UNITED STATES
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~~November 3130, 2005 Commission File Number: 333-109667-01 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)

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

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)

AsIndicate ofby ~~July~~check ~~15,~~mark ~~2005,~~whether the ~~there~~registrant ~~were~~is ~~two~~a ~~beneficial~~shell ~~interests~~company (as defined in Rule 12b-2 of the ~~registrant~~Exchange ~~outstanding~~Act). Yes ( ) No (X)

As of January 17, 2006, there were two beneficial interests of the registrant outstanding.

PAGE

PART I.

FINANCIAL INFORMATION

Item 1.	Financial Statements	3
Item 2.	Management's Discussion and Analysis of Financial Condition ~~and Results of Operation~~	612
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
	and Results of Operations
Item 4.	Controls and Procedures	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	24

PART II.

OTHER INFORMATION

Item 1.	Legal Proceedings	2126
Item 6.	Exhibits	21
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities	28
	and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Submission of Matters to a Vote of Security Holders	28
Item 5.	Other Information	28
Item 6.	Exhibits	28

SIGNATURES 2229

EXHIBIT INDEX 2330

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PART I. FINANCIAL INFORMATION


ITEM 1.	FINANCIAL STATEMENTS.

BALANCE SHEETS At ~~May~~November 3130, 2005 and February 28, 2005(in thousands)

		May 31, 2005
		November 30, 2005
		(unaudited)			February 28, 2005
ASSETS
Aircraft and equipment, net	$	11,~~639~~452		$	11,732
Capitalized loan acquisition costs		17			-
Due from affiliate		639			639
Total assets	$	12,~~295~~091		$	12,371
LIABILITIES AND TRUST EQUITY
Current liabilities:
Accrued liabilities	$	18-		$	29
Current portion of long-term debt		~~2,035~~-			3,370
Total current liabilities		~~2,053~~-			3,399
Deferred rental income		56,~~457~~394			5,178
Total liabilities		76,~~510~~394			8,577
Trust equity		2629,~~004~~513			24,327
Less: Account receivable from affiliate		(21,219	)		(20,533	)
Less: Receivable from affiliate		(23,816	)		(20,533	)
Total trust equity		45,~~785~~697			3,794
Total liabilities and trust equity	$	12,~~295~~091		$	12,371

See notes to unaudited financial statements.

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

		For the Three Months Ended May 31,
		For the Three Months						For the Nine Months
		2005			2004
		Ended November 30,						Ended November 30,
Operating revenue:
		2005			2004			2005			2004
Rental income from affiliate	$	1,846		$	1,880
Operating revenue:
(Expense) other income
Rental income from affiliate	$	1,874		$	1,881		$	5,595		$	5,642
Depreciation		(93	)		(93	)
(Expense) other income:
Loan acquisition costs		(8	)		-
Depreciation		(93	)		(94	)		(280	)		(280	)
Interest expense		(68	)		(197	)
Amortization of loan acquisition costs		(4	)		-			(25	)		-
Interest income from affiliate		-			6
Interest expense		(4	)		(188	)		(104	)		(554	)
Net income		1,677			1,596
Interest income from affiliate		-			-			-			9
Trust equity at beginning of period		24,327			18,409
Net income		1,773			1,599			5,186			4,817
Less: Distributions to beneficiaries		-			(302	)
Trust equity at beginning of period		27,740			21,019			24,327			18,409
Trust equity at end of period	$	26,004		$	19,703
Less: Distributions to beneficiaries		-			-			-			(608	)
Trust equity at end of period	$	29,513		$	22,618		$	29,513		$	22,618

See notes to unaudited financial statements.

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

		For the Three Months Ended May 31,
		For the Nine MonthsEnded November 30,
		2005			2004
Cash flows from operating activities:
Net income	$	15,~~677~~186		$	14,~~596~~817
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization		93305			93280
Account receivable from affiliate		(686	)		(711	)
Receivable from affiliate		(3,283	)		(2,605	)
Accrued liabilities		(1129	)		-95
Due from affiliate		-			(3	)
Due to (from) affiliate		-			(3	)
Deferred rental income		~~279~~1,216			~~245~~734
Net cash provided by operating activities		13,~~352~~395			13,~~220~~318
Cash flows from investing activities:
Note receivable from affiliate		-			~~300~~604
Net cash provided by investing activities		-			~~300~~604
Cash flows from financing activities:
Payments on long-term debt		(13,~~335~~370	)		(13,~~218~~314	)
Capitalized loan acquisition costs		(1725	)		-
Distributions to beneficiaries		-			(~~302~~608	)
Net cash used in financing activities		(13,~~352~~395	)		(13,~~520~~922	)
Net decrease in cash		-			-
Cash, beginning of period		-			-
Cash, end of period	$	-		$	-

See notes to unaudited financial statements.

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NOTES TO UNAUDITED FINANCIAL STATEMENTS

NOTE 1 – BASIS FOR PRESENTATION

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.

The Trust provides aircraft leasing services to its sole customer, Evergreen International Airlines, Inc. ("Evergreen Airlines"), a wholly-owned subsidiary of Evergreen Aviation.

The interim financial statements included in 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.

In the opinion of management, the interim financial statements included in this quarterly report contain all adjustments necessary to present fairly the financial position, results of operations, and cash flows of the Trust for the periods indicated. Such adjustments, other than adjustments that have been separately disclosed, are of a normal recurring nature. The interim financial statements included in this report should be read in conjunction with our ~~consolidated~~ financial statements and the accompanying notes that were included in our Annual Report on Form 10-K for the fiscal year ended February 28, 2005, which was filed with the SEC on June 14, 2005.

RECENT ACCOUNTING PRONOUNCEMENT

In January 2003, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 46 ("FIN 46"), Consolidation of Variable Interest Entities - An Interpretation of ARB No.51 Consolidated Financial Statements, ~~and~~which was subsequently revised in December 2003, with the issuance of FIN 46-R. The interpretation addresses how variable interest entities are to be identified and how an enterprise assesses its interests in a variable interest entity to decide whether to consolidate that entity. The Interpretation also requires existing unconsolidated variable interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risks among the parties involved. The Trust's parent company, Evergreen Aviation, adopted FIN 46-R as of the period ended May 31, 2005. Based upon their assessment of the impact of FIN 46-R on Evergreen Aviation and the Trust, management concluded that the Trust is not the primary beneficiary of any variable interest entities. The adoption of FIN 46-R by Evergreen Aviation did not have an impact on the Trust's financial statements.

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NOTE 2 – LONG-TERM DEBT OBLIGATIONS

The Trust's long-term debt as of ~~May~~November 3130, 2005 and February 28, 2005 consisted of the following:

(in thousands)			~~May~~November 3130, 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	$	-		$	-

In May 1997, we entered into a $30.0 million Secured Loan Agreement with FINOVA Capital Corporation (the "FINOVA Note")., ~~The~~with ~~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. The FINOVA Note was secured by means of a first priority security interest granted to FINOVA in the Trust Boeing 747 and the three DC-9 aircraft owned by the Trust.

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~~extended 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~~were scheduled through the extended maturity date, resulting in a full amortization of the remaining outstanding principal balance. ~~All~~In September 2005, the outstanding principal and accrued, ~~but~~interest ~~unpaid~~of ~~interest~~the FINOVA Note was paid in full, ~~will~~and beFINOVA ~~due~~has ~~upon~~released ~~maturity~~its security interest in the aircraft.

The FINOVA Note is secured by means of a first priority security interest granted to FINOVA in one Boeing 747 aircraft and three McDonnell Douglas DC-9 ("DC-9") aircraft owned by the Trust.

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NOTE 3 – RELATED PARTY TRANSACTIONS

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.

Rental Income from Affiliate – The Trust leases its owned aircraft to Evergreen Airlines, an affiliate of the Trust. During each of the three-month ~~months~~periods ended ~~May~~November 3130, 2005 and November 30, 2004, the Trust recognized rental ~~revenue~~income from affiliate in the amount of $1.89 million,. During aseach ~~compared~~of tothe ~~$1.9~~nine-month ~~million~~periods ofended ~~rental~~November ~~revenue~~30, ~~recognized~~2005 ~~during~~and November 30, 2004, the ~~three~~Trust ~~months~~recognized ~~ended~~rental ~~May~~income ~~31,~~from affiliate ~~2004~~in the amount of $5.6 million.

Deferred Rental Income – The monthly rent obligation of Evergreen Airlines incrementally increases throughout the term of the aircraft lease. However, the Trust recognizes rental revenue 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~~November 3130, 2005 and February 28, 2005, ~~the~~ the balances of deferred rental income were $56.4 million and $5.2 million, respectively.

~~Account~~ Receivable from Affiliate – In partial satisfaction of its obligations under the aircraft lease, Evergreen Airlines ~~pays~~paid 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~~were 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 ~~May~~November 3130, 2005 and February 28, 2005, the ~~amounts of~~ receivable from affiliate ~~were~~was $2123.28 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 a reduction to trust equity.

