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ODFL Old Dominion Freight Line

Document And Entity Information

Document And Entity Information - shares9 Months Ended
Sep. 30, 2020Nov. 04, 2020
Cover [Abstract]
Entity Registrant NameOLD DOMINION FREIGHT LINE, INC.
Entity Central Index Key0000878927
Document Type10-Q
Amendment Flagfalse
Document Period End DateSep. 30,
2020
Document Fiscal Year Focus2020
Document Fiscal Period FocusQ3
Trading SymbolODFL
Current Fiscal Year End Date--12-31
Entity Filer CategoryLarge Accelerated Filer
Entity Emerging Growth Companyfalse
Entity Small Businessfalse
Entity Common Stock, Shares Outstanding117,331,447
Document Quarterly Reporttrue
Document Transition Reportfalse
Entity File Number0-19582
Entity Incorporation, State or Country CodeVA
Entity Tax Identification Number56-0751714
Entity Address, Postal Zip Code27360
Entity Address, Address Line One500 Old Dominion Way
Entity Address, City or TownThomasville
Entity Address, State or ProvinceNC
City Area Code336
Local Phone Number889-5000
Security Exchange NameNASDAQ
Title of 12(b) SecurityCommon Stock ($0.10 par value)
Entity Current Reporting StatusYes
Entity Interactive Data CurrentYes
Entity Shell Companyfalse

Condensed Balance Sheets

Condensed Balance Sheets - USD ($) $ in ThousandsSep. 30, 2020Dec. 31, 2019
Current assets:
Cash and cash equivalents $ 420,396 $ 403,571
Short-term investments205,294
Customer receivables, less allowances of $10,286 and $8,866, respectively453,346 397,579
Other receivables9,578 10,586
Prepaid expenses and other current assets49,882 55,098
Total current assets1,138,496 866,834
Property and equipment:
Revenue equipment1,892,005 1,898,999
Land and structures2,167,557 2,039,937
Other fixed assets495,268 482,425
Leasehold improvements12,043 11,709
Total property and equipment4,566,873 4,433,070
Accumulated depreciation(1,631,398)(1,464,235)
Net property and equipment2,935,475 2,968,835
Goodwill19,463 19,463
Other assets180,254 140,436
Total assets4,273,688 3,995,568
Current liabilities:
Accounts payable59,229 70,254
Compensation and benefits217,154 192,524
Claims and insurance accruals54,493 54,330
Other accrued liabilities60,141 46,130
Income taxes payable13,271 2,847
Current maturities of long-term debt45,000
Total current liabilities449,288 366,085
Long-term liabilities:
Long-term debt99,927 45,000
Other non-current liabilities316,831 241,802
Deferred income taxes236,809 261,964
Total long-term liabilities653,567 548,766
Total liabilities1,102,855 914,851
Commitments and contingent liabilities
Shareholders’ equity:
Common stock - $0.10 par value, 280,000,000 shares authorized, 117,331,447 shares outstanding at September 30, 2020 and 140,000,000 shares authorized, 119,532,534 shares outstanding at December 31, 201911,733 11,953
Capital in excess of par value185,991 218,462
Retained earnings2,973,109 2,850,302
Total shareholders’ equity3,170,833 3,080,717
Total liabilities and shareholders’ equity $ 4,273,688 $ 3,995,568

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - USD ($) $ in ThousandsSep. 30, 2020Dec. 31, 2019
Statement Of Financial Position [Abstract]
Customer receivables, allowances $ 10,286 $ 8,866
Common stock, par value $ 0.10 $ 0.10
Common stock, shares authorized280,000,000 140,000,000
Common stock, shares outstanding117,331,447 119,532,534

Condensed Statements of Operati

Condensed Statements of Operations (Unaudited) - USD ($) $ in Thousands3 Months Ended9 Months Ended
Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019
Income Statement [Abstract]
Revenue from operations $ 1,058,166 $ 1,048,457 $ 2,941,740 $ 3,099,905
Operating expenses:
Salaries, wages and benefits524,658 533,451 1,510,047 1,588,378
Operating supplies and expenses90,269 117,343 273,374 361,110
General supplies and expenses27,383 33,633 86,872 97,584
Operating taxes and licenses29,923 29,117 86,280 87,572
Insurance and claims11,821 11,280 32,581 34,039
Communications and utilities7,622 8,098 23,075 22,071
Depreciation and amortization64,983 63,493 196,153 189,137
Purchased transportation25,405 23,063 65,188 68,218
Miscellaneous expenses, net5,858 11,452 15,590 21,354
Total operating expenses787,922 830,930 2,289,160 2,469,463
Operating income270,244 217,527 652,580 630,442
Non-operating expense (income):
Interest expense1,071 3 1,936 285
Interest income(123)(1,714)(1,602)(4,966)
Other expense, net961 844 4,205 768
Total non-operating expense (income)1,909 (867)4,539 (3,913)
Income before income taxes268,335 218,394 648,041 634,355
Provision for income taxes66,467 54,295 165,191 162,861
Net income $ 201,868 $ 164,099 $ 482,850 $ 471,494
Earnings per share:
Basic $ 1.72 $ 1.37 $ 4.09 $ 3.91
Diluted $ 1.71 $ 1.37 $ 4.07 $ 3.90
Weighted average shares outstanding:
Basic117,188,398 119,820,422 117,946,805 120,711,513
Diluted117,933,440 119,984,153 118,696,836 120,882,836
Dividends declared per share $ 0.15 $ 0.11 $ 0.45 $ 0.34

