Old Dominion Freight Line (ODFL) 10-Q 10 May 17 2017 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 08, 2017
Document And Entity Information [Abstract]
Entity Registrant Name	OLD DOMINION FREIGHT LINE INC/VA
Entity Central Index Key	878,927
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Trading Symbol	ODFL
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		82,441,875

Condensed Balance Sheets

Condensed Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 47,551	$ 10,171
Customer receivables, less allowances of $8,711 and $8,346, respectively	332,157	320,087
Other receivables	5,734	14,402
Prepaid expenses and other current assets	39,632	37,962
Total current assets	425,074	382,622
Property and equipment:
Revenue equipment	1,492,136	1,496,697
Land and structures	1,417,866	1,377,106
Other fixed assets	416,431	402,482
Leasehold improvements	8,733	8,699
Total property and equipment	3,335,166	3,284,984
Accumulated depreciation	(1,088,880)	(1,043,582)
Net property and equipment	2,246,286	2,241,402
Goodwill	19,463	19,463
Other assets	54,187	52,760
Total assets	2,745,010	2,696,247
Current liabilities:
Accounts payable	56,843	89,216
Compensation and benefits	126,511	129,170
Claims and insurance accruals	47,693	47,417
Other accrued liabilities	22,315	22,833
Income taxes payable	31,423	0
Current maturities of long-term debt	50,000	0
Total current liabilities	334,785	288,636
Long-term liabilities:
Long-term debt	45,000	104,975
Other non-current liabilities	183,263	178,879
Deferred income taxes	272,599	272,599
Total long-term liabilities	500,862	556,453
Total liabilities	835,647	845,089
Commitments and Contingencies
Shareholders' equity:
Common stock - $0.10 par value, 140,000,000 shares authorized, 82,465,636 and 82,416,657 shares outstanding at March 31, 2017 and December 31, 2016, respectively	8,247	8,242
Capital in excess of par value	136,171	135,466
Retained earnings	1,764,945	1,707,450
Total shareholders' equity	1,909,363	1,851,158
Total liabilities and shareholders' equity	$ 2,745,010	$ 2,696,247

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Customer receivables, allowances	$ 8,711	$ 8,346
Common stock, par value	$ 0.10	$ 0.10
Common stock, shares authorized	140,000,000	140,000,000
Common stock, shares outstanding	82,465,636	82,416,657

Condensed Statements Of Operati

Condensed Statements Of Operations - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income Statement [Abstract]
Revenue from operations	$ 754,096,000	$ 707,733,000
Operating expenses:
Salaries, wages and benefits	416,504,000	400,869,000
Operating supplies and expenses	90,987,000	75,372,000
General supplies and expenses	22,872,000	21,142,000
Operating taxes and licenses	24,022,000	23,188,000
Insurance and claims	8,790,000	10,244,000
Communications and utilities	7,433,000	7,005,000
Depreciation and amortization	50,287,000	44,772,000
Purchased transportation	17,997,000	18,496,000
Building and office equipment rents	2,114,000	2,273,000
Miscellaneous expenses, net	4,968,000	4,824,000
Total operating expenses	645,974,000	608,185,000
Operating income	108,122,000	99,548,000
Non-operating expense (income):
Interest expense	595,000	1,183,000
Interest income	(35,000)	(16,000)
Other expense (income), net	409,000	516,000
Total non-operating expense	969,000	1,683,000
Income before income taxes	107,153,000	97,865,000
Provision for income taxes	41,361,000	37,580,000
Net income	$ 65,792,000	$ 60,285,000
Earnings per share:
Basic	$ 0.80	$ 0.72
Diluted	0.80	0.72
Dividends declared per share	$ 0.10	$ 0
Weighted average shares outstanding:
Basic	82,349,024	83,983,028
Diluted	82,444,458	83,983,028

Condensed Statements Of Cash Fl

Condensed Statements Of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities:
Net income	$ 65,792	$ 60,285
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	50,287	44,772
(Gain) loss on sale of property and equipment	77	200
Share-based compensation	710	0
Other operating activities, net	(6,057)	63,136
Net cash provided by operating activities	110,809	168,393
Cash flows from investing activities:
Purchase of property and equipment	(56,997)	(120,294)
Proceeds from sale of property and equipment	1,828	691
Net cash used in investing activities	(55,169)	(119,603)
Cash flows from financing activities:
Principal payments under long-term debt agreements	0	(892)
Proceeds From (Repayments Of) Line Of Credit	(9,975)	(7,591)
Payments for share repurchases	(50)	(44,646)
Dividends paid	(8,235)	0
Net cash provided by (used in) financing activities	(18,260)	(53,129)
(Decrease) increase in cash and cash equivalents	37,380	(4,339)
Cash and cash equivalents at beginning of period	10,171	11,472
Cash and cash equivalents at end of period	$ 47,551	$ 7,133

