Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

OLD DOMINION FREIGHT LINE, INC.

BALANCE SHEETS

		December 31,
(In thousands, except share and per share data)		2023				2022
ASSETS
Current assets:
Cash and cash equivalents		$	433,799			$	186,312
Short-term investments			—				49,355
Customer receivables, less allowances of $10,405 and $10,689, respectively			578,885				578,648
Income taxes receivable			18,554				12,738
Other receivables			17,884				13,743
Prepaid expenses and other current assets			94,211				92,944
Total current assets			1,143,333				933,740
Property and equipment:
Revenue equipment			2,590,770				2,501,995
Land and structures			3,021,447				2,750,100
Other fixed assets			623,164				550,442
Leasehold improvements			14,436				13,516
Total property and equipment			6,249,817				5,816,053
Less: Accumulated depreciation			**(**2,154,412	)			(2,128,985	)
Net property and equipment			4,095,405				3,687,068
Other assets			273,655				217,802
Total assets		$	5,512,393			$	4,838,610
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	112,774			$	106,275
Compensation and benefits			278,953				288,278
Claims and insurance accruals			63,346				63,307
Other accrued liabilities			69,585				51,933
Current maturities of long-term debt			20,000				20,000
Total current liabilities			544,658				529,793
Long-term debt			59,977				79,963
Other non-current liabilities			286,815				265,422
Deferred income taxes			363,132				310,515
Total long-term liabilities			709,924				655,900
Total liabilities			1,254,582				1,185,693
Commitments and contingent liabilities
Shareholders’ equity
Common stock - $0.10 par value, 280,000,000 shares authorized, 108,965,466 and 110,222,819 shares outstanding at December 31, 2023 and December 31, 2022, respectively.			10,897				11,022
Capital in excess of par value			242,958				244,590
Retained earnings			4,003,956				3,397,305
Total shareholders’ equity			4,257,811				3,652,917
Total liabilities and shareholders’ equity		$	5,512,393			$	4,838,610

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

OLD DOMINION FREIGHT LINE, INC.

STATEMENTS O****F OPERATIONS

		Year Ended December 31,
(In thousands, except share and per share data)		2023				2022				2021
Revenue from operations		$	5,866,152			$	6,260,077			$	5,256,328
Operating expenses:
Salaries, wages and benefits			2,629,676				2,716,835				2,467,985
Operating supplies and expenses			718,326				852,955				567,615
General supplies and expenses			162,416				159,998				136,059
Operating taxes and licenses			145,642				141,239				133,452
Insurance and claims			75,368				58,301				53,549
Communications and utilities			43,269				40,584				34,149
Depreciation and amortization			324,435				276,050				259,883
Purchased transportation			121,516				158,111				185,785
Miscellaneous expenses, net			4,831				15,372				26,249
Total operating expenses			4,225,479				4,419,445				3,864,726
Operating income			1,640,673				1,840,632				1,391,602
Non-operating (income) expense:
Interest expense			464				1,563				1,727
Interest income			**(**12,799	)			(4,884	)			(786	)
Other expense, net			5,232				2,604				2,238
Total non-operating (income) expense			**(**7,103	)			(717	)			3,179
Income before income taxes			1,647,776				1,841,349				1,388,423
Provision for income taxes			408,274				464,190				354,048
Net income		$	1,239,502			$	1,377,159			$	1,034,375
Earnings per share:
Basic		$	11.33			$	12.26			$	8.94
Diluted		$	11.26			$	12.18			$	8.89
Weighted average shares outstanding:
Basic			109,421,245				112,340,791				115,651,411
Diluted			110,090,212				113,077,820				116,409,989
Dividends declared per share		$	1.60			$	1.20			$	0.80

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

OLD DOMINION FREIGHT LINE, INC.

