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

FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended May 31, 2005 Commission File Number: 333-109667-01 TRUST CREATED FEBRUARY 25, 1986 (Exact name of registrant as specified in its charter)

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

Oregon	51-6162910
(State or other jurisdiction of	(IRS Employer Identification No.)
incorporation or organization)

For the quarterly period ended November 30, 2004

3850 Three Mile Lane, McMinnville, Oregon	97128-9496
(Address of principal executive offices)	(Zip Code)

ORRegistrant's telephone number, including area code: (503) 472-9361

(Indicate by check mark whether the registrant (1) ~~TRANSITION~~has ~~REPORT~~filed ~~PURSUANT~~all TOreports ~~SECTION~~required to be filed by Section 13 ORor 15(d) OFof ~~THE~~the ~~SECURITIES~~Securities ~~EXCHANGE~~Exchange ~~ACT~~Act OFof 1934 during the 12 preceding 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 (X) No ( )

~~For~~Indicate by check mark whether the ~~transition~~registrant ~~period~~is ~~from~~an ~~_______~~accelerated tofiler ~~________~~(as defined in Rule 12b-2 of the Exchange Act). Yes ( ) No (X)

~~Commission~~As ~~File~~of ~~Number:~~July ~~333-109667-01~~15, 2005, there were two beneficial interests of the registrant outstanding.

TRUST CREATED FEBRUARY 25, 1986(Exact name of registrant as specified in its charter)

OREGON	51-6162910
(State or other jurisdiction of	(IRS Employer Identification No.)
incorporation or organization)

3850 THREE MILE LANE, McMINNVILLE, OREGON	97128-9496
(Address of principal executive offices)	(Zip Code)

503-472-9361(Registrant’s telephone number, including area code)

NONE(Former name, former address and former fiscal year,if changed since last report)

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 12 preceding 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 (X) No ( )

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ( ) No (X)

Indicate the number of units of beneficial interest outstanding, as of the latest practicable date:

CLASS	OUTSTANDING AS OF JANUARY 18, 2005
Beneficial interest	Not applicable

TRUST CREATED FEBRUARY 25, 1986

QUARTERLY REPORT ON FORM 10-QFOR THE QUARTER ENDED NOVEMBER 30, 2004

PAGE

PART I.

FINANCIAL INFORMATION

Item 1. Financial Statements 3

Item 1.	Financial Statements	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operation	6
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	20

Balance Sheets 3

Income Statements (Unaudited) 4

Statements of Cash Flows (Unaudited) 5

Condensed Notes to the Unaudited Financial Statements 6

Item 2. Management’s Discussion and Analysis of Financial Condition 11

and Results of Operations

Item 3. Quantitative and Qualitative Disclosures About Market Risk 16

Item 4. Controls and Procedures 16

PART II.

OTHER INFORMATION

Item 6. Exhibits 19

	Item 1.	Legal Proceedings	21
	Item 6.	Exhibits	21

SIGNATURES 2022

EXHIBIT INDEX 2123

~~PART~~Table I.of ~~FINANCIAL INFORMATION~~Contents

~~ITEM~~PART 1I. FINANCIAL ~~STATEMENTS.~~INFORMATION

~~TRUST~~ITEM ~~CREATED~~1. ~~FEBRUARY~~FINANCIAL ~~25, 1986BALANCE SHEETS(in thousands)~~STATEMENTS.

	November 30,
	2004		February 29,
	(unaudited)		2004
ASSETS
Aircraft and equipment, net	$	11,825	$	12,105
Notes receivable from affiliate		-		604
Due from affiliate		640		637
Total assets	$	12,465	$	13,346

BALANCE SHEETS
At May 31, 2005 and February 28, 2005
(in thousands)

		May 31, 2005
		(unaudited)			February 28, 2005
ASSETS
Aircraft and equipment, net	$	11,639		$	11,732
Capitalized loan acquisition costs		17			-
Due from affiliate		639			639
Total assets	$	12,295		$	12,371
LIABILITIES AND TRUST EQUITY
Current liabilities:
Accrued liabilities	$	9518		$	-29
Current portion of long-term debt		42,~~643~~035			53,~~059~~370
Total current liabilities		42,~~738~~053			53,~~059~~399
Deferred rental income		5,457			5,178
Total liabilities		7,510			8,577
Trust equity		26,004			24,327
Less: Account receivable from affiliate		(21,219	)		(20,533	)
Total trust equity		4,785			3,794
Total liabilities and trust equity	$	12,295		$	12,371

Long-term debt		-			2,898
Deferred rental income		5,533			4,799
Total liabilities		10,271			12,756
Trust equity		22,618			18,409
Less: Accounts and notes receivable from affiliates		(20,424	)		(17,819	)
Total trust equity		2,194			590
Total liabilities and trust equity	$	12,465		$	13,346

See notes to unaudited financial statements.

~~The accompanying condensed notes to unaudited financial statements are an integral part of these statements.~~ 3

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3STATEMENTS OF OPERATIONS AND TRUST EQUITY For the Three Months EndedMay 31, 2005 and May 31, 2004(in thousands)

TRUST CREATED FEBRUARY 25, 1986INCOME STATEMENTS (UNAUDITED)(in thousands)


		For the Three Months Ended May 31,
		2005			2004

Operating revenue:
Rental income from affiliate	$	1,846		$	1,880

(Expense) other income
Depreciation		(93	)		(93	)
Loan acquisition costs		(8	)		-
Interest expense		(68	)		(197	)
Interest income from affiliate		-			6

Net income		1,677			1,596

Trust equity at beginning of period		24,327			18,409
Less: Distributions to beneficiaries		-			(302	)

Trust equity at end of period	$	26,004		$	19,703

		For the Three Months					For the Nine Months
		Ended November 30,					Ended November 30,
		2004		2003			2004			2003
Operating revenue:
Rental income from affiliate	$	1,881	$	1,881		$	5,642		$	5,642
Expense (other income)
Depreciation		94		93			280			280
Interest expense		188		265			554			1,066
Interest income from affiliate		-		(3	)		(9	)		(62	)
Total expense (other income)		282		355			825			1,284
Net income		1,599		1,526			4,817			4,358
Trust equity at beginning of period		21,019		16,695			18,409			15,138
Less: Distributions to beneficiaries		-		(212	)		(608	)		(1,487	)
Trust equity at end of period	$	22,618	$	18,009		$	22,618		$	18,009

See notes to unaudited financial statements.

~~The accompanying condensed notes to unaudited financial statements are an integral part of these statements.~~ 4

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4STATEMENTS OF CASH FLOWS For the Three Months Ended May 31, 2005 and May 31, 2004(in thousands)

TRUST CREATED FEBRUARY 25, 1986STATEMENTS OF CASH FLOWS (UNAUDITED)(in thousands)


		For the Three Months Ended May 31,
		2005			2004

Cash flows from operating activities:
Net income	$	1,677		$	1,596
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization		93			93
Account receivable from affiliate		(686	)		(711	)
Accrued liabilities		(11	)		-
Due from affiliate		-			(3	)
Deferred rental income		279			245

Net cash provided by operating activities		1,352			1,220


Cash flows from investing activities:
Note receivable from affiliate		-			300

Net cash provided by investing activities		-			300


Cash flows from financing activities:
Payments on long-term debt		(1,335	)		(1,218	)
Capitalized loan acquisition costs		(17	)		-
Distributions to beneficiaries		-			(302	)

Net cash used in financing activities		(1,352	)		(1,520	)

Net decrease in cash		-			-

Cash, beginning of period		-			-

Cash, end of period	$	-		$	-

		For the Nine Months Ended November 30,
		2004		2003
Cash flows from operating activities:
Net income	$	4,817		$	4,358
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization		280			280
Changes in operating assets and liabilities:
Accounts receivable from affiliate		(2,605	)		(246	)
Accrued liabilities		95			85
Due from affiliate		(3	)		296
Deferred rental income		734			735
Net cash provided by operating activities		3,318			5,508

See notes to unaudited financial statements.

Cash flows from investing activities:
Notes receivable from affiliate	604	774
Net cash provided by investing activities	604	744

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Cash flows from financing activities:
Distributions to beneficiaries		(608	)		(1,487	)
Payments on long-term debt		(3,314	)		(4,765	)
Net cash used in financing activities		(3,922	)		(6,252	)
Cash and cash equivalents, beginning and end of period	$	-		$	-

NOTES TO UNAUDITED FINANCIAL STATEMENTS

~~The~~NOTE ~~accompanying~~1 ~~condensed~~– ~~notes~~BASIS toFOR ~~unaudited financial statements are an integral part of these statements.~~ PRESENTATION

5 Organization – The Trust Created February 25, 1986 ("Trust", "we", "us", or "our") is a subsidiary of Evergreen International Aviation, Inc. ("Evergreen Aviation"), which is a wholly-owned subsidiary of Evergreen Holdings, Inc. ("Holdings"). The Trust was created pursuant to the Trust Agreement, dated as of February 25, 1986, as amended and restated pursuant to the Amended and Restated Trust Agreement, dated as of August 31, 1987, as amended on August 31, 1988, and as amended and restated pursuant to the Second Amended and Restated Trust Agreement, dated as of September 29, 1995, as amended by the First Amendment thereto as of May 8, 2003, as amended by the Second Amendment thereto as of January 14, 2004, and as amended by the Third Amendment thereto as of May 10, 2004, among Evergreen International Aviation, Inc. (an assignee of Evergreen Holdings, Inc., as successor to 747, Inc. and King Christian, Inc.) and Mr. Delford M. Smith, as Beneficiaries, and Wilmington Trust Company, not in its individual capacity, but solely as Owner Trustee.

~~TRUST~~ The ~~CREATED~~Trust ~~FEBRUARY~~provides 25aircraft leasing services to its sole customer, ~~1986CONDENSED~~Evergreen ~~NOTES~~International ~~TOTHE~~Airlines, ~~UNAUDITED~~Inc. ~~FINANCIAL~~("Evergreen ~~STATEMENTS~~Airlines"), a wholly-owned subsidiary of Evergreen Aviation.

~~NOTE~~ The 1interim —financial statements ~~BASIS~~included ~~FOR~~in ~~PRESENTATION~~this quarterly report have been prepared by the Trust, without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC"). Certain information and note disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the SEC.

~~The~~In the opinion of management, the interim financial statements included in this quarterly report ~~have~~contain ~~been~~all ~~prepared~~adjustments ~~pursuant~~necessary to present fairly the ~~rules~~financial position, results of operations, and ~~regulations~~cash flows of the Trust for the periods indicated. Such adjustments, other ~~United~~than ~~States~~adjustments ~~Securities~~that ~~and~~have ~~Exchange~~been ~~Commission~~separately ~~("SEC").~~disclosed, ~~Certain~~are ~~information~~of ~~and~~a ~~note~~normal ~~disclosures~~recurring ~~normally~~nature. The interim financial statements included in this report should be read in ~~the~~conjunction ~~annual~~with our consolidated financial statements ~~prepared~~and inthe ~~accordance~~accompanying ~~with~~notes ~~accounting~~that ~~principles~~were ~~generally~~included ~~accepted~~ in ~~the~~our ~~United~~Annual ~~States~~Report ofon ~~America~~Form ~~have~~10-K ~~been condensed~~for orthe ~~omitted~~fiscal ~~pursuant~~year toended February ~~the~~28, ~~rules~~2005, ~~and~~which ~~regulations~~was offiled with the SEC on June 14, 2005.

