR NELSON JASON NELSON ERIC NELSON CING NEM DIM NEM DEI NENG HILLARY NERO JOSHUA NETTEN SETH NETTEN ANDRES NEWMAN ICSHA NEWSOME NUAM NGIN ZAM NGIN ALVIN NGIRATEBL EN NGO NANG NGO PAU NGO A VAN NGUYEN BICH NGUYEN HUNG NGUYEN HUU NGUYEN SAU NGUYEN TAM NGUYEN THI NGUYEN TUONG NGUYEN VIET NGUYEN LINDA NGUYEN MORGAN LE NHU CING NI LA JA NI MA CIN NIANG CING NIANG CING NIANG CING NIANG CING NIANG CING NIANG CING NIANG CING NIANG DIM NIANG DIM NIANG EN NIANG ESTHER NIANG ESTHER NIANG GIN NIANG HAU NIANG KAP NIANG KHAN NIANG KHEM NIANG LAM NIANG LUN NIANG NEM NIANG NGO NIANG NUAM NIANG PUM NIANG TUAL NIANG VUNG NIANG VUNG NIANG VUNG NIANG ANTHONY NICHOLAS JACOB NICHOLS MITCHELL NICHOLS TAKODA NICHOLS JUSTIN NICHOLSON JAMES NICKERSON ABDULRAUFKHAN NICKMAL NOUNG NIE TRAVIS NIEDERHOFER HALEY NIELSEN BRANDY NIETO EMILY NIETO TARREN NIETO THANG NING ZAM NING ATINIAR NISIUO CING NO CING NO MAN NO NIANG NO THAWN NO JACOB NOE CHRISTOPHER NOEAR SAIFULLAH NOORISTANI MARK NORDSTROM BRANDON NORDSTROM WILLIAM NORFLEET JATAVIAN NORRIS DAVINA NORRIS SALYER NORTON AARON NOTARIANNI JERRY NOWEL SAILER NOWELL TUMAI NPAWT NGIN NTEM KIM NU KIM NU SEN NU CIIN NUAM CING NUAM CING NUAM CING NUAM CING NUAM CING NUAM CING NUAM HAU NUAM LAWH NUAM NING NUAM NING NUAM THANG NUAM CING NUAMBOIH RAHMAT NUMAN DENISE NUNEZ EDUARDO NUNEZ MALPICA NGIN NUNG MICHAEL OBRIEN THOMAS ODOM, II ALEXANDER OFOSU TYLER OGDEN UDUIHAYE OGEDENGBE WYATT OGLE BRANDON OHARA BREE OHARO KAI OJALA YELITZA OJEDA RAMIREZ TYESHA OLDEN ISMAEL OLIVARRIA OLIVAS ERICK OLIVAS VALERIO ANTWANETTE OLIVER DANIEL OLIVER STEPHEN OLIVER MELCHOR OLIVERA-ORTEGA ANTHONY OLIVERAS JAMES OLSEN ERIC OLSON KEITH OLSON KEVIN OLSON ALEXIS OLVERA DIANE OMALLEY MYERS MAROOF OMAR DAVID ON TUANG JAMES ONEILL, JR PROVINA ONOPWI PAUL ONYENEHO SAW OO TIN OO WAI OO AVERY OPPEGARD ZEYAR ORAHMAN J DANIEL ORNELAS CARRILLO RACHEL ORONA LETICIA OROZCO BULMARA OROZCO JOSE OROZCO ESMERELDA OROZCO ESTEBAN ORTEGA RODRIGUEZ JOSE ORTIZ JULIAN ORTIZ SAUL ORTIZ PATRICK OSBORNE JACINTA OSOMAI LENA OSS CHRIS OSSIG VERONICA OSTAPOWICH WUILLIAN OSTOS JJ OTIS ABIGAIL OTT JENNIFER OVERMEYER MARCO OVIEDO KEVIN OWEN DEKEVIAN OWENS JOHN OZBUN GO PAA MIGUEL