STATEMENTS OF CHANGES I****N SHAREHOLDERS’ EQUITY

										Capital in
		Common Stock								Excess of				Retained
(In thousands, except per share data)		Shares				Amount				Par Value				Earnings				Total
Balance as of December 31, 2020			117,058			$	11,706			$	226,451			$	3,088,131			$	3,326,288
Net income			—				—				—				1,034,375				1,034,375
Share repurchases, including settlements under accelerated share repurchase programs			(2,083	)			(209	)			—				(536,256	)			(536,465	)
Cash dividends declared ($0.80 per share)			—				—				—				(92,389	)			(92,389	)
Forward contract for 2021 accelerated share repurchases			—				—				(62,500	)			—				(62,500	)
Share-based compensation and share issuances, net of forfeitures			57				6				15,033				—				15,039
Taxes paid in exchange for shares withheld			(21	)			(2	)			(4,539	)			—				(4,541	)
Balance as of December 31, 2021			115,011				11,501				174,445				3,493,861				3,679,807
Net income			—				—				—				1,377,159				1,377,159
Share repurchases, including settlements under accelerated share repurchase programs			(4,815	)			(482	)			62,500				(1,339,237	)			(1,277,219	)
Cash dividends declared ($1.20 per share)			—				—				—				(134,478	)			(134,478	)
Share-based compensation and share issuances, net of forfeitures			55				6				15,887				—				15,893
Taxes paid in exchange for shares withheld			(28	)			(3	)			(8,242	)			—				(8,245	)
Balance as of December 31, 2022			110,223				11,022				244,590				3,397,305				3,652,917
Net income			—				—				—				1,239,502				1,239,502
Share repurchases, including transaction costs			**(**1,314	)			**(**131	)			—				**(**457,768	)			**(**457,899	)
**Cash dividends declared ($**1.60 per share)			—				—				—				**(**175,083	)			**(**175,083	)
Share-based compensation and share issuances, net of forfeitures			92				9				11,071				—				11,080
Taxes paid in exchange for shares withheld			**(**36	)			**(**3	)			**(**12,703	)			—				**(**12,706	)
Balance as of December 31, 2023			108,965			$	10,897			$	242,958			$	4,003,956			$	4,257,811

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

OLD DOMINION FREIGHT LINE, INC.

STATEMENTS O****F CASH FLOWS

		Year Ended December 31,
(In thousands)		2023				2022				2021
Cash flows from operating activities:
Net income		$	1,239,502			$	1,377,159			$	1,034,375
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			324,449				276,066				259,899
Noncash lease expense			18,665				16,658				14,890
Gain on disposal of property and equipment			**(**22,555	)			(3,425	)			(563	)
Deferred income taxes			53,341				62,008				30,165
Share-based compensation			11,080				15,893				15,039
Changes in assets and liabilities:
Customer and other receivables, net			**(**3,875	)			(13,009	)			(125,562	)
Prepaid expenses and other assets			**(**38,189	)			(24,714	)			(38,387	)
Accounts payable			6,499				23,756				14,008
Compensation, benefits and other accrued liabilities			**(**1,422	)			(11,202	)			32,437
Claims and insurance accruals			**(**2,249	)			5,464				10,963
Income taxes, net			**(**5,816	)			6,480				(27,929	)
Other liabilities			**(**10,295	)			(39,552	)			(6,729	)
Net cash provided by operating activities			1,569,135				1,691,582				1,212,606
Cash flows from investing activities:
Purchase of property and equipment			**(**757,309	)			(775,148	)			(550,077	)
Proceeds from sale of property and equipment			48,637				22,096				19,548
Purchase of short-term investments			—				(163,720	)			(359,389	)
Proceeds from maturities of short-term investments			48,852				369,300				435,130
Other investing activities, net			—				—				(500	)
Net cash used in investing activities			**(**659,820	)			(547,472	)			(455,288	)
Cash flows from financing activities:
Payments for share repurchases			**(**453,613	)			(1,277,219	)			(536,465	)
Forward contract for accelerated share repurchases			—				—				(62,500	)
Dividends paid			**(**175,089	)			(134,484	)			(92,366	)
Principal payments under debt agreements			**(**20,000	)			—				—
Other financing activities, net			**(**13,126	)			(8,659	)			(4,853	)
Net cash used in financing activities			**(**661,828	)			(1,420,362	)			(696,184	)
Increase (decrease) in cash and cash equivalents			247,487				(276,252	)			61,134
Cash and cash equivalents at beginning of year			186,312				462,564				401,430
Cash and cash equivalents at end of year		$	433,799			$	186,312			$	462,564
Income taxes paid		$	361,448			$	396,510			$	352,826
Interest paid		$	3,484			$	3,953			$	4,232
Capitalized interest		$	3,364			$	3,260			$	2,655
Supplemental disclosure of noncash investing and financing activities:
Noncash purchases of property		$	-			$	-			$	16,034

