Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

OLD DOMINION FREIGHT LINE, INC.

BALANCE SHEETS

		December 31,
(In thousands, except share data)		2011				2010
ASSETS
Current assets:
Cash and cash equivalents		$	75,850			$	5,450
Customer receivables, less allowances of $9,173 and $8,475, respectively			213,481				172,989
Other receivables			4,441				7,711
Prepaid expenses and other current assets			18,614				17,766
Deferred income taxes			19,466				18,666
Total current assets			331,852				222,582
Property and equipment:
Revenue equipment			789,984				701,648
Land and structures			738,359				667,917
Other fixed assets			214,816				170,533
Leasehold improvements			5,773				4,421
Total property and equipment			1,748,932				1,544,519
Less: Accumulated depreciation			(621,982	)			(580,303	)
Net property and equipment			1,126,950				964,216
Goodwill			19,463				19,463
Other assets			34,809				33,620
Total assets		$	1,513,074			$	1,239,881
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	42,096			$	29,221
Compensation and benefits			66,740				51,355
Claims and insurance accruals			35,934				33,927
Other accrued liabilities			20,686				18,413
Current maturities of long-term debt			39,354				37,130
Total current liabilities			204,810				170,046
Long-term debt			229,831				234,087
Other non-current liabilities			86,998				76,331
Deferred income taxes			134,916				90,768
Total long-term liabilities			451,745				401,186
Commitments and contingent liabilities			0				0
Total liabilities			656,555				571,232
Shareholders’ equity
Common stock - $0.10 par value, 70,000,000 shares authorized, 57,443,324 and 55,926,945 shares outstanding at December 31, 2011 and 2010, respectively			5,744				5,593
Capital in excess of par value			137,275				89,026
Retained earnings			713,500				574,030
Total shareholders’ equity			856,519				668,649
Total liabilities and shareholders’ equity		$	1,513,074			$	1,239,881

The accompanying notes are an integral part of these financial statements.

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OLD DOMINION FREIGHT LINE, INC.

STATEMENTS OF OPERATIONS

		Year Ended December 31,
(In thousands, except share and per share data)		2011				2010				2009
Revenue from operations		$	1,882,541			$	1,480,998			$	1,245,005
Operating expenses:
Salaries, wages and benefits			956,079				808,819				718,744
Operating supplies and expenses			355,186				244,291				181,329
General supplies and expenses			49,900				41,580				35,013
Operating taxes and licenses			63,284				55,420				50,175
Insurance and claims			27,693				25,329				23,095
Communications and utilities			18,104				15,218				14,614
Depreciation and amortization			90,820				80,362				94,784
Purchased transportation			63,257				50,489				33,786
Building and office equipment rents			13,689				15,244				14,900
Miscellaneous expenses, net			10,457				6,507				8,174
Total operating expenses			1,648,469				1,343,259				1,174,614
Operating income			234,072				137,739				70,391
Non-operating expense (income):
Interest expense			14,067				12,613				13,041
Interest income			(180	)			(148	)			(43	)
Other expense, net			101				848				228
Total non-operating expense			13,988				13,313				13,226
Income before income taxes			220,084				124,426				57,165
Provision for income taxes			80,614				48,775				22,294
Net income		$	139,470			$	75,651			$	34,871
Earnings per share:
Basic		$	2.44			$	1.35			$	0.62
Diluted		$	2.44			$	1.35			$	0.62
Weighted average shares outstanding:
Basic			57,146,486				55,926,988				55,927,013
Diluted			57,146,486				55,926,988				55,927,013

The accompanying notes are an integral part of these financial statements.

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OLD DOMINION FREIGHT LINE, INC.

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

										Capital in Excess of				Retained
		Common Stock
(In thousands)		Shares				Amount				Par Value				Earnings				Total
Balance as of December 31, 2008			55,927			$	5,593			$	89,028			$	463,508			$	558,129
Net income			0				0				0				34,871				34,871
Balance as of December 31, 2009			55,927			$	5,593			$	89,028			$	498,379			$	593,000
Net income			0				0				0				75,651				75,651
Purchase of fractional shares			0				0				(2	)			0				(2	)
Balance as of December 31, 2010			55,927			$	5,593			$	89,026			$	574,030			$	668,649
Issuance and sale of common stock			1,516				151				48,249				0				48,400
Net income			0				0				0				139,470				139,470
Balance as of December 31, 2011			57,443			$	5,744			$	137,275			$	713,500			$	856,519

The accompanying notes are an integral part of these financial statements.

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OLD DOMINION FREIGHT LINE, INC.

