Executive Speaker Series Luncheon July 12, 2012

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Friends of the LATC

Executive Speaker Series

Christopher Lytle Executive Director Port of Long Beach

Tuesday, October 9, 2012

Maya Hotel Long Beach, CA

Events

Annual Transportation Night

89th Annual LATC Installation Gala Hyatt Regency, Long Beach Friday, November 2, 2012, 6:30 pm

2011 Expense – ($4,000) Current – ($0)

New Members for the LATC

Bruce Hearn Jon McElroy Alto Systems Pasha Distribution Services Pomona, CA Huntington Beach, CA

Kevin Turner Ron Viola Voit Real Estate Services Nippon Express Irvine, CA El Segundo, CA

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Please visit the LATC at: www.latc.la

2011 Goal – $6,500 Current – $5,710

Friends of the LATC

David Parker Chairman/CEO/President

Covenant Transport

Thursday, July 12, 2012 Monterey Hill Banquet Center

Monterey Park

Los Angeles Transportation Club

David R. Parker, Chairman & CEO Covenant Transportation Group

DISCLOSURE STATEMENT This presentation and discussion includes forward-looking statements within the

meaning of the Private Securities Litigation reform Act of 1995. Words such as “expects,” “anticipates,” “intends,” “estimates,” or similar expressions are intended to identify these forward-looking statements. These statements are based on Covenant Transportation Group’s current plans and are not guarantees of future performance. These forward-looking statements are subject to risks and uncertainties that could cause actual results and the company’s plans and objectives to differ materially from those expressed in the forward-looking statements. Such risks and uncertainties are discussed further in Covenant Transportation Group’s reports and filings with the Securities and Exchange Commission.

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Topics • Company Summary • U.S. Economy

• Consumers • Industrial

• Truckload Industry Trends • Supply/Demand • Capacity • Fuel • Equipment • Pricing

• Summary • Questions

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• Group of companies focused on targeted markets offering just-in-time and other premium transportation and logistics services including team expedited long-haul, refrigerated, regional, event, brokerage, factoring, tractor/trailer sales, and equipment leasing services

• Group operates about 2,940 tractors and 7,150 trailers

• Young average tractor age (3/31/12): 1.8 years (or 22 mos)

• Utilize 10 full size terminals and 30+ drop yards

• Consumed with providing exceptional service to our customers

• Fiscal 2011 Revenue, including FSC: $653 Million

• Headquarters: Chattanooga, TN

• NASDAQ GS: CVTI

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Company Summary

Who/What is CTG CTG is a holding company:

• 3 Specialized Asset-Based Trucking Companies

• Expedited (Covenant Transport - Chattanooga) • Regional (Star Transportation – Nashville) • Refrigerated (SRT - Texarkana)

• 1 Non-Asset Based Brokerage

• Covenant Transport Solutions (Chattanooga)

• 1 Equipment Leasing Company

• Transport Enterprise Leasing (Chattanooga)

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For more information, please visit: www.ctgcompanies.com

Group Revenue Breakdown

5

54%

Covenant

SRT 30%

% of Revenue

10% Star

6% Solutions

Do You Know My Reps? Cindy West Covers Southern CA

& AZ wescin@covenanttransport.com

Rick Fiore Covers Northern CA, OR, WA, UT & Vegas

fioric@covenanttransport.com

Kent Wickham Covers the Western Region

wicken@southernref.com

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U.S. Economy

7

0%

2%

4%

6%

8%

2010 2011 2012

(quarterly, annualized rate percent change, 2005 dollars)

Real Gross Domestic Product

Sources: BEA and ATA and Bank of America

2010 – 2012 2010: +3.0% 2011: +1.7% 2012F: +1.9% 2013F: +2.0%

• Growth in second half of 2012 is supported by lower energy prices, which counters labor market. • Forecast assumes that U.S. fiscal policy is unchanged and that Europe stays in recession through 2013, but no collapse of the euro and Greece doesn’t leave the euro until 2013.

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Sources: Department of Labor & ATA

-1000

-800

-600

-400

-200

0

200

400

600

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

2005 2006 2007 2008 2009 2010 2011 2012

Unemployment Rate

Change in Employment (Thousands)

The consumer is 70% of the U.S. economy. It will take years to regain the 8.8 million jobs lost during the recession. Would need payrolls to increase 175,000 per month for 3+ years straight to regain all the lost jobs.

2011 2012 2013

Δ in Employment 1.2% 1.4% 1.3%

Unemployment Rate

9.0%

8.2%

7.9%

Economy - Consumers

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-8% -6% -4% -2% 0% 2% 4% 6% 8% 10%

0

5

10

15

2008 2009 2010 2011 2012

Sources: BEA & ATA

Personal spending is holding up more than income, which is pushing the savings rate down

Savings Rate (%)

Personal Income: Year-over-Year

Percent Change

Personal Consumption: Year-over-Year

Percent Change

Economy - Consumers

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Source: IHS Global Insight

$0 $10 $20 $30 $40 $50 $60 $70 $80 $90

$100 $110

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Crude Oil Prices – Impact? WTI, US$ per Barrel