PABON DAVID PACQUETTE HAKIM PAEE KHAN AUSTIN PAINTER LAUREN PALACIOS GILBERTO PALACIOS CODY PALMER TINA PALMER SIRVINCENT PARAMORE ROBERT PARANG LUCAS PARANTO JORDY PAREDES HEIDI PARK BILLY PARKER GOLDIED PARKER JAKE PARKER JAMES PARKER KEYANNA PARKER MICHAEL PARKER ROBERT PARKER SARAH PARMELEE BRENDA PARRA HARRY PARRISH FRAY PARTIDAS ANDRES PARTIDAS AGELVIS ANNEL PARTIDAS PAZ FASIHULLAH PASHTANA LESLIE PASZTOR JASON PATE THOMAS PATE CALEB PATERIK CHRISTOPHER PATERSON KY PATRICK AEVA PATRICK PAUL PATTERSON JAELYNE PATTON CARL PATTON CEDRIC PATTON CIN PAU CIN PAU DAI PAU DAL PAU DAL PAU DAL PAU DO PAU EN PAU KAI PAU KHEN PAU LANG PAU MUNG PAU MUNG PAU NANG PAU NANG PAU NENG PAU NENG PAU PETER PAU PUM PAU THANG PAU THAWNG PAU TUAL PAU TUNG PAU ZAM PAU ZAM PAU ZOO PAU SUAN PAUDOPMUL LANGH PAUGUITE TERESA PAUL CHRISTOPHER PAULI DEMI PAULUS RODNEY PAULUS SAW PAW DEVEN PAWLOWSKI JONATHAN PEARCE DEANA PECK CORY PEDERSEN ANTHONY PEDONE DAMON PELUCHETTE JUAN PENA ARTHUR PENNINGTON BONNER PENNINGTON SHAMATA PENTECOST QUNICY PEOPLES ABEL PERALTA ROSALINA PERDOMO PERDOMO JOSEPH PERDUE BLAZE PEREZ CARLOS PEREZ DARWIN PEREZ DIANA PEREZ JESUS PEREZ JOE PEREZ LEYBIS PEREZ SERGIO PEREZ TULIO PEREZ VICTOR PEREZ MARCO PEREZ ANDREA PEREZ PERLA PEREZ ARIAS CHRISTIAN PEREZ GUTIERREZ LUIS PEREZ MEJIA PEDRO PEREZ PAEZ GLENDA MARISOL PEREZ ROMERO FRANCISCO PEREZ SANCHEZ JOHN PERRY MILES PERRY RILEY PERRY MATTHEW PESCHONG TAINELYNN PETER TAIPO PETER AUSTIN PETERS ROBERT PETERSON JEFFREY PETERSON TIMMY PETERSON HUNTER PETERSON BRITANY PETERSON DANIEL PEURIFOY HUY PHAM LINH PHAM QUOC PHAM PHUOC PHAN NAW PHAW LIANKHAN PHAWNG SANTINO PHILLIP NATHANIEL PHILLIPS TRAVIS PHILLIPS TROY PHILLIPS HNIN PWINT PHYU CIN PI HAU PI HAU PI HELEN PI MANG PI MUAN PI NIANG PI PETER PI SB PI SING PI THOMAS PI TUANG PI MANG PIAN DAL PIANG DO PIANG GIN PIANG GOH PIANG KHUP PIANG KHUP PIANG LIAN PIANG SUAN PIANG THANG PIANG VAN PIANG CHRISTOPHER PICKENS DEVOTRICK PICKRON WILLIAM PIDGE HILARIO PIEDRA ANDREW PIETROMONACO CIN PII JOHN PIKE DAMIAN PINEDA MIGLANIA PIRONA GONZALEZ HAROLD PITTS, II CANDY PITTSER YOANA PLASCENIA EMILIA PLATA VASQUEZ AMBER PLOIUM EVAN PLUMLEE ELISHA PLUMMER