STATEMENTS OF CASH FLOWS

		Year Ended December 31,
(In thousands)		2011				2010				2009
Cash flows from operating activities:
Net income		$	139,470			$	75,651			$	34,871
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			90,820				80,362				94,784
Loss on sale of property and equipment			1,263				758				173
Deferred income taxes			43,348				7,624				10,778
Changes in assets and liabilities, net of acquisition effects:
Customer and other receivables, net			(40,414	)			(36,169	)			2,806
Prepaid expenses and other assets			(3,506	)			(12,760	)			(4,713	)
Accounts payable			12,875				(4,247	)			(7,531	)
Compensation, benefits and other accrued liabilities			17,626				22,476				(10,746	)
Claims and insurance accruals			6,696				3,831				3,274
Income taxes, net			3,224				(3,613	)			2,812
Other liabilities			5,978				7,163				4,208
Net cash provided by operating activities			277,380				141,076				130,716
Cash flows from investing activities:
Purchase of property and equipment			(250,214	)			(106,347	)			(210,888	)
Proceeds from sale of property and equipment			5,436				2,050				2,303
Proceeds from sale of short-term investment securities			0				0				4,861
Net cash used in investing activities			(244,778	)			(104,297	)			(203,724	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt			96,010				0				0
Principal payments under long-term debt agreements			(40,382	)			(36,681	)			(11,972	)
Net (payments) proceeds on revolving line of credit			(66,230	)			1,183				65,047
Proceeds from stock issuance, net of issuance costs			48,400				0				0
Other financing activities, net			0				(2	)			0
Net cash provided by (used in) financing activities			37,798				(35,500	)			53,075
Increase (decrease) in cash and cash equivalents			70,400				1,279				(19,933	)
Cash and cash equivalents at beginning of year			5,450				4,171				24,104
Cash and cash equivalents at end of year		$	75,850			$	5,450			$	4,171
Income taxes paid		$	34,579			$	44,893			$	9,027
Interest paid		$	14,011			$	13,561			$	14,708
Capitalized interest		$	895			$	682			$	1,654
Supplemental disclosure of noncash investing and financing activities:
Acquisition of property and equipment by capital lease		$	8,570			$	1,183			$	468
Fair value of property exchanged		$	0			$	544			$	1,277

The accompanying notes are an integral part of these financial statements.

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OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS

Note 1. Significant Accounting Policies

Business

Old Dominion is a leading, less-than-truckload (“LTL”), union-free motor carrier providing regional, inter-regional and national LTL service and value-added logistics services from a single integrated organization. In addition to our core LTL services, we offer our customers a broad range of logistics services including ground and air expedited transportation, supply chain consulting, transportation management, truckload brokerage, container delivery and warehousing services. Through marketing and carrier relationships, we also offer door-to-door international freight services to and from all of North America, Central America, South America and the Far East.

We have one operating segment and no single customer that exceeds 10% of our revenue.

Basis of Presentation

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

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.

Revenue and Expense Recognition

We recognize revenue based upon when our transportation services have been completed in accordance with the bill of lading contract, our general tariff provisions or contractual agreements with our customers. Generally, this occurs when we complete the delivery of a shipment. For transportation services not completed at the end of a reporting period, we use a percentage of completion method to allocate the appropriate revenue to each separate reporting period. Under this method, we develop a factor for each uncompleted shipment by dividing the actual number of days in transit at the end of a reporting period by that shipment’s standard delivery time schedule. This factor is applied to the total revenue for that shipment and revenue is allocated between reporting periods accordingly.

Expenses are recognized when incurred.

Allowances for Uncollectible Accounts and Revenue Adjustments

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. 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.

We also maintain an allowance for estimated revenue adjustments resulting from future billing corrections, customer allowances, money-back service guarantees and other miscellaneous revenue adjustments. These revenue adjustments are recorded in our revenue from operations. We use historical experience, trends and current information to update and evaluate these estimates.

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OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist principally of customer receivables. We perform initial and ongoing credit evaluations of our customers to minimize credit risk. We generally do not require collateral but may require prepayment of our services under certain circumstances. Credit risk is generally diversified due to the large number of entities comprising our customer base and their dispersion across many different industries and geographic regions. We are also exposed to credit risk associated with Company-owned life insurance contracts on certain employees. We utilize a third-party to manage these assets and minimize our exposure to fluctuations in equity markets related to these variable life insurance contracts.

Cash and Cash Equivalents

We consider cash on hand and deposits in banks along with certificates of deposit and short-term marketable securities with original maturities of three months or less as cash and cash equivalents.

Property and Equipment

Property and equipment are stated at cost. Major additions and improvements are capitalized, while maintenance and repairs that do not improve or extend the lives of the respective assets are charged to expense as incurred. We capitalize the cost of tires mounted on purchased revenue equipment as a part of the total equipment cost. Subsequent replacement tires are expensed at the time those tires are placed in service.

Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the related assets. The following table provides the estimated useful lives by asset type:

Structures		7 to 30 years
Revenue equipment		4 to 15 years
Other equipment		2 to 20 years
Leasehold improvements		Lesser of economic life or life of lease

Depreciation expense, which includes the amortization of capital leases, was $89.9 million, $79.4 million and $93.9 million for 2011, 2010 and 2009, respectively.

During the first quarter of 2010, we completed an evaluation of the estimated useful lives and salvage values for our equipment and determined that the actual period of service of certain revenue equipment exceeded that of our previously estimated useful lives. As a result, we extended the estimated useful lives of most of our tractors to 9 years from 7 years and extended the estimated useful lives of our trailers to 15 years from 12. In addition, we reduced the estimated salvage values associated with this equipment to more accurately reflect the value we believe such equipment will have at the end of its respective useful life. We made similar changes to the estimated useful lives and salvage values for certain of our other equipment but the results of these changes have less of an impact on our future depreciation expense. As a result of the impact on depreciation from these changes that were effective January 1, 2010, income from continuing operations and net income in 2010 increased by approximately $12.7 million and $7.7 million, respectively.

Goodwill and Other Intangible Assets

Intangible assets have been acquired in connection with business combinations and are comprised of goodwill and other intangible assets. Goodwill is calculated as the excess cost over the fair value of assets acquired and is not subject to amortization. We review our goodwill balance annually for impairment, unless circumstances dictate more frequent assessments. In 2011, we adopted Accounting Standards Update (“ASU”) 2011-08, Testing Goodwill for Impairment, which allows us to first assess

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OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under this amendment, we would not be required to calculate the fair value of a reporting unit unless we determine, based on the qualitative review, that it is more likely than not that its fair value is less than its carrying amount. The amendment includes events and circumstances for us to consider when conducting the qualitative assessment. In the fourth quarter of 2011, we performed the qualitative assessment of goodwill and determined it was more likely than not that the fair value of our reporting unit would be greater than its carrying amount. Therefore, we determined it was not necessary to perform the two-step goodwill impairment test. There has been no historical impairment of our goodwill balance since the acquisition of the goodwill.

Other intangible assets include the value of acquired customer lists and related non-compete agreements and are amortized on a straight-line basis over their estimated useful lives, none of which exceeds ten years. The gross carrying amount of our other intangible assets totaled $8.1 million as of December 31, 2011 and 2010. Accumulated amortization for these assets was $4.7 million and $3.8 million as of December 31, 2011 and 2010, respectively. The net carrying amounts of our other intangible assets are included in “Other assets” on our Balance Sheets. Amortization expense was $0.9 million for 2011, 2010 and 2009. Annual amortization expense for the next five years for these intangible assets is estimated to be:

(In thousands)
2012		$	908
2013		$	712
2014		$	695
2015		$	495
2016		$	315

Long-Lived Assets

We assess the realizable value of our long-lived assets and evaluate such assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

Claims and Insurance Accruals

We are self-insured for bodily injury and property damage (“BIPD”) claims up to $2.75 million per occurrence. Cargo loss and damage claims are self-insured up to $100,000 per occurrence. We are exposed to workers’ compensation claims up to $1.0 million per occurrence, through either self-insurance or insurance deductibles. In 2011, we self-insured our group health claims up to $375,000 per occurrence plus an aggregate $200,000 over this retention level. We self-insured long-term disability claims to a maximum of $3,000 per month for our salaried and non-salaried employees until April 2, 2010 and July 1, 2011, respectively. We subsequently began to offer elective coverage to our employees and, therefore, we have no liability for new long-term disability claims after those dates.

Claims and insurance accruals reflect the estimated cost of claims for cargo loss and damage, BIPD, workers’ compensation, long-term disability, group health and dental not covered by insurance. These accruals include amounts for future claim development and claims incurred but not reported, which are primarily based on historical claims development experience. The related costs for cargo loss and damage and BIPD are charged to insurance and claims expense, while the related costs for workers’ compensation, long-term disability, group health and dental are charged to employee benefits expense.

We reserved $86.0 million and $79.3 million at December 31, 2011 and 2010, respectively, for self-insured claims and insurance reserves. The long-term portions of those reserves were $50.1 million and $45.4 million for 2011 and 2010, respectively, which were included in “Other non-current liabilities” on our Balance Sheets.

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OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

Advertising

The costs of advertising our services are expensed as incurred and are included in “General supplies and expenses” on our Statements of Operations. Advertising costs charged to expense totaled $8.3 million, $6.3 million and $4.1 million for 2011, 2010 and 2009, respectively.