~~Note Receivable~~Due from Affiliate – ~~Until~~The ~~August~~line ~~31,~~item ~~2004,~~"Due ~~the Trust held a note receivable~~ from ~~one~~affiliate" ~~of its~~on ~~beneficiaries. During~~ the ~~three~~Trust's ~~months~~balance ~~ended~~sheets ~~May~~represents ~~31,~~certain ~~2004,~~accounts ~~the note~~ receivable ~~was~~from Evergreen ~~reduced~~Aviation byand ~~$0.3~~its ~~million~~subsidiaries ofthat ~~in-kind~~have ~~distributions from~~accrued ~~that~~over ~~beneficiary's~~time. As ~~share~~ of ~~the~~November ~~Trust's~~30, ~~net~~2005 ~~income.~~and AsFebruary ~~of August 31~~28, ~~2004~~2005, the ~~note~~balances ~~receivable~~of ~~was~~"Due from ~~repaid~~affiliate" inwere ~~full~~$0.6 million.

~~Due~~Note Receivable from Affiliate – ~~The~~On the Trust's statement of cash flows for the period ended November 30, 2004, the line item "~~Due~~Note receivable from affiliate" onreflects ~~the~~$0.6 ~~Trust's~~million ~~balance~~of ~~sheets~~in-kind ~~represents~~distributions ~~certain~~that ~~accounts~~were ~~receivable~~applied ~~from Evergreen~~against ~~Aviation~~the ~~and~~outstanding balance ~~its~~of ~~subsidiaries~~a ~~that~~note ~~have~~receivable ~~accrued~~from ~~over~~an ~~time~~affiliate beneficiary. AsThe in-kind distributions came from the affiliate beneficiary's share of ~~May~~the ~~31,~~Trust's ~~2005~~net ~~and~~income. ~~February~~As 28of November 30, ~~2005~~2004, the ~~balances~~note ofreceivable ~~"Due from~~was ~~affiliate"~~repaid ~~were~~in $0full.~~6 million.~~

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NOTE 4 – TRUST AS CO-GUARANTOR OF EVERGREEN AVIATION DEBT OBLIGATIONS

The Trust, along with substantially all of the subsidiaries of Evergreen Aviation, is a joint and several co-guarantor of the Indenture Notes (see "Indenture Notes" below) and the Secured Credit Facility (see "Secured Credit Facility" below). Substantially all of the Trust's assets are pledged as collateral to secure payment of 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) Law Debenture Trust Company of New York, as successor trustee to J.P. Morgan Trust Company, N.A., as successor trustee to Bank One, N.A., as trustee.

The Indenture Notes bear interest 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~~November 1514, 2005. The next payment of accrued interest in the amount of $12.9 million will be due and payable on ~~November~~May 15, ~~2005~~2006.

The Indenture Notes are secured by a second priority lien, subject to certain permitted liens, on substantially all of the assets of Evergreen Aviation and its domestic subsidiaries, including the assets of the Trust. The Indenture Notes are fully and unconditionally guaranteed, both jointly and severally, by Holdings, substantially all of the subsidiaries of Evergreen Aviation, and the Trust.

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:

•		incur additional debt or create liens;
•		pay dividends 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.

Secured Credit Facility

On May 13, 2004, Evergreen Aviation and certain of its subsidiaries, including the Trust, entered into a three-year senior secured credit facility (the “Secured Credit Facility”) with Wells Fargo Foothill, Inc. and CapitalSource Finance LLC, as successor-in-interest to all of Ableco Finance LLC's interest in the Secured Credit Facility and as successor-in-interest to Wells Fargo Foothill, Inc.'s interest in the Term Loan (as defined herein), (collectively, “the Wells Fargo Lenders”). The Secured Credit Facility consists of two loans – a $50.0 million term loan (the "Term Loan") and a $50.0 million revolving loan (the "Revolving Loan"). The Secured Credit Facility is secured by substantially all of the assets of Evergreen Aviation and its domestic subsidiaries, including the assets of the Trust.

As of ~~May~~November 3130, 2005, the outstanding balance of the Secured Credit Facility was $7457.01 million. Taking into consideration the Minimum Availability Requirement (as defined below), as of ~~May~~November 3130, 2005, Evergreen Aviation’s availability to obtain additional advances under the Secured Credit Facility was $023.85 million.

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Evergreen Aviation and its restricted subsidiaries, including the Trust, are subject to various restrictive covenants under the Secured Credit Facility. In addition to other requirements that are set forth in the covenants, Evergreen Aviation and its restricted subsidiaries, including the Trust, are required to maintain: i) an undrawn availability of not less than $5.0 million on the ~~revolving~~Revolving ~~loan~~Loan (the "Minimum Availability Requirement"), ii) minimum thresholds with respect to certain consolidated and non-consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”), and iii) a 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 than the Secured Credit Facility. As of ~~May~~November 3130, 2005, Evergreen Aviation and its subsidiaries were in compliance with such covenants.

Notice and Waiver of Specified Events of Default under Secured Credit Facility. On June 1, 2005, the Wells Fargo Lenders notified Evergreen 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:

Oni) ~~June~~occurrence 1,of ~~2005,~~a default at the ~~Wells Fargo~~final ~~Lenders~~maturity, ~~notified~~on ~~Evergreen~~April ~~Aviation~~29, ~~that~~2005, of the ~~Wells~~obligations ~~Fargo~~under ~~Lenders~~the ~~believed~~FINOVA ~~that~~Note; ~~Evergreen~~ii) ~~Aviation~~failure ~~was in~~to ~~default~~maintain ofinsurance ~~certain~~on ~~covenants~~the ofCollateral (as defined in the Secured Credit Facility); iii) making an unpermitted investment toward the purchase of two Boeing 747 airplanes (the "~~Specified~~VAC ~~Events~~Boeing ~~of Default~~747s"),; asand ~~follows:~~iv) unauthorized use of the proceeds from advances under the Secured Credit Facility to renovate the VAC Boeing 747s.

i) The ~~occurrence~~Wells ofFargo aLenders ~~default~~further atnotified ~~the~~Evergreen ~~final~~Aviation ~~maturity~~that, onas ~~April~~a ~~29,~~result ~~2005,~~ of the ~~obligations~~Specified ~~under~~Events of Default, the ~~FINOVA~~Wells Fargo ~~Note;~~Lenders ~~ii)~~had ~~failure~~elected to ~~maintain~~charge ~~insurance~~the ondefault ~~the~~rate ~~Collateral~~of (interest, which, as ~~defined~~set forth in the Secured Credit Facility);, ~~iii)~~is ~~making~~a anper ~~unpermitted~~annum rate ~~investment~~equal ~~toward~~to 2 percentage points above the ~~purchase~~per annum rate otherwise applicable. The default rate of ~~two~~interest ~~Boeing~~was ~~747~~charged from ~~airplanes~~April (29, 2005, the ~~"Designated~~date ~~747s");~~on ~~and~~which ivthe 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) ~~unauthorized~~waived ~~use~~the Specified Events of Default. At April 29, 2005, the ~~proceeds~~per ~~from~~annum ~~advances~~rates ~~under~~of interest on the Secured Credit Facility toranged ~~renovate~~from ~~the~~6.09% ~~Designated~~to ~~747s~~8.75%.

~~The~~Amendment ~~Wells~~Number ~~Fargo~~Two ~~Lenders~~to ~~further~~Secured ~~notified~~Credit ~~Evergreen~~Facility. ~~Aviation~~On ~~that,~~June ~~as a result of the Specified Events of Default~~14, ~~the Wells~~2005, ~~Fargo~~Evergreen ~~Lenders had elected to charge the default rate of interest~~Aviation, ~~which,~~its assubsidiaries ~~set~~that ~~forth~~are inco-borrowers under the Secured Credit Facility, isand athe ~~per~~Trust, ~~annum rate~~as ~~equal~~co-guarantor, toentered into 2an ~~percentage~~Amendment ~~points~~Number ~~above~~Two ~~the~~and ~~per~~Waiver ~~annum~~to ~~rate~~Loan ~~otherwise~~and ~~applicable.~~Security ~~The~~Agreement ~~default~~(the ~~rate~~"Amendment ofNumber ~~interest~~Two") ~~was~~with ~~charged from April 29, 2005,~~ the ~~date~~Wells onFargo Lenders ~~which~~whereby the Wells Fargo Lenders ~~asserted~~agreed ~~that~~to awaive ~~default had occurred under~~ the ~~FINOVA~~Specified ~~Note,~~Events ~~until June~~of 14Default, ~~2005,~~and the ~~date on which the~~ Wells Fargo Lenders, byand Evergreen ~~execution~~Aviation ofagreed ~~the~~to ~~Amendment~~amend ~~Number~~the ~~Two~~Secured ~~(as~~Credit ~~defined~~Facility ~~below)~~to ~~waived~~allow ~~the Specified~~Evergreen ~~Events~~Aviation ofand ~~Default.~~its Atsubsidiaries ~~April~~to ~~29,~~maintain ~~2005,~~only all-risk ~~the~~ground ~~per~~insurance ~~annum~~coverage ~~rates~~for ofaircraft ~~interest~~that onhave ~~the~~been ~~Secured~~grounded ~~Credit~~and ~~Facility~~taken ~~ranged~~out ~~from~~of 6service.~~09% to 8.75%.~~

On June 14, 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 Two and Waiver to Loan and Security Agreement (the "Amendment Number Two") with the Wells Fargo Lenders whereby the Wells Fargo Lenders agreed to waive the Specified Events of Default, and the Wells Fargo Lenders and Evergreen Aviation agreed to amend the Secured Credit Facility to allow Evergreen Aviation and its subsidiaries to maintain only all-risk ground insurance coverage for aircraft that have been grounded and taken out of service.10

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~~Table~~ 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 VAC Boeing 747s from Ventures Acquisition Company LLC ("Ventures Acquisition Company"), an affiliated entity that is wholly-owned by one of ~~Contents~~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 VAC Boeing 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 (the "VAC Stock Pledge"). However, the maximum amount of Aviation's obligations under the Secured Credit Facility that was secured by the VAC Stock Pledge was limited to an amount not greater than $58 million minus the aggregate amount of all principal, interest and fees owed by Ventures Acquisition Company under VAC's Loan Agreement with Landsbanki Íslands hf., which providing financing for VAC's purchase of the VAC Boeing 747s.

Amendment Number ~~Three~~Four to Secured Credit Facility. On ~~July~~November 1130, 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~~Four ~~and~~to ~~Consent~~Loan and ~~(the~~Security Agreement ("Amendment Number ~~Three~~Four") with the Wells Fargo Lenders. The provisions of Amendment Number ~~Three~~Four ~~amends~~include the following amendments and modifications: i) the deletion and replacement of certain definitions utilized in the Secured Credit Facility; toii) ~~allow~~ the clarification of the principal business operations of Evergreen ~~Airlines~~Aviation toand iits subsidiaries; iii) ~~lease~~ the ~~Designated~~addition ~~747s~~of ~~from~~certain ~~Ventures~~disclosures ~~Acquisition~~and ~~Company~~covenants ~~LLC~~of ~~("Ventures~~compliance ~~Acquisition~~regarding ~~Company"),~~Section an1 of Executive Order 13224 of ~~affiliated~~September ~~entity~~23, ~~that~~2001 isBlocking ~~wholly-owned~~Property byand ~~one~~Prohibiting ofTransactions ~~our~~With ~~beneficiaries~~Persons Who Commit, ~~Mr.~~Threaten ~~Smith~~to Commit, ~~and~~or ~~ii)~~Support ~~reimburse~~Terrorism ~~Ventures~~(66 ~~Acquisition~~Fed. ~~Company~~Reg. ~~for~~49049 ~~certain~~(2001)) ~~out-of-pocket~~(the ~~transaction~~"USA ~~costs~~Patriot ~~incurred~~Act"); byiv) ~~Ventures~~a ~~Acquisition~~modification ~~Company in~~of ~~connection~~the ~~with~~Fixed ~~the~~Charge ~~purchase~~Coverage ofRatio (as defined in the ~~Designated~~Secured ~~747s.~~Credit InFacility) ~~exchange,~~covenant ~~Mr.~~compliance ~~Smith~~requirement; ~~pledged~~and tov) ~~Wells~~Evergreen ~~Fargo~~Aviation ~~Foothill,~~agreed ~~Inc.,~~to ~~as administrative~~cause ~~agent~~the ~~and~~Trust to grant, for the benefit of the Wells Fargo Lenders, a security interest in all of ~~his~~the ~~rights,~~aircraft ~~title~~owned by the Trust. In addition, ~~and~~Amendment Number Four recognizes CapitalSource Finance LLC as the successor-in-interest to all of Ableco Finance LLC's interest in the Secured Credit Facility and as ~~Ventures~~successor-in-interest ~~Acquisition~~to ~~Company~~Wells Fargo Foothill, Inc.'s interest in the Term Loan.

~~Risk~~ Release of VAC Stock Pledge. In connection with the execution of ~~Default~~Amendment onNumber ~~Debt~~Four, ~~Obligations~~and pursuant to a letter dated December 2, 2005, Wells Fargo Foothill, Inc., in its capacity as administrative agent for the Wells Fargo Lenders, (i) terminated the VAC Stock Pledge, (ii) released and discharged Mr. Smith from all obligations under the VAC Stock Pledge, and (iii) released all liens that had been granted by Mr. Smith under the VAC Stock Pledge.

~~Substantially~~Risk ~~all~~ of ~~the assets~~Default ofon ~~Evergreen~~Debt 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. Obligations

11 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 obligations under either, or both, the Indenture Notes and the Secured Credit Facility will be accelerated.

~~Table of Contents~~11

~~ITEM~~Table 2.of ~~MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~Contents

~~CAUTIONARY~~ITEM ~~STATEMENT~~2. ~~REGARDING~~MANAGEMENT'S ~~FORWARD-LOOKING~~DISCUSSION ~~STATEMENTS~~AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~This~~CAUTIONARY ~~Quarterly~~STATEMENT ~~Report~~REGARDING ~~on Form 10~~FORWARD-QLOOKING contains statements, which to the extent they are not recitations of historical fact, constitute "forward-looking statements" as defined in Section 21E of the Securities Exchange Act of 1934, as amended. Statements and assumptions with regard to future revenues, income and cash flows, program performance, the outcome of litigation, and planned dispositions of assets are examples of forward-looking statements. Wherever possible, we have identified these forward-looking statements by words such as "anticipates", "believes", "could", "may", "intends", "estimates", "expects", "projects", and similar phrases.STATEMENTS

~~Forward-looking~~This ~~statements~~Quarterly ~~involve~~Report on Form ~~risks~~10-Q ~~and~~contains ~~uncertainties~~statements, ~~that~~which ~~could~~to ~~cause~~the ~~actual~~extent ~~results~~they toare ~~differ~~not ~~materially~~recitations ~~from~~of historical ~~experience~~fact, orconstitute ~~our~~"forward-looking ~~present expectations.~~statements" ~~The~~as ~~risks~~defined ~~and~~in ~~uncertainties~~Section to21E ~~which~~of ~~our~~the ~~business~~Securities isExchange ~~subject~~Act ~~include~~of 1934, ~~but~~as ~~are~~amended. Statements ~~not~~and ~~limited~~assumptions with regard to future revenues, ~~the~~income ~~risks~~ and ~~uncertainties~~ ~~included under~~cash flows, program performance, the ~~heading~~outcome ~~"Risk~~of ~~Factors~~litigation, ~~Relating~~and toplanned ~~the~~dispositions ~~Trust"~~of inassets ~~our~~are ~~Annual~~examples ~~Report~~of forward-looking onstatements. Wherever ~~Form~~possible, 10we have identified these forward-Klooking ~~for~~statements ~~the~~by ~~fiscal~~words ~~year~~such ~~ended~~as ~~February~~"anticipates", "believes", 28"could", ~~2005. Such~~"may", ~~risks~~"intends", "estimates", "expects", "projects", and ~~uncertainties~~similar ~~include:~~phrases.

• Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or our ~~reliance~~present ~~upon~~expectations. The ~~one~~risks ~~customer,~~and ~~Evergreen~~uncertainties ~~Airlines~~to which our business is subject include, ~~for~~but ~~100%~~are ofnot ~~our~~limited ~~revenue~~to, ~~(see~~the ~~"Our~~risks ~~Sole~~and ~~Customer~~uncertainties included in "Item ~~below);~~1A. •Risk ~~the~~Factors" ~~financing~~of ~~agreements~~Part II of ~~Evergreen~~this ~~Aviation~~quarterly ~~which~~report. ~~include~~For ~~financial~~further ~~covenants~~information ~~that~~regarding ~~impose~~the risks ~~substantial~~and ~~restrictions~~uncertainties ~~upon~~associated ~~us;~~with our business, please see the Trust's other reports and •filings with the ~~age~~SEC, ofincluding, but not limited to, our ~~aircraft~~Annual Report on Form 10-K for the fiscal year ended February 28, 2005.

~~For~~Readers ~~further~~of ~~information~~this ~~regarding~~Quarterly ~~the~~Report ~~risks~~on ~~and~~Form ~~uncertainties~~10-Q ~~associated~~are ~~with~~cautioned ~~our~~not ~~business,~~to ~~please~~place ~~see~~undue reliance on the ~~Trust's~~forward-looking ~~other~~statements ~~reports~~contained ~~and~~herein, ~~filings~~which ~~with~~speak only as of the ~~SEC,~~date ~~including,~~hereof. ~~but not~~We ~~limited~~assume no obligation to, ~~our~~publicly ~~Annual~~update ~~Report~~or onrevise ~~Form~~our 10forward-Klooking ~~for~~statements ~~the~~included ~~fiscal~~in ~~year~~this ~~ended~~report, whether ~~February~~as 28a result of new information, ~~2005~~future events, or otherwise, except as required by law.

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.12

12Table of Contents

~~Table~~BUSINESS ~~of Contents~~OVERVIEW

~~BUSINESS~~ The Trust ~~OVERVIEW~~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 November 30, 1987, as amended on November 30, 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.