MICHEAL PLUMMER RANDALL PLUSH JASON POBLETE KEVIN POBUDA SUSANNE POINDEXTER BASANT POKHREL RENU POKHREL GEORJANNA POKORNEY ANIK POKUKU JANICE POLK AUBREY POLK AKEEM POLLARD MILTON POLLOCK TAYLOR POMAVILLE BRANDON POMEROY MARK POOL KENNETH POORE RODNEY POPE JAMES PORTER CHRISTOPHER PORTER ELVIA PORTILLO ASHLEY POWELL DEMYKLE POWELL RUDY POWELL CHARLES POWELL MICHAEL POYNTER NATHAN PRADMORE JOSE PRADO KENNETH PRENTICE, JR DANIEL PRESSLER, JR ANGELICA PRICE LEON PRICE MICHAEL PRICE SHANE PROBST ERIN PROCHAZKA STEPHEN PRUITT CIN PU KHAI PU KHAM PU LIAN PU MANG PU MANG PU MUANG PU SING PU TUANG PU CALEB PUDDEN ALMA PUGA JERRY PUGH JR THANG PUI ALEJANDRA PULIDO KAM PUM JACOB PURINTON JEFFREY PURKERSON COREY PURVIS JOHN QUANG CANDELARIA QUICK BRENDA QUINTANILLA GARCIA WASEL QURAISHI JAMES RABURN NATHANIEL RABURN FATIMA RACHU FLARA RACHU JOHNATAN RACHU MARIA RACHU VINA RACHU VINCENT RACHU EVA RAGLAND RETSIAN RAIN PATTI RAINS LANDON RAKE BRANDON RALPH DEE RAM BRIAN RAMBO SUSAN RAMBO ALICIA RAMIREZ EVA RAMIREZ MARTINELLY RAMIREZ EDGAR RAMIREZ ANGEL RAMIREZ RIGOBERTO RAMIREZ ENRIQUE RAMIREZ MORALES PATRICIA RAMIREZ NAVARR DIEGO RAMIREZ RAMIREZ MANUELA RAMIREZ SOBERANIS WALTER RAMOS GERMAN RAMOS ALONSO FRANCISCO RAMOS- RODRIGUEZ MARCUS RAMSEY HEIDI RAMZEL KARLY RANCK CAMERON RAND COURTNEY RANDALL JEFFREY RANDALL COREY RANDALL TIMOTHY RANEY JESSICA RANGEL MIRIAN RANGEL JOHNATHAN RASH SEEDAK RASOOLUDEEN ROBERT RATLIFF TOMMY RATLIFF RYAN RAUSCH JOHN RAVELLI PERSON RAYMOND ANTHONY RAYMOND CURTIS RAYON THOMAS READ JOHN REASOR FLOR REBOLLAR DAVID RECCA ELIZABETH RECORD IVY RECORD SHAGLENDA REDDIX MICHAEL REED JOHN GREGORY REED-BASK CLINTON REESE CHARLES REESE WENDY REEVES STEPAN REGUS ETHAN REICHERT JOHN REID RAMIRO REINA CORY REITER RENCHENINA RENCHY MICHAEL RENIGAR JAKOB RESSLER ARIN RETAN TRAVIS REVELL CLARA REYES LA REYES PABLO REYES JOSELIN REYES ANA REYES AGUSTIN REYES, JR STACIE REYNA SALAS JOSHUA REYNOLDS JAVIER REYNOSO GUSTAVO REYNOSO JAVIER REYNOSO URIETA DANIEL RHOADES EFFIE RHODES JEFFREY RHODES RIEROSE RICHARD JONATHAN RICHARDS HOBERT RICHARDSON ANITRA RICHARDSON GILDA RICHARDSON ROBERT RICHEY BRIAN RICKETT, JR ANYLA RICO RANDALL RIDENOUR