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

OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS

Note 1. Significant Accounting Policies

Business

We are one of the largest North American less-than-truckload (“LTL”) motor carriers. We provide regional, inter-regional and national LTL services through a single integrated, union-free 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 no single customer exceeds 6% of our revenue. The composition of our revenue is summarized below:

		Year Ended December 31,
(In thousands)		2023				2022				2021
LTL services		$	5,804,939			$	6,177,055			$	5,177,497
Other services			61,213				83,022				78,831
Total revenue		$	5,866,152			$	6,260,077			$	5,256,328

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 and related services have been completed in accordance with the bill of lading (“BOL”) contract, our general tariff provisions and contractual agreements with our customers. Generally, our performance obligations begin when we receive a BOL from a customer and are satisfied when we complete the delivery of a shipment and related services. We recognize revenue for our performance obligations under our customer contracts over time, as our customers receive the benefits of our services in accordance with ASC Topic 606. With respect to 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. Payment terms vary by customer and are short-term in nature.

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, 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

OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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.

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. When held, we generally expect our short-term investments will be diversified over various high-quality issuers. Such short-term investments may also subject us to concentrations of credit risk.

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.

Short-term Investments

The Company’s investments in 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 Balance Sheets. These investments are measured at fair value each reporting period, with gains or losses recorded in “Non-operating (income) expense” on our Statements of Operations.

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. 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.

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 was $324.0 million, $275.6 million and $259.5 million for 2023, 2022 and 2021, respectively.

Claims and Insurance Accruals

We carry a significant amount of insurance with third-party insurance carriers that provides various levels of protection for our risk exposure, including protection in the areas of property, casualty, cyber, management, and group health, with coverage limits and retention and deductible levels that we believe are reasonable given historical claim activity and severity. We believe that our policy of maintaining self-insured retentions or deductibles under these various insurance programs for a portion of our risks, supported by our safety, claims management and loss prevention programs, is an effective means of managing insurance costs. We periodically review our risk exposure and insurance coverage applicable to those risks and believe that we maintain sufficient insurance coverage.

OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

Claims and insurance accruals reflect the Company’s estimated cost of claims for cargo loss and damage, BIPD, workers’ compensation, group health and group dental. These accruals include amounts for future claims development and claims incurred but not reported, which are primarily based on historical claims development experience. The related cost for cargo loss and damage and BIPD is charged to “Insurance and claims” on our Statements of Operations, while the related costs for workers’ compensation, group health and group dental are charged to “Salaries, wages and benefits” on our Statements of Operations.

Our liability for claims and insurance totaled $153.8 million and $156.0 million at December 31, 2023 and 2022, respectively. The long-term portions of those reserves were $90.4 million and $92.7 million for 2023 and 2022, respectively, which were included in “Other non-current liabilities” on our Balance Sheets.

Share-Based Compensation

We have various share-based compensation plans for our employees and non-employee directors. Our share-based compensation includes awards of phantom stock, restricted stock, and performance-based restricted stock units which are accounted for under ASC Topic 718, Compensation - Stock Compensation. All share-based compensation expense is presented in “Salaries, wages and benefits” for employees and “Miscellaneous expenses, net” for non-employee directors in the accompanying Statements of Operations. Total compensation expense recognized for all share-based compensation awards was $11.1 million, $15.9 million and $15.0 million during 2023, 2022, and 2021, respectively. The total tax benefit recognized related to these awards was $3.3 million, $3.3 million and $2.9 million during 2023, 2022, and 2021, respectively.