AsRECENT ~~used~~ACCOUNTING in these condensed notes to unaudited financial statements, the term "Trust" refers to that certain Trust created pursuant to the Trust Agreement, dated as of February 25, 1986, as amended and restated pursuant to the Amended and Restated Trust Agreement, dated as of August 31, 1987, as amended on August 31, 1988, and as amended and restated pursuant to the Second Amended and Restated Trust Agreement, dated as of September 29, 1995, as amended by the First Amendment thereto as of May 8, 2003, as amended by the Second Amendment thereto as of January 14, 2004, and as amended by the Third Amendment thereto as of May 10, 2004, among Evergreen International Aviation, Inc. (an assignee of Evergreen Holdings, Inc., as successor to B-747, Inc. and King Christian, Inc.) and Mr. Delford M. Smith, as Beneficiaries, and Wilmington Trust Company, not in its individual capacity, but solely as Owner Trustee. The Trust is a majority-owned subsidiary of Evergreen International Aviation, Inc. ("Evergreen Aviation"), which is a wholly-owned subsidiary of Evergreen Holdings, Inc. ("Holdings"). The Trust's sole business purpose is to lease airplanes to Evergreen International Airlines, Inc. ("Airlines"), which is a wholly-owned subsidiary of Evergreen Aviation. Because the Trust and Airlines are both subsidiaries of Evergreen Aviation, the aircraft leasing services provided by the Trust to Airlines result in intercompany transactions that also produce intercompany receivables and payables between affiliates.PRONOUNCEMENT

In January 2003, the ~~opinion~~FASB issued FASB Interpretation No. 46 ("FIN 46"), Consolidation of ~~management~~Variable Interest Entities - An Interpretation of ARB No.51 Consolidated Financial Statements, and subsequently revised in December 2003, with the ~~interim~~issuance ~~financial~~of ~~statements~~FIN ~~included~~46-R. The interpretation addresses how variable interest entities are to be identified and how an enterprise assesses its interests in ~~this~~a ~~report~~variable ~~contain~~interest entity ~~all~~to ~~adjustments~~decide ~~necessary~~whether to consolidate that entity. The Interpretation also requires existing unconsolidated variable interest ~~present~~entities ~~fairly~~to be consolidated by their primary beneficiaries if the ~~financial~~entities ~~position~~do not effectively disperse risks among the parties involved. The Trust's parent company, ~~results~~Evergreen Aviation, adopted FIN 46-R as of ~~operations~~the period ended May 31, ~~and~~2005. Based ~~cash~~upon ~~flows~~their assessment of the ~~Trust~~impact ~~for~~of ~~the~~FIN ~~periods~~46-R ~~indicated.~~on ~~Such adjustments,~~Evergreen ~~other~~Aviation ~~than~~and ~~adjustments~~the Trust, management concluded that ~~have~~the ~~been~~Trust ~~separately~~is ~~disclosed,~~not ~~are~~the primary beneficiary of aany ~~normal,~~variable ~~recurring~~interest ~~nature~~entities. The adoption of FIN 46-R by Evergreen Aviation did not have an impact on the Trust's financial statements.

Interim results presented in this report are not necessarily indicative of operating results for a full year. The interim financial statements included in this report should be read in conjunction with the Trust's financial statements and the accompanying notes that were included in the Trust's Annual Report on Form 10-K for the fiscal year ended February 29, 2004 filed with the SEC on June 14, 2004.6

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6NOTE 2 – LONG-TERM DEBT OBLIGATIONS

~~TRUST~~ The ~~CREATED~~Trust's ~~FEBRUARY~~long-term debt 25as of May 31, ~~1986CONDENSED~~2005 ~~NOTES~~and ~~TOTHE~~February ~~UNAUDITED~~28, ~~FINANCIAL~~2005 ~~STATEMENTS~~consisted of the following:

NOTE 2 — AIRCRAFT


*(in thousands)*			May 31, 2005			February 28, 2005

Note payable to FINOVA Capital Corporation		$	2,035		$	3,370
Less: current portion			(2,035	)		(3,370	)

	Net long-term debt	$	-		$	-

~~Aircraft~~In May 1997, we entered into ~~owned~~a by$30.0 million Secured Loan Agreement with FINOVA Capital Corporation (the ~~Trust~~"FINOVA ~~consists~~Note"). ofThe ~~one~~FINOVA ~~Boeing~~Note ~~747~~bears ~~aircraft~~interest ~~and~~at ~~three~~the annual ~~DC-9~~rate ~~aircraft~~of 10.44%. AsMonthly installments of ~~November~~ ~~30,~~principal ~~2004~~ and ~~February~~interest ~~29,~~were ~~2004~~payable through April 2005, at which time the ~~net~~FINOVA ~~carrying~~Note was ~~value~~scheduled to mature with a final payment of ~~the~~approximately ~~aircraft~~$2.5 ~~was~~million asdue ~~follows:~~and payable upon maturity.

NET CARRYING VALUE OF AIRCRAFT
(in thousands)
			November 30,			February 29,
			2004			2004
Boeing 747 aircraft		$	31,243		$	31,243
DC-9 aircraft			17,380			17,380
Less:
	Accumulated depreciation		(36,798	)		(36,518	)
	Net carrying value	$	11,825		$	12,105

Effective April 29, 2005, the Trust and FINOVA executed a Third Amendment Agreement to amend and extend the FINOVA Note (the "Third Amendment"). The Third Amendment extends the maturity date of the FINOVA Note to September 29, 2005, with the annual rate of interest remaining at 10.44%. Monthly installments of principal and interest in the amount of $471,650 are scheduled through the extended maturity date, resulting in a full amortization of the remaining outstanding principal balance. All outstanding principal and accrued, but unpaid interest, will be due upon maturity.

~~On May~~The ~~7, 1997, the Trust granted to~~ FINOVA ~~Capital Corporation (“FINOVA”) a first~~Note ~~priority~~is ~~security~~secured ~~interest~~by inmeans ~~all~~ of ~~the~~a ~~above-listed~~first ~~aircraft.~~priority ~~The~~ security interest ~~was~~ granted into ~~connection~~FINOVA ~~with~~in ~~the~~one ~~$30.0~~Boeing ~~million~~747 ~~Secured~~aircraft ~~Loan~~and ~~Agreement~~three ~~that~~McDonnell ~~was executed by~~Douglas ~~the~~DC-9 ~~Trust~~("DC-9") ~~and~~aircraft ~~FINOVA~~owned onby ~~May~~the ~~7, 1997~~Trust. ~~See Note 3 — Long-Term Debt below.~~

The Trust leases all of the above-listed aircraft to Airlines. Because the Trust and Airlines are both subsidiaries of Evergreen Aviation, the aircraft leases are related-party transactions. See Note 4 — Related Party Transactions below. 7

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NOTE 3 —– ~~LONG-TERM~~RELATED ~~DEBT~~PARTY TRANSACTIONS

~~On May~~The ~~7, 1997, the~~ Trust ~~and~~has ~~FINOVA entered into a Secured Loan Agreement whereby FINOVA~~extensive ~~agreed~~transactions toand ~~loan~~relationships ~~$30.0~~with ~~million~~subsidiaries toand ~~the~~affiliates ~~Trust.~~of ~~Outstanding~~Holdings ~~principal~~and ~~under~~Evergreen ~~the Secured Loan Agreement bears interest at the annual rate of 10~~Aviation.~~44%.~~ Because ~~Monthly installments~~ of ~~principal~~ ~~and~~these ~~interest in the amount of approximately $472~~relationships,~~000~~ ~~are~~it ~~payable~~is ~~through April~~possible ~~2005.~~that ~~Upon maturity of~~ the ~~Secured~~terms ~~Loan Agreement in April 2005, a final payment~~ of ~~approximately~~ ~~$2.5~~these ~~million~~transactions ~~will~~are benot ~~due and payable. Performance of~~ the ~~Trust’s obligations~~same ~~under~~as ~~the~~those ~~Secured~~that ~~Loan~~would ~~Agreement~~result ~~are secured by means of a first priority~~from ~~security~~transactions ~~interest~~with ~~granted~~unaffiliated bythird ~~the Trust to FINOVA in all of the aircraft owned by the Trust~~parties.

7 Rental Income from Affiliate – The Trust leases its owned aircraft to Evergreen Airlines, an affiliate of the Trust. During the three months ended May 31, 2005, the Trust recognized rental revenue from affiliate in the amount of $1.8 million, as compared to $1.9 million of rental revenue recognized during the three months ended May 31, 2004.

~~TRUST~~ Deferred Rental ~~CREATED~~Income ~~FEBRUARY~~– 25The monthly rent obligation of Evergreen Airlines incrementally increases throughout the term of the aircraft lease. However, ~~1986CONDENSED~~the ~~NOTES~~Trust ~~TOTHE~~recognizes ~~UNAUDITED~~rental ~~FINANCIAL~~revenue ~~STATEMENTS~~on a straight-line basis. Therefore, each month the Trust recognizes rental revenue in an amount equal to the total amount of rent payable under the lease divided by the total number of months in the lease term. The accumulated differences between the lessee's monthly rent obligation and the amount of rental revenue recognized by the Trust has been recorded as deferred rental income. As of May 31, 2005 and February 28, 2005, the balances of deferred rental income were $5.4 million and $5.2 million, respectively.

~~The~~Account ~~outstanding~~Receivable ~~principal~~from ~~balances~~Affiliate – In partial satisfaction of its obligations under the ~~Secured~~aircraft ~~Loan~~lease, ~~Agreement~~Evergreen Airlines pays to FINOVA the monthly installments due under the FINOVA Note. See "Note 2 - Long-Term Debt Obligations" above. However, the amounts of the monthly debt installments paid by Evergreen Airlines are less than the amounts of the monthly rent that Evergreen Airlines would have otherwise paid under the aircraft lease. The Trust has recorded the accumulated differences as a receivable from affiliate. As of ~~November~~May 3031, ~~2004~~2005 and February 2928, ~~2004~~2005, the amounts of receivable from affiliate were $21.2 million and $20.5 million, respectively. However, because the timing of future collection is uncertain, we have reported the receivable on our financial statements as ~~follows:~~a reduction to trust equity.

SECURED LOAN AGREEMENT
Outstanding Principal Balances (in thousands)
			November 30,			February 29,
(in thousands)			2004			2004
Note payable to FINOVA Capital Corporation		$	4,643		$	7,957
Less: current portion			(4,643	)		(5,059	)
	Net long-term debt	$	-		$	2,898

Note Receivable from Affiliate – Until August 31, 2004, the Trust held a note receivable from one of its beneficiaries. During the three months ended May 31, 2004, the note receivable was reduced by $0.3 million of in-kind distributions from that beneficiary's share of the Trust's net income. As of August 31, 2004, the note receivable was repaid in full.

~~NOTE~~ Due 4from Affiliate —– ~~RELATED~~The ~~PARTY~~line ~~TRANSACTIONS~~item "Due from affiliate" on the Trust's balance sheets represents certain accounts receivable from Evergreen Aviation and its subsidiaries that have accrued over time. As of May 31, 2005 and February 28, 2005, the balances of "Due from affiliate" were $0.6 million.