Condensed Statements of Changes

Condensed Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in ThousandsTotalCommon Stock [Member]Capital In Excess Of Par Value [Member]Retained Earnings [Member]
Balance at Dec. 31, 2018 $ 12,185 $ 138,210 $ 2,530,088
Share repurchases(211)(205,135)
Cash dividends declared(41,018)
Share-based compensation and restricted share issuances, net of forfeitures10 5,353
Taxes paid in exchange for shares withheld(2)(1,446)
Net income471,494
Balance at Sep. 30, 2019 $ 2,909,528 11,982 142,117 2,755,429
Balance at Jun. 30, 201912,020 140,970 2,645,495
Share repurchases(38)(40,576)
Cash dividends declared(13,589)
Share-based compensation and restricted share issuances, net of forfeitures1,147
Net income164,099
Balance at Sep. 30, 20192,909,528 11,982 142,117 2,755,429
Balance at Dec. 31, 20193,080,717 11,953 218,462 2,850,302
Share repurchases(223)(306,568)
Cash dividends declared(53,475)
Share-based compensation and restricted share issuances, net of forfeitures6 8,371
Taxes paid in exchange for shares withheld(2)(2,731)
Forward contract for accelerated share repurchases(37,500)
Cash paid for fractional shares(1)(611)
Net income482,850
Balance at Sep. 30, 20203,170,833 11,733 185,991 2,973,109
Balance at Jun. 30, 202011,734 181,895 2,788,839
Cash dividends declared(17,598)
Share-based compensation and restricted share issuances, net of forfeitures(1)4,096
Net income201,868
Balance at Sep. 30, 2020 $ 3,170,833 $ 11,733 $ 185,991 $ 2,973,109

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands9 Months Ended
Sep. 30, 2020Sep. 30, 2019
Cash flows from operating activities:
Net income $ 482,850 $ 471,494
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization196,157 189,137
Loss on disposal of property and equipment255 5,624
Share-based compensation8,377 5,363
Provision for deferred income taxes(25,155)
Other operating activities, net23,974 75,897
Net cash provided by operating activities686,458 747,515
Cash flows from investing activities:
Purchase of property and equipment(166,459)(370,310)
Proceeds from sale of property and equipment3,411 2,598
Purchase of short-term investments(205,301)
Other investing, net(100)
Net cash used in investing activities(368,449)(367,712)
Cash flows from financing activities:
Proceeds from issuance of long-term debt99,923
Payments for share repurchases(306,791)(205,346)
Forward contract for accelerated share repurchases(37,500)
Dividends paid(53,471)(41,005)
Other financing activities, net(3,345)(1,448)
Net cash used in financing activities(301,184)(247,799)
Increase in cash and cash equivalents16,825 132,004
Cash and cash equivalents at beginning of period403,571 190,282
Cash and cash equivalents at end of period $ 420,396 $ 322,286