Fair Values of Financial Instruments

At December 31, 2011 and 2010, the carrying values of financial instruments, such as cash and cash equivalents, customer and other receivables and trade payables, approximate their fair value due to the short maturities of these instruments. The cash surrender value relating to Company-owned life insurance contracts is included in “Other assets” on our Balance Sheets and totaled $27.6 million and $25.8 million at December 31, 2011 and 2010, respectively, which approximates fair value. The fair value of the senior notes included in our long-term debt was estimated to be $270.3 million and $212.3 million at December 31, 2011 and 2010, respectively. The fair value of these senior notes is based on undiscounted cash flows at market interest rates for similar issuances of private debt.

Earnings Per Share

Earnings per common share is computed using the weighted-average number of common shares outstanding during the period.

Common Stock Split

On July 30, 2010, our Board of Directors approved a three-for-two common stock split for shareholders of record as of the close of business on August 9, 2010. On August 23, 2010, those shareholders received one additional share of common stock for every two shares owned. In lieu of fractional shares, shareholders received a cash payment based on the average of the high and low sales prices of the common stock on the record date.

All references in this report to shares outstanding, weighted average shares outstanding and earnings per share amounts have been restated retroactively to reflect this stock split.

Recent Accounting Pronouncements

In September 2011, the Financial Accounting Standards Board issued ASU 2011-08, Testing Goodwill for Impairment, which provides amendments to the existing two-step goodwill impairment test as described in Topic 350, Intangibles—Goodwill and Other. The amendments permit a first assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The qualitative assessment is optional, allowing companies to go directly to the quantitative assessment. Although amendments of ASU 2011-08 are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, early adoption was permitted. We adopted the provisions of ASU 2011-08 in the fourth quarter of 2011 without a material impact on our financial position, results of operations or cash flows.

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OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

Note 2. Long-term Debt

Long-term debt consisted of the following:

		December 31,
(In thousands)		2011				2010
Senior notes		$	262,857			$	203,572
Revolving credit facility			0				66,230
Capitalized lease and other obligations			6,328				1,415
Total long-term debt			269,185				271,217
Less: Current maturities			(39,354	)			(37,130	)
Total maturities due after one year		$	229,831			$	234,087

We have three outstanding unsecured senior note agreements with an aggregate amount outstanding of $262.9 million at December 31, 2011. These notes call for periodic principal payments with maturities that range from 2015 to 2021, of which $35.7 million is due in the next twelve months. Interest rates on these notes are fixed and range from 4.00% to 5.85%. The effective average interest rate on our outstanding senior note agreements was 5.17% and 5.54% at December 31, 2011 and 2010, respectively.

Included in our senior notes is $95.0 million related to a Note Purchase Agreement by and among the Company and the purchasers, dated as of January 3, 2011. Under this agreement, we issued $50.0 million of privately-placed Senior Notes, Tranche A (the “Tranche A Notes”) and $45.0 million of privately-placed Senior Notes, Tranche B (the “Tranche B Notes” and, together with the Tranche A Notes, the “Notes”) on January 3, 2011. The Notes are unsecured and rank equally in right of repayment with the Company’s other senior unsecured indebtedness. The Tranche A Notes mature on January 3, 2018. The Company will pay interest on the unpaid balance of the Tranche A Notes at the rate of 4.00% per annum from the date of issuance. The Tranche B Notes mature on January 3, 2021. The Company will pay interest on the unpaid balance of the Tranche B Notes at the rate of 4.79% per annum from the date of issuance. The Company used a portion of the proceeds of the issuance of the Notes to refinance existing indebtedness, including paying down the outstanding balance on its senior unsecured revolving credit facility in January 2011.

We entered into a five-year, $200.0 million senior unsecured revolving credit facility pursuant to the terms of a second amended and restated credit agreement on August 10, 2011 (the “Credit Agreement”), with Wells Fargo Bank, National Association (“Wells Fargo”) serving as administrative agent for the lenders. This Credit Agreement amended and restated the terms of the previous senior unsecured revolving credit facility dated August 10, 2006. Of the $200.0 million line of credit commitments, $150.0 million may be used for letters of credit and $20.0 million may be used for borrowings under the Wells Fargo Sweep Plus Loan Program. This sweep program is a daily cash management tool that automatically initiates borrowings to cover overnight cash requirements up to an aggregate of $20.0 million. In addition, we have the right to request an increase in the line of credit commitments up to a total of $300.0 million in minimum increments of $25.0 million. At our option, revolving loans under the facility bear interest at either: (a) the Applicable Margin Percentage for Base Rate Loans plus the higher of Wells Fargo’s prime rate, the federal funds rate plus 0.5% per annum, or the one month LIBOR Rate plus 1.0% per annum; (b) the LIBOR Rate plus the Applicable Margin Percentage for LIBOR Loans; or (c) the LIBOR Market Index Rate (“LIBOR Index Rate”) plus the Applicable Margin Percentage for LIBOR Market Index Loans. The Applicable Margin Percentage is determined by a pricing grid in the Credit Agreement and ranges from 1.0% to 1.875%. The Applicable Margin Percentage was 1.125% for the period this Credit Agreement was in effect during 2011. Revolving loans under the sweep program bear interest at the LIBOR Index Rate.