Awards of restricted stock, modified phantom stock and performance-based restricted stock units are accounted for as equity under ASC Topic 718. We recognize compensation cost, net of estimated forfeitures, for restricted stock awards and modified phantom stock awards on a straight-line basis over the requisite service period of each award. Compensation cost for performance-based restricted stock unit awards is recognized using the accelerated attribution method over the requisite service period of each award. At the end of each reporting period, we reassess the probability of achieving performance targets and changes to our initial assessment are reflected in the reporting period in which the change in estimate occurs.

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 $34.6 million, $29.0 million and $28.1 million for 2023, 2022 and 2021, respectively.

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 are measured at fair value on a recurring basis. Our long-term debt, including current maturities, are measured at fair value. Both of these instruments are further described in Note 9. Our other financial securities in current assets and current liabilities approximate their fair value due to the short-term maturities of these instruments.

OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

Stock Repurchase Program

On May 1, 2020, we announced that our Board of Directors had approved a 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 on May 29, 2020. On July 28, 2021, we announced that our Board of Directors had approved a stock repurchase program authorizing us to repurchase up to an aggregate of $2.0 billion of our outstanding common stock (the “2021 Repurchase Program”). The 2021 Repurchase Program, which does not have an expiration date, began after the completion of the 2020 Repurchase Program in January 2022. At December 31, 2023, we had $225.4 million remaining authorized under the 2021 Repurchase Program. On July 26, 2023, we announced that our Board of Directors had approved a new stock repurchase program authorizing us to repurchase up to an aggregate of $3.0 billion of our outstanding common stock. The new repurchase program, which does not have an expiration date, will be effective upon the completion of our 2021 Repurchase Program.

Under our repurchase programs, 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.

We entered into accelerated share repurchase agreements with a third-party financial institution on each of August 26, 2021 and February 24, 2022. The Company’s accelerated share repurchase agreements are each accounted for as a settled treasury stock purchase and a forward stock purchase contract. The par value of the initial shares received is 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 Balance Sheets. The Company's accelerated share repurchase agreements are each settled with the final number of shares received based on the daily volume-weighted average share price of our common stock over the term of the agreement, less a negotiated discount. The table below summarizes our accelerated share repurchase activity for 2022 and 2021. There was no accelerated share repurchase activity for the year ended December 31, 2023.

						Agreement
Agreement			Settlement			Amount				Initial Shares				Shares Received				Total Shares
Date			Date			(In millions)				Received				at Settlement				Received
February 2021			August 2021			$	275.0				960,330				140,716				1,101,046
August 2021			January 2022			$	250.0				655,365				123,410				778,775
February 2022			April 2022			$	400.0				1,018,157				372,809				1,390,966

Comprehensive Income

The Company has no components of other comprehensive income. Accordingly, net income equals comprehensive income for all periods presented in this report.

Note 2. Long-term Debt

Long-term debt, net of unamortized debt issuance costs, consisted of the following:

		December 31,
(In thousands)		2023				2022
Senior notes		$	79,977			$	99,963
Revolving credit facility			—				—
Total long-term debt			79,977				99,963
Less: Current maturities			**(**20,000	)			(20,000	)
Total maturities due after one year		$	59,977			$	79,963

OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

Note Agreement

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 (as subsequently amended on March 22, 2023, 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 March 22, 2026. On May 4, 2020, we issued $100.0 million aggregate principal amount of senior promissory notes (the “Series B Notes”). Borrowing availability under the Note Agreement is reduced by the outstanding amount of the existing 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. The first principal payment of $20.0 million was paid on May 4, 2023. The remaining $80.0 million will be paid in four equal annual installments of $20.0 million through May 4, 2027. The Series B Notes are senior unsecured obligations and rank pari passu with borrowings under our third amended and restated credit agreement, dated March 22, 2023, with Wells Fargo Bank, National Association serving as administrative agent for the lenders (the “Credit Agreement”) or other senior promissory notes issued pursuant to the Note Agreement.