Significant Accounting Policies

Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Significant Accounting Policies [Text Block]	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, which include ground and air expedited transportation and consumer household pickup and delivery, through a single integrated organization. In addition to our core LTL services, we offer a range of value-added services including container drayage, truckload brokerage, supply chain consulting and warehousing. We have one operating segment and the composition of our revenue is summarized below: Three Months Ended March 31, (In thousands) 2017 2016 LTL services $ 740,186 $ 694,533 Other services 13,910 13,200 Total revenue $ 754,096 $ 707,733 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 March 31, 2017 are not necessarily indicative of the results that may be expected for subsequent quarterly periods or the year ending December 31, 2017 . 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, 2016 . 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, 2016 , other than those disclosed in this Form 10-Q. 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. Fair Values of Financial Instruments The carrying values of financial instruments in current assets and current liabilities approximate their fair value due to the short maturities of these instruments. The carrying value of our revolving credit facility approximates fair value due to the variable interest rates of the facility that correlate with current market rates. The carrying value of our total long-term debt, including current maturities, was $95.0 million and $105.0 million at March 31, 2017 and December 31, 2016 , respectively. The estimated fair value of our total long-term debt, including current maturities, was $98.2 million and $108.3 million at March 31, 2017 and December 31, 2016 , 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 Financial Accounting Standards Board (the “FASB”). Stock Repurchase Program During the second quarter of 2016, we completed our stock repurchase program, previously announced on November 10, 2014, to repurchase up to an aggregate of $200.0 million of our outstanding common stock. On May 23, 2016, 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 $250.0 million of our outstanding common stock (the “2016 Repurchase Program”). Under the 2016 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 program are canceled at the time of repurchase and are classified as authorized but unissued shares of our common stock. During the three months ended March 31, 2017 , we repurchased 600 shares of our common stock for $50,000 under our 2016 Repurchase Program. As of March 31, 2017 , we had $199.9 million remaining authorized under the 2016 Repurchase Program. Dividends On February 2, 2017, we announced that our Board of Directors had declared a quarterly cash dividend of $0.10 per share. The dividend was paid on March 20, 2017 to shareholders of record at the close of business on March 6, 2017.

Earnings Per Share

Earnings Per Share	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Earnings Per Share, Policy [Policy Text Block]	Note 2. Earnings Per Share Basic earnings per share of the Company is computed by dividing net income by the daily weighted average number of shares of common stock outstanding for the period, excluding unvested restricted stock. Unvested restricted stock is included in common shares outstanding in the balance sheets. Diluted earnings per share is computed using the treasury stock method and includes the impact of shares of unvested restricted stock. The following table provides a reconciliation of the number of common shares used in computing basic and diluted earnings per share: Three Months Ended March 31, 2017 2016 Weighted average shares outstanding - basic 82,349,024 83,983,028 Dilutive effect of share-based awards 95,434 — Weighted average shares outstanding - diluted 82,444,458 83,983,028