ANGELA RIDEOUT COREY RIDER KASSANDRA RILEY SARA RILEY ISAAC RINKE ALEXANDER RIOS MARTHA RIOS DE PAZ DINA RISING CORY RISINGER HILLARY RITE VILMA RIVAS SANCHEZ DAVID RIVERA LUIS RIVERA RAMON RIVERA SIGFREDO RIVERA MELISSA RIVERA CRUZ TERRI ROBBINS ROMERO ROBERTS APRIL ROBERTSON BRANDON ROBERTSON TRAVASIL ROBERTSON CHAD ROBINSON DEARLD ROBINSON ROSHANDA ROBINSON CURTIS ROBINSON EDDIE ROBINSON BYRON ROBINSON DAVID ROBINSON, JR JEREMIAH ROBISON MATTHEW ROBLES ABRAHAM ROBLES CIRILO ROBLES AMBRIZ ROBERT ROBNETT BRAD RODRIGUES ALYSSA RODRIGUEZ DANIEL RODRIGUEZ DAVIANA RODRIGUEZ EULALIO RODRIGUEZ HECTOR RODRIGUEZ JESUS RODRIGUEZ MARIA RODRIGUEZ MARTINA RODRIGUEZ NELSON RODRIGUEZ OSWALDO RODRIGUEZ RAUL RODRIGUEZ RICARDO RODRIGUEZ MARIA RODRIGUEZ NATHAN RODRIGUEZ JOSEFINA RODRIGUEZ PABLO RODRIGUEZ EMILIANO RODRIGUEZ BALDOMERO RODRIGUEZ ESTEPFANI RODRIGUEZ LOPEZ ALESHA ROESCHKE BRIAN ROGERS DON ROGERS DYLAN ROGERS TONY ROGERS M SALIM ROHANI NANG ROI IVAN ROJAS JOSE ROJAS LIDIA ROJAS NELSON ROJAS ROSA ROJAS GABRIEL ROJAS DAVILA WESLEY ROLLINGS DANIEL ROMERO PAULINA ROMERO CYNTHIA ROMINE TONY RONGEY MAKINTA ROOSEVELT ROYCE ROPER OSCAR ROSA JOSE ROSALES MAURICIO ROSAS SANCHEZ CORTNEY ROSE REAGAN ROSELL STEPHANIE ROSELL ROBERT ROSENCUTTER MORNIS ROTENIS FILOMINA ROUND FINIKSIANO ROUND LANDYMENTA ROUND MICHELLE ROUSSEAU ERIC ROUTT CARLOS RUIZ LILIANA RUIZ MA RUIZ ORTEGA TERENCE RUSHING BRIANA RUSSELL DERICK RUSSELL KARISSA RUSSELL RICHARD RUTHERFORD MARK RUTTAN LISA RYAN SLAVIC RYCHKO SA SAAN TRISA SACK MOHAMMAD SARWAR SADAR ABDUL W SADAT ASADULLAH SADIQ LINDSEY SADLER ABDUL SAEEDE ABDUL SAYEED SAEEDE KARINA SAENZ ACOSTA CESAR SAENZ RODRIGUEZ SHIR SAIL PON SAIM EDSON SAK MOHAMMAD SAKHIZADA KHALILURAHMAN SALAR RAEES SALARZAI DANIEL SALAS ABELINO SALAZAR DAVID SALAZAR NOAH SALAZAR JUDITH SALAZAR JOHANNA SALAZAR CEDENO MARIANGEL SALAZAR GONZALEZ JORGE SALAZAR MARTINEZ JORGE SALAZAR SOARES BRISA SALCEDO DAVID SALDIVAR MARIA SALDIVAR MIGUEL SALDIVAR VICTOR SALDIVAR JOSE SALDIVAR OROPEZA DAVID SALEGO NAEL SALEM DIANA SALINAS CARSON SALSBURY KENNEDY SALYERS IM SAMMY IOMITA SAMMY MARLEEN SAMMY ESTHER SAN JOHNY SANABRIA ROBERTO SANABRIA ADRIAN SANCHEZ BEATRIZ SANCHEZ CRISTAL SANCHEZ ISELA SANCHEZ JOYCE SANCHEZ MAYRA SANCHEZ ZADY SANCHEZ JERSON SANCHEZ ALEXANDER SANCHEZ JEREMY SANCHEZ MAURY SANCHEZ FILIBERTO SANCHEZ ANDREINA SANCHEZ BOLIVAR ANTONIO SANCHEZ-GIRON JACOB SANDERS MARCUS SANDOVAL SHANNON SANDRIDGE VASILE SANDUTA VIORICA SANDUTA TRAVES SANDY CIN SANG LIAN SANG PAU SANG PAU SANG TUAN SANG RAIS SANGEEN KAYTLYNN SANGER LAL SANGI WILLIAM SANGSTER WENCESLAO SANTIAGO JAIMYNA SANTIER NADELIN SANTOS VERONICA SANTOS STACY SANTOYO WILLIAM SAPP NANG SAR JANGIZ SARDAR SUBHAN JEREMY SASSER LUIS SAUCE ALVIN SAURES TIMOTHY ELIAS SAVAGE ERICK SAWYER JORENS SAWYER BRYAN SCANLON SHANE SCHAMING ARYN SCHAUMANN HEAVIN SCHIEBERL ISAAC SCHLENBECKER JACOB SCHMUCKER DAVID SCHNEIDER CONNOR SCHOENE AUSTIN SCHROEDER STEVEN SCHWAB DUSTIN SCHWANKE MARK SCOFIELD JERRY SCOTT SHAUTE SCOTT THOMAS SCOTT KYVEN SCOTT JORDAN SCOTT RONA SEAGO DAVID SEAMAN SOVATNITA SEAMAN RYAN SECHELSKI CATHY SECHRIST JAVIER SEDANO JACOB SEDLAR JOSEPH SEDLAR ALONDRA SEGOVIANO HOU SEI THONG SEI THONGKU SEI JOHN SEIBERT ALEXA SEIDEL MARCUS SEIP JAMIE SELF KAYUN SENG ROI SENG ANNETTE SERNA LENNYN SERRANO HENRY SEYLER ADAM SHADER JACOB SHAFER AMIR HUSSEIN BIN SHAFIE AUSTIN SHAHAN RODNEY SHAHAN AHMADULLA SHAHISTA ROBERT SHANDS AUSTIN SHANE INHA SHAPOVALOVA MATTHEW SHAUB CARA SHAW THOMAS SHAW TRENT SHAW KHAIR SHEER MOHAMMAD THOMAS SHELLEY VASILIY SHEMEREKO CHELSIE SHEPHERD LARRY SHEPHERD LILLIAN SHEPHERD DUSTIN SHERIER RAEES SHERIN KARZAI SHINWARI SHAH WAZIR SHINWARI SHAIHID SHINWARI ZARMEN SHAH SHINWARI ZAMARY SHIRZAD TAYLOR SHISLER ATHENA SHONE RAYMOND SHUNOWSKI, JR MAW SI CING SIAM NAA SIAM ZAM SIAM CIIN SIAN ON SIAN PAU SIAN RANA SIDDHARTH N NES SIECH ANA SIGALA CINDIA SILLEM LONNIE SILVA ROBERTO SILVA RUVALCABA MONTIE SILVEY MARK SIMILA BLAINE SIMMONS TYREC SIMMONS WILLIAM SIMMS WILLIAM SIMONTON DWAYNE SIMPSON ANTHONY SING DAL SING DAL SING DAL SING DO SING HAU SING PAU SING THANG SING THAWN SING BRANDON SINGENES BRYAN SINOR ADRIANA SIPES SARAH SIPIA CHRISTOPHER SISSOM AUDREY SISSON MICHAEL SITTERLY LEE SKAGGS KATELAND SLATER IAN SLATTERY ANDREW SLAVENS MALECAI SLOAN-RAMSEY MARY SMALL ISAIAH SMITH AIDAN SMITH ALEC SMITH DAVID SMITH DAVID