~~The Trust~~Our ~~Created~~only ~~February~~source ~~25,~~of ~~1986~~revenue ~~("Trust",~~comes from ~~"we",~~the ~~"us",~~rental orof ~~"our")~~one isBoeing a747 ~~subsidiary~~aircraft ofand ~~Evergreen~~three ~~International~~DC-9 ~~Aviation,~~aircraft ~~Inc.~~to ("Evergreen ~~Aviation")~~ Airlines, ~~which is~~ a wholly-owned subsidiary of ~~Evergreen~~our ~~Holdings~~direct parent company, ~~Inc.~~Evergreen ~~("Holdings")~~Aviation. ~~The~~During ~~Trust was created pursuant to~~ the ~~Trust~~last ~~Agreement,~~three ~~dated~~fiscal ~~as of February 25~~years, ~~1986,~~rental asrevenue ~~amended~~from ~~and~~Evergreen ~~restated~~Airlines ~~pursuant~~accounted tofor ~~the Amended and Restated Trust~~100% ~~Agreement, dated as~~ of ~~August~~our ~~31,~~operating ~~1987,~~revenue. asBecause ~~amended~~all onof ~~August~~our ~~31,~~aircraft ~~1988,~~are ~~and~~under aslease ~~amended and restated pursuant~~ to ~~the~~Evergreen ~~Second Amended and Restated Trust Agreement~~Airlines, ~~dated~~we asdo ofnot ~~September~~have ~~29,~~excess ~~1995,~~capacity. ~~as amended by the First Amendment thereto as of May 8~~In addition, ~~2003,~~because aswe ~~amended~~share by the ~~Second~~same ~~Amendment~~direct ~~thereto~~parent ~~as of January 14~~company, ~~2004, and as amended by~~ the ~~Third~~aircraft ~~Amendment thereto as of May 10, 2004, among~~leasing ~~Evergreen~~activity ~~International~~between ~~Aviation,~~the ~~Inc.~~Trust ~~(an~~and ~~assignee of~~ Evergreen ~~Holdings,~~Airlines ~~Inc.,~~generates ~~as successor to 747, Inc. and King Christian, Inc.) and Mr. Delford M. Smith, as Beneficiaries, and Wilmington Trust Company,~~ not inonly ~~its~~intercompany ~~individual capacity~~transactions, but ~~solely~~also asreceivables ~~Owner Trustee. The~~from ~~Trust assets consist primarily of one Boeing 747 aircraft~~ affiliate and ~~three~~payables ~~McDonnell~~to ~~Douglas DC-9 ("DC-9") aircraft~~affiliate.

~~Our~~In ~~only~~partial ~~source~~satisfaction of ~~revenue comes~~its ~~from~~obligations under the ~~rental~~aircraft oflease, ~~one~~Evergreen ~~Boeing~~Airlines ~~747~~paid ~~aircraft~~to ~~and~~FINOVA ~~three~~Capital ~~DC-9~~Corporation ~~aircraft~~("FINOVA") the tomonthly ~~Evergreen~~installments ~~Airlines,~~due afrom ~~wholly-owned~~the ~~subsidiary~~Trust ofunder ~~our~~the ~~direct~~FINOVA ~~parent company,~~Note ~~Evergreen~~(as ~~Aviation.~~defined ~~During~~in ~~the~~"Capital ~~last~~Resources ~~three~~and ~~fiscal~~Liquidity ~~years,~~- ~~rental~~FINOVA ~~revenue~~Note" ~~from~~below). However, ~~Evergreen~~because ~~Airlines~~the ~~accounted~~amounts ~~for~~of ~~100%~~the ofmonthly ~~our~~debt ~~operating~~installments ~~revenue.~~paid ~~Because~~by ~~all~~Evergreen ofAirlines ~~our aircraft~~ are ~~under~~less ~~lease~~than tothe ~~Evergreen~~amounts ~~Airlines,~~of wethe domonthly ~~not~~rent ~~have~~that ~~excess~~Evergreen ~~capacity.~~Airlines Inwould ~~addition,~~have ~~because~~otherwise wepaid ~~share~~under the ~~same~~lease, ~~direct~~we ~~parent~~have ~~company,~~recorded the ~~aircraft~~accumulated ~~leasing activity~~differences ~~between~~as ~~the~~a ~~Trust~~receivable ~~and~~from ~~Evergreen~~affiliate. ~~Airlines~~See ~~generates~~"Note ~~not~~3 ~~only~~- Related ~~intercompany~~Party ~~transactions,~~Transactions" ~~but~~in ~~also~~Item ~~receivables~~1 ~~from~~of ~~affiliate and~~the ~~payables~~quarterly ~~to affiliate~~report.

InAll ~~partial~~intercompany ~~satisfaction of its~~transactions, ~~obligations~~affiliate ~~under the aircraft lease~~receivables, ~~Evergreen~~and ~~Airlines~~affiliate ~~pays~~payables tobetween ~~FINOVA~~us ~~Capital Corporation ("FINOVA") the monthly installments due from the Trust under the FINOVA Note (as defined in "Capital Resources~~ and ~~Liquidity - FINOVA Note" below). However, because the amounts of the monthly debt installments paid by~~ Evergreen Airlines are ~~less~~eliminated ~~than~~in ~~the~~consolidation ~~amounts~~at of the ~~monthly rent that Evergreen Airlines would~~parent ~~have~~company ~~otherwise paid under the lease, we have recorded the accumulated differences as a receivable from affiliate~~level. ~~See "Note 3 - Related Party Transactions" in Item 1 of the quarterly report.~~

~~All~~Our ~~intercompany~~Sole ~~transactions, affiliate receivables, and affiliate payables between us and Evergreen Airlines are eliminated in consolidation at the parent company level.~~Customer

~~Our~~ Evergreen ~~Sole~~Airlines, ~~Customer~~our sole customer, is a leading provider of worldwide air freight transportation. Evergreen Airlines provides air freight services to a broad base of customers, including the United States Air Force Air Mobility Command, freight forwarders, domestic and foreign airlines, industrial manufacturers, and other government agencies. Evergreen Airlines' diverse customer base and its ability to deploy aircraft to match market conditions gives it the agility to respond to changes in demand for air freight services.

Because Evergreen Airlines, is our ~~sole~~only customer, is aour ~~leading~~ability ~~provider~~to ofgenerate ~~worldwide~~revenue ~~air~~is ~~freight~~dependent ~~transportation.~~ upon Evergreen Airlines' ~~provides~~continued ~~air~~demand ~~freight~~to ~~services~~lease toour aaircraft. Such ~~broad~~demand ~~base~~for ~~of customers,~~leased ~~including~~aircraft is affected by various trends and fluctuations in the ~~United~~markets ~~States~~served ~~Air~~by ~~Force~~Evergreen ~~Air~~Airlines. ~~Mobility~~Changes in ~~Command,~~government ~~freight~~regulations ~~forwarders~~and policies, ~~domestic~~shifts in global economic and ~~foreign~~political ~~airlines~~environments, ~~industrial~~and the emergence of new competition ~~manufacturers,~~are ~~and~~all ~~other~~factors ~~government~~that ~~agencies.~~influence decisions by Evergreen Airlines' ~~diverse~~to ~~customer~~increase ~~base~~or ~~and~~decrease ~~its~~the ~~ability~~number toof ~~deploy~~ aircraft tothat ~~match~~it leases. A ~~market~~decision ~~conditions~~by ~~gives~~Evergreen itAirlines ~~the~~to ~~agility~~terminate toour ~~respond~~aircraft tolease ~~changes~~would inhave ~~demand~~a ~~for~~materially ~~air~~adverse ~~freight~~effect ~~services~~upon us.

Because Evergreen Airlines is our only customer, our ability to generate revenue is dependent upon Evergreen Airlines' continued demand to lease our aircraft. Such demand for leased aircraft is affected by various trends and fluctuations in the markets served by Evergreen Airlines. Changes in government regulations and policies, shifts in global economic and political environments, and the emergence of new competition are all factors that influence decisions by Evergreen Airlines to increase or decrease the number of aircraft that it leases. A decision by Evergreen Airlines to terminate our aircraft lease would have a materially adverse effect upon us.13

13Table of Contents

~~Table~~Trust ~~of Contents~~Beneficiaries

The Trust ~~Beneficiaries~~has two beneficiaries, as follows:

The Trust has two beneficiaries, as follows:

	•	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.

	•	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.

Available Information

~~Available~~ 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.

~~General~~RECENT ~~information~~ACCOUNTING 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.PRONOUNCEMENT

~~RECENT~~ The ~~ACCOUNTING~~accounting pronouncements ~~PRONOUNCEMENT~~adopted during the nine months ended November 30, 2005 did not have an effect on our financial position or results of operations. For a further discussion of recent accounting pronouncements, see "Note 1 - Significant Accounting Policies" in Item 1 of this Quarterly Report.

The accounting pronouncement enacted during the three months ended May 31, 2005 did not have an effect on our financial position or results of operations. For a further discussion of recent accounting pronouncements, see "Note 1 - Significant Accounting Policies" in Item 1 of this Quarterly Report.14

14Table of Contents

~~Table~~RESULTS ofOF ~~Contents~~OPERATIONS FOR THE THREE MONTHS ENDED NOVEMBER 30, 2005 AS COMPARED TO THE THREE MONTHS ENDED NOVEMBER 30, 2004

~~RESULTS~~ The following OFtable ~~OPERATIONS~~sets ~~FOR~~forth ~~THE~~the ~~THREE~~Trust's ~~MONTHS~~results ~~ENDED~~of ~~MAY~~operations ~~31,~~for ~~2005 AS~~the ~~COMPARED~~three TOmonths ~~THE~~ended ~~THREE~~November ~~MONTHS~~30, ~~ENDED~~2005 ~~MAY~~and 31November 30, 2004.