The Credit Agreement contains 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. Any future wholly-owned subsidiaries of the Company would be required to guarantee payment of all of our obligations under the facility. There was no outstanding balance on the line of credit facility at December 31, 2011. The outstanding balance of borrowings on the line of credit facility was $66.2 million at December 31, 2010. There were $49.9 million and $49.6 million of outstanding letters of credit at December 31, 2011 and 2010, respectively.

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OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

Commitment fees ranging from 0.175% to 0.30% are charged quarterly in arrears on the aggregate unutilized portion of the Credit Agreement. Letter of credit fees equal to the applicable margin for Adjusted LIBOR Rate loans are charged quarterly in arrears on the daily average aggregate stated amount of all letters of credit outstanding during the quarter. The commitment fees and letter of credit fees were 0.20% and 1.125%, respectively, for the period this Credit Agreement was in effect during 2011. In addition, the Company will pay to Wells Fargo for its own account as issuer of letters of credit (i) a facing fee with respect to each letter of credit in an amount equal to 0.125% of the daily average aggregate Stated Amount thereof, payable quarterly in arrears and calculated on an actual/360-day basis and (ii) such fees and charges customarily charged in connection with the issuance and administration of such letters of credit. Wells Fargo, as administrative agent, shall also receive an annual administrative fee for providing such services.

Our Credit Agreement limits the amount of dividends that could be paid to shareholders to the greater of (i) $20.0 million, (ii) the amount of dividends paid in the immediately preceding fiscal year, or (iii) an amount equal to 25% of net income from the immediately preceding fiscal year. We did not declare or pay a dividend on our common stock in 2011 or 2010, and we have no plans to declare or pay a dividend in 2012.

Our three outstanding senior note agreements and the Credit 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. Any future wholly-owned subsidiaries of the Company would be required to guarantee payment of all of our obligations under these agreements.

At December 31, 2010, the outstanding balance of borrowings on our previous line of credit facility of $66.2 million was reported as a long-term liability despite that facility’s maturity within one year of the balance sheet date, as we utilized a portion of the $95.0 million of proceeds obtained from privately-placed senior notes issued on January 3, 2011 to refinance the outstanding balance on the Credit Agreement.

Capitalized lease obligations are collateralized by property and equipment with a book value of $9.2 million at December 31, 2011.

As of December 31, 2011, aggregate maturities of long-term debt are as follows:

(In thousands)
2012		$	39,354
2013			38,403
2014			35,714
2015			35,714
2016			25,000
Thereafter			95,000
		$	269,185

Note 3. Shareholders’ Equity

On February 2, 2011, we entered into an At-The-Market Equity Offering Sales Agreement with Stifel, Nicolaus & Company, Incorporated (“Stifel Nicolaus Weisel”) pursuant to which we had the ability to issue and sell, from time to time over a 12-month period through or to Stifel Nicolaus Weisel, shares of our common stock having an aggregate offering price of up to $100.0 million (the “ATM program”). The ATM program was conducted pursuant to the Company’s automatic shelf registration statement on Form S-3 (File No. 333-162709), filed by the Company on October 28, 2009 with the SEC, and a prospectus supplement, filed by the Company on February 2, 2011 with the SEC. Sales of the Company’s common stock in the offering were made by means of ordinary brokers’ transactions on the Nasdaq, in privately negotiated transactions, or otherwise at prevailing market prices at the time of sale. Set forth below is information regarding our ATM program from February 2, 2011 through December 31, 2011.

Period		Aggregate Number of Shares Sold				Aggregate Gross Proceeds				Aggregate Net Proceeds				Average Sales Price Per Share
First quarter 2011			1,516,379			$	49,575,000			$	48,400,000			$	32.69

There were no subsequent issuances pursuant to the ATM program through February 2, 2012, which was the date on which the ATM program expired.

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OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

Note 4. Leases

We lease certain information systems under capital leases. We also lease other assets under operating leases, which primarily consist of real estate leases for 77 of our 216 service center locations at December 31, 2011.