Significant Accounting Policies

Significant Accounting Policies9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]
Significant Accounting PoliciesNote 1. Significant Accounting Policies Business We are a leading, less-than-truckload (“LTL”), union-free motor carrier providing regional, inter-regional and national LTL services through a single integrated organization. Our service offerings, which include expedited transportation, are provided through an expansive network of service centers located throughout the continental United States. Through strategic alliances, we also provide LTL services throughout North America. In addition to our core LTL services, we offer a range of value-added services including container drayage, truckload brokerage and supply chain consulting. We have one operating segment and the composition of our revenue is summarized below:
Three Months Ended
Nine Months Ended
September 30,
September 30,
(In thousands)
2020
2019
2020
2019
LTL services
$
1,044,640
$
1,035,093
$
2,903,140
$
3,058,864
Other services
13,526
13,364
38,600
41,041
Total revenue from operations
$
1,058,166
$
1,048,457
$
2,941,740
$
3,099,905
Basis of Presentation The accompanying unaudited, interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and, in management’s opinion, contain all adjustments (consisting of normal recurring items) necessary for a fair presentation, in all material respects, of the financial position and results of operations for the periods presented. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The preparation of condensed financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions. Such estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Our operating results are subject to seasonal trends; therefore, the results of operations for the interim period ended September 30, 2020 are not necessarily indicative of the results that may be expected for the subsequent quarterly periods or the year ending December 31, 2020. The condensed financial statements should be read in conjunction with the financial statements and related notes, which appear in our Annual Report on Form 10-K for the year ended December 31, 2019. There have been no significant changes in the accounting principles and policies, long-term contracts or estimates inherent in the preparation of the condensed financial statements of Old Dominion Freight Line, Inc. as previously described in our Annual Report on Form 10-K for the year ended December 31, 2019, other than those disclosed in this Form 10-Q. Certain amounts in prior years have been reclassified to conform prior years’ financial statements to the current presentation. Unless the context requires otherwise, references in these Notes to “Old Dominion,” the “Company,” “we,” “us” and “our” refer to Old Dominion Freight Line, Inc. Common Stock Split On February 21, 2020, we announced that our Board of Directors approved a three All references in this report to shares outstanding, weighted average shares outstanding, earnings per share, and dividends per share amounts have been restated retroactively to reflect this stock split. Split-adjusted quarterly per-share metrics may not recalculate precisely due to rounding. Short-term Investments The Company’s investments in certificates of deposit, U.S. government securities, and commercial paper with an original maturity of greater than three months have been classified and accounted for as trading securities, and are reported in “Short-term investments” on our Condensed Balance Sheet. These investments are measured at fair value each reporting period, with gains or losses recorded in “Non-operating expense (income)” on our Condensed Statement of Operations. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The levels of inputs used to measure fair value are: • Level 1 — Quoted prices for identical instruments in active markets; • Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets; and • Level 3 — Valuations based on inputs that are unobservable, generally utilizing pricing models or other valuation techniques that reflect management’s judgment and estimates. Our short-term investments and our long-term debt, including current maturities, are measured at fair value on a recurring basis, and are further described in Note 6. Our other financial securities in current assets and current liabilities approximate their fair value due to the short maturities of these instruments. Stock Repurchase Program On May 1, 2020, we announced that our Board of Directors had approved a new two-year stock repurchase program authorizing us to repurchase up to an aggregate of $700.0 million of our outstanding common stock (the “2020 Repurchase Program”). The 2020 Repurchase Program became effective upon the termination of our $350.0 million repurchase program on May 29, 2020, as of which date $21.5 million remained authorized under the prior program. Under the 2020 Repurchase Program, we may repurchase shares from time to time in open market purchases or through privately negotiated transactions. Shares of our common stock repurchased under our repurchase programs are canceled at the time of repurchase and are classified as authorized but unissued shares of our common stock. On May 29, 2020, we entered into an accelerated share repurchase agreement (the “ASR Agreement”) with a third-party financial institution as part of our 2020 Repurchase Program. Under the ASR Agreement, we paid the third-party financial institution $125.0 million and received an initial delivery of 511,427 shares of our common stock for $87.5 million, representing approximately 70% of the total value of shares to be received under the ASR Agreement. The remaining expected shares are scheduled to settle during the fourth quarter of 2020. At final settlement, we may receive additional shares of our common stock, or, under certain circumstances, we may be required to provide the third-party financial institution additional shares or may elect to make a cash payment to the third-party financial institution. The total shares repurchased will be based on the daily volume-weighted average share price of our common stock during the term of the ASR Agreement, less a negotiated discount. The ASR Agreement was accounted for as a settled treasury stock purchase and a forward stock purchase contract. The par value of the initial share delivery was recorded as a reduction to common stock, with the excess purchase price recorded as a reduction to retained earnings. The forward stock purchase contract is accounted for as a contract indexed to our own stock and is classified within capital in excess of par value on our Condensed Statements of Changes in Shareholders’ Equity. During the three months ended September 30, 2020, we did not repurchase any shares of our common stock. During the nine months ended September 30, 2020, we repurchased 2,237,320 shares of our common stock for $306.8 million under our repurchase programs, including shares repurchased under the ASR Agreement. As of September 30, 2020, we had $612.5 million remaining authorized under the 2020 Repurchase Program. Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Statements” (Topic 326). This ASU modified the loss methodology for establishing a provision against financial assets, including customer receivables, to include an expected future performance component. We adopted ASU 2016-13 on January 1, 2020. The adopti on did not have a material impact to our financial position, results of operations, or cash flow. We maintain an allowance for uncollectible accounts for estimated losses resulting from the inability of our customers to make required payments. We estimate this allowance by analyzing the aging of our customer receivables, our historical loss experience and other trends and factors affecting the credit risk of our customers, including anticipated changes to future performance. Write-offs occur when we determine an account to be uncollectible and could differ from our allowance estimate as a result of factors such as changes in the overall economic environment or risks surrounding our customers. Additional allowances may be required if the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments. We periodically review the underlying assumptions in our estimate of the allowance for uncollectible accounts to ensure that the allowance reflects the most recent trends and factors. Our allowance for uncollectible accounts was $4.9 million at September 30, 2020. There were no material write-offs to our allowance for uncollectible accounts during the third quarter of 2020.