The Trust has extensive transactions and relationships with subsidiaries and affiliates of Holdings and Evergreen Aviation. Because of these relationships, it is possible that the terms of these transactions are not the same as those that would result from transactions with unaffiliated third parties.8

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~~Rental Income~~NOTE ~~from~~4 ~~Affiliate~~– —TRUST ~~The~~AS ~~Trust,~~CO-GUARANTOR asOF ~~lessor,~~EVERGREEN ~~and~~AVIATION ~~Airlines, as lessee,~~DEBT are parties to an aircraft lease whereby the Trust leases its owned aircraft to Airlines. During the three months and nine months ended November 30, 2004 and November 30, 2003, the Trust recognized lease revenue from the aircraft lease in the amounts of $1.9 million and $5.6 million, respectively. OBLIGATIONS

~~Deferred Rental~~The ~~Income~~Trust, —along ~~Pursuant~~with ~~to the terms of the lease agreement, the~~substantially ~~amount~~all of the ~~monthly~~subsidiaries ~~rental payments varies over the term~~ of ~~the~~Evergreen ~~lease. However~~Aviation, ~~the Trust~~is ~~amortizes~~a ~~the~~joint ~~effects~~and ofseveral ~~the~~co-guarantor ~~varying rental payments over the term~~ of the ~~lease in~~Indenture ~~order~~Notes to(see ~~recognize~~"Indenture ~~rental~~Notes" ~~income on a straight-line basis. As a result, deferred rental~~below) ~~income~~and ~~is generated in an amount equal to~~ the ~~difference~~Secured ~~between~~Credit ~~the~~Facility ~~monthly~~(see ~~payment,~~"Secured ~~as set~~Credit ~~forth~~Facility" inbelow). ~~the~~Substantially ~~lease~~all ~~agreement,~~of ~~and~~ the ~~straight-line~~Trust's ~~recognition~~assets ofare ~~lease~~pledged ~~income.~~as ~~As of~~collateral ~~November~~to ~~30,~~secure ~~2004~~payment ~~and February 29, 2004, the balance~~ of ~~deferred~~these ~~rental~~debt ~~income was $5~~obligations.~~5 million and $4.8 million, respectively.~~

~~Accounts Receivable~~Indenture from Affiliate — In lieu of making monthly rental payments to the Trust, Airlines pays directly to FINOVA the monthly payments that become due under the Secured Loan Agreement. Because the monthly debt payment made by Airlines to FINOVA is less than the monthly rental amount under the lease agreement, the difference is recognized by the Trust as a receivable from Airlines. As of November 30, 2004 and February 29, 2004, the amounts of the Trust’s receivable from Airlines were $20.4 million and $17.8 million, respectively. Due to the uncertainty of the future collection of the Trust’s outstanding receivable from Airlines, the receivable is classified as a reduction to the Trust’s equity on the financial statements. Notes

8 In May 2003, Evergreen Aviation issued $215.0 million of 12% Senior Second Secured Notes (the “Indenture Notes”) pursuant to an Indenture, dated as of May 16, 2003, executed by and among i) Evergreen Aviation, as issuer, ii) Holdings and substantially all of the subsidiaries of Evergreen Aviation, including the Trust, as guarantors, and iii) J.P. Morgan Trust Company, N.A., as successor trustee to Bank One, N.A., as trustee.

~~TRUST~~ The Indenture ~~CREATED~~Notes ~~FEBRUARY~~bear 25interest at an annual fixed rate of 12.0%. Payments of interest are due semi-annually on May 15th and November 15th of each year. The most recent semi-annual payment of interest in the amount of $12.9 million was paid by Evergreen Aviation on May 15, ~~1986CONDENSED~~2005. ~~NOTES~~The ~~TOTHE~~next ~~UNAUDITED~~payment ~~FINANCIAL~~of ~~STATEMENTS~~accrued interest in the amount of $12.9 million will be due and payable on November 15, 2005.

~~Indebtedness~~The ofIndenture ~~Mr.~~Notes ~~Smith~~are —secured ~~The~~by ~~Trust~~a ~~previously~~second ~~held~~priority alien, ~~note~~subject ~~receivable from~~to ~~one~~certain ofpermitted ~~its beneficiaries~~liens, on ~~Mr.~~substantially ~~Smith.~~all ~~The~~of ~~note~~the ~~bore~~assets ~~interest at~~of anEvergreen ~~annual~~Aviation ~~rate~~and ofits 4%domestic ~~and~~subsidiaries, including ~~was~~the ~~reduced~~assets ~~annually~~of bythe MrTrust. ~~Smith’s~~The ~~beneficial~~Indenture ~~share~~Notes ~~of the~~are ~~Trust’s~~fully ~~net~~and ~~income. Payments~~unconditionally ofguaranteed, ~~principal~~both onjointly ~~the~~and ~~note~~severally, ~~were~~by ~~classified~~Holdings, assubstantially ~~reductions~~all toof the ~~Trust’s~~subsidiaries ~~equity~~of onEvergreen Aviation, and the ~~financial~~ ~~statements~~Trust.

AtThe Indenture ~~February~~Notes ~~29,~~impose ~~2004,~~certain ~~the outstanding~~restrictions ~~balance~~ on ~~the~~Evergreen ~~note~~Aviation ~~receivable from~~and ~~Mr.~~its ~~Smith was approximately $604~~restricted subsidiaries,~~000.~~ ~~During~~including the ~~six~~Trust. ~~months~~Such ~~ended~~restrictions ~~August 31~~include, ~~2004, distributions~~but ofare ~~Mr.~~not ~~Smith’s~~limited ~~beneficial share of Trust net income were applied~~ to, ~~repay~~restrictions inon ~~full~~ the ~~outstanding~~ability ~~balance.~~ to:

~~NOTE~~• 5incur —additional ~~TRUST~~debt ASor ~~CO-GUARANTOR~~create OFliens; ~~EVERGREEN~~• ~~AVIATION~~pay ~~DEBT~~dividends ~~OBLIGATIONS~~or acquire shares of capital stock; • make payments on subordinated debt or make investments; • make distributions from restricted subsidiaries; • issue or sell capital stock of restricted subsidiaries; • issue guarantees; • sell or exchange assets, or make capital expenditures; • enter into transactions with shareholders and affiliates; and • effect mergers and other changes of control.

~~Indenture Notes — On May 16, 2003, Evergreen Aviation issued $215.0 million of 12% Senior Second~~ Secured ~~Notes~~Credit (the “Indenture Notes”). The Indenture Notes were issued pursuant to an Indenture, dated as of May 16, 2003, by and among i) Evergreen Aviation, as issuer, ii) Holdings and substantially all of the subsidiaries of Evergreen Aviation, including the Trust, as guarantors, and iii) Bank One, National Association, as trustee. Facility

~~The~~On May 13, 2004, Evergreen ~~Indenture~~Aviation ~~Notes~~and ~~bear~~certain ~~interest~~of atits ansubsidiaries, ~~annual~~including ~~fixed~~the ~~rate~~Trust, ofentered ~~12%.~~into ~~Payments~~a ofthree-year ~~interest~~senior ~~are~~secured ~~due~~credit ~~semi-annually~~facility on(the ~~May~~“Secured 15Credit Facility”) with Wells Fargo Foothill, Inc. and ~~November~~Ableco 15Finance ofLLC ~~each~~(collectively, ~~year.~~“the Wells Fargo Lenders”). The ~~next~~Secured ~~payment~~Credit Facility consists of ~~accrued~~two ~~interest in~~loans ~~the~~– ~~amount~~a of$50.0 million term loan and a $1250.90 million ~~will~~revolving beloan. ~~due~~The ~~and~~Secured ~~payable~~Credit onFacility ~~May~~is 15secured by substantially all of the assets of Evergreen Aviation and its domestic subsidiaries, ~~2005~~including the assets of the Trust.

~~The~~As ~~Indenture~~of ~~Notes~~May ~~are secured by a second priority lien~~31, ~~subject to certain permitted liens~~2005, on ~~substantially~~the ~~all~~outstanding balance of the ~~assets~~Secured ofCredit ~~Evergreen~~Facility ~~Aviation~~was ~~and its domestic subsidiaries,~~$74.0 ~~including~~million. ~~the~~Taking ~~assets~~into ofconsideration the ~~Trust.~~Minimum ~~The~~Availability ~~Indenture~~Requirement ~~Notes~~(as ~~are~~defined ~~fully and unconditionally guaranteed~~below), ~~both~~as ~~jointly~~of ~~and~~May ~~severally~~31, ~~by Holdings~~2005, ~~substantially all of~~ Evergreen Aviation’s ~~subsidiaries,~~availability ~~and~~to obtain additional advances under the ~~Trust~~Secured Credit Facility was $0.8 million.

The Indenture Notes impose certain restrictions on Evergreen Aviation and its restricted subsidiaries, including the Trust. Such restrictions include, but are not limited to, restrictions on the ability to:9

Table of Contents

• Evergreen Aviation ~~incur~~and ~~additional~~its ~~debt;~~restricted •subsidiaries, ~~pay~~including ~~dividends;~~the •Trust, ~~acquire~~are ~~shares~~subject ofto ~~capital~~various restrictive ~~stock;~~covenants •under ~~make~~the ~~payments~~Secured onCredit ~~subordinated~~Facility. ~~debt~~In oraddition ~~make~~to ~~investments;~~other •requirements ~~make~~that ~~distributions~~are ~~from~~set forth in the covenants, Evergreen Aviation and its restricted subsidiaries;, •including ~~issue~~the orTrust, ~~sell~~are ~~capital~~required ~~stock~~to maintain: i) an undrawn availability of ~~restricted~~not ~~subsidiaries;~~less •than ~~issue~~$5.0 ~~guarantees;~~million •on ~~sell~~the orrevolving ~~exchange~~loan ~~assets;~~(the •"Minimum ~~enter~~Availability ~~into~~Requirement"), ~~transactions~~ii) minimum thresholds with ~~shareholders~~respect to certain consolidated and ~~affiliates;~~non-consolidated •earnings ~~make~~before interest, ~~capital~~taxes, ~~expenditures;~~depreciation •and ~~create~~amortization ~~liens;~~(“EBITDA”), and •iii) ~~effect~~a ~~mergers~~minimum ratio with respect to fixed charge coverages. In addition, Evergreen Aviation and its restricted subsidiaries, including the Trust, have agreed to limit the amount of capital expenditures that may be made in any fiscal year to $75.0 million, of which at least $10.0 million must be financed from sources other ~~changes~~than the Secured Credit Facility. As of ~~control~~May 31, 2005, Evergreen Aviation and its subsidiaries were in compliance with such covenants.

9Notice and Waiver of Specified Events of Default under Secured Credit Facility

~~TRUST~~ On ~~CREATED~~June ~~FEBRUARY~~1, 252005, ~~1986CONDENSED~~the ~~NOTES~~Wells Fargo ~~TOTHE~~Lenders ~~UNAUDITED~~notified ~~FINANCIAL~~Evergreen ~~STATEMENTS~~Aviation that the Wells Fargo Lenders believed that Evergreen Aviation was in default of certain covenants of the Secured Credit Facility (the "Specified Events of Default"), as follows:

~~Secured Credit~~i) ~~Facility~~occurrence —of Ona ~~May~~default ~~13,~~at ~~2004,~~the ~~Evergreen~~final ~~Aviation~~maturity, ~~and~~on ~~certain~~April ~~of its~~29, ~~subsidiaries~~2005, ~~including~~of the ~~Trust,~~obligations ~~entered~~under ~~into a three-year senior secured credit facility financing agreement (~~the ~~“Secured~~FINOVA ~~Credit~~Note; ~~Facility”~~ii) ~~with~~failure ~~Wells~~to ~~Fargo Foothill,~~maintain ~~Inc.~~insurance ~~and~~on ~~Ableco~~the ~~Finance~~Collateral ~~LLC~~ (~~collectively,~~as ~~“the~~defined ~~Wells~~in ~~Fargo~~the ~~Lenders”). The~~ Secured Credit Facility); ~~consists~~iii) ofmaking ~~two~~an ~~loans~~unpermitted —investment atoward ~~$50.0~~the ~~million~~purchase ~~term~~of ~~loan~~two ~~and~~Boeing ~~a $50.0~~747 ~~million~~airplanes ~~revolving~~(the ~~loan.~~"Designated ~~The~~747s"); ~~Secured~~and ~~Credit~~iv) ~~Facility~~unauthorized isuse ~~secured by substantially all~~ of the ~~assets~~proceeds offrom ~~Evergreen~~advances ~~Aviation~~under ~~and~~the ~~its~~Secured ~~domestic~~Credit ~~subsidiaries,~~Facility ~~including~~to ~~the~~renovate ~~assets of~~ the ~~Trust.~~Designated 747s.