Long-Term Debt

Long-Term Debt	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Long-Term Debt	Note 3. Long-Term Debt Long-term debt consisted of the following: (In thousands) March 31, December 31, Senior notes $ 95,000 $ 95,000 Revolving credit facility — 9,975 Total long-term debt 95,000 104,975 Less: Current maturities (50,000 ) — Total maturities due after one year $ 45,000 $ 104,975 We have one unsecured senior note agreement with an amount outstanding of $95.0 million at each of March 31, 2017 and December 31, 2016 . Our unsecured senior note agreement calls for two scheduled principal payments of $50.0 million and $45.0 million on January 3, 2018 and January 3, 2021, respectively. Interest rates on the January 3, 2018 and January 3, 2021 scheduled principal payments are 4.00% and 4.79% , respectively. The effective average interest rate on our outstanding senior note agreement was 4.37% at each of March 31, 2017 and December 31, 2016 . On December 15, 2015, we entered into an amended and restated credit agreement with Wells Fargo Bank, National Association ("Wells Fargo") serving as administrative agent for the lenders (the "Credit Agreement"). The Credit Agreement originally provided for a five-year, $250.0 million senior unsecured revolving line of credit and a $100.0 million accordion feature, which if fully exercised and approved, would expand the total borrowing capacity up to an aggregate of $350.0 million . On September 9, 2016, we exercised a portion of the accordion feature and entered into an amendment to the Credit Agreement to increase the aggregate commitments from existing lenders by $50.0 million to an aggregate of $300.0 million . Of the $300.0 million line of credit commitments under the Credit Agreement, as amended, up to $100.0 million may be used for letters of credit and $30.0 million may be used for borrowings under the Wells Fargo Sweep Plus Loan Program (the "Sweep Program"). We utilize the Sweep Program to manage our daily cash needs, as it automatically initiates borrowings to cover overnight cash requirements primarily for working capital needs. At our option, borrowings under the Credit Agreement bear interest at either: (i) LIBOR plus an applicable margin (based on our ratio of net debt-to-total capitalization) that ranges from 1.0% to 1.50% ; or (ii) a Base Rate plus an applicable margin (based on our ratio of net debt-to-total capitalization) that ranges from 0.0% to 0.5% . Loans under the Sweep Program bear interest at the LIBOR plus applicable margin rate. 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 0.125% to 0.2% (based upon the ratio of net debt-to-total capitalization) are charged quarterly in arrears on the aggregate unutilized portion of the Credit Agreement. Wells Fargo, as administrative agent, also receives an annual fee for providing administrative services. For each of the three-month periods ended March 31, 2017 and 2016 , the applicable margin on LIBOR loans was 1.0% and commitment fees were 0.125% under the Credit Agreement. There were $81.8 million and $74.6 million of outstanding letters of credit at March 31, 2017 and December 31, 2016 , respectively. Letter of credit fees remained at 1.0% during each of the three-month periods ended March 31, 2017 and 2016 .

Commitments And Contingencies

Commitments And Contingencies	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Commitments And Contingencies	Note 4. Commitments and Contingencies We are involved in or addressing various legal proceedings, governmental inquiries and notices, and claims that have arisen in the ordinary course of our business and have not been fully adjudicated, some of which are covered in whole or in part by insurance. Certain of these matters include class-action allegations. We do not believe that the resolution of any of these legal proceedings, governmental inquiries and notices, or claims will have a material adverse effect upon our financial position, results of operations or cash flows.

Significant Accounting Polici10

Significant Accounting Policies (Policy)	3 Months Ended
	Mar. 31, 2017
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, which include ground and air expedited transportation and consumer household pickup and delivery, through a single integrated organization. In addition to our core LTL services, we offer a range of value-added services including container drayage, truckload brokerage, supply chain consulting and warehousing. We have one operating segment and the composition of our revenue is summarized below: Three Months Ended March 31, (In thousands) 2017 2016 LTL services $ 740,186 $ 694,533 Other services 13,910 13,200 Total revenue $ 754,096 $ 707,733
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 March 31, 2017 are not necessarily indicative of the results that may be expected for subsequent quarterly periods or the year ending December 31, 2017 . 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, 2016 . 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, 2016 , other than those disclosed in this Form 10-Q. 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.
Fair Value of Financial Instruments	Fair Values of Financial Instruments The carrying values of financial instruments in current assets and current liabilities approximate their fair value due to the short maturities of these instruments. The carrying value of our revolving credit facility approximates fair value due to the variable interest rates of the facility that correlate with current market rates. The carrying value of our total long-term debt, including current maturities, was $95.0 million and $105.0 million at March 31, 2017 and December 31, 2016 , respectively. The estimated fair value of our total long-term debt, including current maturities, was $98.2 million and $108.3 million at March 31, 2017 and December 31, 2016 , 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 Financial Accounting Standards Board (the “FASB”).
Stockholders' Equity	Stock Repurchase Program During the second quarter of 2016, we completed our stock repurchase program, previously announced on November 10, 2014, to repurchase up to an aggregate of $200.0 million of our outstanding common stock. On May 23, 2016, 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 $250.0 million of our outstanding common stock (the “2016 Repurchase Program”). Under the 2016 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 program are canceled at the time of repurchase and are classified as authorized but unissued shares of our common stock. During the three months ended March 31, 2017 , we repurchased 600 shares of our common stock for $50,000 under our 2016 Repurchase Program. As of March 31, 2017 , we had $199.9 million remaining authorized under the 2016 Repurchase Program. Dividends On February 2, 2017, we announced that our Board of Directors had declared a quarterly cash dividend of $0.10 per share. The dividend was paid on March 20, 2017 to shareholders of record at the close of business on March 6, 2017.