Significant Accounting Polici_2

Significant Accounting Policies (Tables)9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]
BusinessBusiness We are a leading, less-than-truckload (“LTL”), union-free motor carrier providing regional, inter-regional and national LTL services through a single integrated organization. Our service offerings, which include expedited transportation, are provided through an expansive network of service centers located throughout the continental United States. Through strategic alliances, we also provide LTL services throughout North America. In addition to our core LTL services, we offer a range of value-added services including container drayage, truckload brokerage and supply chain consulting. We have one operating segment and the composition of our revenue is summarized below:
Three Months Ended
Nine Months Ended
September 30,
September 30,
(In thousands)
2020
2019
2020
2019
LTL services
$
1,044,640
$
1,035,093
$
2,903,140
$
3,058,864
Other services
13,526
13,364
38,600
41,041
Total revenue from operations
$
1,058,166
$
1,048,457
$
2,941,740
$
3,099,905
Disaggregated RevenueWe have one operating segment and the composition of our revenue is summarized below:
Three Months Ended
Nine Months Ended
September 30,
September 30,
(In thousands)
2020
2019
2020
2019
LTL services
$
1,044,640
$
1,035,093
$
2,903,140
$
3,058,864
Other services
13,526
13,364
38,600
41,041
Total revenue from operations
$
1,058,166
$
1,048,457
$
2,941,740
$
3,099,905

Earnings Per Share

Earnings Per Share9 Months Ended
Sep. 30, 2020
Earnings Per Share [Abstract]
Earnings Per ShareNote 2. Earnings Per Share Basic earnings per share is computed by dividing net income by the daily weighted average number of shares of our common stock outstanding for the period, excluding unvested restricted stock. Unvested restricted stock is included in common shares outstanding on our Condensed Balance Sheets. Diluted earnings per share is computed using the treasury stock method. The denominator used in calculating diluted earnings per share includes the impact of unvested restricted stock and other dilutive, non-participating securities under our equity award agreements. The denominator excludes contingently-issuable shares under performance-based award agreements when the performance target has not yet been deemed achieved. The following table provides a reconciliation of the number of shares of common stock used in computing basic and diluted earnings per share:
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
Weighted average shares outstanding - basic
117,188,398
119,820,422
117,946,805
120,711,513
Dilutive effect of share-based awards
745,042
163,731
750,031
171,323
Weighted average shares outstanding - diluted
117,933,440
119,984,153
118,696,836
120,882,836

Long-Term Debt

Long-Term Debt9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]
Long-Term DebtNote 3. Long-Term Debt Long-term debt, net of unamortized debt issuance costs, consisted of the following:
(In thousands)
September 30, 2020
December 31, 2019
Senior notes
$
144,927
$
45,000
Revolving credit facility


Total long-term debt
144,927
45,000
Less: Current maturities
(45,000
)