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


Results of Operations (in thousands of dollars)
			For the Three Months
			Ended November 30,

			2005			2004

	Operating revenue:
	Rental income from affiliate	$	1,874		$	1,881

	(Expense) other income:
	Depreciation		(93	)		(94	)
	Amortization of loan acquisition costs		(4	)		-
	Interest expense		(4	)		(188	)
	Interest income		-			-

	Net income		1,773			1,599

	Trust equity at beginning of period		27,740			21,019
	Less: Distributions to beneficiaries		-			-

	Trust equity at end of period	$	29,513		$	22,618

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

Rental income from affiliate – We derive 100% of our operating revenue from the aircraft lease with our affiliate, Evergreen Airlines. During each of the three-month periods ended November 30, 2005 and November 30, 2004, we recognized $1.9 million of rental income from affiliate.

~~Rental income from~~Depreciation ~~affiliate~~ – WeDuring ~~derive~~each ~~100%~~ of ~~our operating revenue from~~ the ~~aircraft lease with our affiliate, Evergreen Airlines.~~three-month ~~During~~periods ~~the three months~~ ended ~~May~~November 3130, 2005, weand ~~recognized rental~~November ~~income~~30, ~~from~~2004, ~~affiliate~~depreciation ofexpense ~~$1.8~~on ~~million,~~our aircraft aswas ~~compared~~approximately to $10.91 million ofper ~~rental revenue recognized during the three months ended May 31, 2004~~period.

~~Depreciation~~Amortization of loan acquisition costs – ~~During~~Amortization ~~each~~ of loan acquisition costs during the three~~-month~~ ~~periods~~months ended ~~May~~November 3130, 2005 ~~and~~was ~~May~~$4,000, 31as compared to $0 of expense during the three months ended November 30, 2004, ~~depreciation~~resulting in a $4,000 increase in expense. onThe ~~our~~increase is ~~aircraft~~attributable ~~was~~to $0the amortization of capitalized financing fees incurred for the amendment and extension of the FINOVA note in June 2005.1 ~~million~~See ~~per~~"Note ~~period~~2 - Long-Term Debt Obligations" in Item 1 above.

Interest expense – Interest expense during the three months ended May 31, 2005 was $0.1 million, as compared to $0.2 million of interest expense during the three months ended May 31, 2004, resulting in a $0.1 million decrease in expense. The decrease in interest expense was primarily attributable to reductions in the outstanding principal balance of our note payable to FINOVA. See "Note 2 - Long-Term Debt Obligations" in Item 1 above.15

~~Interest~~Table ~~income – Interest income during the three months ended May 31, 2005 was $0, as compared to $6,000~~ of interest income recognized during the three months ended May 31, 2004. The $6,000 decrease in interest income was primarily attributable to reductions in notes receivable from affiliates. See "Note 3 - Related Party Transactions" in Item 1 above.Contents

15 Interest expense – Interest expense during the three months ended November 30, 2005 was $4,000, as compared to $188,000 of interest expense during the three months ended November 30, 2004, resulting in a $184,000 decrease in interest expense. The decrease in interest expense was primarily attributable to the payment in full of the FINOVA Note during the current fiscal year. See "Note 2 - Long-Term Debt Obligations" in Item 1 above.

~~Table of Contents~~16

~~CAPITAL~~Table ~~RESOURCES~~of ~~AND LIQUIDITY~~ Contents

~~FINOVA~~RESULTS ~~Note~~OF OPERATIONS FOR THE NINE MONTHS ENDED NOVEMBER 30, 2005 AS COMPARED TO THE NINE MONTHS ENDED NOVEMBER 30, 2004

~~In May 1997, we entered into~~The afollowing ~~$30.0~~table ~~million~~sets ~~Secured~~forth ~~Loan Agreement with FINOVA Capital Corporation (~~the ~~"FINOVA~~Trust's ~~Note").~~results ~~The~~of ~~FINOVA~~operations ~~Note~~for ~~bears interest at~~ the ~~annual~~ ~~rate~~nine ofmonths ~~10.44%.~~ended ~~Monthly~~November ~~installments~~30, of2005 ~~principal~~ and ~~interest~~November ~~were payable through April 2005~~30, ~~at which time the FINOVA Note was scheduled to mature with a final payment of approximately $2~~2004.5 ~~million due and payable upon maturity.~~

On June 9, 2005, we 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.


Results of Operations (in thousands of dollars)
			For the Nine Months
			Ended November 30,

			2005			2004

	Operating revenue:
	Rental income from affiliate	$	5,595		$	5,642

	(Expense) other income:
	Depreciation		(280	)		(280	)
	Amortization of loan acquisition costs		(25	)		-
	Interest expense		(104	)		(554	)
	Interest income		-			9

	Net income		5,186			4,817

	Trust equity at beginning of period		24,327			18,409
	Less: Distributions to beneficiaries		-			(608	)

	Trust equity at end of period	$	29,513		$	22,618

~~The~~Rental ~~FINOVA~~income ~~Note~~from isaffiliate – We ~~secured~~derive by100% ~~means~~ of aour ~~first~~operating revenue ~~priority~~from ~~security~~the ~~interest~~aircraft ~~granted~~lease towith ~~FINOVA~~our inaffiliate, Evergreen Airlines. During each of the ~~one~~nine-month ~~Boeing~~periods ~~747~~ended ~~aircraft~~November 30, 2005 and ~~three~~November ~~DC-9~~30, ~~aircraft owned~~2004, bywe ~~the~~recognized ~~Trust~~$5.6 million of rental income from affiliate.

~~Repayment of the FINOVA Note has been~~Depreciation ~~through~~ – During ~~monthly~~each ~~installments~~ of ~~principal and interest that have incrementally increased throughout~~ the ~~term~~nine ofmonths ~~the~~ended ~~note.~~November ~~The~~30, ~~monthly installments~~2005 ~~have~~and ~~been~~November ~~paid~~30, ~~by Evergreen Airlines~~2004, indepreciation ~~satisfaction~~expense ofon ~~its obligation to make lease payments under the terms of its~~our aircraft ~~lease~~was $0.3 Wemillion ~~anticipate~~per ~~that future rentals from the aircraft lease will be sufficient to satisfy our debt obligations to FINOVA~~period.

~~The~~Amortization ~~amount~~ of ~~the~~loan acquisition ~~monthly~~costs ~~loan~~ – Amortization ~~installments~~of ~~paid~~loan byacquisition ~~Evergreen~~costs ~~Airlines~~during ~~have~~the ~~been~~nine ~~slightly~~months ~~lower~~ended ~~than~~November ~~Evergreen~~30, ~~Airlines'~~2005 ~~monthly~~was ~~rental~~$25,000, ~~obligation~~as compared ~~under~~to ~~the~~$0 ~~aircraft~~of ~~lease.~~expense ~~The~~during ~~difference between~~ the ~~amounts~~nine ~~has~~months ~~been~~ended ~~recorded~~November by30, us2004, asresulting in a ~~receivable~~$25,000 ~~from~~increase ~~affiliate~~in expense. ~~However,~~The ~~because~~increase is ~~future~~attributable ~~collection~~to isthe ~~uncertain,~~amortization weof ~~have~~capitalized ~~reported~~financing fees incurred for the ~~receivable~~amendment onand ~~our~~extension ~~financial~~of the ~~statements~~FINOVA asnote ain ~~reduction~~June to2005. ~~trust~~See ~~equity~~"Note 2 - Long-Term Debt Obligations" in Item 1 above.

We do not generate or hold any liquid assets. Our contractual obligations are paid by Evergreen Airlines, in satisfaction of its lease obligations under the terms of our aircraft lease. Based upon current known and expected future commitments, we do not anticipate that our liquidity will materially increase or decrease.17

~~Trust~~Table ~~as Co-Guarantor~~ of ~~Evergreen Aviation Debt Obligations~~Contents

~~The~~Interest ~~Trust, along with substantially~~expense ~~all~~ – Interest ofexpense during the ~~subsidiaries~~nine ofmonths ~~Evergreen~~ended ~~Aviation~~November 30, is2005 awas ~~joint~~$0.1 ~~and~~million, ~~several~~as ~~co-guarantor~~compared to $0.6 million of interest expense during the ~~Indenture~~nine ~~Notes~~months ~~(defined~~ended November 30, 2004, resulting in ~~"Indenture Notes"~~a ~~below)~~$0.5 ~~and~~million ~~the~~decrease ~~Secured~~in ~~Credit~~interest ~~Facility~~expense. ~~(defined~~The decrease in interest ~~"Secured~~expense ~~Credit~~was ~~Facility"~~primarily ~~below).~~attributable ~~Substantially~~to ~~all~~the payment in full of the ~~Trust's~~FINOVA ~~assets~~Note ~~are~~during ~~pledged~~the ascurrent ~~collateral~~fiscal year. See to"Note ~~secure~~2 ~~payment~~- ofLong-Term ~~these~~Debt ~~debt~~Obligations" ~~obligations~~in Item 1 above.