Certain operating leases provide for renewal options. Renewal options and length of renewals vary by lease and are typically offered at their fair rental value. We have not made any residual value guarantees related to our operating leases; therefore, we have no corresponding liability recorded on our Balance Sheets.

Assets under capital leases are included in property and equipment as follows:

		December 31,
(In thousands)		2011				2010
Information systems		$	12,232			$	3,587
Less: Accumulated amortization			(3,065	)			(2,360	)
		$	9,167			$	1,227

Future minimum annual lease payments as of December 31, 2011 are as follows:

(In thousands)		Capital Leases				Operating Leases				Total
2012		$	3,728			$	16,256			$	19,984
2013			2,730				12,682				15,412
2014			—				9,439				9,439
2015			—				6,193				6,193
2016			—				5,126				5,126
Thereafter			—				23,616				23,616
Total minimum lease payments			6,458			$	73,312			$	79,770
Less: Amount representing interest			(130	)
Present value of capitalized lease obligations		$	6,328

Aggregate expense under operating leases was $19.5 million, $21.0 million and $20.5 million for 2011, 2010 and 2009, respectively. Certain operating leases include rent escalation provisions, which we recognize as expense on a straight-line basis.

Note 5. Income Taxes

The components of the provision for income taxes are as follows:

		Year Ended December 31,
(In thousands)		2011				2010				2009
Current:
Federal		$	27,470			$	34,255			$	7,910
State			9,796				6,896				3,605
			37,266				41,151				11,515
Deferred:
Federal			39,934				6,695				9,752
State			3,414				929				1,027
			43,348				7,624				10,779
Total provision for income taxes		$	80,614			$	48,775			$	22,294

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OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

The following is a reconciliation of the U.S. statutory federal income tax rates with our effective income tax rates for 2011, 2010 and 2009:

		Year Ended December 31,
(In thousands)		2011				2010				2009
Tax provision at statutory rate on income before income taxes		$	77,029			$	43,549			$	20,008
State income taxes, net of federal benefit			7,480				5,002				2,359
Meals and entertainment disallowance			721				616				521
Tax credits			(4,453	)			(744	)			(783	)
Other, net			(163	)			352				189
Total provision for income taxes		$	80,614			$	48,775			$	22,294

Deferred tax assets and liabilities consist of the following:

		December 31,
(In thousands)		2011				2010
Deferred tax assets:
Claims and insurance reserves		$	33,424			$	30,823
Allowance for doubtful accounts			2,827				2,642
Accrued vacation			9,339				8,332
Deferred compensation			14,441				12,204
Other			11,036				6,652
Total deferred tax assets			71,067				60,653
Deferred tax liabilities:
Depreciation			(174,353	)			(122,950	)
Unrecognized revenue			(6,995	)			(6,084	)
Employee benefits			(3,421	)			(2,544	)
Other			(1,748	)			(1,177	)
Total deferred tax liabilities			(186,517	)			(132,755	)
Net deferred tax liability		$	(115,450	)		$	(72,102	)

Our net deferred tax liability consists of the following:

		December 31,
(In thousands)		2011				2010
Current deferred tax asset		$	19,466			$	18,666
Noncurrent deferred tax liability			(134,916	)			(90,768	)
Net deferred tax liability		$	(115,450	)		$	(72,102	)

We are subject to U.S. federal income tax, as well as income tax of multiple state tax jurisdictions. We remain open to examination by the Internal Revenue Service for tax years 2008 through 2011. We remain open to examination by state tax jurisdictions for tax years 2007 through 2011.

Changes in our liability for unrecognized tax benefits could affect our effective tax rate, if recognized, but we do not expect any material changes within the next twelve months. Interest and penalties related to uncertain income tax positions, which are immaterial, are recorded in our Provision for Income Taxes on our Statement of Operations.

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OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

Note 6. Related Person Transactions

Family Relationships

Each of Earl E. Congdon, John R. Congdon, David S. Congdon and John R. Congdon, Jr. are related to one another and served in various executive management positions and/or on our Board of Directors during 2011. We have entered into amended and restated employment agreements with Earl E. Congdon, John R. Congdon and David S. Congdon, which are incorporated by reference as exhibits to our Annual Report on Form 10-K. We regularly disclose the amount of compensation that we pay to these individuals in the proxy statement for our Annual Meeting of Shareholders.

Transactions with Old Dominion Truck Leasing, Inc.