Total maturities due after one year
$
99,927
$
45,000
Senior Note Agreements We had an unsecured senior note agreement with a principal amount outstanding of $45.0 million at each of September 30, 2020 and December 31, 2019 (the “Senior Note”). The agreement for the Senior Note calls for a scheduled principal payment of $45.0 million, with an interest rate of 4.79%, on January 3, 2021. On May 4, 2020, we entered into a Note Purchase and Private Shelf Agreement with PGIM, Inc. (“Prudential”) and certain affiliates and managed accounts of Prudential (the “Note Agreement”). The Note Agreement, which is uncommitted and subject to Prudential’s sole discretion, provides for the issuance of senior promissory notes with an aggregate principal amount of up to $350.0 million through May 4, 2023. Pursuant to the Note Agreement, we issued $100.0 million aggregate principal amount of senior promissory notes (the “Series B Notes”), the proceeds of which are available for capital expenditures, share repurchases, dividends, acquisitions, or general corporate purposes. Borrowing availability under the Note Agreement is reduced by the outstanding amount of the existing Senior Note, the Series B Notes, and all other senior promissory notes issued pursuant to the Note Agreement. The Series B Notes bear interest at 3.10% per annum and mature on May 4, 2027, unless prepaid. Credit Agreement On November 21, 2019, we entered into a second amended and restated credit agreement with Wells Fargo Bank, National Association serving as administrative agent for the lenders (the “Credit Agreement”). The Credit Agreement provides for a five-year, $250.0 million senior unsecured revolving line of credit and a $150.0 million accordion feature, which if fully exercised and approved, would expand the total borrowing capacity up to an aggregate of $400.0 million. Of the $250.0 million line of credit commitments under the Credit Agreement, up to $100.0 million may be used for letters of credit. At our option, borrowings under the Credit Agreement bear interest at either: (i) LIBOR (including applicable successor provisions) plus an applicable margin (based on our ratio of net debt-to-total capitalization) that ranges from 1.000% to 1.375%; or (ii) a Base Rate plus an applicable margin (based on our ratio of net debt-to-total capitalization) that ranges from 0.000% to 0.375%. Letter of credit fees equal to the applicable margin for LIBOR loans are charged quarterly in arrears on the daily average aggregate stated amount of all letters of credit outstanding during the quarter. Commitment fees ranging from 0.100% to 0.175% (based upon the ratio of net debt-to-total capitalization) are charged quarterly in arrears on the aggregate unutilized portion of the Credit Agreement. For periods covered under the Credit Agreement, the applicable margin on LIBOR loans and letter of credit fees were 1.000% and commitment fees were 0.100%. The Credit Agreement replaced our previous five-year, $300.0 million senior unsecured revolving credit agreement dated as of December 15, 2015, as amended on September 9, 2016 (the “Prior Credit Agreement”). For periods in 2019 covered under the Prior Credit Agreement, the applicable margin on LIBOR loans and letter of credit fees were 1.000% and commitment fees were 0.125%. There were $42.1 million and $48.9 million of outstanding letters of credit at September 30, 2020 and December 31, 2019, respectively. General Debt Provisions The Senior Note, Credit Agreement, and Note Agreement contain customary covenants, including financial covenants that require us to observe a maximum ratio of debt to total capital and a minimum fixed charge coverage ratio. The Credit Agreement and Note Agreement also include a provision limiting our ability to make restricted payments, including dividends and payments for share repurchases, unless, among other conditions, no defaults or events of default are ongoing (or would be caused by such restricted payment).

Commitments and Contingencies

Commitments and Contingencies9 Months Ended
Sep. 30, 2020
Commitments And Contingencies Disclosure [Abstract]
Commitments and ContingenciesNote 4. Commitments and Contingencies We are involved in or addressing various legal proceedings and claims, governmental inquiries, notices and investigations that have arisen in the ordinary course of our business and have not been fully adjudicated, some of which may be covered in whole or in part by insurance. Certain of these matters include collective and/or class-action allegations. We do not believe that the resolution of any of these matters will have a material adverse effect upon our financial position, results of operations or cash flows.

Leases

Leases9 Months Ended
Sep. 30, 2020
Leases [Abstract]
LeasesNote 5. Leases Our right-of-use assets totaled $100.2 million and $65.3 million as of September 30, 2020 and December 31, 2019, respectively, and are presented within “Other assets,” which is classified as long-term, on our Condensed Balance Sheets. Our corresponding lease liabilities consist of a current and a non-current portion. The current lease liability was $12.3 million and $10.4 million as of September 30, 2020 and December 31, 2019, respectively, and is presented within “Other accrued liabilities” on our Condensed Balance Sheets. The non-current lease liability was $89.5 million and $56.1 million as of September 30, 2020 and December 31, 2019, respectively, and is presented within “Other non-current liabilities” on our Condensed Balance Sheets. During the three-months ended September 30, 2020, we added $41.0 million in new right-of-use assets in exchange for corresponding lease liabilities, which includes leases that were executed prior to December 31, 2019 and commenced in the quarter ended September 30, 2020.

Fair Value Measurements

Fair Value Measurements9 Months Ended
Sep. 30, 2020
Fair Value Disclosures [Abstract]
Fair Value MeasurementsNote 6. Fair Value Measurements Short-term investments A summary of the fair value of our short-term investments as of September 30, 2020 is shown in the table below.
September 30, 2020
Level 1
Level 2
Level 3
Certificates of deposit
$
55,000
$

$
55,000
$

U.S. government securities
75,367
75,367


Commercial paper
74,927

74,927

Total
$
205,294
$
75,367
$
129,927
$

Our certificates of deposit are measured at carrying value including accrued interest, which approximates fair value due to their short-term nature. Our commercial paper is valued using broker quotes that utilize observable market inputs. Long-term debt The carrying value of our total long-term debt, including current maturities, was $144.9 million and $45.0 million at September 30, 2020 and December 31, 2019, respectively. The estimated fair value of our total long-term debt, including current maturities, was $151.1 million and $46.1 million at September 30, 2020 and December 31, 2019, respectively. The fair value measurement of our senior notes was determined using a discounted cash flow analysis that factors in current market yields for comparable borrowing arrangements under our credit profile. Since this methodology is based upon market yields for comparable arrangements, the measurement is categorized as Level 2 under the three-level fair value hierarchy as established by the FASB.