As ofThe ~~November~~Wells 30Fargo Lenders further notified Evergreen Aviation that, ~~2004~~as a result of the Specified Events of Default, the ~~outstanding~~Wells Fargo ~~balance~~Lenders had elected to charge the default rate of interest, which, as set forth in the Secured Credit Facility, ~~was~~is ~~$77.9~~a per annum ~~million~~rate equal to 2 percentage points above the per annum rate otherwise applicable. AsThe default rate of ~~November~~interest 30was charged from April 29, ~~2004~~2005, ~~Evergreen~~the ~~Aviation’s~~date ~~availability~~on towhich ~~obtain additional~~the ~~advances~~Wells Fargo Lenders asserted that a default had occurred under the FINOVA Note, until June 14, 2005, the date on which the Wells Fargo Lenders, by execution of the Amendment Number Two (as defined below) waived the Specified Events of Default. At April 29, 2005, the per annum rates of interest on the Secured Credit Facility ~~was~~ranged ~~$9.8~~from ~~million~~6.09% to 8.75%.

~~Evergreen Aviation~~ On ~~and~~June ~~its~~14, ~~restricted~~2005, Evergreen ~~subsidiaries~~Aviation, ~~including~~its ~~the~~subsidiaries ~~Trust,~~that are ~~subject~~co-borrowers ~~to various restrictive covenants~~ under the Secured Credit Facility~~. In particular~~, ~~Evergreen Aviation~~ and ~~its restricted subsidiaries, including~~ the Trust, ~~have~~as ~~agreed~~co-guarantor, toentered into ~~maintain:~~an i)Amendment ~~an undrawn~~Number ~~availability~~Two ofand ~~not~~Waiver ~~less~~to ~~than~~Loan ~~$5.0~~and ~~million~~Security onAgreement (the ~~revolving~~"Amendment ~~loan,~~Number iiTwo") ~~minimum thresholds~~ with ~~respect~~the toWells ~~certain consolidated and non-consolidated earnings before~~Fargo ~~interest,~~Lenders ~~taxes,~~whereby ~~depreciation~~the ~~and~~Wells ~~amortization~~Fargo ~~(“EBITDA”),~~Lenders ~~and~~agreed ~~iii)~~to awaive ~~minimum ratio~~the ~~with~~Specified ~~respect~~Events toof ~~fixed~~Default, ~~charge~~and ~~coverages.~~the InWells ~~addition,~~Fargo ~~Evergreen~~Lenders ~~Aviation~~ and ~~its~~ ~~restricted~~Evergreen ~~subsidiaries,~~Aviation ~~including the Trust, have~~ agreed to ~~limit~~amend the ~~amount~~Secured ofCredit ~~capital expenditures~~Facility ~~that~~to ~~may~~allow beEvergreen ~~made~~Aviation inand ~~any~~its ~~fiscal~~subsidiaries ~~year~~ to ~~$75.0~~maintain ~~million,~~only all-risk ofground ~~which~~insurance atcoverage ~~least~~for ~~$10.0 million~~aircraft ~~must~~that behave ~~financed~~been ~~from~~grounded ~~sources~~and ~~other~~taken ~~than~~out ~~the~~of ~~Secured Credit Facility~~service.

Risk of Default on Debt Obligations — Substantially all of the assets of Evergreen Aviation and its subsidiaries, including the Trust, are pledged as collateral under Evergreen Aviation’s various debt agreements. Furthermore, the Indenture Notes and the Secured Credit Facility both contain cross-default provisions whereby certain events of default under one or more of the debt obligations of Evergreen Aviation or its subsidiaries, including the Trust, will result in an event of default under either, or both, the Indenture Notes and the Secured Credit Facility. In the event that such defaults are not cured or waived, the Trust is at risk that the Trust’s guarantor obligations under either, or both, the Indenture Notes and the Secured Credit Facility will be accelerated. 10

~~Going Concern~~Table Qualification for Holdings and Evergreen Aviation — In their audit report on the financial statements for Holdings for the fiscal year ended February 29, 2004, the former independent registered public accounting firm for Holdings and Evergreen Aviation included an explanatory paragraph which noted that Holdings and Evergreen Aviation have historically had violations of certain debt covenants. Because of the various cross-default provisions that are contained in Evergreen Aviation’s long-term debt obligations, a failure by Evergreen Aviation or one of its subsidiaries, including the Trust, to comply with the covenants of Evergreen Aviation’s long-term debt obligations could result in an acceleration of all of Evergreen Aviation’s outstanding debt obligations. Due to the historical difficulty experienced by Holdings and Evergreen Aviation in meeting debt covenants, there is substantial doubt as to the ability of Holdings and Evergreen Aviation to continue as going concerns. Contents

~~Dependence~~ Amendment onNumber ~~Sole~~Three ~~Source~~to Secured Credit Facility. On July 11, 2005, Evergreen Aviation, its subsidiaries that are ofco-borrowers ~~Income~~under —the ~~The~~Secured Credit Facility, and the Trust’s, ~~sole~~as ~~source~~co-guarantor, ofentered ~~income~~into isan ~~from~~Amendment Number Three and Consent (the "Amendment Number Three") with the Wells Fargo Lenders. Amendment Number Three amends the Secured Credit Facility to allow Evergreen Airlines to i) lease the Designated 747s from Ventures Acquisition Company LLC ("Ventures Acquisition Company"), aan affiliated entity that is wholly-owned ~~subsidiary~~by one of ~~Evergreen~~ ~~Aviation~~our beneficiaries, Mr. ~~Any~~Smith, ~~event~~and ~~which~~ii) ~~would~~reimburse Ventures ~~result~~Acquisition Company for certain out-of-pocket transaction costs incurred by Ventures Acquisition Company in connection with the ~~discontinuance~~purchase of the ~~business operations~~Designated of747s. ~~Evergreen~~In ~~Aviation~~exchange, ~~and~~Mr. ~~its~~Smith ~~subsidiaries~~pledged ~~would~~to ~~have~~Wells aFargo ~~materially~~Foothill, ~~negative~~Inc., as ~~impact~~administrative ~~upon~~agent and for the ~~Trust~~benefit of the Wells Fargo Lenders, all of his rights, title, and interest in Ventures Acquisition Company.

10Risk of Default on Debt Obligations

~~ITEM~~ Substantially 2all of the assets of Evergreen Aviation and its subsidiaries, including the Trust, are pledged as collateral under Evergreen Aviation’s various debt agreements. ~~MANAGEMENT~~Furthermore, the Indenture Notes and the Secured Credit Facility both contain cross-default provisions whereby certain events of default under one or more of the debt obligations of Evergreen Aviation or its subsidiaries, including the Trust, will result in an event of default under either, or both, the Indenture Notes and the Secured Credit Facility. In the event that such defaults are not cured or waived, the Trust is at risk that the Trust’Ss ~~DISCUSSION~~obligations under ~~AND~~either, ~~ANALYSIS~~or OFboth, ~~FINANCIAL~~the ~~CONDITION~~Indenture ~~AND~~Notes ~~RESULTS~~and OFthe ~~OPERATIONS~~Secured Credit Facility will be accelerated.

~~CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS~~11

~~In accordance~~Table ~~with the “safe harbor” provisions~~ of the Private Securities Litigation Reform Act of 1995, we note that certain statements in this Quarterly Report on Form 10-Q and elsewhere are forward-looking and provide other than historical information. The words “believe,” “estimate,” anticipate,” “project,” “intend,” “expect,” “plan,” “forecast,” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to certain risks and uncertainties that could cause actual events and results to differ materially from those discussed herein. Because such forward-looking statements are necessarily dependent on assumptions, data, or methods that may be incorrect or imprecise, and may not be realized, the statements contained in this Quarterly Report on Form 10-Q or elsewhere should not be relied upon as predictions of future events. Contents

~~The~~ITEM ~~Trust~~2. MANAGEMENT'~~s Annual~~S ~~Report~~DISCUSSION onAND ~~Form~~ANALYSIS ~~10-K~~OF ~~for~~FINANCIAL ~~the~~CONDITION ~~fiscal~~AND ~~year~~RESULTS ~~ended~~OF February 29, 2004 (the "2004 Annual Report on Form 10-K") filed with the Securities and Exchange Commission ("SEC") on June 14, 2004 identifies important risks that could cause actual results to differ materially from assertions made by us in forward-looking statements. Such risks include, but are not limited to: OPERATIONS

•CAUTIONARY ~~our~~STATEMENT ~~reliance~~REGARDING onFORWARD-LOOKING one customer, an affiliate, Evergreen International Airlines, Inc.; • our future compliance with the terms of our debt agreements; • general conditions in the aviation industry; • the effect of government laws and regulations; • the risks related to our operations in dangerous locations; and • weaknesses in our internal controls.STATEMENTS

~~These~~This Quarterly Report on Form ~~are~~10-Q ~~only~~contains ~~some~~statements, ofwhich to the ~~risks~~extent ~~that~~they ~~may~~are ~~affect~~not ~~the~~recitations of historical fact, constitute "forward-looking statements" as ~~contained~~defined in ~~this~~ ~~Quarterly~~Section ~~Report~~21E onof ~~Form~~the ~~10-Q.~~Securities ~~For~~Exchange ~~further~~Act ~~information~~of ~~regarding~~1934, ~~risks~~as amended. Statements and ~~uncertainties~~assumptions ~~associated~~ with regard to future ~~our~~revenues, ~~business~~income and cash flows, ~~please~~program ~~see~~performance, the ~~Trust’s~~outcome ~~other~~of ~~reports~~litigation, and ~~filings~~planned ~~with~~dispositions ~~the~~of ~~Securities and~~assets ~~Exchange~~are ~~Commission~~examples ~~(“SEC”),~~of forward-looking ~~including~~statements. Wherever possible, ~~but~~we ~~not~~have ~~limited~~identified tothese ~~the~~forward-looking ~~Trust’s~~statements by words such as "anticipates", ~~2004~~"believes", ~~Annual~~"could", ~~Report~~"may", on"intends", ~~Form~~"estimates", ~~10-K.~~"expects", "projects", and similar phrases.

~~Readers of~~Forward-looking ~~this~~statements ~~Quarterly~~involve risks ~~Report~~and onuncertainties ~~Form~~that ~~10-Q~~could ~~are~~cause ~~cautioned~~actual ~~not~~results to ~~place~~differ ~~undue~~materially ~~reliance~~from onhistorical ~~the~~experience or our present expectations. ~~forward-looking~~The ~~statements~~risks ~~contained~~and ~~herein,~~uncertainties to which ~~speak~~our ~~only~~business asis ofsubject ~~the~~include, ~~date~~but ~~hereof.~~are ~~We undertake~~not nolimited ~~obligation~~ to, ~~publicly~~the ~~update~~risks orand uncertainties ~~revise~~included under ~~our~~the ~~forward-looking~~heading ~~statements included~~"Risk inFactors ~~this~~Relating ~~report,~~to ~~whether~~the asTrust" ain ~~result~~our ofAnnual ~~new~~Report ~~information,~~on ~~future~~Form ~~events~~10-K ~~or otherwise,~~for ~~except~~the asfiscal ~~required~~year byended ~~law~~February 28, 2005. Such risks and uncertainties include:

~~The Trust’s~~• ~~annual~~our ~~reports~~reliance onupon ~~Form~~one ~~10-K~~customer, ~~quarterly~~Evergreen ~~reports~~Airlines, onfor ~~Form~~100% ~~10-Q~~of ~~and~~our ~~current reports~~revenue on(see ~~Form~~"Our ~~8-K,~~Sole asCustomer" ~~well~~below); as• ~~any~~the ~~amendments~~financing toagreements ~~those reports, are available free~~ of ~~charge~~ ~~through~~ Evergreen Aviation’s ~~website~~which atinclude ~~www.evergreenaviation.com as~~financial ~~soon~~covenants asthat ~~reasonably~~impose ~~practicable~~substantial ~~after~~restrictions ~~the~~upon ~~Trust~~us; ~~files~~and ~~such~~• ~~reports~~the ~~with,~~age orof ~~furnishes them~~our ~~to, the SEC~~aircraft.

