Transportation Research Board January 10, 2005

1
Transportation Research BoardJanuary 10, 2005

• Thom S. Albrecht, CFA
• BBT Capital Markets
• talbrecht_at_bbandt.com
• 804-787-8231

FOR REQUIRED DISCLOSURES, PLEASE REFER TO THE
IMPORTANT DISCLOSURES SECTION AT THE END OF THIS
REPORT
BBT Capital Markets is a division of Scott
Stringfellow, Inc., a registered broker/dealer
subsidiary of BBT Corporation. Member NYSE/SIPC.
NOT A DEPOSIT, NOT FDIC INSURED, NOT GUARANTEED
BY THE BANK, NOT INSURED BY ANY FEDERAL
GOVERNMENT AGENCY AND MAY GO DOWN IN VALUE
2
Ugly Driver Demographics Will Persist Through 2010
Males, ages 20-44 52.3MM in 2000 52.7MM in
2010 0.1 CAGR Females, ages 20-44 51.8MM in
2000 51.7MM in 2010 At 3 GDP, Driver
Availability Would be 34 Worse by 2010 Males,
ages 20-34 0.4 CAGR, going from 29.9MM to
31.1MM by 2010--the only hope--demographic is
still growing less than half of GDP Average age
of Teamster Driver is 57 years--Yikes! Source
U.S. Census Bureau
3
Demographics Remain Unfavorable for Driver
Recruitment
Source U.S. Census Bureau
4
Ages 45 and Up Growing Much Faster, but Hardly a
Cure
Source U.S. Census Bureau. Represents
2000-2010.
5
Mileage Utilization (Driver Productivity) Has
Been Stagnant for Years
Source Company reports. Figures are for about a
dozen public truckload carriers.
6
Average BIPD Deductibles are up Six-Fold Since
1999
Source Company reports and BBT Capital Markets
estimates. Self insurance retention (SIR) per
BIPD (bodily injury, physical damage) incident.
Figures represent average
deductibles for a group of 11 TL carriers.
7
Workers Compensation Cargo SIRs Are Way Up
Source Company reports and BBT Capital Markets
estimates. Self insurance retention (SIR) per
workers comp/cargo claim. Workers
comp figures represent average deductibles for a
group of 12 TL carriers. Cargo
figures represent average deductibles for a group
of 8 TL carriers.
8
Case Study JBHT and WERN Length of Haul Since
1990
Source Company reports
9
Most Important Elements Factors to Drivers
Source Newport Communications and Heavy Duty
Trucking, 1999.
10
Why Drivers Leave Their Jobs?
Source Newport Communications and Heavy Duty
Trucking, 1999.
11
RATING SYSTEM Effective 2/2/04, the rating
system was changed to a three-tier system Buy
(1), Hold (2), Underweight (3). Prior to 2/2/04,
there was a four-tier system Strong Buy (1), Buy
(2), Hold (3), Underweight (4). The BBTCM Equity
Research Department Stock Rating System consists
of three separate ratings. The appropriate rating
is determined by a stocks estimated 12-month
total return potential, which consists of the
percentage price change to the 12-month price
target and the current yield on anticipated
dividends. A 12-month price target is the
analysts best estimate of the market price of
the stock in 12 months. A 12-month price target
is highly subjective and the result of numerous
assumptions, including company, industry, and
market fundamentals, both on an absolute and
relative basis, as well as investor sentiment,
which can be highly volatile. The definition
of each rating is as follows Buy
(1) estimated total return potential greater
than or equal to 10 Hold (2) estimated total
return potential greater than or equal to 0 and
less than 10 Underweight (3) estimated total
return potential less than 0 NR Not
Rated NA Not Applicable NM Not
Meaningful SP Suspended Stocks rated Buy (1)
are required to have a published 12-month price
target, while it is not required on stocks rated
Hold (2) and Underweight (3).
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BBT Capital Markets rating distribution by
percentage (as of June 30, 2004) All companies
under coverage Buy (1) 60.7 Hold
(2) 33.2 Underweight/Sell (3) 6.1 Not Rated
(NR) 0.0 Suspended (SP) 0.0 All companies
under coverage to which it has provided
investment banking services in the previous 12
months Buy (1) 20.9 Hold (2) 13.2 Underweight
/Sell (3) 7.1 Not Rated (NR) 0.0 Suspended
(SP) 0.0 ADDITIONAL INFORMATION AVAILABLE ON
REQUEST BBT Capital Markets makes a market in
the securities of Celadon Group, Inc. Covenant
Transport, Inc. Heartland Express, Inc. J.B.
Hunt Transport Services, Inc. Knight
Transportation, Inc. Landstar System, Inc.
Marten Transport P.A.M. Transportation Services
Swift Transportation Co., Inc. U.S. Xpress
Enterprises and Werner Enterprises, Inc. BBT
Capital Markets has managed or co-managed a
public offering of securities for Celadon Group,
Inc. Covenant Transport, Inc. and Marten
Transport in the last 12 months. BBT Capital
Markets has received compensation for investment
banking services from Celadon Group, Inc.
Covenant Transport, Inc. and Marten Transport in
the last 12 months. BBT Capital Markets expects
to receive or intends to seek compensation for
investment banking services from Celadon Group,
Inc. Covenant Transport, Inc. Heartland
Express, Inc. J.B. Hunt Transport Services,
Inc. Knight Transportation, Inc. Landstar
System, Inc. Marten Transport P.A.M.
Transportation Services Swift Transportation
Co., Inc. U.S. Xpress Enterprises and Werner
Enterprises, Inc. in the next three
months. Covenant Transport, Inc. is, or during
the past 12 months was, a client of BBT Capital
Markets, which provided non-investment banking,
securities-related services to, and received
compensation from, the aforementioned company for
such services. The analyst or employees of BBT
Capital Markets with the ability to influence the
substance of this report knows the foregoing
facts. An affiliate of BBT Capital Markets
received compensation from Covenant Transport,
Inc. J.B. Hunt Transport Services, Inc. Swift
Transportation Co., Inc. and U.S. Xpress
Enterprises for products or services other than
investment banking services during the past 12
months. The analyst or employees of BBT Capital
Markets with the ability to influence the
substance of this report know or have reason to
know the foregoing facts. For valuation
methodology and related risk factors on BBT
Capital Markets Buy (1)rated stocks, please
refer to the body text of this report or to
individual reports on covered companies
referenced in this report. The analyst
principally responsible for preparation of this
report received compensation that is based upon
many factors, including the firms overall
investment banking revenue. ANALYST
CERTIFICATION. The analyst(s) principally
responsible for the preparation of this research
report certify that the views expressed in this
research report accurately reflect his/her
(their) personal views about the subject
security(ies) or issuer(s) and that his/her
(their) compensation was not, is not, or will not
be directly or indirectly related to the specific
recommendations or views contained in this
research report. OTHER DISCLOSURES The
information and statistics in this report have
been obtained from sources we believe are
reliable but we do not warrant their accuracy or
completeness. We do not undertake to advise the
reader as to changes in figures or our views.
This is not a solicitation of an order to buy or
sell any securities. The securities sold,
offered, or recommended by BBT Capital Markets
are not insured by the FDIC, not bank guaranteed,
and may lose value.