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2009“Our financialcondition atDecember 31,2009, remainedstrong. Totalcurrent assetswere 96.2million with acurrent ratioAnnual ReportOver the past decade we instituted three common stock repurchase programs. In 1999the National Society of Professional Engineers (NSPE). Inremainder of our expenditures will be devoted to machineryand 2002, two of these programs totalled 3.0 million shares at a cost of 36 million. Inannouncing the award, Richard Buchanan, Chairman of thepurchases including metal fabricating equipment. At theNovember 2007 the Board of Directors authorized the third stock buyback of up to 10%New Product Award committee said, “this prestigious awardend of 2009, our machinery capabilities could accommodate(approximately 1.8 million shares) of the outstanding common stock. Through 2008 weserves to not only recognize the engineering that goes intoannual volume of up to 350-400 million depending on ourhad repurchased almost 1.7 million shares at a total cost of 33.7 million. During thethese new products, but also the forward-thinking ability andproduct mix.past year we acquired an additional 25,546 shares and we purchased 10,000 shares ofinitiative of the companies who are bringing these products tostock from certain directors of the Company and 129,571 shares from AAON’s 401(k)light.”savings and investment plan. We funded these stock buybacks out of our cash flow fromNew ProductsAt the outset of AAON’s business 22 years ago, the first productsoperations. We believe our sizeable cash flow can best be utilized by repurchasing ourIn August, Standard and Poor’s Index Services announced thatmanufactured were rooftop unitary units with 2-10 toncommon stock at prices that, we believe, do not reflect AAON’s true value.AAON, Inc. would be added to the S&P Small Cap 600 GICScapacity, serving the commercial and industrial markets. ThisBuilding Products Sub-Industry index. Standard and Poor’s ismarket segment has traditionally been highly competitive dueReturn on average equity is a measure of how successfully a company uses reinvestedthe world’s foremost provider of independent credit ratings,to the significant number of companies operating in this sizeearnings to generate additional earnings. It is used as a general indication of the company’sindices, risk evaluation, investment research and data.range. Over the next two decades, we opted to concentrate ourfinancial efficiency. In 2009 our return on average equity was 25.8% as compared withmanufacturing efforts on higher tonnage units (10-230 tons).29.8% a year earlier. Total shareholders’ equity advanced 22% to 118.0 million or 6.85Finally, in October, and for the third consecutive year, AAONWhile these markets are far smaller, there is less competition,per share from 96.5 million or 5.61 per share in 2008.was selected to the Forbes 200 Best Small Companies list,which allows us greater pricing flexibility.ranking 58th. Inclusion on the Forbes list requires companiesThe Copper Hedgeto meet a series of financial benchmarks, including return onWe have grown significantly since then, in size and also inTraditionally, we have entered into cancellable purchase contracts for all of ourequity, sales growth and profit growth over the past year andexperience. We have built a solid manufacturing and financialcommodity needs. Since the fourth quarter of 2008, due to a significant decline in thealso over five years. The Company was also previously honoredbase, while offering a large diversity of HVAC products. Weprice of commodities, we also entered into non-cancellable contracts, mainly for copper.in this list for three consecutive years from 2000 to 2002.manufacture a complete line of semi-custom and customof 3:1. CapitalAs economic conditions continued to worsen, one of our main suppliers of copperencountered some financial difficulties. Fearful that our contracts could not be fulfilled,Capital Expenditurescondensing units, chillers, heat recovery units, commercialexpenditureswe entered into a derivative instrument that re-assigned the rights of the non-cancellableWe continue to pursue our commitment to expand our plantself-contained units and coils. In addition, we have begun tocontract to a large financial institution. The increase in the price of copper through theand machinery capacity in order to meet the demands of ourwitness increased demand for our geothermal water-cooledlast half of 2009 