11 For further information regarding the risks and uncertainties associated with our business, please see the Trust's other reports and filings with the SEC, including, but not limited to, our Annual Report on Form 10-K for the fiscal year ended February 28, 2005.

~~OVERVIEW~~ Readers of this Quarterly Report on Form 10-Q are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. We assume no obligation to publicly update or revise our forward-looking statements included in this report, whether as a result of new information, future events, or otherwise, except as required by law.

The Trust was created pursuant to the Trust Agreement, dated as of February 25, 1986, as amended and restated pursuant to the Amended and Restated Trust Agreement, dated as of August 31, 1987, as amended on August 31, 1988, and as amended and restated pursuant to the Second Amended and Restated Trust Agreement, dated as of September 29, 1995, as amended by the First Amendment thereto as of May 8, 2003, as amended by the Second Amendment thereto as of January 14, 2004, and as amended by the Third Amendment thereto as of May 10, 2004, among Evergreen International Aviation, Inc. (an assignee of Evergreen Holdings, Inc., as successor to B-747, Inc. and King Christian, Inc.) and Mr. Delford M. Smith, as Beneficiaries, and Wilmington Trust Company, not in its individual capacity, but solely as Owner Trustee. The Trust is a majority-owned subsidiary of Evergreen International Aviation, Inc. (“Evergreen Aviation”), which is a wholly-owned subsidiary of Evergreen Holdings, Inc. (“Holdings”). 12

~~The Trust~~Table ~~does not have directors. Instead, the Trust is operated and managed pursuant to the terms~~ of the Second Amended and Restated Trust Agreement, as amended. Mr. Smith holds a one-third beneficial ownership interest in that portion of the Trust that owns a Boeing 747 aircraft. Evergreen Aviation holds the remaining two-thirds beneficial interest in that portion of the Trust that owns the Boeing 747 and all of the beneficial interest in that portion of the Trust that owns the three DC-9 aircraft. The Trust’s sole business purpose is to lease airplanes to Evergreen International Airlines, Inc. (“Airlines”), which is a wholly-owned subsidiary of Evergreen Aviation. Contents

12BUSINESS OVERVIEW

~~RESULTS~~ The Trust OFCreated ~~OPERATIONS:~~February 25, 1986 ("Trust", "we", "us", or "our") is a subsidiary of Evergreen International Aviation, Inc. ("Evergreen Aviation"), which is a wholly-owned subsidiary of Evergreen Holdings, Inc. ("Holdings"). The Trust was created pursuant to the Trust Agreement, dated as of February 25, 1986, as amended and restated pursuant to the Amended and Restated Trust Agreement, dated as of August 31, 1987, as amended on August 31, 1988, and as amended and restated pursuant to the Second Amended and Restated Trust Agreement, dated as of September 29, 1995, as amended by the First Amendment thereto as of May 8, 2003, as amended by the Second Amendment thereto as of January 14, 2004, and as amended by the Third Amendment thereto as of May 10, 2004, among Evergreen International Aviation, Inc. (an assignee of Evergreen Holdings, Inc., as successor to 747, Inc. and King Christian, Inc.) and Mr. Delford M. Smith, as Beneficiaries, and Wilmington Trust Company, not in its individual capacity, but solely as Owner Trustee. The Trust assets consist primarily of one Boeing 747 aircraft and three McDonnell Douglas DC-9 ("DC-9") aircraft.

~~Results~~ Our only source of ~~Operations~~revenue ~~for~~comes from the ~~Three~~rental ~~Months~~of ~~Ended~~one ~~November~~Boeing 30747 aircraft and three DC-9 aircraft to Evergreen Airlines, ~~2004~~a wholly-owned subsidiary of our direct parent company, Evergreen Aviation. During the last three fiscal years, rental revenue from Evergreen Airlines accounted for 100% of our operating revenue. Because all of our aircraft are under lease to Evergreen Airlines, we do not have excess capacity. In addition, because we share the same direct parent company, the aircraft leasing activity between the Trust and ~~November~~Evergreen 30Airlines generates not only intercompany transactions, ~~2003~~but also receivables from affiliate and payables to affiliate.

~~The~~In ~~following~~partial ~~table~~satisfaction ~~sets~~of ~~forth~~its obligations under the ~~results~~aircraft oflease, ~~operations~~Evergreen ~~with~~Airlines ~~respect~~pays to FINOVA Capital Corporation ("FINOVA") the ~~Trust's~~monthly ~~operations~~installments ~~for~~due from the ~~three~~Trust ~~months~~under ~~ended~~the ~~November~~FINOVA ~~30,~~Note ~~2004~~(as defined in "Capital Resources and ~~November~~Liquidity 30- FINOVA Note" below). However, ~~2003:~~because the amounts of the monthly debt installments paid by Evergreen Airlines are less than the amounts of the monthly rent that Evergreen Airlines would have otherwise paid under the lease, we have recorded the accumulated differences as a receivable from affiliate. See "Note 3 - Related Party Transactions" in Item 1 of the quarterly report.

~~RESULTS~~ All OFintercompany ~~OPERATIONSUnaudited(~~transactions, affiliate receivables, and affiliate payables between us and Evergreen Airlines are eliminated in ~~thousands)~~consolidation at the parent company level.

				For the Three Months					2004 v. 2003
				ended November 30,					Increase (decrease)
				2004		2003			Amount		%
Operating revenue:
Rental income from affiliate			$	1,881	$	1,881		$	-		0.0	%
Expense (other income)
	Depreciation			94		93			1		1.1
	Interest expense			188		265			(77	)	(29.1	)
	Interest income from affiliate			-		(3	)		3		100.0
		Total expense (other income)		282		355			(73	)	(20.6	)
		Net income	$	1,599	$	1,526		$	73		4.8	%

Our Sole Customer

~~Rental Income~~Evergreen ~~from~~Airlines, ~~Affiliate~~our —sole ~~Rental~~customer, is ~~income~~a ~~from~~leading ~~affiliate~~provider isof ~~derived~~worldwide ~~solely from~~air ~~rental~~freight ~~income~~transportation. Evergreen ~~related~~Airlines toprovides ~~the~~air ~~lease~~freight ofservices ~~the~~to ~~Trust’s~~a ~~aircraft~~broad tobase ~~Airlines. Rental~~of ~~income~~customers, ~~earned~~including ~~from~~the ~~affiliate~~United ~~was~~States ~~$1.9~~Air ~~million~~Force ~~during~~Air ~~the~~Mobility ~~three~~Command, ~~months~~freight ~~ended~~forwarders, ~~November~~domestic 30and foreign airlines, industrial ~~2004~~manufacturers, ~~which~~and ~~was~~other ~~the~~government ~~same~~agencies. ~~amount~~Evergreen ofAirlines' ~~revenue~~diverse ~~earned~~customer ~~from~~base ~~affiliate~~and ~~during~~its ~~the~~ability ~~three~~to ~~months ended~~deploy ~~November~~aircraft ~~30,~~to ~~2003.~~match market ~~Rental~~conditions ~~income~~gives isit ~~earned~~the byagility ~~the~~to ~~Trust~~respond into ~~accordance~~changes ~~with~~in ~~the~~demand ~~terms of~~for ~~the~~air ~~aircraft~~freight ~~lease~~services.

~~Depreciation~~Because Evergreen Airlines is —our ~~Depreciation~~only ~~consists~~customer, ofour ~~depreciation~~ability onto ~~the~~generate ~~Trust’s~~revenue is dependent upon Evergreen Airlines' continued demand to lease our aircraft. ~~Depreciation~~ ~~expense~~Such ~~was~~demand ~~approximately~~for ~~$94,000~~leased ~~for~~aircraft is affected by various trends and fluctuations in the ~~three~~markets ~~months~~served ~~ended~~by ~~November~~Evergreen 30Airlines. Changes in government regulations and policies, ~~2004~~shifts in global economic and political environments, asand ~~compared~~the emergence of new competition are all factors that influence decisions by Evergreen Airlines to ~~approximately~~increase ~~$93,000~~or ~~for~~decrease the ~~three~~number ~~months~~of ~~ended~~aircraft ~~November~~that ~~30,~~it ~~2003~~leases. A decision by Evergreen Airlines to terminate our aircraft lease would have a materially adverse effect upon us.

Interest Expense — Interest expense is comprised primarily of interest incurred on the outstanding loan payable to FINOVA Capital Corporation (“FINOVA”). Interest expense for the three months ended November 30, 2004 was approximately $188,000, as compared to approximately $265,000 for the three months ended November 30, 2003. The reduction in interest expense is primarily due to a $4.9 million reduction in the outstanding principal balance of the note payable over the past twelve months, of which $1.5 million was attributable to insurance proceeds received in connection with a runway landing incident that occurred in fiscal year 2003. 13

13Table of Contents

~~Interest Income~~Trust from Affiliate— Interest income from affiliate for the three months ended November 30, 2004 was $0, as compared to approximately $3,000 for the three months ended November 30, 2003. The decrease in interest income is attributable to a $0.6 million reduction in the outstanding principal balance of the note receivable from Mr. Smith. As of August 31, 2004, the note receivable from Mr. Smith was paid in full. For further information on the note receivable from Mr. Smith, see "Note 4 - Related Party Transactions - Indebtedness of Mr. Smith" in Part I, Item 1 of this Quarterly Report on Form 10-Q.Beneficiaries

~~Results~~ The Trust ofhas ~~Operations~~two ~~for the Nine Months Ended November 30~~beneficiaries, ~~2004~~as ~~and November 30, 2003~~ follows:

The following table sets forth the results of operations with respect to the Trust's operations for the nine months ended November 30, 2004 and November 30, 2003:

	•	Mr. Delford M. Smith, the controlling shareholder of Holdings, holds a one-third beneficial ownership interest in that portion of the Trust that owns the Boeing 747 aircraft.
	•	Evergreen Aviation, our direct parent company, holds the remaining two-thirds beneficial ownership interest in the portion of the Trust that owns the Boeing 747 aircraft and the entire beneficial ownership interest in that portion of the Trust that owns the three DC-9 aircraft.

~~RESULTS~~Available ~~OF OPERATIONSUnaudited(in thousands)~~Information

				For the Nine Months						2004 v. 2003
				ended November 30,						Increase (decrease)
				2004			2003			Amount		%
Operating revenue:
Rental income from affiliate			$	5,642		$	5,642		$	-		-	%
Expense (other income)
	Depreciation			280			280			-		-
	Interest expense			554			1,066			(512	)	(48.0	)
	Interest income from affiliate			(9	)		(62	)		53		85.5
		Total expense (other income)		825			1,284			(459	)	(35.7	)
		Net income	$	4,817		$	4,358		$	459		10.5	%

General information about us, our direct parent company, and the other subsidiaries of our direct parent company can be found at www.evergreenaviation.com/invr.html. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports are available free of charge on our direct parent company's website at www.evergreenaviation.com/invr.html, as soon as reasonably practicable after such reports are filed with, or furnished to, the SEC. Information on our direct parent company's website is not incorporated into, or a part of, this
Form 10-Q or our other securities filings.

