Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 04, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | OLD DOMINION FREIGHT LINE, INC. | |
Entity Central Index Key | 0000878927 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | ODFL | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 117,331,447 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 0-19582 | |
Entity Incorporation, State or Country Code | VA | |
Entity Tax Identification Number | 56-0751714 | |
Entity Address, Postal Zip Code | 27360 | |
Entity Address, Address Line One | 500 Old Dominion Way | |
Entity Address, City or Town | Thomasville | |
Entity Address, State or Province | NC | |
City Area Code | 336 | |
Local Phone Number | 889-5000 | |
Security Exchange Name | NASDAQ | |
Title of 12(b) Security | Common Stock ($0.10 par value) | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 420,396 | $ 403,571 |
Short-term investments | 205,294 | |
Customer receivables, less allowances of $10,286 and $8,866, respectively | 453,346 | 397,579 |
Other receivables | 9,578 | 10,586 |
Prepaid expenses and other current assets | 49,882 | 55,098 |
Total current assets | 1,138,496 | 866,834 |
Property and equipment: | ||
Revenue equipment | 1,892,005 | 1,898,999 |
Land and structures | 2,167,557 | 2,039,937 |
Other fixed assets | 495,268 | 482,425 |
Leasehold improvements | 12,043 | 11,709 |
Total property and equipment | 4,566,873 | 4,433,070 |
Accumulated depreciation | (1,631,398) | (1,464,235) |
Net property and equipment | 2,935,475 | 2,968,835 |
Goodwill | 19,463 | 19,463 |
Other assets | 180,254 | 140,436 |
Total assets | 4,273,688 | 3,995,568 |
Current liabilities: | ||
Accounts payable | 59,229 | 70,254 |
Compensation and benefits | 217,154 | 192,524 |
Claims and insurance accruals | 54,493 | 54,330 |
Other accrued liabilities | 60,141 | 46,130 |
Income taxes payable | 13,271 | 2,847 |
Current maturities of long-term debt | 45,000 | |
Total current liabilities | 449,288 | 366,085 |
Long-term liabilities: | ||
Long-term debt | 99,927 | 45,000 |
Other non-current liabilities | 316,831 | 241,802 |
Deferred income taxes | 236,809 | 261,964 |
Total long-term liabilities | 653,567 | 548,766 |
Total liabilities | 1,102,855 | 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, 2019 | 11,733 | 11,953 |
Capital in excess of par value | 185,991 | 218,462 |
Retained earnings | 2,973,109 | 2,850,302 |
Total shareholders’ equity | 3,170,833 | 3,080,717 |
Total liabilities and shareholders’ equity | $ 4,273,688 | $ 3,995,568 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 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 authorized | 280,000,000 | 140,000,000 |
Common stock, shares outstanding | 117,331,447 | 119,532,534 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 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 benefits | 524,658 | 533,451 | 1,510,047 | 1,588,378 |
Operating supplies and expenses | 90,269 | 117,343 | 273,374 | 361,110 |
General supplies and expenses | 27,383 | 33,633 | 86,872 | 97,584 |
Operating taxes and licenses | 29,923 | 29,117 | 86,280 | 87,572 |
Insurance and claims | 11,821 | 11,280 | 32,581 | 34,039 |
Communications and utilities | 7,622 | 8,098 | 23,075 | 22,071 |
Depreciation and amortization | 64,983 | 63,493 | 196,153 | 189,137 |
Purchased transportation | 25,405 | 23,063 | 65,188 | 68,218 |
Miscellaneous expenses, net | 5,858 | 11,452 | 15,590 | 21,354 |
Total operating expenses | 787,922 | 830,930 | 2,289,160 | 2,469,463 |
Operating income | 270,244 | 217,527 | 652,580 | 630,442 |
Non-operating expense (income): | ||||
Interest expense | 1,071 | 3 | 1,936 | 285 |
Interest income | (123) | (1,714) | (1,602) | (4,966) |
Other expense, net | 961 | 844 | 4,205 | 768 |
Total non-operating expense (income) | 1,909 | (867) | 4,539 | (3,913) |
Income before income taxes | 268,335 | 218,394 | 648,041 | 634,355 |
Provision for income taxes | 66,467 | 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: | ||||
Basic | 117,188,398 | 119,820,422 | 117,946,805 | 120,711,513 |
Diluted | 117,933,440 | 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 Thousands | Total | Common 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 forfeitures | 10 | 5,353 | ||
Taxes paid in exchange for shares withheld | (2) | (1,446) | ||
Net income | 471,494 | |||
Balance at Sep. 30, 2019 | $ 2,909,528 | 11,982 | 142,117 | 2,755,429 |
Balance at Jun. 30, 2019 | 12,020 | 140,970 | 2,645,495 | |
Share repurchases | (38) | (40,576) | ||
Cash dividends declared | (13,589) | |||
Share-based compensation and restricted share issuances, net of forfeitures | 1,147 | |||
Net income | 164,099 | |||
Balance at Sep. 30, 2019 | 2,909,528 | 11,982 | 142,117 | 2,755,429 |
Balance at Dec. 31, 2019 | 3,080,717 | 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 forfeitures | 6 | 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 income | 482,850 | |||
Balance at Sep. 30, 2020 | 3,170,833 | 11,733 | 185,991 | 2,973,109 |
Balance at Jun. 30, 2020 | 11,734 | 181,895 | 2,788,839 | |
Cash dividends declared | (17,598) | |||
Share-based compensation and restricted share issuances, net of forfeitures | (1) | 4,096 | ||
Net income | 201,868 | |||
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 Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 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 amortization | 196,157 | 189,137 |
Loss on disposal of property and equipment | 255 | 5,624 |
Share-based compensation | 8,377 | 5,363 |
Provision for deferred income taxes | (25,155) | |
Other operating activities, net | 23,974 | 75,897 |
Net cash provided by operating activities | 686,458 | 747,515 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (166,459) | (370,310) |
Proceeds from sale of property and equipment | 3,411 | 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 debt | 99,923 | |
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 equivalents | 16,825 | 132,004 |
Cash and cash equivalents at beginning of period | 403,571 | 190,282 |
