Filed Pursuant to Rule 424(b)(3)
Registration No. 333-133692

PROSPECTUS SUPPLEMENT NO. 2 DATED JUNE 14, 2006

AAR CORP.
$150,000,000
1.75% Convertible Senior Notes due 2026

This prospectus supplement No. 2 supplements the prospectus dated May 1, 2006, as supplemented by prospectus supplement No. 1 thereto dated May 26, 2006, of AAR CORP. relating to the sale by certain of its securityholders (including their transferees, pledgees, donees, assignees or other successors) of AAR’s 1.75% Convertible Senior Notes due 2026.

You should read this prospectus supplement No. 2 in conjunction with the prospectus and prospectus supplement No. 1. This prospectus supplement No. 2 is qualified by reference to the prospectus and prospectus supplement No. 1, except to the extent that the information in this prospectus supplement No. 2 supersedes the information contained in the prospectus and prospectus supplement No. 1. Capitalized terms used in this prospectus supplement No. 2 have the meanings specified in the prospectus.

1.             The table of Selling Securityholders beginning on page 54 of the prospectus is hereby amended to include the following additional line items:

Selling
Securityholder

 

 

 

Original Principal 
Amount of Notes
Beneficially Owned
and Offered Hereby

 

Percentage of
Notes Outstanding

 

Number of Shares of
Common Stock
Owned and
Offered Hereby

 

Percentage of 
Common Stock 
Outstanding

 

1976 Distribution
Trust F/B/O A.R.
Lander/Zinterhofer

 

$

6,000

 

*

 

204

 

*

 

2000 Revocable
Trust F/B/O A.R.
Lander/Zinterhofer

 

$

6,000

 

*

 

204

 

*

 

Alcon Laboratories

 

$

515,000

 

*

 

17,499

 

*

 

Arlington County
Employees
Retirement

 

$

756,000

 

*

 

25,688

 

*

 

British Virgin
Islands Social
Security Board

 

$

175,000

 

*

 

5,946

 

*

 

City University of
New York

 

$

151,000

 

*

 

5,131

 

*

 

DKR SoundShore
Opportunity Holding
Fund Ltd.

 

$

2,250,000

 

1.5

%

76,453

 

*

 

Fidelity Financial
Trust: Fidelity
Convertible
Securities Fund

 

$

2,500,000

 

1.7

%

84,947

 

*

 

 



 

Fidelity Financial
Trust: Fidelity
Strategic Dividend
& Income Fund

 

$

1,000,000

 

*

 

33,979

 

*

 

The Grable
Foundation

 

$

73,000

 

*

 

2,480

 

*

 

Grady Health
System

 

$

144,000

 

*

 

4,893

 

*

 

Independence Blue
Cross

 

$

638,000

 

*

 

21,679

 

*

 

New Orleans Fire
Fighters Pension

 

$

88,000

 

*

 

2,990

 

*

 

Occidental
Petroleum Corp.

 

$

331,000

 

*

 

11,247

 

*

 

Police and Fire
Retirement System
of the City of Detroit

 

$

584,000

 

*

 

19,844

 

*

 

Promutual

 

$

949,000

 

*

 

32,246

 

*

 

San Francisco City
and County ERS

 

$

1,486,000

 

*

 

50,493

 

*

 

Trustmark

 

$

374,000

 

*

 

12,708

 

*

 

Vicis Capital Master
Fund

 

$

6,200,000

 

4.1

%

210,669

 

*

 

Whitebox
Diversified
Convertible
Arbitrage Partners LP

 

$

600,000

 

*

 

20,387

 

*

 

 

2.             The following line item in the table of Selling Securityholders in prospectus supplement No. 1 is hereby amended as follows:

Selling
Securityholder

 

 

 

Original Principal
Amount of Notes
Beneficially Owned
and Offered Hereby

 

Percentage of
Notes Outstanding

 

Number of Shares of
Common Stock
Owned and
Offered Hereby

 

Percentage of
Common Stock
Outstanding

 

The Drake Offshore Master Fund, Ltd.

 

$

3,000,000

 

2.0

%

101,937

 

*

 

 

3.             The following line item in the table of Selling Securityholders beginning on page 54 of the prospectus is hereby amended as follows:

 

Selling
Securityholder

 

 

 

Original Principal 
Amount of Notes
Beneficially Owned
and Offered Hereby

 

Percentage of
Notes Outstanding

 

Number of Shares of
Common Stock 
Owned and
Offered Hereby

 

Percentage of 
Common Stock
Outstanding

 

Citigroup Global Markets, Inc.

 

$

11,850,000

 

7.9

%

402,650

 

1.1

 

 

2



4.             The table of Selling Securityholders beginning on page 54 of the prospectus is hereby amended to delete the rows for “Subtotal” and “All other holders of the notes or future transferees, pledgees, donees, assignees or successors of such holders.”

See “Risk Factors” beginning on page 5 of the prospectus to read about important factors you should consider before buying the notes.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

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