{"url_path":"/sec/air/10-k/2026/item-7a","section_key":"item-7a","section_title":"Item 7A ****QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-07-22","source_url":"https://www.sec.gov/Archives/edgar/data/1750/0001104659-26-085459-index.html","accession_number":"0001104659-26-085459","cik":"0000001750","ticker":"AIR","issuer_name":"AAR CORP","edgar_url":"https://www.sec.gov/Archives/edgar/data/1750/0001104659-26-085459-index.html","primary_entity_key":"0000001750","primary_entity_name":"AAR CORP"},"word_count":200,"has_tables":true,"body_markdown":"**ITEM 7A.****QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**\n\nOur exposure to market risk includes fluctuating interest rates under our credit agreements, changes in foreign exchange rates, and credit losses on accounts receivable. See Note 1 of Notes to Consolidated Financial Statements for a discussion on accounts receivable exposure.\n\nWe are exposed to the risk that our earnings and cash flows could be adversely impacted by fluctuations in interest rates. We manage interest costs by using a mix of fixed - and floating - rate debt. A 10 percent increase to the average interest rate across our floating - rate debt obligations would have reduced our pre - tax income by $2.3 million during fiscal 2026.\n\nRevenues and expenses of our foreign operations are translated at average exchange rates during the year, and balance sheet accounts are translated at year-end exchange rates. Balance sheet translation adjustments are excluded from the results of operations and are recorded in stockholders’ equity as a component of accumulated other comprehensive loss. A hypothetical 10 percent devaluation of the U.S. dollar against foreign currencies would not have had a material impact on our financial position or operating results during fiscal 2026.\n\n​\n\n42\n\n[Table of Contents](#TOC)"}