Significant Accounting Polici_3

Significant Accounting Policies (Policies)9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]
Basis of PresentationBasis of Presentation The accompanying unaudited, interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and, in management’s opinion, contain all adjustments (consisting of normal recurring items) necessary for a fair presentation, in all material respects, of the financial position and results of operations for the periods presented. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The preparation of condensed financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions. Such estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Our operating results are subject to seasonal trends; therefore, the results of operations for the interim period ended September 30, 2020 are not necessarily indicative of the results that may be expected for the subsequent quarterly periods or the year ending December 31, 2020. The condensed financial statements should be read in conjunction with the financial statements and related notes, which appear in our Annual Report on Form 10-K for the year ended December 31, 2019. There have been no significant changes in the accounting principles and policies, long-term contracts or estimates inherent in the preparation of the condensed financial statements of Old Dominion Freight Line, Inc. as previously described in our Annual Report on Form 10-K for the year ended December 31, 2019, other than those disclosed in this Form 10-Q. Certain amounts in prior years have been reclassified to conform prior years’ financial statements to the current presentation. Unless the context requires otherwise, references in these Notes to “Old Dominion,” the “Company,” “we,” “us” and “our” refer to Old Dominion Freight Line, Inc.
Common Stock SplitCommon Stock Split On February 21, 2020, we announced that our Board of Directors approved a three All references in this report to shares outstanding, weighted average shares outstanding, earnings per share, and dividends per share amounts have been restated retroactively to reflect this stock split. Split-adjusted quarterly per-share metrics may not recalculate precisely due to rounding.
Short-term InvestmentsShort-term Investments The Company’s investments in certificates of deposit, U.S. government securities, and commercial paper with an original maturity of greater than three months have been classified and accounted for as trading securities, and are reported in “Short-term investments” on our Condensed Balance Sheet. These investments are measured at fair value each reporting period, with gains or losses recorded in “Non-operating expense (income)” on our Condensed Statement of Operations.
Fair Values of Financial InstrumentsFair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The levels of inputs used to measure fair value are: • Level 1 — Quoted prices for identical instruments in active markets; • Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets; and • Level 3 — Valuations based on inputs that are unobservable, generally utilizing pricing models or other valuation techniques that reflect management’s judgment and estimates. Our short-term investments and our long-term debt, including current maturities, are measured at fair value on a recurring basis, and are further described in Note 6. Our other financial securities in current assets and current liabilities approximate their fair value due to the short maturities of these instruments.
Stock Repurchase ProgramStock Repurchase Program On May 1, 2020, we announced that our Board of Directors had approved a new two-year stock repurchase program authorizing us to repurchase up to an aggregate of $700.0 million of our outstanding common stock (the “2020 Repurchase Program”). The 2020 Repurchase Program became effective upon the termination of our $350.0 million repurchase program on May 29, 2020, as of which date $21.5 million remained authorized under the prior program. Under the 2020 Repurchase Program, we may repurchase shares from time to time in open market purchases or through privately negotiated transactions. Shares of our common stock repurchased under our repurchase programs are canceled at the time of repurchase and are classified as authorized but unissued shares of our common stock. On May 29, 2020, we entered into an accelerated share repurchase agreement (the “ASR Agreement”) with a third-party financial institution as part of our 2020 Repurchase Program. Under the ASR Agreement, we paid the third-party financial institution $125.0 million and received an initial delivery of 511,427 shares of our common stock for $87.5 million, representing approximately 70% of the total value of shares to be received under the ASR Agreement. The remaining expected shares are scheduled to settle during the fourth quarter of 2020. At final settlement, we may receive additional shares of our common stock, or, under certain circumstances, we may be required to provide the third-party financial institution additional shares or may elect to make a cash payment to the third-party financial institution. The total shares repurchased will be based on the daily volume-weighted average share price of our common stock during the term of the ASR Agreement, less a negotiated discount. The ASR Agreement was accounted for as a settled treasury stock purchase and a forward stock purchase contract. The par value of the initial share delivery was recorded as a reduction to common stock, with the excess purchase price recorded as a reduction to retained earnings. The forward stock purchase contract is accounted for as a contract indexed to our own stock and is classified within capital in excess of par value on our Condensed Statements of Changes in Shareholders’ Equity. During the three months ended September 30, 2020, we did not repurchase any shares of our common stock. During the nine months ended September 30, 2020, we repurchased 2,237,320 shares of our common stock for $306.8 million under our repurchase programs, including shares repurchased under the ASR Agreement. As of September 30, 2020, we had $612.5 million remaining authorized under the 2020 Repurchase Program.
Recent Accounting PronouncementsRecent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Statements” (Topic 326). This ASU modified the loss methodology for establishing a provision against financial assets, including customer receivables, to include an expected future performance component. We adopted ASU 2016-13 on January 1, 2020. The adopti on did not have a material impact to our financial position, results of operations, or cash flow. We maintain an allowance for uncollectible accounts for estimated losses resulting from the inability of our customers to make required payments. We estimate this allowance by analyzing the aging of our customer receivables, our historical loss experience and other trends and factors affecting the credit risk of our customers, including anticipated changes to future performance. Write-offs occur when we determine an account to be uncollectible and could differ from our allowance estimate as a result of factors such as changes in the overall economic environment or risks surrounding our customers. Additional allowances may be required if the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments. We periodically review the underlying assumptions in our estimate of the allowance for uncollectible accounts to ensure that the allowance reflects the most recent trends and factors. Our allowance for uncollectible accounts was $4.9 million at September 30, 2020. There were no material write-offs to our allowance for uncollectible accounts during the third quarter of 2020.