Old Dominion Truck Leasing, Inc. (“Leasing”) is a North Carolina corporation whose voting stock is owned by an Earl E. Congdon Revocable Trust; the John R. Congdon Revocable Trust; and members of Earl E. Congdon’s and John R. Congdon’s families. Leasing is primarily engaged in the business of purchasing and leasing tractors, trailers and other vehicles. John R. Congdon is Chairman of the Board of Leasing, and Earl E. Congdon is Vice Chairman of the Board of Leasing. Since 1986, we have combined our requirements with Leasing for the purchase of tractors, trailers, equipment, parts, tires and fuel. We believe that the termination of this arrangement would not have a material adverse impact on our financial results.

We purchased $278,000, $242,000 and $231,000 of maintenance and other services from Leasing in 2011, 2010 and 2009, respectively. We believe that the prices we pay for such services are no more than what would be charged by unaffiliated third parties for the same quality of work, and we intend to continue to purchase maintenance and other services from Leasing, provided that Leasing’s prices continue to be favorable to us.

We also paid Leasing $86,000 and $114,000 for leased equipment in 2010 and 2009, respectively. These payments were for long-term leases for tractors used in our linehaul operations. We received no commission or other financial benefit from Leasing or any other party in connection with these lease transactions. We did not lease any equipment from Leasing in 2011.

We charged Leasing $18,000, $17,000 and $12,000 for the rental of property in 2011, 2010 and 2009, respectively. No other services were provided to Leasing for the years ended December 31, 2011, 2010 and 2009.

Split Dollar Life Insurance Policies

We are the owner of two split-dollar life insurance contracts insuring the life of John R. Congdon. The net cash surrender value for these policies was $6.6 million and $6.3 million at December 31, 2011 and 2010, respectively, and is included on our Balance Sheets under the caption “Other assets.” At December 31, 2011, these policies provided for an aggregate of $8.7 million in net death benefits due to the Company, of which we have endorsed $2.0 million to Mr. Congdon’s children.

Note 7. Employee Benefit Plans

Defined Contribution Plan

Substantially all employees meeting certain service requirements are eligible to participate in our 401(k) employee retirement plan. Employee contributions are limited to a percentage of their compensation, as defined in the plan. We make contributions based upon the greater of a percentage of employee contributions or ten percent of net income. Company contributions for 2011, 2010 and 2009 were $13.9 million, $7.6 million and $4.8 million, respectively.

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OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

Deferred Compensation Plan

We maintain a nonqualified deferred compensation plan for the benefit of certain eligible employees whose contributions to the 401(k) employee retirement plan are limited due to provisions of the Internal Revenue Code. Participating employees may elect to defer receipt of a percentage of their compensation, as defined in the plan, and the deferred amount is credited to each participant’s deferred compensation account. The plan is not funded and the Company does not make a matching contribution to this plan. Although the plan is not funded, each participant is allowed to select one or more investments from the available options. Participant accounts are adjusted at the end of each fiscal quarter to reflect the performance of the selected investment options in which the participants’ accounts are deemed invested. The amounts owed to the participants totaled $24.6 million and $22.3 million at December 31, 2011 and 2010, respectively.

Note 8. Share-Based Compensation

On May 16, 2005, our Board of Directors approved, and the Company adopted, the Old Dominion Freight Line, Inc. Phantom Stock Plan, as amended effective January 1, 2009, May 18, 2009 and May 17, 2011 (the “Phantom Stock Plan”). Each share of phantom stock awarded to eligible employees under the Phantom Stock Plan represents a contractual right to receive an amount in cash equal to the fair market value of a share of our common stock on the settlement date, which generally is the earlier of the eligible employee’s (i) termination from the Company after reaching 55 years of age, (ii) death or (iii) disability. No shares of common stock will be issued pursuant to the Phantom Stock Plan, as the awards are settled in cash after the required vesting period has been satisfied and upon termination of employment. The maximum number of shares of phantom stock available for awards under the Phantom Stock Plan is 562,500, subject to any change in the outstanding shares of our common stock. Our Board of Directors approved the initial grant under this plan at its January 2006 meeting and have approved and awarded grants annually thereafter.

Phantom Stock Plan awards vest upon the earlier to occur of the following: the date of a change of control in our ownership; the fifth anniversary of the grant date of the award, provided the participant is employed by us on that date; the date of the participant’s death while employed by us; the date of the participant’s total disability; or the date the participant attains the age of 65 while employed by us. Awards that are not vested upon termination of employment are forfeited. If termination occurs prior to attaining the age of 55, all vested and unvested awards are generally forfeited unless the termination results from death or total disability. The Phantom Stock Plan does, however, provide the Board of Directors with discretionary authority to modify and/or accelerate the vesting of awards.