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) the Secured Overnight Financing Rate (SOFR) plus the Term SOFR Adjustment, as defined in the Credit Agreement, equal to 0.100%, plus an applicable margin that ranges from 1.000% to 1.375%; or (ii) a Base Rate, as defined in the Credit Agreement, plus an applicable margin that ranges from 0.000% to 0.375%. The applicable margin for each of the foregoing options is dependent upon our consolidated debt to consolidated total capitalization ratio. Letter of credit fees equal to the applicable margin for SOFR 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 0.090% to 0.175% (based upon our consolidated debt to total consolidated capitalization ratio) 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 SOFR loans and letter of credit fees were 1.000% and commitment fees were 0.090%.

The Credit Agreement replaced our previous five-year, $250.0 million senior unsecured revolving credit agreement dated as of November 21, 2019 (the “Prior Credit Agreement”). For periods in 2023 and 2022 covered under the Prior Credit Agreement, the applicable margin on LIBOR loans and letter of credit fees was 1.000% and commitment fees were 0.100%.

There were $40.0 million and $38.7 million of outstanding letters of credit at December 31, 2023 and 2022, respectively.

General Debt Provisions

The 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).

Note 3. Leases

We lease certain assets under operating leases, which primarily consisted of real estate leases for certain service center locations and automotive leases for private passenger vehicles. Certain operating leases provide for renewal options, which can 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.

OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

The right-of-use assets and corresponding lease liabilities on our Balance Sheets represent payments over the lease term, which includes renewal options for certain real estate leases that we are likely to exercise. These renewal options begin in 2024 and continue through 2035, and range from one to ten years in length. Short-term leases, which have an initial term of 12 months or less, are not included in our right-of-use assets or corresponding lease liabilities.

Of our total operating lease liabilities, $15.6 million and $17.3 million are classified as current and are presented within “Other accrued liabilities,” and $104.8 million and $80.8 million are classified as non-current and are presented within “Other non-current liabilities” on our Balance Sheets as of December 31, 2023 and 2022, respectively. Our right-of-use assets totaled $116.4 million and $95.2 million and are presented within “Other assets,” which is classified as long-term, on our Balance Sheets as of December 31, 2023 and 2022, respectively.

Future lease payments for assets under operating leases, as well as a reconciliation to our total lease liabilities as of December 31, 2023, are as follows:

(In thousands)		Lease Payments
2024		$	21,598
2025			18,926
2026			18,335
2027			17,747
2028			16,922
Thereafter			57,745
Total lease payments		$	151,273
Less: imputed interest			(30,918	)
Total lease liabilities		$	120,355

The weighted average lease term for our operating leases was 7.6 years and 8.1 years at December 31, 2023 and 2022, respectively. The discount rate used in the calculation of our right-of-use assets and corresponding lease liabilities was determined based on the stated rate within each contract when available, or our collateralized borrowing rate from lending institutions. The weighted average discount rate for our operating leases was 4.9% and 3.8% as of December 31, 2023 and 2022, respectively.

Cash paid for amounts included in the measurement of our lease liabilities was $22.6 million and $18.6 million for the years ended December 31, 2023 and 2022, respectively. Certain operating leases include rent escalation provisions, which we recognize as expense on a straight-line basis. Lease expense is presented within “Operating supplies and expenses” or “General supplies and expenses,” depending on the nature of the use of the leased asset. Aggregate expense under operating leases was $24.5 million, $20.0 million and $19.0 million for 2023, 2022 and 2021, respectively. During the years ended December 31, 2023 and 2022, we increased our right-of-use assets by $39.9 million and $11.6 million, respectively, in exchange for new operating lease liabilities.