~~Indenture~~Interest income ~~Notes~~ – Interest income —during Inthe ~~May~~nine ~~2003,~~months ~~Evergreen~~ended ~~Aviation~~November ~~issued~~30, 2005 was $~~215.~~0, ~~million~~as ofcompared ~~12% Senior~~to ~~Second~~$9,000 ~~Secured~~of ~~Notes~~interest ~~(the~~income ~~“Indenture~~recognized ~~Notes”)~~during ~~pursuant~~the tonine anmonths ~~Indenture,~~ended ~~dated~~November ~~as of May 16~~30, ~~2003,~~2004. ~~executed~~The ~~by and among i) Evergreen Aviation~~$9,000 ~~as issuer,~~decrease ~~ii)~~in ~~Holdings~~interest ~~and~~income ~~substantially~~was ~~all~~primarily ofattributable ~~the~~to ~~subsidiaries~~reductions ofin ~~Evergreen Aviation,~~notes ~~including~~receivable ~~the~~from ~~Trust, as guarantors, and iii) J~~affiliates.P. ~~Morgan~~See ~~Trust~~"Note ~~Company,~~3 ~~N.A.,~~- asRelated ~~successor~~Party ~~trustee~~Transactions" toin ~~Bank~~Item ~~One,~~1 Nabove.~~A., as trustee.~~

~~The Indenture~~CAPITAL ~~Notes~~RESOURCES ~~bear~~AND ~~interest~~LIQUIDITY 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, 2005. The next payment of accrued interest in the amount of $12.9 million will be due and payable on November 15, 2005.

16FINOVA Note

~~Table~~ In May 1997, we entered into a $30.0 million Secured Loan Agreement with FINOVA Capital Corporation (the "FINOVA Note"), with interest at the annual rate of ~~Contents~~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. The FINOVA Note was secured by means of a first priority security interest granted to FINOVA in the Trust Boeing 747 and the three DC-9 aircraft owned by the Trust.

~~The Indenture~~ Effective ~~Notes~~April ~~are~~29, ~~secured~~2005, bywe executed a ~~second~~Third ~~priority~~Amendment ~~lien,~~Agreement ~~subject~~ to ~~certain~~amend and ~~permitted~~extend ~~liens, on~~the ~~substantially~~FINOVA ~~all~~Note of(the "Third Amendment"). The Third Amendment extended the ~~assets~~maturity date of ~~Evergreen~~the ~~Aviation~~FINOVA Note ~~and~~to ~~its~~September ~~domestic~~29, ~~subsidiaries~~2005, ~~including~~ with the ~~assets~~annual rate of ~~the~~interest ~~Trust.~~remaining ~~The~~at ~~Indenture~~10.44%. ~~Notes~~Monthly ~~are~~installments ~~fully~~of principal and ~~unconditionally guaranteed~~interest in the amount of $471,650 ~~both~~were ~~jointly~~scheduled ~~and~~through ~~severally~~the extended maturity date, byresulting ~~Holdings~~in a full amortization of the remaining outstanding principal balance. In September 2005, ~~substantially~~the ~~all~~outstanding principal and accrued interest of ~~Evergreen~~the FINOVA Note ~~Aviation’s~~was ~~subsidiaries~~paid in full, and FINOVA has released its security interest in the ~~Trust~~aircraft.

~~The Indenture~~Trust ~~Notes~~as ~~impose~~Co-Guarantor ~~certain~~of ~~restrictions on~~ Evergreen Aviation ~~and~~Debt ~~its restricted subsidiaries, including the Trust. Such restrictions include, but are not limited to, restrictions on the ability to:~~Obligations

• The ~~incur~~Trust, ~~additional~~along ~~debt~~with orsubstantially all ~~create~~of ~~liens;~~the •subsidiaries ~~pay dividends or acquire shares~~ of ~~capital~~Evergreen ~~stock;~~Aviation, •is ~~make~~a ~~payments~~joint onand ~~subordinated~~several ~~debt~~co-guarantor orof ~~make~~the ~~investments;~~Indenture •Notes ~~make~~(defined ~~distributions~~in ~~from~~"Indenture Notes" ~~restricted~~below) ~~subsidiaries;~~and •the ~~issue~~Secured orCredit ~~sell~~Facility ~~capital~~(defined ~~stock~~in of"Secured ~~restricted~~Credit ~~subsidiaries;~~Facility" •below). ~~issue~~Substantially ~~guarantees;~~all •of ~~sell~~the orTrust's ~~exchange~~ assets, orare ~~make~~pledged ~~capital~~as ~~expenditures;~~collateral to •secure ~~enter~~payment ~~into~~of ~~transactions~~these ~~with~~debt ~~shareholders and affiliates; and • effect mergers and other changes of control~~obligations.

~~Secured~~Indenture ~~Credit~~Notes ~~Facility~~ — OnIn May 132003, ~~2004,~~ Evergreen Aviation ~~and~~issued ~~certain~~$215.0 million of 12% ~~its~~Senior ~~subsidiaries,~~Second ~~including~~Secured ~~the~~Notes ~~Trust, entered into a three-year senior secured credit facility~~ (the “~~Secured~~Indenture ~~Credit Facility~~Notes”) pursuant ~~with~~to ~~Wells~~an ~~Fargo Foothill~~Indenture, ~~Inc.~~dated ~~and~~as ~~Ableco~~of ~~Finance~~May ~~LLC~~16, ~~(collectively~~2003, ~~“the~~executed ~~Wells~~by ~~Fargo~~and ~~Lenders”~~among i). Evergreen Aviation, as ~~The~~issuer, ~~Secured~~ii) ~~Credit~~Holdings ~~Facility~~and ~~consists~~substantially all of ~~two~~the ~~loans~~subsidiaries –of aEvergreen ~~$50.0~~Aviation, including ~~million~~the ~~term~~Trust, ~~loan~~as guarantors, and ~~a $50.0~~iii) ~~million~~Law ~~revolving~~Debenture ~~loan.~~Trust ~~The~~Company ~~Secured~~of ~~Credit~~New ~~Facility~~York, isas ~~secured~~successor bytrustee ~~substantially~~to ~~all of~~J.P. ~~the~~Morgan ~~assets~~Trust Company, ofN.A., ~~Evergreen~~as ~~Aviation~~successor ~~and~~trustee ~~its~~to ~~domestic~~Bank ~~subsidiaries~~One, ~~including~~N.A., ~~the~~as ~~assets of the Trust~~trustee.

As of May 31, 2005, the outstanding balance of the Secured Credit Facility was $74.0 million. Taking into consideration the Minimum Availability Requirement (as defined below), as of May 31, 2005, Evergreen Aviation’s availability to obtain additional advances under the Secured Credit Facility was $0.8 million. 18

~~Evergreen Aviation~~Table and its restricted subsidiaries, including the Trust, are subject to various restrictive covenants under the Secured Credit Facility. In addition to other requirements that are set forth in the covenants, Evergreen Aviation and its restricted subsidiaries, including the Trust, are required to maintain: i) an undrawn availability of not less than $5.0 million on the revolving loan (the "Minimum Availability Requirement"), ii) minimum thresholds with respect to certain consolidated and non-consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”), and iii) a 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 than the Secured Credit Facility. As of May 31, 2005, Evergreen Aviation and its subsidiaries were in compliance with such covenants.Contents

17 The Indenture Notes bear interest 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 November 14, 2005. The next payment of accrued interest in the amount of $12.9 million will be due and payable on May 15, 2006.

~~Table of Contents~~Liquidity

~~Notice~~We ~~and~~do ~~Waiver~~not ~~of Specified~~generate ~~Events of Default — On June 1, 2005, the Wells~~or ~~Fargo~~hold ~~Lenders~~any ~~notified~~liquid ~~Evergreen~~assets. ~~Aviation~~Our ~~that~~contractual ~~the~~obligations ~~Wells~~are ~~Fargo~~paid ~~Lenders~~by ~~believed that~~ Evergreen ~~Aviation~~Airlines, ~~was~~ in ~~violation~~satisfaction of ~~certain~~its ~~covenants~~lease ofobligations under the ~~Secured~~terms ~~Credit Facility (the "Specified Events~~ of ~~Default"),~~our asaircraft ~~follows:~~lease.

i) In ~~occurrence~~partial satisfaction of aits obligations ~~default~~under at the ~~final~~aircraft ~~maturity~~lease, onEvergreen ~~April~~Airlines ~~29,~~paid ~~2005,~~to ofFINOVA the ~~obligations~~monthly installments due under the FINOVA Note;. ~~ii)~~See ~~failure~~"Note 3 to- ~~maintain~~Related ~~insurance~~Party onTransactions" ~~the~~in ~~Collateral~~Item ~~(as~~1 ~~defined~~of inthis quarterly report. However, the ~~Secured~~amount ~~Credit~~of ~~Facility);~~the ~~iii)~~monthly loan ~~making~~installments anpaid ~~unpermitted~~by ~~investment~~Evergreen ~~toward~~Airlines ~~the~~were ~~purchase~~slightly oflower ~~two~~than ~~Boeing~~Evergreen ~~747~~Airlines' ~~airplanes~~monthly ~~(the~~rental ~~"Designated~~obligation under ~~747s");~~the ~~and~~aircraft ~~iv)~~lease. ~~unauthorized~~The ~~use~~difference ofbetween the ~~proceeds~~amounts has been recorded by us as a receivable from ~~advances~~affiliate. ~~under~~However, because the ~~Secured~~timing ~~Credit~~of ~~Facility~~future tocollection ~~renovate~~is uncertain, we have reported the ~~Designated~~receivable ~~747s~~on our financial statements as a reduction to trust equity.