On May 28, 2008, our Board of Directors approved, and the Company adopted, the Old Dominion Freight Line, Inc. Director Phantom Stock Plan, as amended on April 1, 2011 (the “Director Phantom Stock Plan” and together with the Phantom Stock Plan, the “Phantom Plans”). Under the Director Phantom Stock Plan, each non-employee eligible director shall be granted an annual award of phantom shares equal to $50,000 on the grant date. Prior to the 2011 grant, the annual award to each non-employee eligible director was equal to $30,000 on the grant date. For each vested share, participants are entitled to an amount in cash equal to the fair market value of a share of our common stock the on date service as a director terminates for any reason. No shares of common stock will be issued pursuant to the Director Phantom Stock Plan, as the awards are settled in cash. Our Board of Directors approved the initial grant under this plan at its May 2008 meeting and have approved and awarded grants annually thereafter.

Director Phantom Stock Plan awards vest upon the earlier to occur of the following: the one-year anniversary of the grant date; the date of the first annual meeting of shareholders that occurs after the grant date provided the participant is still in service as a director; the date of a change of control in our ownership provided that the participant is still in service as a director; or the date of the participant’s death or total disability while still in service as a director. Awards that are not vested upon termination of service as a director are forfeited.

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OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

A summary of the changes in the number of outstanding phantom stock awards during the year ended December 31, 2011 for the Phantom Plans is provided below. Of these awards, 134,584 and 124,994 phantom shares were vested at December 31, 2011 and 2010.

		Phantom Stock Plan				Director Phantom Stock Plan
Balance of shares outstanding at December 31, 2010			253,802				25,239
Granted			41,028				8,250
Settled			(13,381	)			0
Balance of shares outstanding at December 31, 2011			281,449				33,489

Awards granted under the Phantom Plans are accounted for as a liability under The Financial Accounting Standards Board Accounting Standards Codification_™_ (“FASC”) 718, Compensation – Stock Compensation. FASC 718 requires changes in the fair value of our liability for the Phantom Plans to be recognized as compensation cost over the requisite service period for the percentage of requisite service rendered each period. Changes in the fair value of the liability that occur after the requisite service period are recognized as compensation cost during the period in which the changes occur. We remeasure the liability for the outstanding awards at the end of each reporting period based on the closing price of our common stock at that date, and the compensation cost is based on the change in fair value for each reporting period. The liability for these awards totaled $10.9 million and $7.2 million at December 31, 2011 and 2010, respectively. Compensation costs related to the Phantom Plans totaled $4.2 million, $4.4 million and $1.3 million for 2011, 2010 and 2009, respectively. Unrecognized compensation cost related to all unvested shares as of December 31, 2011 was $2.9 million based on the price of our common stock on that date.

Note 9. Commitments and Contingencies

We are involved in various legal proceedings and claims that have arisen in the ordinary course of our business that have not been fully adjudicated. Many of these are covered in whole or in part by insurance. Our management does not believe that these actions, when finally concluded and determined, will have a material adverse effect upon our financial position, liquidity or results of operations.

Note 10. Quarterly Financial Information (Unaudited)

A summary of our unaudited quarterly financial information for 2011 and 2010 is provided below. Our tonnage levels and revenue mix are subject to seasonal trends common in the motor carrier industry. Financial results in the first quarter are normally lower due to reduced shipments during the winter months. Harsh winter weather can also adversely impact our performance by reducing demand and increasing operating expenses.

		Quarter
(In thousands, except per share data)		First				Second				Third				Fourth				Total
2011
Revenue		$	422,679			$	480,255			$	494,475			$	485,132			$	1,882,541
Operating income			37,921				64,645				68,194				63,312				234,072
Net income			21,573				39,383				38,631				39,883				139,470
Net income per share:
Basic and diluted			0.38				0.69				0.67				0.69				2.44
2010
Revenue		$	317,795			$	368,250			$	395,981			$	398,972			$	1,480,998
Operating income			16,375				40,011				43,384				37,969				137,739
Net income			7,701				21,513				24,381				22,056				75,651
Net income per share:
Basic and diluted			0.14				0.38				0.44				0.39				1.35

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OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

Note 11. Subsequent Events

Management evaluated all subsequent events and transactions through the issuance date of these financial statements, and concluded that no subsequent events or transactions have occurred that require recognition or disclosure in our financial statements.

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of

Old Dominion Freight Line, Inc.

We have audited the accompanying balance sheets of Old Dominion Freight Line, Inc. as of December 31, 2011 and 2010, and the related statements of operations, changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2011. Our audits also included the financial statement schedule of Old Dominion Freight Line, Inc. listed in Item 15(a)(2). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Old Dominion Freight Line, Inc. at December 31, 2011 and 2010, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2011, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Old Dominion Freight Line, Inc.’s internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 29, 2012 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Charlotte, North Carolina

February 29, 2012

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