~~Rental Income~~RECENT ~~from~~ACCOUNTING Affiliate — Rental income from affiliate is derived solely from rental income related to the lease of the Trust’s aircraft to Airlines. Rental income earned from affiliate was $5.6 million during the nine months ended November 30, 2004, which was the same amount of revenue earned from affiliate during the nine months ended November 30, 2003. Rental income is earned by the Trust in accordance with the terms of the aircraft lease. PRONOUNCEMENT

~~Depreciation~~The accounting —pronouncement ~~Depreciation~~enacted ~~consists~~during ofthe ~~depreciation~~three onmonths ~~the~~ended ~~Trust’s~~May ~~aircraft.~~31, ~~Depreciation expense~~2005 ~~was~~did ~~approximately~~not ~~$280,000~~have ~~for~~an ~~the~~effect ~~nine~~on ~~months~~our ~~ended~~financial position ~~November~~or ~~30,~~results ~~2004,~~of ~~which~~operations. ~~was~~For ~~the~~a ~~same~~further ~~amount~~discussion of ~~depreciation~~recent ~~expense recorded~~accounting ~~during~~pronouncements, ~~the~~see ~~nine~~"Note ~~months~~1 ~~ended~~- ~~November~~Significant ~~30,~~Accounting Policies" ~~2003.~~in Item 1 of this Quarterly Report.

Interest Expense — Interest expense is comprised primarily of interest incurred on the outstanding note payable to FINOVA. Interest expense for the nine months ended November 30, 2004 was approximately $554,000, as compared to approximately $1.1 million for the nine months ended November 30, 2003. The reduction in interest expense is primarily due to a $4.9 million reduction in the outstanding principal balance of the note payable, of which $1.5 million was attributable to insurance proceeds received in connection with a runway landing incident in fiscal year 2003. 14

14Table of Contents

~~Interest Income~~RESULTS ~~from~~OF ~~Affiliate—~~OPERATIONS ~~Interest~~FOR ~~income~~THE ~~from~~THREE ~~affiliate~~MONTHS isENDED ~~comprised~~MAY ~~primarily of interest earned on the outstanding note receivable from Mr. Smith. Interest income for the nine months ended November 30~~31, ~~2004 was approximately $9,000, as compared to approximately $62,000 for the nine~~2005 ~~months~~AS ~~ended~~COMPARED ~~November~~TO ~~30,~~THE ~~2003.~~THREE ~~The~~MONTHS ~~decrease~~ENDED inMAY ~~interest income is due to a $0.6 million reduction in the outstanding principal balance of the note receivable from Mr. Smith. As of August~~ 31, 2004~~, the note receivable from Mr. Smith was paid in full.~~

~~LIQUIDITY~~ The following ~~AND~~table ~~CAPITAL~~sets ~~RESOURCES~~forth the Trust's results of operations for the three months ended May 31, 2005 and May 31, 2004.

Cash from Operating Activities — The Trust owns one Boeing 747 aircraft and three DC-9 aircraft. The Trust financed its purchase of the Boeing 747 by means of a $30.0 million Secured Loan Agreement with FINOVA. The Trust’s obligation to repay the Secured Loan Agreement is secured by a first priority security interest in all of the Trust’s owned aircraft. Installments of principal and interest in the amount of approximately $472,000 per installment are payable to FINOVA each month.


Results of Operations (in thousands of dollars)
			For the Three Months
			Ended May 31,

			2005			2004

	Operating revenue:
	Rental income from affiliate	$	1,846		$	1,880

	(Expense) other income
	Depreciation		(93	)		(93	)
	Loan acquisition costs		(8	)		-
	Interest expense		(68	)		(197	)
	Interest income		-			6

	Net income		1,677			1,596

	Trust equity at beginning of period		24,327			18,409
	Less: Distributions to beneficiaries		-			(302	)

	Trust equity at end of period	$	26,004		$	19,703

~~The Trust~~Rental ~~generates~~income ~~revenue~~from affiliate – We byderive ~~leasing~~100% ~~its~~of ~~owned~~our ~~aircraft to Airlines. However, under the~~operating ~~terms~~revenue offrom the aircraft lease, ~~Airlines~~with ~~does~~our ~~not~~affiliate, ~~make~~Evergreen ~~payments~~Airlines. During ~~of cash to~~ the ~~Trust. Instead,~~three ~~Airlines~~months ~~satisfies~~ended ~~its~~May ~~lease~~31, ~~obligations~~2005, towe ~~the Trust by paying directly to~~recognized ~~FINOVA~~rental ~~the~~income ~~monthly~~from ~~installments~~affiliate of ~~principal and interest that are due under the Secured Loan Agreement~~$1.8 ~~Thus~~million, ~~although~~as ~~the~~compared ~~Trust~~to ~~generates~~$1.9 ~~cash~~million ~~equivalents~~of ~~because~~rental ~~Airlines~~revenue ~~pays the~~recognized ~~Trust’s~~during ~~monthly debt obligation,~~ the ~~Trust~~three ~~does not generate cash from its leasing operations. During the nine~~ months ended ~~November~~May 3031, 2004~~, the Trust generated cash equivalents of $3~~.~~3 million from its operating activities.~~

~~The~~Depreciation ~~monthly~~ – During ~~lease~~each ~~rental~~of ~~that is due from Airlines to~~ the ~~Trust~~three-month isperiods ~~slightly~~ended ~~lower~~May ~~than~~31, ~~the monthly~~2005 ~~installment of principal~~ and ~~interest~~May ~~that~~31, is2004, ~~paid~~depreciation byexpense ~~Airlines~~on ~~to FINOVA. This~~our ~~difference between the monthly rent that is due under the~~ aircraft ~~lease~~was ~~and the amount of the debt payment actually paid by Airlines to FINOVA is recognized by the Trust as a receivable from affiliate~~$0.1 ~~Due~~million toper ~~the uncertainty of the future collection of the receivable, the receivable from affiliate is classified as a reduction to the Trust’s equity on the financial statements~~period.

~~Cash~~Interest expense ~~from~~ – Interest ~~Investing~~expense ~~Activities~~during ~~— During~~ the ~~nine~~three months ended ~~November~~May 3031, ~~2004,~~ ~~the~~2005 ~~Trust~~was ~~generated~~$0.1 ~~cash~~million, ~~equivalents~~as ofcompared to $0.62 million of ~~from~~interest ~~investing~~expense ~~activities.~~during ~~Until~~the ~~August~~three months ended May 31, 2004, ~~the Trust~~resulting ~~had~~in a ~~note~~$0.1 ~~receivable~~million ~~from~~decrease ~~Mr.~~in ~~Smith~~expense. The ~~note~~decrease ~~bore~~ in interest atexpense anwas ~~annual~~primarily ~~rate~~attributable ofto 4%reductions ~~and~~in ~~was~~the ~~reduced~~outstanding ~~annually~~principal bybalance ~~distributions~~ of Mrour note payable to FINOVA. ~~Smith’s~~See "Note ~~beneficial~~2 ~~share~~- ofLong-Term ~~the~~Debt ~~Trust’s~~Obligations" ~~net~~in ~~income.~~Item 1 above.

~~Payments~~Interest income of – Interest income ~~principal~~during on the ~~note~~three ~~were~~months ~~classified~~ended asMay ~~additions~~31, to2005 ~~the~~was ~~Trust’s~~$0, ~~equity~~as oncompared ~~the financial~~to ~~statements.~~$6,000 Atof ~~February~~interest ~~29,~~income ~~2004,~~recognized during the ~~outstanding~~three ~~balance~~months onended ~~the~~May ~~note~~31, ~~receivable from Mr~~2004. ~~Smith~~The ~~was approximately~~ $0.6,000 ~~million.~~decrease ~~During~~in ~~the~~interest ~~six~~income ~~months~~was ~~ended~~primarily ~~August~~attributable ~~31, 2004,~~to ~~distributions~~reductions ofin ~~Mr.~~notes receivable ~~Smith’s~~from ~~beneficial~~affiliates. ~~share~~See of"Note ~~Trust~~3 ~~net~~- ~~income~~Related ~~were~~Party ~~applied to~~Transactions" ~~repay~~ in ~~full~~Item ~~the~~1 ~~outstanding balance of $0~~above.~~6 million.~~

Cash used in Financing Activities — During the nine months ended November 30, 2004, the Trust used cash and cash equivalents of $3.9 million in payment of its debt obligations under the Secured Loan Agreement. All of the Trust’s debt obligations, in the principal amount of $4.6 million as of November 30, 2004, will mature on or before April 29, 2005. The Trust anticipates that future rental income from the aircraft lease with Airlines will be sufficient to satisfy these debt obligations. 15

15Table of Contents

~~ITEM~~CAPITAL 3.RESOURCES ~~QUANTITATIVE~~ AND ~~QUALITATIVE~~LIQUIDITY ~~DISCLOSURES ABOUT MARKET RISK.~~

~~There have~~FINOVA ~~been~~Note ~~no material changes in the market risk of the Trust during the nine months ended November 30, 2004.~~

~~ITEM~~ In 4May 1997, we entered into a $30. ~~CONTROLS~~0 ~~AND~~million ~~PROCEDURES~~Secured Loan Agreement with FINOVA Capital Corporation (the "FINOVA Note"). The FINOVA Note bears interest at the annual rate of 10.44%. Monthly installments of principal and interest were payable through April 2005, at which time the FINOVA Note was scheduled to mature with a final payment of approximately $2.5 million due and payable upon maturity.

~~Disclosure~~ On ~~Controls~~June 9, 2005, we executed a Third Amendment Agreement to amend and ~~Procedures~~extend the FINOVA Note (the "Third Amendment"). The Third Amendment extends the maturity date of the FINOVA Note to September 29, 2005, with the annual rate of interest remaining at 10.44%. Monthly installments of principal and interest in the amount of $471,650 are scheduled through the extended maturity date, resulting in a full amortization of the remaining outstanding principal balance. All outstanding principal and accrued, but unpaid interest, will be due upon maturity.

The ~~Trust’s~~FINOVA ~~management, with~~Note ~~participation~~is ofsecured ~~the~~by ~~Trust’s~~means ~~principal executive officer and principal financial officer, have performed an evaluation~~ of ~~the~~a ~~Trust’s~~first ~~disclosure~~priority ~~controls~~security ~~and~~interest ~~procedures,~~granted ~~(as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”))~~ to ~~ensure~~FINOVA ~~that information required to be disclosed by the Trust~~ in the ~~reports~~one ~~that~~Boeing ~~the~~747 ~~Trust~~aircraft ~~files~~and orthree ~~submits~~DC-9 ~~under the Exchange~~aircraft ~~Act~~owned ~~is recorded, processed, summarized, and reported within the time periods specified~~ by the ~~SEC’s rules and forms~~Trust.

~~Based on~~Repayment ~~that~~of ~~evaluation,~~ the ~~Trust’s~~FINOVA ~~principal~~Note ~~executive~~has ~~officer and principal financial~~been ~~officer~~through ~~have~~monthly ~~concluded~~installments ~~that, as~~ of ~~November~~principal ~~30, 2004, the Trust’s disclosure controls~~ and ~~procedures~~interest ~~were not effective in ensuring~~ that ~~information~~have ~~required~~incrementally toincreased bethroughout ~~disclosed by~~ the ~~Trust~~term inof the ~~reports~~note. ~~that~~The itmonthly installments ~~files~~have orbeen ~~submits~~paid ~~under~~by ~~the~~Evergreen ~~Exchange~~Airlines, ~~Act~~in issatisfaction ~~recorded, processed,~~of ~~summarized,~~its ~~and~~obligation ~~reported~~to ~~within~~make ~~the~~lease ~~time~~payments ~~periods~~under ~~specified~~the byterms ~~the~~of ~~SEC’s~~its ~~rules~~aircraft ~~and forms~~lease. AtWe ~~this~~anticipate ~~time,~~that ~~management~~future ~~has~~rentals ~~determined~~from ~~that~~ the ~~Trust’s~~aircraft ~~disclosure controls~~lease ~~and~~will ~~procedures may not~~ be sufficient i) to ~~ensure~~satisfy ~~that~~our ~~data~~debt ~~errors,~~obligations ~~control problems, or acts of fraud are detected and ii)~~ to ~~confirm that appropriate corrective action, including process improvements, is undertaken in a timely manner~~FINOVA.