SMITH GRAYHAWK SMITH JORDAN SMITH KATHERINE SMITH KENNETH SMITH KERRY SMITH RENALDO SMITH SAVANNAH SMITH TONY SMITH BAYLOR SMITH CLAYTON SMITH DAVONNA SMITLEY JACINTA SNAL BRANDY SNIDER STEPHEN SNIDER BRANDY SNIDER ROGER SNOW JOSHUA SNOW KEVIN SOAP ANTONIO SOARES BADDY SOCHIRO YENNIS SOLANO JOSE SOLARES NEMISIA SOLIS VERONICA SOLIS ANGEL SOLIS KELLY SONGER BRADLEY SOOTER ORACIO SORIA AISON SORYZ BENDY SOTEN BENSON SOTEN MARIELA SOTO DE DIAZ CLENT SOUTHERLAND, II CARRIE SOUTHERN KEVIN SOUVANNASING DENNEY SOWDER TERRY SOWEKA JOHN SPAIN III KYLE SPANSEL SIERRA SPARKS DALE SPENCER JAMES SPENCER COLBY SPENCER JAMESON SPIRES JOHN SPOONER CECIL SPRY JORDAN SPURGEON COURTNEY STACEY BARBARA STAGGERS SEVERINO STAGNOLI ROBERT STAMPS MARCUS STANDBERRY LAWANA STANE BRENT STANLEY TERRY STAPLETON NICHOLAS STAPP DEMETRIUS STARLING JAMES STASZKO LACEY STEADMAN SPENCER STEFFEY TREVOR STENCIL AREST STEPHEN RACKY STEPHEN MELVIN STEPHENS CHARLES STEPHENSON WILLIAM STEPHENSON CHRISTOPHER STEVENS NATHON STEWART RICHARD STEWART NICHOLAS STEWART WINSTON STEWART RICHARD STEWART DAVID STIEWE CHARLES STINECIPHER BRENT STOCKTON JOEL STOCKTON JACOB STODDARD AUSTIN STOKES LARRY STOKES ALLEN STONE DYLAN STONE ROBERT STONE TIMOTHY STOUT JULIAN STRADER MICHAEL STRAPASON STACEY STRATTON MICHAEL STRAUB ROBERT STROH CAMERON STULTS BRYAN STURDIVANT GREGORY STUTSMAN NATHAN STWYER JULIA STWYER DAI SUAN HAU SUAN KIM SUAN NANG SUAN NGIN SUAN PAU SUAN THANG SUAN THANG SUAN THANG SUAN PAUL SUAN MUNG ANSER SUDA NU SUI DEIH SUKZO BAWMKHAI DAVID SUM GIN SUM HAU SUM KAP SUM MANG SUM NGIN SUM WA SUM PETER SUMMANG LADDIE SUMTER, JR ANDREW SUPPAH TIMOTHY SURGEON, II ROY SURGINER SEAN SUROWIAK LARRY SUTTON CIN SUUM CHRIS SWARR JACK SWEET JOHNATHAN SWEET AMANDA SWIFT CHAD SWIFT KINOMIE SYHO SWAINER SYNE SAW TA LEL MOSES TALAMANTE JEFF TALLEY TYLER TALLMAN GEORGE TALUGMAR AJMAL TANAI WAL MINH TANG KEITH TANNER TRENT TAORMINA ISRAEL TAPIA MARTIN TAPIA CARVAJAL WHITNEY TAPP HAROLD TARALA ABDUL TARIN NOOR TARIN NORIANN TARO ARSINO TARRY SKYLER TARTSAH RICK TATE LARRY TATE, JR JON TATUM TYRONDA TATUM CING TAWI THANG TAWNG CAMRYN TAYLOR AHTEUHNA TAYLOR BEVERLY TAYLOR CALEB TAYLOR ERIC TAYLOR JESSICA