Note 4. Income Taxes

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

		Year Ended December 31,
(In thousands)		2023				2022				2021
Current:
Federal		$	288,030			$	318,571			$	253,084
State			66,903				83,611				70,799
			354,933				402,182				323,883
Deferred:
Federal			42,728				51,862				26,382
State			10,613				10,146				3,783
			53,341				62,008				30,165
Total provision for income taxes		$	408,274			$	464,190			$	354,048

OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

The following is a reconciliation of income tax expense calculated using the U.S. statutory federal income tax rate with our income tax expense for 2023, 2022 and 2021:

		Year Ended December 31,
(In thousands)		2023				2022				2021
Tax provision at statutory rate		$	346,033			$	386,683			$	291,569
State income taxes, net of federal benefit			66,055				75,906				60,036
Other, net			**(**3,814	)			1,601				2,443
Total provision for income taxes		$	408,274			$	464,190			$	354,048

Deferred tax assets and liabilities, which are included in “Other assets” and “Deferred income taxes” on our Balance Sheets, consist of the following:

		December 31,
(In thousands)		2023				2022
Deferred tax assets:
Claims and insurance reserves		$	29,776			$	31,736
Accrued vacation			19,849				20,330
Deferred compensation			41,343				39,973
Other			12,142				11,767
Total deferred tax assets			103,110				103,806
Deferred tax liabilities:
Depreciation and amortization			**(**460,703	)			(407,942	)
Other			**(**4,997	)			(5,113	)
Total deferred tax liabilities			**(**465,700	)			(413,055	)
Net deferred tax liability		$	**(**362,590	)		$	(309,249	)

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 2020 through 2023. We also remain open to examination by various state tax jurisdictions for tax years 2019 through 2023.

The Company’s liability for unrecognized tax benefits was immaterial as of December 31, 2023 and 2022. Interest and penalties related to uncertain tax positions, which are immaterial, are recorded in our “Provision for income taxes” on our Statements of Operations. 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.

Note 5. Related Party Transactions

John R. Congdon, Jr., a member of our Board of Directors, is the cousin of David S. Congdon, Executive Chairman of our Board of Directors. We regularly disclose the amount of compensation that we pay to these individuals, as well as the compensation paid to any of their family members employed by us that from time to time may require disclosure, in the proxy statement for our Annual Meeting of Shareholders.

Note 6. Employee Benefit Plans

Defined Contribution Plan

Full-time employees meeting certain eligibility requirements are automatically enrolled in our 401(k) employee retirement plan, unless the employee elects not to defer any compensation. Employee contributions are limited to a percentage of the employee’s compensation, as defined in the plan. We match a percentage of our employees’ contributions up to certain maximum limits. In addition, we may also provide a discretionary matching contribution as specified in the plan. Our employer contributions, net of forfeitures, for 2023, 2022 and 2021 were $119.5 million, $135.2 million and $102.0 million, respectively.

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, including those 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, participants are allowed to select investment options for which their deferrals and future earnings are deemed to be invested. Participant accounts are adjusted to reflect participant deferrals and the performance of their deemed investments. The amounts owed to the participants totaled $101.4 million and $88.3 million at December 31, 2023 and 2022, respectively, of which $91.2 million and $83.2 million were included in “Other non-current liabilities” on our Balance Sheets as of December 31, 2023 and 2022, respectively.

Note 7. 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 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:

		Year Ended December 31,
(In thousands)		2023				2022				2021
Weighted average shares outstanding - basic			109,421,245				112,340,791				115,651,411
Dilutive effect of share-based awards			668,967				737,029				758,578
Weighted average shares outstanding - diluted			110,090,212				113,077,820				116,409,989

Note 8. Share-Based Compensation

Stock Incentive Plan

On May 19, 2016, our shareholders approved the Old Dominion Freight Line, Inc. 2016 Stock Incentive Plan (the “Stock Incentive Plan”) previously approved by our Board of Directors. The Stock Incentive Plan, under which awards may be granted until May 18, 2026, or the Stock Incentive Plan’s earlier termination, serves as our primary equity incentive plan and provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted awards, performance awards, phantom stock awards and other stock-based awards or dividend equivalent awards to selected employees and non-employee directors. The maximum number of shares of common stock that we may issue or deliver pursuant to awards granted under the Stock Incentive Plan is 3,000,000 shares.