~~The~~ Based ~~Wells~~upon ~~Fargo~~current ~~Lenders~~known ~~further notified Evergreen Aviation that, as a result of the Specified Events of Default, the Wells~~and ~~Fargo~~expected ~~Lenders~~future ~~had elected to charge the default rate of interest~~commitments, ~~which,~~we asdo ~~set~~not ~~forth~~anticipate 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 aour ~~default~~liquidity ~~had~~will ~~occurred~~materially ~~under~~increase ~~the~~or ~~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~~decrease. ~~At April 29, 2005, the per annum rates of interest on the Secured Credit Facility ranged from 6.09% to 8.75%.~~

~~Amendment~~Table 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. Contents

~~Risk~~The ofIndenture ~~Default~~Notes onare ~~Debt~~secured ~~Obligations~~by —a ~~Substantially~~second ~~all~~priority ~~of the assets of Evergreen Aviation and its subsidiaries~~lien, ~~including~~subject ~~the~~to ~~Trust,~~certain ~~are~~permitted ~~pledged as collateral under Evergreen Aviation’s various debt agreements. Furthermore~~liens, ~~the Indenture Notes and~~ ~~the~~on ~~Secured~~substantially ~~Credit~~all ~~Facility both contain cross-default provisions whereby certain events~~ of ~~default under one or more of~~ the ~~debt~~assets ~~obligations~~ of Evergreen Aviation orand its domestic subsidiaries, including the ~~Trust,~~assets ~~will result in an event~~ of ~~default~~the ~~under~~Trust. ~~either,~~The ~~or both, the~~ Indenture Notes ~~and~~are ~~the~~fully ~~Secured~~and ~~Credit Facility. In the event that such defaults~~unconditionally ~~are~~guaranteed, ~~not~~both ~~cured~~jointly orand ~~waived~~severally, ~~the~~by ~~Trust~~Holdings, issubstantially atall ~~risk~~of ~~that the Trust~~Evergreen Aviation’s ~~obligations under either~~subsidiaries, ~~or both, the Indenture Notes~~ and the ~~Secured Credit Facility will be accelerated~~Trust.

18 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:

~~Table~~• incur additional debt or create liens; • pay dividends or acquire shares of ~~Contents~~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.

~~Distributions~~ Secured Credit Facility — On May 13, 2004, Evergreen Aviation and certain of its subsidiaries, including the Trust, entered into a three-year senior secured credit facility (the “Secured Credit Facility”) with Wells Fargo Foothill, Inc. and CapitalSource Finance LLC, as successor-in-interest to ~~Beneficiaries~~all of Ableco Finance LLC's interest in the Secured Credit Facility and as successor-in-interest to Wells Fargo Foothills, Inc.'s interest in the Term Loan (as defined herein), (collectively, “the Wells Fargo Lenders”). The Secured Credit Facility consists of two loans – a $50.0 million term loan (the "Term Loan") and a $50.0 million revolving loan (the "Revolving Loan"). The Secured Credit Facility is secured by substantially all of the assets of Evergreen Aviation and its domestic subsidiaries, including the assets of the Trust.

~~We previously held a note~~As ~~receivable from one~~ of ~~our~~November ~~beneficiaries.~~30, ~~In lieu of cash distributions to the beneficiary~~2005, the ~~note~~outstanding ~~receivable~~balance ~~was reduced by in-kind distributions~~ of the ~~beneficiary's~~Secured ~~share~~Credit ofFacility ~~the~~was ~~Trust's~~$57.1 ~~net income~~million. ~~During~~Taking ~~the~~into ~~three~~consideration ~~months ended May 31, 2004,~~ the ~~note~~Minimum ~~receivable~~Availability ~~was~~Requirement ~~reduced~~(as bydefined ~~$0.3~~below), ~~million~~as of ~~in-kind~~November ~~distributions from~~30, ~~the~~2005, ~~beneficiary'~~Evergreen Aviation’s ~~share~~availability ofto ~~the~~obtain ~~Trust's~~additional ~~net~~advances ~~income.~~under ~~As of August 31, 2004,~~ the ~~note~~Secured ~~receivable~~Credit Facility was ~~repaid~~$23.5 ~~in full~~million.

WeEvergreen Aviation ~~have~~and ~~not~~its ~~made~~restricted ~~any~~subsidiaries, ~~other~~including the Trust, are subject to various ~~distributions~~restrictive covenants under the Secured Credit Facility. In addition to other requirements that are set forth in the ~~trust~~covenants, ~~beneficiaries~~Evergreen Aviation and its restricted subsidiaries, ~~until~~including the ~~trust~~Trust, isare ~~terminated,~~required weto domaintain: i) an undrawn availability of not ~~anticipate~~less than $5.0 million on the Revolving Loan (the "Minimum Availability Requirement"), ii) minimum ~~making~~thresholds with respect to certain consolidated and non-consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”), and iii) a 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 than the Secured Credit Facility. As of November 30, 2005, Evergreen Aviation and its subsidiaries were in compliance with such ~~distributions~~covenants.

~~Table of Contractual Obligations~~20

~~The~~Table ~~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:~~ Contents

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

Notice and Waiver of Specified Events of Default — On June 1, 2005, the Wells Fargo Lenders notified Evergreen Aviation that the Wells Fargo Lenders believed that Evergreen Aviation was in violation of certain covenants of the Secured Credit Facility (the "Specified Events of Default"), as follows:

~~ITEM~~i) 3.occurrence ~~QUANTITATIVE~~of ~~AND~~a ~~QUALITATIVE~~default ~~DISCLOSURES~~at ~~ABOUT~~the ~~MARKET~~final ~~RISK~~maturity, on April 29, 2005, of the obligations under the FINOVA Note; ii) failure to maintain insurance on the Collateral (as defined in the Secured Credit Facility); iii) making an unpermitted investment toward the purchase of two Boeing 747 airplanes (the "VAC Boeing 747s"); and iv) unauthorized use of the proceeds from advances under the Secured Credit Facility to renovate the VAC Boeing 747s.

~~Interest~~ The ~~Rate~~Wells ~~Risk~~Fargo Lenders 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%.

~~With~~ On June 14, 2005, ~~respect~~Evergreen toAviation, ~~interest~~its ~~rate~~subsidiaries ~~risks~~that atare ~~May~~co-borrowers 31under the Secured Credit Facility, ~~2005~~and the Trust, weas ~~had~~co-guarantor, ~~debt~~entered into ofan ~~$2.0~~Amendment ~~million~~Number atTwo aand ~~fixed~~Waiver ~~annual~~to ~~interest~~Loan ~~rate~~and ofSecurity ~~10.44%.~~Agreement A(the ~~1% increase~~"Amendment inNumber ~~interest~~Two") ~~rates~~with ~~would~~the ~~decrease~~Wells Fargo Lenders whereby the ~~fair~~Wells ~~market~~Fargo ~~value~~Lenders ofagreed ~~our~~to ~~fixed~~waive ~~rate~~the ~~debt~~Specified byEvents ~~approximately~~of $4Default,~~000.~~ Weand ~~have~~the ~~not entered~~Wells ~~into~~Fargo ~~any~~Lenders ~~obligations~~and Evergreen ~~for~~Aviation ~~trading~~agreed ~~purposes.~~to Weamend ~~are~~the ~~not~~Secured ~~exposed~~Credit Facility to ~~foreign~~allow ~~currency~~Evergreen ~~exchange~~Aviation ~~rate~~and ~~risks~~its orsubsidiaries ~~commodity~~to maintain only ~~price~~all-risk ~~risks.~~ground Weinsurance ~~have~~coverage ~~not~~for ~~entered~~aircraft ~~into~~that ~~any~~have ~~futures~~been orgrounded ~~swap~~and ~~contracts~~taken atout ~~this~~of ~~time~~service.

~~Concentration~~ Amendment ofNumber Three to Secured Credit ~~Risks~~ –Facility. ~~Financial~~On ~~instruments~~July 11, 2005, Evergreen Aviation, its subsidiaries that ~~potentially~~are co-borrowers ~~subject~~under the Secured Credit Facility, and the Trust, toas ~~credit~~co-guarantor, ~~risk~~entered ~~are~~into an Amendment Number Three and Consent ~~primarily~~(the ~~accounts~~"Amendment ~~receivable~~Number Three") with the Wells Fargo Lenders. ~~Accounts~~Amendment ~~receivable~~Number ~~derived~~Three ~~from~~amends ~~operations~~the ~~are~~Secured Credit Facility to allow Evergreen Airlines to i) lease the ~~same~~VAC asBoeing ~~collateral~~747s ~~for~~from ~~debt~~Ventures toAcquisition ~~FINOVA~~Company ~~Capital~~LLC ~~Corporation.~~("Ventures ~~See~~Acquisition Company"~~Note~~), 3an affiliated entity that is wholly-owned ~~Long~~by one of our beneficiaries, Mr. Smith, and ii) reimburse Ventures Acquisition Company for certain out-~~Term~~of-pocket ~~Debt~~transaction ~~Obligations"~~costs incurred by Ventures Acquisition Company in ~~Item~~connection 8with ~~below~~the purchase of the VAC Boeing 747s. ~~The~~In exchange, Mr. Smith pledged to Wells Fargo Foothill, Inc., as ~~Trust~~administrative ~~operates~~agent and for the benefit of the Wells Fargo Lenders, all of his rights, title, and ~~grants~~interest ~~credit~~in Ventures Acquisition Company (the "VAC Stock Pledge"). However, the maximum amount of Aviation's obligations under the Secured Credit Facility that was secured by the VAC Stock Pledge was limited to ~~its~~an ~~customer~~amount ~~Evergreen~~not ~~Airlines~~greater than $58 million minus the aggregate amount of all principal, interest and fees owed by Ventures Acquisition Company under VAC's Loan Agreement with Landsbanki Íslands hf., which providing financing for VAC's purchase of the VAC Boeing 747s.