Earnings Per Share (Tables)

Earnings Per Share (Tables)9 Months Ended
Sep. 30, 2020
Earnings Per Share [Abstract]
Reconciliation of Number of Common Stock used in Computing Basic and Diluted Earning Per ShareThe following table provides a reconciliation of the number of shares of common stock used in computing basic and diluted earnings per share:
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
Weighted average shares outstanding - basic
117,188,398
119,820,422
117,946,805
120,711,513
Dilutive effect of share-based awards
745,042
163,731
750,031
171,323
Weighted average shares outstanding - diluted
117,933,440
119,984,153
118,696,836
120,882,836

Long-Term Debt (Tables)

Long-Term Debt (Tables)9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]
Schedule of Long-Term Debt, Net of Unamortized Debt Issuance CostsLong-term debt, net of unamortized debt issuance costs, consisted of the following:
(In thousands)
September 30, 2020
December 31, 2019
Senior notes
$
144,927
$
45,000
Revolving credit facility


Total long-term debt
144,927
45,000
Less: Current maturities
(45,000
)

Total maturities due after one year
$
99,927
$
45,000

Fair Value Measurements (Tables

Fair Value Measurements (Tables)9 Months Ended
Sep. 30, 2020
Fair Value Disclosures [Abstract]
Schedule of Fair Value of Short-term InvestmentsA summary of the fair value of our short-term investments as of September 30, 2020 is shown in the table below.
September 30, 2020
Level 1
Level 2
Level 3
Certificates of deposit
$
55,000
$

$
55,000
$

U.S. government securities
75,367
75,367


Commercial paper
74,927

74,927

Total
$
205,294
$
75,367
$
129,927
$

Significant Accounting Polici_4

Significant Accounting Policies - Additional Information (Details)1 Months Ended9 Months Ended
May 29, 2020USD ($)sharesSep. 30, 2020USD ($)SegmentsharesSep. 30, 2019USD ($)May 01, 2020USD ($)
Significant Accounting Policies [Line Items]
Number of operating segment | Segment1
Common stock split, descriptionOn February 21, 2020, we announced that our Board of Directors approved a three-for-two split of our common stock for shareholders of record as of the close of business on the record date of March 10, 2020. On March 24, 2020, those shareholders received one additional share of common stock for every two shares owned.
Common stock split, conversion ratio1.5
Payments made to third party financial institution for share repurchase under the ASR agreement $ 125,000,000
Number of shares received under stock repurchase ASR agreement | shares511,427
Payments for repurchase of common stock recieved under stock repurchase ASR agreement $ 87,500,000 $ 306,791,000 $ 205,346,000
Percentage of shares received under stock repurchase ASR agreement70.00%
Allowance for uncollectible accounts4,900,000
2019 Share Repurchase Program [Member] | Maximum [Member]
Significant Accounting Policies [Line Items]
Stock repurchase program, authorized amount $ 21,500,000 $ 350,000,000
2020 Share Repurchase Program [Member]
Significant Accounting Policies [Line Items]
Stock repurchase program, remaining authorized repurchase amount $ 612,500,000
2020 Share Repurchase Program [Member] | Maximum [Member]
Significant Accounting Policies [Line Items]
Stock repurchase program, authorized amount $ 700,000,000
Share Repurchase Program [Member]
Significant Accounting Policies [Line Items]
Stock repurchased and retired during period, shares | shares2,237,320
Stock repurchased and retired during period, value $ 306,800,000

Significant Accounting Polici_5

Significant Accounting Policies - Disaggregated Revenue (Details) - USD ($) $ in Thousands3 Months Ended9 Months Ended
Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019
Disaggregation of Revenue [Line Items]
Revenue from operations $ 1,058,166 $ 1,048,457 $ 2,941,740 $ 3,099,905
LTL Service Revenue [Member]
Disaggregation of Revenue [Line Items]
Revenue from operations1,044,640 1,035,093 2,903,140 3,058,864
Other Service Revenue [Member]
Disaggregation of Revenue [Line Items]
Revenue from operations $ 13,526 $ 13,364 $ 38,600 $ 41,041