beneficially impacted our financial results, adding approximately 1.4future growth. In 2009 our capital expenditures were 9.8equipment. We continue to enjoy growing acceptance of ourmillion to net income or 0.08 per share.million. We spent 3.0 million on the purchase of machinerytechnologically innovative, highly reliable, product lines.reached 9.8products which include rooftop units, air handling units,and equipment, with the remainder directed to plant andmillion,We continue to have a derivative position, which settles on a monthly basis, as we enterbuilding additions and renovations. A significant portionFortified by our manufacturing experience and financialthis year. We are locked in at a price of 2.38 per pound through December 2010 for aof these expenditures was devoted to completing programsstrength, AAON has once again focused its attention on thewhich wasportion of our expected usage. Since the derivative instrument can be settled at any time,initiated in 2008.2-10 ton markets, bringing the same features which enabledapproximatelythe amount spentin 2008.”we closely monitor the price of the commodity.us to gain a strong foothold in larger tonnage products to theFor 2010, depending on the business outlook, we have budgetedsmaller sized equipment.Recognitionscapital expenditures of 7-8 million. Once our incoming orderIt is said that success has many suitors, but failure goes to the dance alone. Fortunately,rate begins to firm, signaling an improving business outlook, weIn January of 2010, we introduced our redesigned 6-10 tonour dance card was quite full this past year. In June, the Company’s Digital Precisewill expand our physical capacity including a new warehouseunitary products and are just now rolling out our newly updatedAir Control (D-PAC) rooftop unit was recognized as the 2009 Product of the Year byand parts department at an estimated cost of 3-4 million. The2-5 ton units. These products will have inner and outer sheet

2009The ongoing success of our Company canSeptember SeptemberSpringMarchDecember DecemberSpringbe directly attributed to our employees.MarchPurchase of propertyPurchasewith 26,000of property with 26,000Formed AAON CoilFormedProducts,AAONa TexasCoil Products,Corporation,a Texas Corporation,square foot buildingsquareadjacentfoot buildingtoadjacent toas a subsidiary toasAAON,a subsidiaryInc. (Nevada)to AAON,andInc. (Nevada) and AAON Coil ProductsAAONplanCoilin Longview,Products plan in Longview,purchased coil makingpurchasedassetscoilofmakingCoils Plus.assets of Coils Plus.Texas. Issued a 10%Texas.stockIssueddividend.a 10% stock dividend.Purchase of JohnPurchaseZink Air of John Zink AirConditioning Division.Conditioning Division.JuneFallOctoberMayJuneMayFallAAON increases dividendAAON increases dividendInitiation of a semi-annualInitiation ofcasha semi-annual cash payment by 13% payment by 13%Expanded rooftopExpandedproduct linerooftop product line MayMayto 230 tons. Introducedto 230 evaporativetons. Introduced evaporativedividendfor AAONdividendshareholders.for AAON etsofcondensing energycondensingsavings feature.energy savings feature.JuneJuneAir Wise, of Mississauga,Air Wise, of Mississauga,MarchMarch3-for-2 stock split.3-for-2 stock split. AAON Named to AAONthe FortuneNamed to the FortuneOntario, Canada. Ontario, Canada.Modular air handlerproductModular air handlerproduct40: Best Stocks to40:RetireBestOnStocks to Retire OnJuneJune National Society ofNationalProfessionalSociety of Professionalextended to 50,000extendedCFM to 50,000 CFMEngineers Award EngineersAAON 2009Award AAON 2009November November3-for-2 stock split.3-for-2 stock split.Product of the YearProduct of the YearOctoberOctoberIntroduction of lightIntroduction of lightJulyJulyAAON Listed in ForbesAAON ‘200Listed in Forbes Best Small Companies’Best Small Companies’AAON added as aAAON added as aproduct lines.product lines.AugustAugustmember of the Russellmember of the RussellDecember DecemberAAON added to Standard2000 Index.2000 Index.AAON added&to Standard &AAON rings closingAAON rings closingPoor’s SmallCap 600Poor’sIndexSmallCap 600 Indexbell atNASDAQ bell atNASDAQOctoberU.S. patent grantedU.S.topatentAAON grantedfor air to AAON for airconditioner with energyconditionerrecoverywith energy recoveryAprilAprilSeptember Septemberheat wheel.heat wheel.AAON receivedCompleted expansionCompletedof the expansionof the AAON receivedpatent forU.S. patent for SpringSpringTulsa facility to 332,000Tulsa facility