TAYLOR RANDALL TAYLOR REBECCA TAYLOR ROSEANN TAYLOR TIMOTHY TAYLOR CODY TAYLOR JACOB TEAGUE NICHOLAS TEAGUE ANDREA TEAKELL KEVIN TEAKELL ROBERT TEIS JASON TENDERELLA NGIN TENG MARY TENNIES MERCEDES TENNYSON RAY TENRY JONATHAN TERRAZAS BRYAN TERRAZAS JESSE TERRAZAS JORGE TERRAZAS-MEDINA DEMETRIUS TERRONEZ SHANNON TERRY TODD THACKER AUNG THAIK AYE AYE THAIK JOSEPH PAU THANG CIN THANG CIN THANG 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ZAM UK PAT UNDERWOOD PERNELL UNDERWOOD ESMERALDA URIETA ESTRADA DAVID URQUIZA YADIRA URQUIZA NER UWEI VICTOR VALDEZ KATHY VALENZUELA HUGO VALERA JUAREZ CARLA VALERA LINARES JULIO VALLE NORMA VALLES DONG VAN MARVIN VAN GUNDY, JR TIMOTHY VANCE TRENTON VANDER POL ARTEMIO VARGAS-RUIZ ALEKSANDRA VASILEVA MARLYN VASQUEZ CARLO VASSALLE ISSAC VAWTER SHAWN VAWTER ANTONIO VELASCO SHELBY VELASQUEZ JAYDEN YOUNG MARC YOUNG MICHELLE YOUNG CALEB YOUNGPUPPY MARK ZABALA DOMONIC ZACHARY HABIB ZADRAN NADEEN ZADRAN NIK ZADRAN RAHMANULLAH ZADRAN ROHMAIL ZAI KHUSHHAL ZALAND CIIN ZAM CING ZAM CING ZAM EN ZAM HAU ZAM ELIAS ZAMBRANO NEUDO ZAMBRANO SOLANO DAVID ZAMORA NICHOLAS ZAMORA FATIMA ZAPATA MARIA ZARATE GUL BANOOR ZARMAT KAI MIRNA ZAVALA JUAREZ AURORA ZAVALETA HAN ZAW SAW ZAW BRIAN ZELLER CING ZEN CINDY ZEPEDA JUAN ZERMENO VIRGINIA ZERMENO MU ZIN MCKADEN ZIRBEL CIN ZO VAI ZO SHAWALI KHAN ZOI ADRIEN ZORRILLA YAQOOB ZULPIQAR BRYAN ZUNIGA JAMES VELDE DUSTY VENEGAS SALOME VERA EDGAR VERGARA BETANIA VERGARA 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WALSTON WELDON WALSTON STEPHANIE WALTER ALFRED WALTERS MARCUS WALTERS SHORICORE WALTERS NEWMAN WALTON GUOYI WANG MARQUIS WARD DANIEL WARD LEESA WARE MICHAEL WARREN ZACHARY WARREN THURMOND WASHINGTON DAVID WASSON JERRY WATERS THERESA WATKINS TOMORROW WATKINS BOONE WATSON DAVION WATSON DUSTIN WATSON CALEB WATTEAU MANUEL WATTS MOHAMMAD WAZIRI SAYED WAZIRI NAIMATULLAH WAZIRZAI NASRATULLAH WAZIRZAI LANDON WEAVER BRAYLON WEBB KENDRICK WEBB SHAWN WEBB ANGELINA WEBER MICHAEL WEBSTER JAMES WEIGEL RONALD WELCH TRACEY WELDON SEAN WELSH ANDREW WESTBROOK JEFFERY WHEELER MICHAEL WHEELER MICHELLE WHEELER WILLIAM WHEELER DUSTIN WHISENANT HALEY WHISENANT ALLYN WHITE KENDREVIAN