Restricted Stock Awards

During 2023, 2022 and 2021, we granted restricted stock awards to selected employees and non-employee directors under the Stock Incentive Plan. The employee restricted stock awards vest in three equal annual installments on each anniversary of the grant date, and the non-employee director restricted stock awards generally vest in full on the first anniversary of the grant date. In both cases, the restricted stock awards are subject to accelerated vesting due to death, total disability, or change in control of the Company.

Subject to the foregoing, unvested restricted stock awards are generally forfeited upon termination of employment, unless otherwise approved by the Board of Directors or its Compensation Committee. The restricted stock awards accrue dividends while the award is unvested and only carry rights to receive the accrued dividends once vested.

OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

Compensation cost for restricted stock awards is measured at the grant date based on the fair market value per share of our common stock.

The following table summarizes our restricted stock award activity for employees and non-employee directors:

		Shares				Weighted Average Grant Date Fair Value Per Share
Unvested at January 1, 2023			77,725			$	232.79
Granted			37,730				359.53
Vested			(52,447	)			222.91
Forfeited			(5,026	)			322.90
Unvested at December 31, 2023			57,982			$	317.23

The weighted average grant date fair value per restricted stock award granted during fiscal years 2023, 2022 and 2021 was $359.53, $303.81 and $213.55, respectively. The total fair value of vested restricted stock awards for fiscal year 2023, 2022 and 2021 was $18.1 million, $20.1 million and $15.6 million, respectively. At December 31, 2023, the Company had $9.7 million of unrecognized stock-based compensation cost, net of estimated forfeitures, related to unvested restricted stock awards that are expected to be recognized over a weighted average period of 1.7 years.

Performance-Based Restricted Stock Units

During 2023, 2022 and 2021 we granted performance-based restricted stock units (“PBRSUs”) to selected employees under the Stock Incentive Plan. The PBRSUs are earned based on the achievement of stated Company performance metrics over a one-year performance period. One-third of the earned PBRSUs vest following the end of the one-year performance period if the performance metrics are satisfied, with an additional one-third of the PBRSUs vesting on each of the next two grant date anniversaries. Earned PBRSUs are subject to accelerated vesting due to death, total disability, or change in control of the Company. Subject to the foregoing, unvested PBRSUs are generally forfeited if minimum threshold performance targets are not achieved or upon termination of employment. The unvested PBRSUs do not include voting rights or dividend participation rights.

Compensation cost for PBRSUs is measured at the grant date based on the fair market value per share of our common stock, with consideration given to the probability of achieving performance targets. At the end of each reporting period, we reassess the probability of achieving performance targets and changes to our initial assessment are reflected in the reporting period in which the change in estimate occurs.

The following table summarizes our activity for PBRSUs for employees during 2023:

		Shares				Weighted Average Grant Date Fair Value Per Share
Unvested at January 1, 2023			54,536			$	231.03
Granted (a)			—				—
Vested			(35,463	)			228.24
Forfeited			(1,694	)			263.43
Unvested at December 31, 2023			17,379			$	254.93

(a) PBRSUs earned may range from zero to 200% of the target award. PBRSUs granted for the 2023 performance period were not earned as the performance metrics were not met.

At December 31, 2023, the Company had $0.6 million of unrecognized stock-based compensation cost, net of estimated forfeitures, related to unvested PBRSUs that are expected to be recognized over a weighted average period of 1.0 years.

OLD DOMINION FREIGHT LINE, INC.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

Phantom Stock Awards

A summary of the changes in the number of outstanding phantom stock awards during the year ended December 31, 2023 is provided below. There were no phantom stock awards granted during 2023.