to U.S.332,000September Septembersquare feet.square feet. Blower Housing Blower Housing Completed Tulsa,Completed Tulsa,One-for-four reverseOne-for-fourstockreverse stockassembly.assembly.Oklahoma, and Longview,Oklahoma, and Longview,split. Retired 1,927,000split. Retired 1,927,000Texas, plant additionsTexas, plant additionsof subordinated debt.of subordinated debt.yielding a total exceedingyielding a total exceedingone million squareonefeet.million square feet.AAON purchased,AAONrenovatedpurchased, renovatedand moved into aand184,000moved into a 184,000square foot plant squarein Tulsa,foot plant in Tulsa,Oklahoma.Oklahoma.Introduced a newIntroducedproduct linea newof product line ofrooftop heating androoftopair heating and airconditioning unitsconditioning2-140 tons. units 2-140 ��’9695’978’’988’99 ’00’008888899089919092919392AugustListed on NASDAQListedSmallon NASDAQ SmallCap—Symbol “AAON.Cap—Symbol”“AAON.”SummerBecame a publiclyBecametraded acompanypublicly traded companywith the reverse acquisitionwith the reverseof Diamondacquisition of DiamondHead Resources Head(now “AAON,ResourcesInc.”),(now “AAON, Inc.”),a Nevada corporation.a Nevada corporation.AugustAAON, anAAON, anOklahoma corporation,Oklahoma corporation,was founded.was lyDecember DecemberSummer9493November NovemberJanuaryJanuaryNovember NovemberAAON yearly shipmentsAAON yearlyexceedshipments exceedIntroduced a desiccantIntroducedheat a desiccant heatListed on theListedrecoveryon the wheel optionDecemberDecember 100 million. Received 100 million.U.S. patentReceived U.S. patentrecoveryavailablewheel optionavailableNASDAQ NationalNASDAQNationalfor DimpledExchangerDimpled Tube.Heat Exchanger Tube.on allAAON rooftopon units.all AAON rooftopunits.Purchased40 acresPurchasedwith40 acreswith Heat forMarket System. Market System.457,000 square foot457,000plan square foot planand 22,000 squareandfoot22,000 square footSpringSpringoffice space locatedofficeacrossspace located acrossAAON Coil ProductsAAONpurchased,Coil Products purchased,from Tulsa facility.from Tulsa facility.renovated and movedrenovatedinto aand110,000moved into a 110,000square foot plant squarein Longview,foot plantTexas.in Longview, rOctoberAAON listed in Forbes’AAON200listed in Forbes’ 2003-for-23-for-2Started productionStartedofproduction ofBest JulySmall CompaniesBest Small CompaniesJulystock splitstock splitpolyurethane foam-filledpolyurethane foam-filledAprildouble-wall constructiondouble-wall construction AprilAAON products receiveAAON productsDealer receive DealerDesign Awards fromDesignACHRAwardsNewsfrom ACHR Newspanels for rooftoppanelsand chillerfor rooftop and chillerAAON introducesAAONfactoryintroduces usingnewlypurchasedOctoberOctoberpackaged mechanicalpackaged pment. AAONringsopening AAONringsopeningAAON, listed in AAON, listed inroom, which includesroom,a which includes abell at NASDAQ bell at NASDAQFORBES Magazine’sFORBES Magazine’sboiler and all pipingboilerandand all piping and AAON voted “Most AAONValublevoted “Most Valuble“Hot Shots 200 Up“Hot& Comers.Shots 200” Up & Comers.”pumping accessories.pumping accessories.Product” and “ProductProduct”of and “Product ofthe Year” by Consultingthe Year” by ConsultingFallFallSpecifying EngineerSpecifying EngineerAugustAugustMagazineMagazineIndustry introductionIndustryof theintroduction of theAAONreceivedU.S.AAONPatentreceivedU.S.Patent AAONlistedinForbes’ AAON listed in Forbes’modular air handlermodularand air handler and200 Best Small Companies200 Best Small Companiesfor Plenum Fan Banding.for Plenum Fan Banding.chiller products. chiller products.metal walls filled with foam, making composite constructionof production, we will, understandably, incur introductoryThe American Recovery and Reinvestment Act of 2009 provides a taxfor the cabinets. Similar to our competitors, we formerly usedmarketing and training costs. We expect these factors to have acredit for geothermal installations and helps to reduce the paybacka single sheet metal panel with a fiberglass inner liner for ournegative impact on our gross margins, but the additional salesperiod. This tax credit, along with our unique cabinet design and highcabinet construction, which was inferior to our new, strongershould modestly benefit our net income. The 2-10 ton segmentoperating efficiency, has led to an increase in our geothermal sales ofand better insulated composite panels. In addition, theseis

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