~~Letter~~ The toamount ~~Disclosure~~of the monthly ~~Committee~~loan ~~Regarding~~installments ~~Control~~paid ~~Deficiencies~~by Evergreen Airlines have been slightly lower than Evergreen Airlines' monthly rental obligation under the aircraft lease. The difference between the amounts has been recorded by us as a receivable from affiliate. However, because future collection is uncertain, we have reported the receivable on our financial statements as a reduction to trust equity.

~~In connection~~We ~~with~~do ~~its~~not ~~audit~~generate ofor hold ~~the~~any ~~Trust’s~~liquid ~~financial~~assets. ~~statements~~Our ~~for~~contractual ~~the~~obligations ~~fiscal~~are ~~year~~paid ~~ended~~by ~~February~~Evergreen 29Airlines, ~~2004, PricewaterhouseCoopers LLP (“PwC”), the Trust's former independent registered public accounting firm, identified and discussed with the Trust’s management two deficiencies that existed~~ in ~~the~~satisfaction ~~design or operation~~ of ~~the~~its ~~Trust’s~~lease ~~disclosure~~obligations ~~controls that PwC~~under ~~considered to be material weaknesses in~~ the ~~effectiveness~~terms of ~~the~~our ~~Trust’s~~aircraft ~~disclosure controls~~lease. ~~The~~Based ~~two~~upon ~~deficiencies~~current ~~were~~known i)and ~~non-reconciliation~~expected offuture ~~certain~~commitments, ~~accounts~~we ~~and~~do ~~ii)~~not ~~lack~~anticipate ofthat ~~review~~our ~~by management of~~liquidity ~~monthly~~will ~~financial~~materially ~~statements~~increase ~~and~~or ~~significant transactions~~decrease.

~~In a~~Trust ~~letter~~as ~~dated~~Co-Guarantor ~~September 22, 2004 to the Members~~ of ~~the~~ Evergreen ~~Holdings,~~Aviation ~~Inc.~~Debt Disclosure Committee, PwC noted that the two identified deficiencies in the Trust’s system of disclosure controls were caused by the following conditions which existed in the Trust’s system of disclosure controls as of February 29, 2004: Obligations

o The ~~One~~Trust, ~~individual~~along ~~was~~with ~~responsible~~substantially all ~~for~~of ~~performing~~ the ~~accounting~~subsidiaries ~~functions~~of ~~for~~Evergreen ~~the Trust~~Aviation, ~~and~~is ~~this work was not reviewed on~~ a ~~systematic~~joint ~~basis~~and byseveral ~~the~~co-guarantor ~~appropriate level~~ of ~~management. o Some of~~ the ~~Trust’s~~Indenture ~~general~~Notes ~~ledger~~(defined ~~account~~in ~~balances~~"Indenture Notes" ~~were~~below) ~~not~~and ~~reconciled with supporting detail. In other instances,~~ the ~~general~~Secured ~~ledger~~Credit ~~account~~Facility ~~balances~~(defined ~~were~~in ~~supported~~"Secured byCredit ~~workpapers~~Facility" ~~that contained flawed data~~below). oSubstantially ~~The~~all ~~Trust~~of ~~had no committee in place to handle decisions relating to~~ the Trust's ~~disclosure~~assets ~~controls,~~are ~~including~~pledged ~~review~~as ofcollateral to ~~quarterly~~secure ~~and~~payment ~~annual~~of ~~filings~~these debt obligations.

Indenture Notes — In May 2003, Evergreen Aviation issued $215.0 million of 12% Senior Second Secured Notes (the “Indenture Notes”) pursuant to an Indenture, dated as of May 16, 2003, executed by and among i) Evergreen Aviation, as issuer, ii) Holdings and substantially all of the subsidiaries of Evergreen Aviation, including the Trust, as guarantors, and iii) J.P. Morgan Trust Company, N.A., as successor trustee to Bank One, N.A., as trustee.

~~Table~~ The Indenture Notes bear interest at an annual fixed rate of ~~Contents~~12.0%. Payments of interest are due semi-annually on May 15th and November 15th of each year. The most recent semi-annual payment of interest in the amount of $12.9 million was paid by Evergreen Aviation on May 15, 2005. The next payment of accrued interest in the amount of $12.9 million will be due and payable on November 15, 2005.

In the letter, PwC indicated that it considered the two identified deficiencies to be material weaknesses in the effectiveness of the Trust’s disclosure controls pursuant to standards established by the American Institute of Certified Public Accountants. A “material weakness” is a reported condition in which the design or operation of one or more of the specific disclosure control components has a defect or defects that could have a material adverse effect on the Trust’s ability to record, process, summarize and report financial date in the Trust’s financial statements in a timely manner. 16

~~In the~~Table ~~letter to the Disclosure Committee, PwC made three recommendations for improvements to the Trust’s system~~ of ~~disclosure controls. These recommendations included:~~ Contents

o The Indenture ~~Additional~~Notes ~~accounting~~are ~~staff~~secured ~~should~~by bea ~~cross-trained~~second inpriority ~~the~~lien, ~~operations~~subject ofto ~~and~~certain ~~nature~~permitted ofliens, on ~~accounting~~substantially ~~for~~all ~~the Trust; o Implementation~~ of ~~a timely review process by~~ the ~~appropriate~~assets ~~level~~ of ~~management~~Evergreen ofAviation ~~all critical account reconciliations~~ and ~~significant~~its ~~transactions~~domestic subsidiaries, including ~~with~~the ~~such~~assets ~~review~~of ~~process~~the toTrust. ~~include~~The aIndenture ~~reasonableness~~Notes ~~check~~are offully ~~financial statements~~ and ~~investigation~~unconditionally guaranteed, ofboth ~~unusual~~jointly orand ~~significant~~severally, ~~fluctuations~~by inHoldings, ~~account~~substantially ~~balances~~all ~~from period to period; and o Formation~~ of ~~a committee to handle decisions relating to the Trust'~~Evergreen Aviation’s ~~disclosure controls~~subsidiaries, ~~including review of quarterly~~ and ~~annual~~the ~~filings~~Trust.

~~Management’s~~ The Indenture ~~Response~~Notes impose certain restrictions on Evergreen Aviation and ~~Plan~~its ~~for~~restricted subsidiaries, ~~Improvement~~including the Trust. Such restrictions include, but are not limited to, restrictions on the ability to:

~~Management~~• ~~responded~~incur toadditional ~~the~~debt ~~recommendations~~or ~~contained~~create inliens; ~~the~~• ~~letter to~~pay ~~the~~dividends ~~Disclosure~~or ~~Committee~~acquire byshares ~~developing~~of acapital ~~plan~~stock; to• ~~implement~~make ~~the~~payments ~~following~~on ~~controls~~subordinated ~~and procedural~~debt ~~enhancements~~or ~~which~~make ~~are~~investments; ~~designed~~• tomake ~~improve~~distributions ~~the~~from ~~Trust’s~~restricted ~~system~~subsidiaries; • issue or sell capital stock of ~~disclosure~~ ~~controls:~~restricted subsidiaries; • issue guarantees; • sell or exchange assets, or make capital expenditures; • enter into transactions with shareholders and affiliates; and • effect mergers and other changes of control.

o Secured Credit ~~Additional~~Facility ~~accounting~~— ~~staff~~On ~~will~~May be13, ~~trained~~2004, inEvergreen ~~the~~Aviation ~~operations of~~ and ~~nature~~certain of its ~~accounting~~subsidiaries, ~~for~~including the Trust;, oentered Oninto a ~~monthly~~three-year ~~basis,~~senior ~~the~~secured ~~appropriate~~credit facility ~~level~~(the of“Secured ~~management~~Credit ~~will~~Facility”) ~~conduct~~with aWells ~~review~~Fargo Foothill, ofInc. ~~all critical account reconciliations~~ and ~~significant~~Ableco ~~transactions,~~Finance ~~and~~LLC ~~such review process will include~~(collectively, ~~but~~“the ~~not~~Wells beFargo ~~limited~~Lenders”). The ~~to,~~Secured aCredit ~~reasonableness~~Facility ~~check~~consists of ~~financial~~two ~~statements~~loans ~~and~~– ~~investigation~~a of$50.0 ~~unusual~~million orterm ~~significant~~loan ~~fluctuations~~and ina $50.0 ~~account~~million ~~balances~~revolving ~~from~~loan. ~~period~~The toSecured ~~period;~~Credit ~~and~~Facility ois Asecured ~~committee~~by ~~will~~substantially beall of ~~formed~~the toassets ~~handle~~of ~~decisions~~Evergreen ~~relating~~Aviation toand ~~the~~its ~~Trust's~~domestic ~~disclosure controls~~subsidiaries, including ~~review~~the assets of the ~~quarterly and annual filings~~Trust.

As of ~~November~~May 3031, ~~2004~~2005, the ~~Trust~~outstanding ~~has~~balance ~~made~~of the ~~following~~Secured ~~progress~~Credit inFacility was $74.0 million. Taking into consideration the ~~implementation~~Minimum Availability Requirement (as defined below), as of ~~its~~May 31, 2005, Evergreen ~~plan:~~Aviation’s availability to obtain additional advances under the Secured Credit Facility was $0.8 million.

o Evergreen Aviation Atand ~~least~~its ~~one~~restricted ~~additional~~subsidiaries, ~~accountant~~including ~~has~~the ~~been~~Trust, ~~trained~~are insubject ~~the~~to ~~operations~~various restrictive ofcovenants ~~and~~under ~~nature~~the ofSecured ~~accounting~~Credit ~~for~~Facility. ~~the~~In ~~Trust;~~addition oto ~~The~~other ~~Trust~~requirements isthat ~~implementing~~are ~~procedures~~set ~~whereby~~forth in the covenants, onEvergreen aAviation and ~~monthly~~its ~~basis~~restricted subsidiaries, anincluding ~~independent~~the ~~member~~Trust, ofare ~~senior~~required ~~management~~to ~~will~~maintain: ~~conduct~~i) aan undrawn ~~review~~availability of ~~all~~not ~~critical~~less ~~account~~than ~~reconciliations~~$5.0 ~~and~~million ~~significant~~on ~~transactions~~the revolving loan (the "Minimum Availability Requirement"), ~~with~~ii) ~~such~~minimum thresholds ~~review~~with ~~process~~respect to ~~include~~certain consolidated and non-consolidated earnings before interest, ~~but~~taxes, ~~not~~depreciation beand ~~limited~~amortization to(“EBITDA”), and iii) a ~~reasonableness~~minimum ratio ~~check~~with ofrespect ~~financial~~to ~~statements~~fixed ~~and~~charge ~~investigation~~coverages. ofIn ~~unusual~~addition, orEvergreen ~~significant~~Aviation ~~fluctuations~~and inits restricted ~~account~~subsidiaries, ~~balances~~including ~~from~~the ~~period~~Trust, have agreed to ~~period;~~limit ~~and~~the oamount Aof ~~Disclosure~~capital expenditures ~~Committee~~that ~~has~~may ~~been~~be ~~formed.~~made ~~The~~in ~~Disclosure~~any ~~Committee~~fiscal ~~will~~year ~~meet~~to $75.0 million, of which at least ~~once~~$10.0 million ~~every~~must ~~quarter,~~be ~~and~~financed ~~more~~from ~~frequently~~sources ifother ~~required,~~than tothe ~~review,~~Secured ~~discuss,~~Credit ~~and~~Facility. ~~handle~~As ~~decisions~~of ~~relating~~May to31, ~~the~~2005, ~~Trust's~~Evergreen ~~disclosure~~Aviation ~~controls~~ and ~~the~~its subsidiaries ~~Trust’s~~were ~~filings~~in compliance with ~~the~~such ~~SEC~~covenants.