Cash and cash equivalents at end of period | $ 420,396 | $ 322,286 |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 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] | |
Business | 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 |
Disaggregated Revenue | 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 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 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 Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 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 Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 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
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Note 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 Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 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 Presentation | 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 | 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 | 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 Values of Financial Instruments | 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 | 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 | 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. |
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 Share | 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 (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt, Net of Unamortized Debt Issuance Costs | 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 |
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 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 $ — |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Details) | 1 Months Ended | 9 Months Ended | ||
May 29, 2020USD ($)shares | Sep. 30, 2020USD ($)Segmentshares | Sep. 30, 2019USD ($) | May 01, 2020USD ($) | |
Significant Accounting Policies [Line Items] | ||||
Number of operating segment | Segment | 1 | |||
Common stock split, description | On 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 ratio | 1.5 | |||
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 | shares | 511,427 | |||
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 agreement | 70.00% | |||
Allowance for uncollectible accounts | 4,900,000 | |||
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 | shares | 2,237,320 | |||
Stock repurchased and retired during period, value | $ 306,800,000 |
Significant Accounting Polici_5
Significant Accounting Policies - Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 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 operations | 1,044,640 | 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) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Weighted Average Number Of Shares Outstanding [Abstract] | ||||
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 - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt, Net of Unamortized Debt Issuance Costs (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Senior notes | $ 144,927 | $ 45,000 |
Revolving credit facility | 0 | 0 |
Total long-term debt | 144,927 | 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, 2023 | May 04, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||||
Senior note | $ 144,927,000 | $ 45,000,000 | ||
Fixed interest rate | 4.79% | |||
Debt instrument, due date | Jan. 3, 2021 | |||
Proceeds from issuance of senior promissory notes | $ 99,923,000 | |||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.10% | |||
Letter of Credit Fee in Percentage | 1.00% | |||
Letters of Credit Outstanding, Amount | $ 42,100,000 | 48,900,000 | ||
2019 Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Original borrowing capacity | 250,000,000 | |||
Line of Credit Facility Accordion | 150,000,000 | |||
Line of Credit Facility, Maximum Borrowing Capacity | 400,000,000 | |||
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 Percentage | 0.125% | |||
Letter of Credit Fee in Percentage | 1.00% | |||
Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest Rate Spread added to Rate | 0.375% | |||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.175% | |||
Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest Rate Spread added to Rate | 1.375% | |||
Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest Rate Spread added to Rate | 0.00% | |||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.10% | |||
Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest Rate Spread added to Rate | 1.00% | |||
Series B | ||||
Debt Instrument [Line Items] | ||||
Scheduled principal payment | $ 20,000,000 | |||
Debt instrument, due date | May 4, 2027 | |||
Notes interest | 3.10% | |||
Maturity Date Description | The 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 Millions | 3 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease, liability, current | $ 12.3 | $ 10.4 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccruedLiabilitiesCurrent | us-gaap:AccruedLiabilitiesCurrent |
Operating lease, liability, noncurrent | $ 89.5 | $ 56.1 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent | us-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:OtherAssetsNoncurrent | us-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 Thousands | Sep. 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 value | 75,367 |
Level 1 [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Assets, Fair value | 75,367 |
Level 1 [Member] | U.S. government securities [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Assets, Fair value | 75,367 |
Level 2 [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Assets, Fair value | 129,927 |
Certificates of deposit [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Assets, Fair value | 55,000 |
Certificates of deposit [Member] | Level 2 [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Assets, Fair value | 55,000 |
Commercial paper [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Assets, Fair value | 74,927 |
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 Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value Disclosures [Abstract] | ||
Debt and capital lease obligations | $ 144,927 | $ 45,000 |
Long-term debt, fair value | $ 151,100 | $ 46,100 |