Significant Accounting Polici11

Significant Accounting Policies Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Disaggregated Revenue [Table Text Block]	Three Months Ended March 31, (In thousands) 2017 2016 LTL services $ 740,186 $ 694,533 Other services 13,910 13,200 Total revenue $ 754,096 $ 707,733

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	Three Months Ended March 31, 2017 2016 Weighted average shares outstanding - basic 82,349,024 83,983,028 Dilutive effect of share-based awards 95,434 — Weighted average shares outstanding - diluted 82,444,458 83,983,028

Long-Term Debt (Tables)

Long-Term Debt (Tables)	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Schedule Of Long-Term Debt	Long-term debt consisted of the following: (In thousands) March 31, December 31, Senior notes $ 95,000 $ 95,000 Revolving credit facility — 9,975 Total long-term debt 95,000 104,975 Less: Current maturities (50,000 ) — Total maturities due after one year $ 45,000 $ 104,975

Significant Accounting Polici14

Significant Accounting Policies Significant Accounting Policies (Disaggregated Revenue) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Disaggregated Revenue [Line Items]
Revenue from operations	$ 754,096,000	$ 707,733,000
LTL Service Revenue [Member]
Disaggregated Revenue [Line Items]
Revenue from operations	740,186,000	694,533,000
Other Service Revenue [Member]
Disaggregated Revenue [Line Items]
Revenue from operations	$ 13,910,000	$ 13,200,000

Significant Accounting Polici15

Significant Accounting Policies (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Class of Stock [Line Items]
Stock Repurchased and Retired During Period, Shares	600
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 199,900
Stock Repurchased and Retired During Period, Value	50
Debt and Capital Lease Obligations	95,000		$ 105,000
Long-term Debt, Fair Value	$ 98,200		$ 108,300
Dividends declared per share	$ 0.10	$ 0
2014 Share Repurchase Program [Member]
Class of Stock [Line Items]
Stock Repurchase Program, Authorized Amount	$ 200,000
2016 Share Repurchase Program [Member]
Class of Stock [Line Items]
Stock Repurchase Program, Authorized Amount	$ 250,000

Earnings Per Share (Details)

Earnings Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Weighted Average Number of Shares Outstanding, Diluted [Abstract]
Weighted Average Number of Shares Outstanding, Basic	82,349,024	83,983,028
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements	95,434	0
Weighted Average Number of Shares Outstanding, Diluted	82,444,458	83,983,028

Long-Term Debt (Narrative) (Det

Long-Term Debt (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Debt Instrument [Line Items]
Senior Notes	$ 95,000		$ 95,000
Interest Rate Spread added to Rate	1.00%	1.00%
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.125%	0.125%
Letter Of Credit Fee In Percentage	1.00%	1.00%
Long-term Line of Credit	$ 0		$ 9,975
Senior Notes [Member]
Debt Instrument [Line Items]
Effective average interest rate	4.37%		4.37%
Tranche A [Member]
Debt Instrument [Line Items]
Debt Instrument, Periodic Payment, Principal	$ 50,000
Fixed interest rate	4.00%
Tranche B [Member]
Debt Instrument [Line Items]
Debt Instrument, Periodic Payment, Principal	$ 45,000
Fixed interest rate	4.79%
Maximum [Member]
Debt Instrument [Line Items]
Interest Rate Spread added to Rate	0.50%
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.20%
Minimum [Member]
Debt Instrument [Line Items]
Interest Rate Spread added to Rate	0.00%
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.125%
Letter of Credit [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Capacity Available for Specific Purpose Other than for Trade Purchases	$ 100,000
Long-term Line of Credit	81,800		$ 74,600
Sweep Program [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Capacity Available for Specific Purpose Other than for Trade Purchases	30,000
2015 Credit Agreement [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	350,000
Original borrowing capacity	250,000
Line Of Credit Facility Accordion	100,000
Accordion Feature Exercised	50,000
Line of Credit Facility, Current Borrowing Capacity	$ 300,000
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]
Debt Instrument [Line Items]
Interest Rate Spread added to Rate	1.50%
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]
Debt Instrument [Line Items]
Interest Rate Spread added to Rate	1.00%

Long-Term Debt (Schedule Of Lon

Long-Term Debt (Schedule Of Long-Term Debt) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Senior notes	$ 95,000	$ 95,000
Revolving credit facility	0	9,975
Total long-term debt	95,000	105,000
Less: Current maturities	(50,000)	0
Total maturities due after one year	$ 45,000	$ 104,975