1263810--5/30/2006--EVERGREEN_HOLDINGS

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Risk Factors Relating to the Company Our financing agreements include financial covenants that impose substantial restrictions on our financial and business operations, and include financial tests that we must meet in order to continue to borrow under such agreements. Our access to additional financing on acceptable terms is limited. Volatility of aircraft values may affect our ability to obtain financing secured by our aircraft. 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 and loss of revenues during extended periods of maintenance and overhaul. We depend upon our Boeing 747 aircraft to generate the majority of our flight revenue. A significant portion of our operations is dependent on the price and availability of aircraft fuel. We are highly leveraged and have substantial liquidity needs in order to service our debt obligations, and we cannot be assured that we will be able to meet those needs from operating cash flows or additional financing. We have historically had violations of certain of our debt covenants. Many of the arrangements with our customers are not long-term contracts. As a result, our revenue streams may be unpredictable. A significant portion of our revenue stream is dependent upon our continued ability to provide air freight services to the USAF Air Mobility Command. We are also dependent upon continued business with the U.S. Postal Service. As a U.S. government contractor, we are subject to a number of procurement and other rules and regulations. A significant portion of our air freight revenue is generated from operations in volatile overseas markets that are sensitive to changes in U.S. foreign relations, foreign governments, and foreign economies. We operate in dangerous locations and carry hazardous cargo, which increases the risk of harm to our property and personnel. Our ability to provide accurate and timely financial statements is subject to the risks posed by any weaknesses in our financial reporting controls which might occur in the future. Our operating results could be adversely affected by the loss of certain key personnel. All of the outstanding shares of Holdings common stock are controlled by two principal shareholders. Risk Factors Relating to the Air Transportation Services Industry The air transportation services industry is highly competitive. The air transportation services industry is subject to extensive government regulation which could increase our operating costs and restrict our ability to conduct our business. Insurance costs have fluctuated significantly since the September 11 terrorist attacks. Insurance costs have fluctuated significantly since the September 11 terrorist attacks.

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1263810--5/30/2006--EVERGREEN_HOLDINGS_INC