WHITE KYLE WHITE MICHAEL WHITE MICHAEL WHITE TIMOTHY WHITE TRACY WHITE EMILY WHITE ADAM WHITE KENNY WHITT STEVEN WHORTON GORDON WICHMAN DIKKI WICK AUBREY WICKERSON ERIC WIDGER SANIYA WILBERT RYAN WILCOX DAMON WILDER CHRISTOPHER WILES MICHAEL WILES ROBERT WILKINSON DEBORAH WILKINSON BRANDON WILLADSON SHELLIE WILLEFORD ALYSHA WILLEY VICTORIO WILLIAM LUTHER WILLIAMS ALLEN WILLIAMS ALYSSIA WILLIAMS CHANTE WILLIAMS CHRISTOPHER WILLIAMS CORNEL WILLIAMS DERRICK WILLIAMS JAQUAI WILLIAMS JASON WILLIAMS JESSICA WILLIAMS JONATHAN WILLIAMS NATHAN WILLIAMS NICOLE WILLIAMS QUINTANNA WILLIAMS REBECCA WILLIAMS RODNEY WILLIAMS ALYSSIA WILLIAMS WHITNEY WILLIAMS JASON WILLIAMS MICHAEL WILLIAMS LYLA WILLIAMS ORION WILLIAMS SHELBY WILLIAMS ROBERTS LARRY WILLIAMS, JR DUSTIN WILLIFORD JARVORIS WILLIS TRINITY WILLIS KEVIN WILLIS JR DOUGLAS WILLMSCHEN CECIL WILMARTH AUTUMN WILSON BRANDY WILSON DONALD WILSON ISAAC WILSON JAQUAVIAN WILSON REGINALD WILSON SHELBY WILSON SUSAN WILSON IVAN WILSON TIMOTHY WILSON KEVIN WILSON CODY WILSON MALACHI WILSON KASEY WILSON BEVERLY WILSON HEIDI WILSON MYA WIN NAW WIN EVAN WINEGAR THOMAS WINGO DYLAN WINN VINCENT WINTON RASHAUNA WISE AMELIA WITHROW NOOR WIYAL GRANT WOGOMON KAYLI WOIRHAYE CHRISTOPHER WOLFE CORA WOLFE KENNETH WOLFE TRAVIS WOLFE CHRIS WOLFORD RICHARD WOLLEAT CARRIE WOMACK EMILY WOOD TYLER WOOD KYANNA WOODRIFF JAMAIL WOODS TONY WOODS WAYLON WOODS DEWAYLON WOOLRIDGE KASEY WORTHINGTON AMBER WRIGHT BENJAMIN WRIGHT DINA WRIGHT GAGE WRIGHT DARRELL WRITT KENDI WYATT THOMAS WYNNE PHIA XIONG TOU XIONG TOU XIONG JOSHUA YAGER DINA YANES PORTILLO YASMINA YANG DONALD YARBOUGH PATRIAL YARBROUGH KADEN YBARRA LISA YOC-CHAVEZ CHRISTOPHER YOUNG CODY YOUNG COLBY YOUNG Tulsa 2425 S Yukon Avenue Tulsa, Oklahoma 74107 918.583.2266 Kansas City 8500 NW River Park Drive, Suite 108A Parkville, Missouri 64152 816.505.1100 Redmond 3500 SW 21st Place Redmond, Oregon 97756 541.647.6650 Longview 203 Gum Springs Road Longview, Texas 75602 903.236.4403 2 0 2 3 A N N U A L R E P O R T Pushing boundaries since 1988. 35 years of industry-defining innovation. aaon.com Engineered and built in America. 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