1921

Table of Contents

~~ITEM~~ Amendment 4Number Four to Secured Credit Facility. ~~CONTROLS~~On ~~AND~~November ~~PROCEDURES~~30, 2005, Evergreen Aviation, its subsidiaries that are co-borrowers under the Secured Credit Facility, and the Trust, as co-guarantor, entered into Amendment Number Four to Loan and Security Agreement ("Amendment Number Four") with the Wells Fargo Lenders. The provisions of Amendment Number Four include the following amendments and modifications: i) the deletion and replacement of certain definitions utilized in the Secured Credit Facility; ii) the clarification of the principal business operations of Evergreen Aviation and its subsidiaries; iii) the addition of certain disclosures and covenants of compliance regarding Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49049 (2001)) (the "USA Patriot Act"); iv) a modification of the Fixed Charge Coverage Ratio (as defined in the Secured Credit Facility) covenant compliance requirement; and v) Evergreen Aviation agreed to cause the Trust to grant, for the benefit of the Wells Fargo Lenders, a security interest in all of the aircraft owned by the Trust. In addition, Amendment Number Four recognizes CapitalSource Finance LLC as the successor-in-interest to all of Ableco Finance LLC's interest in the Secured Credit Facility and as successor-in-interest to Wells Fargo Foothill, Inc.'s interest in the Term Loan.

~~Disclosure~~ Release of ~~Controls~~VAC Stock Pledge. In connection with the execution of Amendment Number Four, and ~~Procedures~~pursuant to a letter dated December 2, 2005, Wells Fargo Foothill, Inc., in its capacity as administrative agent for the Wells Fargo Lenders, (i) terminated the VAC Stock Pledge, (ii) released and discharged Mr. Smith from all obligations under the VAC Stock Pledge, and (iii) released all liens that had been granted by Mr. Smith under the VAC Stock Pledge.

~~The Trust's management, with~~Risk ~~the participation~~ of ~~the~~Default ~~Trust's~~on ~~principal~~Debt ~~executive~~Obligations ~~officer~~— ~~and~~Substantially ~~principal~~all ~~financial~~of ~~officer, has evaluated~~ the ~~effectiveness~~assets of Evergreen ~~the~~Aviation ~~Trust's disclosure controls~~ and ~~procedures~~its ~~(as~~subsidiaries, ~~such~~including ~~term~~the isTrust, ~~defined~~are inpledged ~~Rules~~as ~~13a-15(e)~~collateral ~~and 15d-15(e)~~ under Evergreen ~~the~~Aviation’s ~~Securities Exchange~~various ~~Act~~debt ofagreements. ~~1934~~Furthermore, ~~as amended (~~the ~~"Exchange~~Indenture ~~Act"))~~Notes ~~as of~~ and the ~~end~~Secured ofCredit ~~the~~Facility ~~period~~both ~~covered~~contain bycross-default ~~this~~provisions ~~report. Based~~whereby oncertain ~~such evaluation,~~events ~~the~~of ~~Trust's~~default ~~principal~~under ~~executive~~one ~~officer~~or ~~and~~more ~~principal financial officer have concluded that, as~~ of the ~~end~~debt obligations of ~~such~~Evergreen ~~period,~~Aviation ~~the Trust's~~or ~~disclosure controls and procedures are effective in recording~~its subsidiaries, ~~processing,~~including ~~summarizing~~the ~~and reporting~~Trust, onwill aresult ~~timely basis, information required to be disclosed by the Trust~~ in ~~the~~an ~~reports~~event ~~that~~of itdefault ~~files or submits~~ under ~~the Exchange Act~~either, ~~and are~~or ~~effective~~both, inthe ~~ensuring~~Indenture ~~that~~Notes ~~information~~and ~~required~~the toSecured beCredit ~~disclosed~~Facility. byIn the ~~Trust~~event inthat ~~the~~such ~~reports~~defaults are ~~that~~not itcured ~~files~~ or ~~submits~~waived, ~~under~~ the ~~Exchange~~ ~~Act~~Trust is ~~accumulated~~at ~~and~~risk ~~communicated~~that to the ~~Company's management, including the~~ Trust'’s ~~principal executive officer and~~obligations ~~principal~~under ~~financial officer~~either, asor ~~appropriate~~both, tothe ~~allow~~Indenture ~~timely~~Notes ~~decisions~~and ~~regarding~~the ~~required~~Secured ~~disclosure~~Credit Facility will be accelerated.

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.22

~~Changes~~Table inof ~~Internal Control Over Financial Reporting~~ Contents

~~There~~Distributions 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.~~Beneficiaries

20 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 nine months ended November 30, 2004, the note receivable was reduced by $0.6 million of in-kind distributions from the beneficiary's share of the Trust's net income. As of November 30, 2004, the note receivable was repaid in full.

We have not made any other distributions to the trust beneficiaries and, until the termination of the aircraft lease with Airlines, we do not anticipate making any such distributions.

Table of Contractual Obligations

As of the date of this report, we do not have any future contractual obligations, excluding any obligations which may arise as a result of our guarantees of indebtedness of Evergreen Aviation.

Table of Contents


ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Interest Rate Risk

We are not exposed to any interest rate risks. We have not entered into any obligations for trading purposes. We have not entered into any futures or swap contracts at this time.

Concentration of Credit Risks – Because the Trust grants credit to its customer Evergreen Airlines, the financial instruments that potentially subject the Trust to credit risk are primarily accounts receivable.

Foreign Currency Exchange Risk

We are not exposed to any foreign currency exchange risks.

Commodity Price Risk

We are not exposed to any commodity price risks.

Investment Risk

We are not exposed to any investment or equity price risks.

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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 has 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 periods 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

Other than as described above, 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 November 30, 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 1.

LEGAL PROCEEDINGS

We are not currently involved in any legal proceedings.


ITEM 1A.	RISK FACTORS

We are reliant upon one customer for 100% of our revenue.

All of our aircraft are leased to Evergreen Airlines, a wholly-owned subsidiary of our direct parent company. As a result, we derive all of our revenue from a single aircraft lease with an affiliated entity. In the event that Evergreen Airlines either ceases to do business, or its requirements for aircraft change, Evergreen Airlines may terminate our aircraft lease. A termination of that lease would leave us without a source of revenue.

The financing agreements of Evergreen Aviation, include financial covenants that impose substantial restrictions on the financial and business operations of Evergreen Aviation and its restricted subsidiaries, including us.

The terms of financing agreements of Evergreen Aviation restrict the ability of Evergreen Aviation and its restricted subsidiaries, including us, to, among other things:

•		incur additional debt;
•		pay dividends or make other payments on investments;
•		consummate asset sales or similar transactions;
•		create liens;
•		merge or consolidate with any other person; or
•		sell, assign, transfer, lease, convey, or otherwise dispose of all or substantially all of our assets.

These financing agreements also contain covenants that require Evergreen Aviation and its restricted subsidiaries, including us, to meet certain financial tests in order to continue to borrow and to avoid a default that might lead to an early termination of the financing agreements

If Evergreen Aviation or any of its restricted subsidiaries, including us, were not able to comply with these covenants, the outstanding obligations under these financing agreements could be accelerated and become immediately due and payable. In such event, the lenders under these financing agreements could seek payment from us as a co-guarantor.

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	*Our fixed-wing aircraft fleet consists primarily of older aircraft which require more maintenance and repair than newer aircraft, exposing us to the potential risks of higher maintenance costs.*

Our fleet of fixed-wing aircraft consists of one Boeing 747 aircraft and three DC-9 aircraft, all manufactured between 1967 and 1975. As of November 30, 2005, the average age of our fixed-wing aircraft was approximately 39 years. The age of our aircraft increases the likelihood that in the future we will need significant capital resources to repair or replace our aircraft. Furthermore, as of the date of this quarterly report, Airlines has temporarily grounded the three DC-9 aircraft, and at least one of the DC-9 aircraft would require significant capital resources to return the aircraft to airworthiness condition. The incurrence of substantial maintenance expenses for our aircraft, or the incurrence of significant capital expenditures to replace any of our aircraft, could have a material adverse effect on our results of operations and financial condition.

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ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5.

OTHER INFORMATION

We are not currently involved in any legal proceedings.

ITEM 6.

EXHIBITS


Exhibit No.		Description of Document

10.1	*	Amendment Number ~~Three~~Four to Loan and ~~Consent,~~Security Agreement dated ~~July~~November 1130, 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.
31.1	*	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.
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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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: July 15, 2005	/s/ John A. Irwin John A. IrwinPrincipal Executive Officer
Date: January 17, 2006	/s/ John A. Irwin John A. IrwinPrincipal Executive Officer
Date: July 15, 2005	/s/ Lawrence J. Bolton Lawrence J. BoltonPrincipal Financial Officer
Date: January 17, 2006	/s/ Lawrence J. Bolton Lawrence J. BoltonPrincipal Financial Officer

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EXHIBIT INDEX


Exhibit No.		Description of Document

10.1	*	Amendment Number ~~Three~~Four to Loan and ~~Consent,~~Security Agreement dated ~~July~~November 1130, 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.
31.1	*	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.
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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PART II. OTHER INFORMATION

SIGNATURES

EXHIBIT INDEX

Filing Compare · TRUST CREATED FEBRUARY 25 1986