	Total Phantom Shares				Weighted Average Grant Date Fair Value Per Share
Balance of shares outstanding at January 1, 2023		612,520			$	120.40
Settled		(24,881	)			118.99
Forfeited		(28,441	)			119.69
Balance of shares outstanding at December 31, 2023		559,198			$	120.50

Of these outstanding awards, 1,722 phantom shares remain unvested with a weighted average grant date fair value per share of $114.76. The outstanding phantom stock awards will be settled in shares of our common stock equal to the number of vested shares of phantom stock on the applicable settlement date. The shares of common stock will generally be distributed in twenty-four substantially equal monthly installments commencing on the first day of the sixth calendar month following such settlement date.

Note 9. Fair Value Measurements

Short-term investments

We held no short-term investments as of December 31, 2023. A summary of the fair value of our short-term investments as of December 31, 2022 is shown in the table below.

(In thousands)	December 31, 2022				Level 1				Level 2				Level 3
Commercial paper	$	49,355			$	—			$	49,355			$	—
Total

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 $80.0 million and $100.0 million at December 31, 2023 and 2022, respectively. The estimated fair value of our total long-term debt, including current maturities, was $75.4 million and $92.6 million at December 31, 2023 and 2022, respectively. The fair value measurement of our Series B 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.

Note 10. 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.

Note 11. Subsequent Event

On February 16, 2024, we announced that our Board of Directors approved a two-for-one split of our common stock for shareholders of record as of the close of business on the record date of March 13, 2024. The additional shares will be distributed by our transfer agent, Computershare Trust Company, N.A., on March 27, 2024.

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Old Dominion Freight Line, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Old Dominion Freight Line, Inc. (the Company) as of December 31, 2023 and 2022, the related statements of operations, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes, as well as the financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 26, 2024 expressed an unqualified opinion.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

	Self-Insurance Reserves for Bodily Injury/Property Damage (“BIPD”) and Workers’ Compensation
Description of the Matter	The liability for claims and insurance totaled $153.8 million at December 31, 2023, and the majority of this amount represents the self-insurance reserves for BIPD and workers’ compensation claims. The long-term portion of this liability was $90.4 million, which was included in “Other non-current liabilities”, and the remainder was included in “Claims and insurance accruals” on the Company’s Balance Sheets. As described in Note 1 to the financial statements, claims and insurance accruals include the estimated cost of claims for BIPD and workers' compensation. These accruals include estimates for both future claims development on reported claims as well as claims incurred but not yet reported. The Company uses historical claims experience, known trends and third-party actuarial estimates to determine the liabilities for each of the BIPD and workers’ compensation reserves. These analyses are complex and require significant judgment as the models utilize multiple valuation methods and reflect subjective assumptions, including 1) the

	weighting of such methods, 2) the loss ratio, 3) the loss trend factor, and 4) the loss development factor, among other assumptions.
How We Addressed the Matter in Our Audit	We identified and tested internal controls over management’s review of the estimate for self-insurance reserves for BIPD and workers’ compensation claims, including controls over the completeness and accuracy of data inputs used in the Company’s third-party calculations, the assumptions and reserve calculations, as well as management’s evaluation of service organization controls and user controls over certain of the Company’s claims data that is managed by a third-party administrator. To test the self-insurance reserves for BIPD and workers’ compensation claims balances, our audit procedures included, among others, evaluating the methodologies used and the significant assumptions discussed above, as well as performing procedures with respect to underlying data and calculations used in the Company’s third-party analyses. We involved our actuarial specialists to assist in our evaluation of the appropriateness of the methods and assumptions used as well as to independently calculate ranges of reasonable reserve estimates developed based on independently selected assumptions and to compare such ranges to the Company’s recorded reserves. We tested claims data by comparing the data to supporting source documentation and payment information as well as performing trend analyses.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1994.

Raleigh, North Carolina

February 26, 2024