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Economy - Consumers

Sources: Federal Reserve & ATA

-20%

-15%

-10%

-5%

0%

5%

10%

15%

0 10 20 30 40 50 60 70 80 90

100 110

2005 2006 2007 2008 2009 2010 2011 2012

Manufacturing has been Leading the Recovery 2007 = 100

Level of Production

Year-over-Year

Percent Change

2011 2012 2013

Total 4.8% 5.0% 3.1%

Durable Goods Only

7.7%

8.5%

5.7%

Economy - Industrial

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0

10

20

30

40

50

60

70 Purchasing Managers’ Index

Source: Institute for Supply Management

Growth Border Line

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Economy - Industrial

Data through June 2012

Sources: Census Bureau & ATA

0.0

0.5

1.0

1.5

2.0

2.5

0.0

0.5

1.0

1.5

2.0

2.5

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Housing Starts

Seasonally Adjusted Annual Rates

2000-2013

Forecast (annual average)

Millions Millions

19%

14%

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Housing Market Remains A Problem

Economy - Industrial

Sources: Bureau of Economic Analysis, ATA, & Global Insight

5

10

15

20

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Light Vehicle Sales Millions of Units; Annualized Rates

2012 Q3 & Q4 Forecasts

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Economy - Industrial

Truckload Industry Trends

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Source: ATA

80

85

90

95

100

105

110

2005 2006 2007 2008 2009 2010 2011 2012

For-Hire TL Supply vs Demand 2005 = 100

TL Loads Index

TL Tractor Count Index

Oversupply

Capacity has tightened.

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Industry Trends – Supply/Demand

Freight has been growing, but signs point to the economy slowing

-12%-10%-8%-6%-4%-2%0%2%4%6%

0 10 20 30 40 50 60 70 80 90

100 110

2008 2009 2010 2011 2012

Source: ATA

Large TLs Are Growing Their Fleets Again – But the Growth is Slowing

Jan ‘08 = 100

Tractor Fleet

Year-over-Year Percent Change

Note: Large TLs have at least $30 million in annual revenues.

Large TLs have not grown their tractor fleet for the last two months.

Industry Trends - Capacity

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-8%

-6%

-4%

-2%

0%

2%

4%

0 10 20 30 40 50 60 70 80 90

100 110

2008 2009 2010 2011 2012

Source: ATA

Small TLs Are Still Contracting Their Fleets Jan ‘08 = 100

Tractor Fleet

Year-over-Year Percent Change

Note: Small TLs have less than $30 million in annual revenues.

Industry Trends - Capacity

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-14%-12%-10%-8%-6%-4%-2%0%2%4%6%

0 10 20 30 40 50 60 70 80 90

100 110

2008 2009 2010 2011 2012

Source: ATA

LTL Tractor Fleets Jan ‘08 = 100

Tractor Fleet

Year-over-Year Percent Change

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Industry Trends - Capacity

Bottom Line on Capacity

Tighter Capacity Carrier Fleet Reductions

Aging Fleet

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Source: ATA

$1.32 $1.51

$1.81

$2.41 $2.71

$2.88

$3.80

$2.46

$2.99

$3.84 $3.85 $3.95

$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

On-Highway Diesel Fuel Prices

Sources: U.S. Department of Energy & ATA

Billions of $ 2009 2010 2011

Cost to the industry (excluding fuel surcharges)

$86.8

$109.0

$142.8

Industry Trends - Fuel

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Fuel Impact Conclusions • Unleaded fuel prices above $3.50-$3.75/gallon begins to impact consumer retail

spending which impacts shipping demand unfavorably.

• Increasing diesel fuel environments like we saw from Fall of 2010 through April

2011 accelerate smaller trucking company failures. This reduces overall shipping

supply/capacity, which eventually puts upward pressure on shipping rates.

• Truckload carriers are only able to pass through approximately 75% of diesel fuel

cost changes to their customers through fuel surcharge programs. In increasing

diesel fuel environments, customer rates will have to be increased as TL carriers

complete their bid proposals.

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Industry Trends - Fuel

Source: ACT Research

5.0

5.2

5.4

5.6

5.8

6.0

6.2

6.4

6.6

6.8

7.0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Years U.S. Class 8 Trucks

Average Age

1999-2012

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Industry Trends - Equipment

$0

$25,000

$50,000

$75,000

$100,000

$125,000

$150,000

2006 2011 2011

Source: ATA

Equipment – the New Diesel?

New Tractor $95k

3-yr old tractor trade $50k

Financing $45k

New Tractor $125k

3-yr old tractor trade $50k

Financing $75k

Financing $105k

7-yr old tractor trade $20k

Class 8 Tractor Replacement Costs: Examples

Industry Trends – Equipment

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• Many inflationary cost pressures to overcome including: • Driver wages • Fuel (still need to catch-up or improve FSC recovery programs) • Equipment (tractors and trailers) • Tires, vehicle replacement parts, maintenance • Health insurance • Casualty insurance • Regulations (CSA, EOBR, HOS, California CARB)

• Contract pricing began moving up in Q4-2010 and has not slowed

• Overall pricing for the large fleets should be up 3% to 6% in 2012 over 2011

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Industry Trends – Pricing

• While there are risks, a recession is not probable.

• Truck freight volumes continue to increase in 2012, but at a slower pace.

• Pricing opportunity exists in 2012 as capacity remains relatively tight. Any supply increase will be matched by freight demand growth.

• Motor carriers must stay focused on controlling costs in 2012.

• Industry stays in a replacement cycle for trucks and trailers, although the pace of replacement is slowing.

• Fleets that can attract and retain drivers/OOs will be ahead of the pack.

Summary

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Source: ATA

Questions?

Thank You!

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