ABF Freight System: Company Overview for Teamster Freight Meeting

April 2010 Prepared by the IBT Economics & Contracts Department, IBT Washington, DC

Overview

„ Current Economic Environment „ Trucking Industry Pressures „ ABF Recent Events and Corporate Overview „ Financial Outlook

1 Economic Indicators Still Mixed or Negative VERY SLOW RECOVERY: 12-18 months to go: ¾ Unemployment High: 9.7% ¾ Family Incomes Down ¾ Foreclosures Rising: 1 in 7 homes ¾ Consumer Debt Still Near All-Time Highs

Some positives, but not many ¾March trucking jobs up per DOL ¾Class 8 orders up ¾Modest tonnage growth 3.5% per ATA ¾Capital goods exports up ¾Freight bills up slightly

L-T-L LANDSCAPE

2009 REVENUE RANK CARRIER NAME ($ million) In 2009 Industry has gone from 1 FedEx Freight $3,618 Top 15 less-than-truckload carriers 2009 revenues 2 (includingYRC Nationalfuel surcharges) $3,177 $35 B to $28 B 3 Con-way Freight $2,574 4 UPS Freight $1,807 During Recession 5 ABF Freight System $1,260 6 YRC Regional $1,226 Only one carrier had 7 $1,174 positive earnings in all 8 Old Dominion $1,158 four quarters last year 9 R+L Carriers* $862

10 $794 ANALYST JINDEL IS CALLING FOR A MODEST ECONOMIC 11 Southeastern * $628 RECOVERY: 12 Vitran Express $519 “I’M NOT FINDING ANY HOPEFUL SIGNS THAT LIFE FOR LTL CARRIERS WILL GET BETTER ANY 13 $471 TIME SOON. IT WILL BE A VERY SLOW PROCESS 14 AAA Cooper Transportation* $418 IN IMPROVING TONNAGE LEVELS. THINGS ARE 15 Central Transport International* $342 GETTING LIGHTER AND SMALLER; AND THAT DOES NOT PORTEND WELL FOR AN INDUSTRY Note: Revenues for LTL operations only, unless otherwise indicated *Revenues include truckload and other services THAT BASES ITS PRICING ON WEIGHT.” Source: Company reports and SJ Consulting Group estimates --Logistics Management, 4/1/10

2 What’s Going on in Freight? All Motor carriers have seen: ¾ 2-3 Years of Declining Results ¾ Heightened Pricing Competition from FDX, C-W, UPS Freight, Estes, R & L, YRC ¾ Significant Revenue Setbacks ¾ OVERCAPACITY of 20%

ABF: > Exposure to So. Housing/Retail Mkts > Credit Options Dried Up in 2009 > Spent ½ of Parent’s Total Cash

ABF is a Unique Player in L-T-L

¾ Moved to Pure Play L-T-L Carrier after Tumultuous 1990’s and Acquisitions ¾ Lots of Small Terminals – different model built on premium service ¾ Very Conservative Capital Structure ¾ Best Web Based LTL Services ¾ Quiet Leader in Industry

3 ABF SERVICE CENTER MAP ABF Service292 facilities Centerin North America, Map 166 Local Unions Competes on service in eastern 2/3rds of US

50% of Locals Have 15 or Fewer ABFers

= Locals with over 300 ABFers

ABF OPERATING RESULTS: LAST 5 YEARS

Summary Financials

Source: SEC documents and company reports

4 ABF Operating Revenues: Last 10 Quarters Revenue is Hard to Replace in Down Economy (in millions)

498.5 495.8 486.0 Year over Year 459.3 447.5 450.0 Declines of -24.3% 399.0 391.2 -37.5% 371.6 362.6 350.0 339.7 ?

250.0 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 ABF Operating Rev (Consol)

Source: SEC documents

ABF Operating Ratio: Last 10 Quarters

115.0

109.3 110.0 108.3 107.8

105.0 104.0 103.8

100.0 ? BREAK EVEN LINE 97.0 95.5 94.7 94.7 95.0 93.9

90.0

85.0 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09

ABF Operating Ratio

Source: SEC documents Break even OR leaves room for certain non-operating expenses to be paid

5 ABF & ABC Income: 2003-2009 (in millions)

$156 $137 Freight Recession $150 $131

$86 $100 $78 $105 $85 $48 $50 $76 $57 $50 $29 $0 2003 2004 2005 2006 2007 2008 2009 ($50) -$100 ($100) ?

($150) -$128

ABF Operating Income ABC Net Income

Source: SEC documents and analysts reports

Company’s Projections for 2010

>>Broadly assume that market conditions are similar to those of 2009 >>Pricing: continued rate war >>Tonnage: comparable levels >>Operating ratios: still high (poor) >>Loss: Negative Cash /EBITDA NO LIGHT AT END OF TUNNEL

6 Changes in Total Compensation for Local Cartage Driver Under 2008-2013 NMFA CSLCSA S-T Hourly Wages + Benefit Rate

$45.00

$41.80 $41.80 $40.80 $40.35 $39.35 $41.80 $40.00 $38.95 $38.95 $37.95 $37.50 $36.50$36.50 $36.10 $36.10 $38.13 $35.10 $37.13 $36.75 $35.00 $36.10 $35.75 $35.10 18 month gap of $35.41 $33.83$34.19 up to $11.94/hr peaking YRC $30.00 on 8/1/10 ABF

$27.19 $27.01 $25.00 $26.23 $26.61

$20.00

8 8 8 9 9 9 0 0 0 1 1 1 2 2 2 3 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 / / / / / / / / / / / / / / / / 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 / / / / / / / / / / / / / / / / 4 8 2 4 8 2 4 8 2 4 8 2 4 8 2 4 1 1 1 1 1

NMFA TEAMSTERS: Age Groupings by % All Job Classifications: 2009

52% of Teamsters were over age 50 last year 25% 21.6% 19.1% 20% 18.0%

15% 13.7% 12.1%

10% 8.0%

5% 4.2% 2.3% 0.9% 0% <25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60+ TOP ISSUES: #1 Job Security #2 H & W #3 Pensions Source: Teamster Freight Survey: June, 2009

7 The Freight Future:

„ End of L-T-L Freight Industry’s Economic Crash is Not Yet Clear

„ Potential Union Market Share Loss is Dramatic without Turnaround

„ ABF Has Resources for 2010 But No More

„ Time to Act is Now –very mixed signals in economy and L-T-L is particularly shaky PROLONGED UNCERTAINTY CONTINUES in 2010-11

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