Earnings Per Share - Reconcilia

Earnings Per Share - Reconciliation of Number of Common Stock used in Computing Basic and Diluted Earning Per Share (Details) - shares3 Months Ended9 Months Ended
Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019
Weighted Average Number Of Shares Outstanding [Abstract]
Weighted average shares outstanding - basic117,188,398 119,820,422 117,946,805 120,711,513
Dilutive effect of share-based awards745,042 163,731 750,031 171,323
Weighted average shares outstanding - diluted117,933,440 119,984,153 118,696,836 120,882,836

Long-Term Debt - Schedule of Lo

Long-Term Debt - Schedule of Long-Term Debt, Net of Unamortized Debt Issuance Costs (Details) - USD ($) $ in ThousandsSep. 30, 2020Dec. 31, 2019
Debt Disclosure [Abstract]
Senior notes $ 144,927 $ 45,000
Revolving credit facility0 0
Total long-term debt144,927 45,000
Less: Current maturities(45,000)0
Total maturities due after one year $ 99,927 $ 45,000

Long-Term Debt - Additional Inf

Long-Term Debt - Additional Information (Details) - USD ($)May 04, 2023May 04, 2020Sep. 30, 2020Dec. 31, 2019
Debt Instrument [Line Items]
Senior note $ 144,927,000 $ 45,000,000
Fixed interest rate4.79%
Debt instrument, due dateJan. 3,
2021
Proceeds from issuance of senior promissory notes $ 99,923,000
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage0.10%
Letter of Credit Fee in Percentage1.00%
Letters of Credit Outstanding, Amount $ 42,100,000 48,900,000
2019 Credit Agreement [Member]
Debt Instrument [Line Items]
Original borrowing capacity250,000,000
Line of Credit Facility Accordion150,000,000
Line of Credit Facility, Maximum Borrowing Capacity400,000,000
Letter of Credit [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Capacity Available for Specific Purpose Other than for Trade Purchases $ 100,000,000
Prior Credit Agreement [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity $ 300,000,000
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage0.125%
Letter of Credit Fee in Percentage1.00%
Maximum [Member]
Debt Instrument [Line Items]
Interest Rate Spread added to Rate0.375%
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage0.175%
Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Interest Rate Spread added to Rate1.375%
Minimum [Member]
Debt Instrument [Line Items]
Interest Rate Spread added to Rate0.00%
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage0.10%
Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Interest Rate Spread added to Rate1.00%
Series B
Debt Instrument [Line Items]
Scheduled principal payment $ 20,000,000
Debt instrument, due dateMay 4,
2027
Notes interest3.10%
Maturity Date DescriptionThe Series B Notes bear interest at 3.10% per annum and mature on May 4, 2027, unless prepaid.
P G I M I N C | Series B Notes
Debt Instrument [Line Items]
Proceeds from issuance of senior promissory notes $ 100,000,000
Unsecured Senior Notes [Member]
Debt Instrument [Line Items]
Senior note $ 45,000,000 $ 45,000,000
Unsecured Senior Note Due January 3, 2021 [Member]
Debt Instrument [Line Items]
Scheduled principal payment $ 45,000,000
Note Agreement | P G I M I N C | Maximum [Member]
Debt Instrument [Line Items]
Aggregate amount on promissory notes issued $ 350,000,000

Leases - Additional Information

Leases - Additional Information (Details) - USD ($) $ in Millions3 Months Ended
Sep. 30, 2020Dec. 31, 2019
Leases [Abstract]
Operating lease, liability, current $ 12.3 $ 10.4
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]us-gaap:AccruedLiabilitiesCurrentus-gaap:AccruedLiabilitiesCurrent
Operating lease, liability, noncurrent $ 89.5 $ 56.1
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]us-gaap:OtherLiabilitiesNoncurrentus-gaap:OtherLiabilitiesNoncurrent
operating Lease right of use asset $ 100.2 $ 65.3
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]us-gaap:OtherAssetsNoncurrentus-gaap:OtherAssetsNoncurrent
Right-of-use assets obtained in exchange for new operating lease liabilities $ 41

Fair Value Measurements - Sched

Fair Value Measurements - Schedule of Fair Value of Short-term Investments (Details) $ in ThousandsSep. 30, 2020USD ($)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair value $ 205,294
U.S. government securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair value75,367
Level 1 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair value75,367
Level 1 [Member] | U.S. government securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair value75,367
Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair value129,927
Certificates of deposit [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair value55,000
Certificates of deposit [Member] | Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair value55,000
Commercial paper [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair value74,927
Commercial paper [Member] | Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets, Fair value $ 74,927

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Details) - USD ($) $ in ThousandsSep. 30, 2020Dec. 31, 2019
Fair Value Disclosures [Abstract]
Debt and capital lease obligations $ 144,927 $ 45,000
Long-term debt, fair value $ 151,100 $ 46,100