Table of Contents

InNotice ~~addition,~~and ~~the~~Waiver ~~Trust~~of Specified ~~has~~Events ~~engaged~~of aDefault ~~registered~~— ~~public~~On ~~accounting~~June ~~firm~~1, ~~which~~2005, ~~is not affiliated with~~ the ~~Trust's independent~~Wells ~~registered~~Fargo ~~public~~Lenders ~~accounting~~notified ~~firm,~~Evergreen toAviation ~~perform~~that the ~~internal~~Wells ~~audit~~Fargo ~~function~~Lenders ~~(the~~believed ~~"Internal~~that ~~Auditor").~~Evergreen ~~The~~Aviation ~~Internal Auditor has conducted, and will continue to conduct,~~was ~~internal~~in ~~audit~~violation ~~procedures~~of ~~and~~certain ~~tests~~covenants of ~~internal~~the ~~controls~~Secured toCredit ~~ensure~~Facility ~~that~~ (the ~~Trust's~~"Specified ~~controls~~Events ~~and procedures for transactional recording, transactional review, segregation~~ of ~~duties~~Default"), ~~and~~as ~~review of significant transactions at the appropriate level of management are effective and being followed.~~follows:

~~Management believes~~i) ~~that~~occurrence of a default at the ~~disclosure~~final ~~controls~~maturity, ~~and~~on ~~procedures~~April ~~which~~29, ~~have~~2005, ~~been~~of ~~implemented~~the ~~are addressing~~obligations under the ~~two~~FINOVA ~~identified~~Note; ~~deficiencies~~ii) infailure to maintain insurance on the ~~Trust’s~~Collateral ~~system~~(as ofdefined ~~disclosure controls.~~in ~~Management~~the ~~will,~~Secured onCredit anFacility); ~~ongoing~~iii) ~~basis,~~making ~~further~~an ~~monitor~~unpermitted investment toward the ~~implementation~~purchase of ~~the plan~~two toBoeing ~~improve~~747 airplanes (the ~~effectiveness~~"Designated 747s"); and iv) unauthorized use of the ~~Trust’s~~proceeds ~~disclosure~~from ~~controls~~advances ~~and~~under ~~procedures, and~~the ~~will~~Secured ~~take~~Credit ~~action~~Facility asto ~~appropriate.~~renovate the Designated 747s.

~~Internal~~ The ~~Control~~Wells ~~Over~~Fargo ~~Financial~~Lenders ~~Reporting~~further notified Evergreen Aviation that, as a result of the Specified Events of Default, the Wells Fargo Lenders had elected to charge the default rate of interest, which, as set forth in the Secured Credit Facility, is a per annum rate equal to 2 percentage points above the per annum rate otherwise applicable. The default rate of interest was charged from April 29, 2005, the date on which the Wells Fargo Lenders asserted that a default had occurred under the FINOVA Note, until June 14, 2005, the date on which the Wells Fargo Lenders, by execution of the Amendment Number Two (as defined below) waived the Specified Events of Default. At April 29, 2005, the per annum rates of interest on the Secured Credit Facility ranged from 6.09% to 8.75%.

~~There~~ On June 14, 2005, ~~have~~Evergreen ~~not~~Aviation, ~~been~~its ~~any~~subsidiaries ~~changes~~that inare co-borrowers under the ~~Trust’s~~Secured ~~internal~~Credit ~~control~~Facility, ~~over~~and ~~financial~~the ~~reporting (~~Trust, as ~~such~~co-guarantor, ~~term~~entered into isan ~~defined~~Amendment inNumber ~~Rules~~Two ~~13a-15(f)~~and Waiver to Loan and ~~15d-15(f)~~Security ~~under~~Agreement (the ~~Exchange~~"Amendment ~~Act~~Number Two") ~~during~~with the Wells Fargo Lenders whereby the ~~fiscal~~Wells ~~quarter~~Fargo toLenders ~~which~~agreed ~~this~~to ~~report~~waive ~~relates~~the ~~that~~Specified ~~have~~Events ~~materially~~of ~~affected~~Default, orand ~~are~~the Wells Fargo Lenders and ~~reasonably~~Evergreen ~~likely~~Aviation agreed to ~~materially~~amend ~~affect,~~ the ~~Trust’s~~Secured ~~internal~~Credit ~~control~~Facility ~~over~~to ~~financial~~allow Evergreen Aviation and its subsidiaries to maintain only ~~reporting.~~all-risk ground insurance coverage for aircraft that have been grounded and taken out of service.

18 Amendment Number Three to Secured Credit Facility. On July 11, 2005, Evergreen Aviation, its subsidiaries that are co-borrowers under the Secured Credit Facility, and the Trust, as co-guarantor, entered into an Amendment Number Three and Consent (the "Amendment Number Three") with the Wells Fargo Lenders. Amendment Number Three amends the Secured Credit Facility to allow Evergreen Airlines to i) lease the Designated 747s from Ventures Acquisition Company LLC ("Ventures Acquisition Company"), an affiliated entity that is wholly-owned by one of our beneficiaries, Mr. Smith, and ii) reimburse Ventures Acquisition Company for certain out-of-pocket transaction costs incurred by Ventures Acquisition Company in connection with the purchase of the Designated 747s. In exchange, Mr. Smith pledged to Wells Fargo Foothill, Inc., as administrative agent and for the benefit of the Wells Fargo Lenders, all of his rights, title, and interest in Ventures Acquisition Company.

~~Table~~ Risk of Default on Debt Obligations — Substantially all of ~~Contents~~the assets of Evergreen Aviation and its subsidiaries, including the Trust, are pledged as collateral under Evergreen Aviation’s various debt agreements. Furthermore, the Indenture Notes and the Secured Credit Facility both contain cross-default provisions whereby certain events of default under one or more of the debt obligations of Evergreen Aviation or its subsidiaries, including the Trust, will result in an event of default under either, or both, the Indenture Notes and the Secured Credit Facility. In the event that such defaults are not cured or waived, the Trust is at risk that the Trust’s obligations under either, or both, the Indenture Notes and the Secured Credit Facility will be accelerated.

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Distributions to Beneficiaries

We previously held a note receivable from one of our beneficiaries. In lieu of cash distributions to the beneficiary, the note receivable was reduced by in-kind distributions of the beneficiary's share of the Trust's net income. During the three months ended May 31, 2004, the note receivable was reduced by $0.3 million of in-kind distributions from the beneficiary's share of the Trust's net income. As of August 31, 2004, the note receivable was repaid in full.

We have not made any other distributions to the trust beneficiaries and, until the trust is terminated, we do not anticipate making any such distributions.

Table of Contractual Obligations

The following table summarizes our contractual obligations as of May 31, 2005, excluding any obligations which may arise as a result of our guarantees of indebtedness of Evergreen Aviation:


Contractual Obligations

	Payments due by End of Fiscal Year

*(in millions)*		2006	2007-2008		2009-2010		After 2010			Total

Current maturities of debt obligations	$	2.0	$	-	$	-	$	-	$	2.0


ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Interest Rate Risk

With respect to interest rate risks at May 31, 2005, we had debt of $2.0 million at a fixed annual interest rate of 10.44%. A 1% increase in interest rates would decrease the fair market value of our fixed rate debt by approximately $4,000. We have not entered into any obligations for trading purposes. We are not exposed to foreign currency exchange rate risks or commodity price risks. We have not entered into any futures or swap contracts at this time.

Concentration of Credit Risks – Financial instruments that potentially subject the Trust to credit risk are primarily accounts receivable. Accounts receivable derived from operations are the same as collateral for debt to FINOVA Capital Corporation. See "Note 3 - Long-Term Debt Obligations" in Item 8 below. The Trust operates for, and grants credit to its customer Evergreen Airlines.

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ITEM 4.	CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Trust's management, with the participation of the Trust's principal executive officer and principal financial officer, has evaluated the effectiveness of the Trust's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the Trust's principal executive officer and principal financial officer have concluded that, as of the end of such period, the Trust's disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Trust in the reports that it files or submits under the Exchange Act, and are effective in ensuring that information required to be disclosed by the Trust in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including the Trust's principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

During fiscal year 2005, the Trust retained a certified public accounting firm (the "Internal Audit Consultants") to provide certain internal audit services to the Trust. The Internal Audit Consultants interfaced with the registered independent public accounting firm during both the audit of the Trust's financial statements for the fiscal year ended February 28, 2005, and the period covered by this report, and have performed analyses of major accounts included in the Trust's financial statements. Although the Trust was not able to file its Annual Report on Form 10-K for the fiscal year ended February 28, 2005 on the original due date, the Trust believes that initiating the internal audit function improved the Trust's effectiveness in recording, processing, summarizing and reporting financial information. In addition, the Trust believes that the internal audit function, and the account analyses performed at, and for, the fiscal year ended February 28, 2005 and the period covered by this report, will positively affect the Trust's internal control over financial reporting, and enhance the Trust's ability to meet its future reporting requirements in a timely manner.

Changes in Internal Control Over Financial Reporting

There have not been any changes in the Trust's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended May 31, 2005 that have materially affected, or are reasonably likely to materially affect, the Trust's internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 61. ~~EXHIBITS.~~LEGAL PROCEEDINGS

~~(a) A list of exhibits that~~ We are ~~filed~~not ascurrently ~~part~~involved ~~of,~~in orany ~~incorporated~~legal ~~by reference into, this Quarterly Report on Form 10-Q are set forth below~~proceedings.

ITEM 6.

EXHIBITS


Exhibit No.		Description of Document

31.1		Certification of Principal Executive Officer pursuant to Exchange Act Rule 13a-14(a).
10.1	*	Amendment Number Three and Consent, dated July 11, 2005, by and between the lenders identified on the signature pages thereof (the "Lenders"), Wells Fargo Foothill, Inc., as the arranger and administrative agent for the Lenders, and Evergreen International Aviation, Inc. and each of its Subsidiaries that are signatories thereto, as Borrowers.
31.2		Certification of Principal Financial Officer pursuant to Exchange Act Rule 13a-14(a).
31.1	*	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
31.2	*	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	*	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	*	Filed herewith.

1922

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TRUST CREATED FEBRUARY 25, 1986
(Registrant)

Date: January 18, 2005 /s/ John A. Irwin John A. IrwinPrincipal Executive Officer


Date: July 15, 2005	/s/ John A. Irwin John A. Irwin Principal Executive Officer


Date: July 15, 2005	/s/ Lawrence J. Bolton Lawrence J. Bolton Principal Financial Officer

~~Date: January 18, 2005 /s/ Lawrence J. Bolton Lawrence J. BoltonPrincipal Financial Officer~~22

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EXHIBIT INDEX


Exhibit No.		Description of Document

31.1		Certification of Principal Executive Officer pursuant to Exchange Act Rule 13a-14(a).
10.1	*	Amendment Number Three and Consent, dated July 11, 2005, by and between the lenders identified on the signature pages thereof (the "Lenders"), Wells Fargo Foothill, Inc., as the arranger and administrative agent for the Lenders, and Evergreen International Aviation, Inc. and each of its Subsidiaries that are signatories thereto, as Borrowers.
31.2		Certification of Principal Financial Officer pursuant to Exchange Act Rule 13a-14(a).
31.1	*	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
31.2	*	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	*	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	*	Filed herewith.

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TRUST CREATED FEBRUARY 25, 1986

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NOTE 2 — AIRCRAFT

9Notice and Waiver of Specified Events of Default under Secured Credit Facility

PART II. OTHER INFORMATION

SIGNATURES

EXHIBIT INDEX

Filing Compare · TRUST CREATED FEBRUARY 25 1986