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What changed in Old Dominion's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Old Dominion's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+157 added−136 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-26)

Top changes in Old Dominion's 2024 10-K

157 paragraphs added · 136 removed · 120 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeDepartment of Transportation (“DOT”) physical and have a valid commercial driver’s license prior to employment. Once employed, drivers are required to obtain and maintain hazardous materials endorsements to their commercial driver’s licenses. Drivers, like all of our employees, are required to take pre-employment drug and alcohol tests and are randomly selected for periodic additional testing.
Biggest changeDepartment of Transportation (“DOT”) physical and have a valid commercial driver’s license prior to employment. Once employed, drivers are required to obtain and maintain hazardous materials endorsements to their commercial driver’s licenses.
We believe our transit times are generally faster and more reliable than those of our principal national competitors, in part because of our more efficient service center network, use of team drivers and proprietary technology. In addition, we provide greater geographic coverage than most of our regional competitors.
We believe our transit times are generally faster and more reliable than those of our principal national competitors, in part because of our efficient service center network, use of team drivers and proprietary technology. In addition, we provide greater geographic coverage than most of our regional competitors.
We may periodically utilize third-party transportation providers in our linehaul network to supplement our equipment or maintain older equipment that would have otherwise been replaced based on our normal equipment cycle, in order to support our equipment needs. The table below sets forth our capital expenditures for tractors and trailers for the years ended December 31, 2023 and 2022.
We may periodically utilize third-party transportation providers in our linehaul network to supplement our equipment or maintain older equipment that would have otherwise been replaced based on our normal equipment cycle, in order to support our equipment needs. The table below sets forth our capital expenditures for tractors and trailers for the years ended December 31, 2024 and 2023.
We do not believe that the cost of future compliance with current environmental laws or regulations will have a material adverse effect on our operations, financial condition, competitive position or capital expenditures for fiscal year 2024. However, future changes to laws or regulations may adversely affect our operations and could result in unforeseen costs to our business.
We do not believe that the cost of future compliance with current environmental laws or regulations will have a material adverse effect on our operations, financial condition, competitive position or capital expenditures for fiscal year 2025. However, future changes to laws or regulations may adversely affect our operations and could result in unforeseen costs to our business.
The 10-year average turnover rate for our driver graduates is approximately 7.4%, which is below our 10-year average turnover rate for our Company-wide drivers of approximately 10.1%. Based on driving records, our drivers are eligible to be rewarded with annual safety bonuses of up to $3,000 per driver.
The 10-year average turnover rate for our driver graduates is approximately 7.5%, which is below our 10-year average turnover rate for our Company-wide drivers of approximately 10.1%. Based on driving records, our drivers are eligible to be rewarded with annual safety bonuses of up to $3,000 per driver.
We believe our driver training and qualification programs have been important factors in improving our safety record and retaining qualified drivers. Over 22% of our drivers have achieved one million safe driving miles or more.
We believe our driver training and qualification programs have been important factors in improving our safety record and retaining qualified drivers. Over 24% of our drivers have achieved one million safe driving miles or more.
Our systems are protected through physical and software safeguards, as well as redundant systems, network security measures and backups. We continue to focus on the development and enhancement of the technology used in our operations in order to improve the efficiency and effectiveness of our services.
Our systems are protected through physical and software safeguards, as well as redundant systems, network security measures and backups. We continue to focus on the development and enhancement of emerging technologies used in our operations in order to improve the efficiency and effectiveness of our services.
For each of our last two fiscal years, more than 95% of our revenue was derived from services performed in the United States and less than 5% of our revenue was generated from services performed internationally.
For the last three fiscal years, more than 95% of our revenue was derived from services performed in the United States and less than 5% of our revenue was generated from services performed internationally.
Department of Energy (the “DOE”) that reset each week and are one of many components that we use to determine the overall price for our transportation services. 4 Human Capital Employee Profile As of December 31, 2023, we employed 22,902 active full-time employees, none of which were represented under a collective bargaining agreement.
Department of Energy (the “DOE”) that reset each week and are one of many components that we use to determine the overall price for our transportation services. 4 Human Capital Employee Profile As of December 31, 2024, we employed 21,895 active full-time employees, none of which were represented under a collective bargaining agreement.
In addition, successful LTL motor carriers generally employ, and regularly update, a high level of technology-based systems and processes that provide information to customers and help reduce operating costs. In 2022, the LTL industry had revenue of approximately $53.8 billion based on information reported in Transport Topics .
In addition, successful LTL motor carriers generally employ, and regularly update, a high level of technology-based systems and processes that provide information to customers and help reduce operating costs. In 2023, the LTL industry had revenue of approximately $46.9 billion based on information reported in Transport Topics .
The LTL industry is highly competitive on the basis of service and price and has consolidated significantly since the industry was deregulated in 1980. The largest 5 and 10 LTL motor carriers accounted for approximately 56% and 81%, respectively, of the domestic LTL market in 2022 according to information reported in Transport Topics .
The LTL industry is highly competitive on the basis of service and price and has consolidated significantly since the industry was deregulated in 1980. The largest 5 and 10 LTL motor carriers accounted for approximately 57% and 82%, respectively, of the domestic LTL market in 2023 according to information reported in Transport Topics .
Twin trailers and long-combination vehicles permit more freight to be transported behind a tractor than could otherwise be transported by one trailer. Tractors, Trailers and Maintenance At December 31, 2023, we owned 10,791 tractors.
Twin trailers and long-combination vehicles permit more freight to be transported behind a tractor than could otherwise be transported by one trailer. Tractors, Trailers and Maintenance At December 31, 2024, we owned 11,284 tractors.
Since 1988, we have provided a no-cost opportunity for qualified employees to become drivers through the “Old Dominion Driver Training Program.” There are currently 3,569 active drivers who have successfully completed this training, which was approximately 31.4% of our driver workforce as of December 31, 2023.
Since 1988, we have provided a no-cost opportunity for qualified employees to become drivers through the “Old Dominion Driver Training Program.” There are currently 3,716 active drivers who have successfully completed this training, which was approximately 34.0% of our full-time driver workforce as of December 31, 2024.
Our infrastructure allows us to provide service through each of our regions covering the continental United States. In addition to numerous service center renovations, expansions, and existing service center relocations, we opened 2, 22 and 36 new service centers over the past one, five and ten years, respectively, for a total of 257 service centers at December 31, 2023.
Our infrastructure allows us to provide service through each of our regions covering the continental United States. In addition to numerous service center renovations, expansions, and existing service center relocations, we opened 4, 25 and 39 new service centers over the past one, five and ten years, respectively, for a total of 261 service centers at December 31, 2024.
These programs support our philosophy of promoting from within our high-quality workforce. Governmental Regulation We are regulated by the DOT and by various state and federal agencies.
These programs, in addition to our succession planning process, support our philosophy of promoting from within our high-quality workforce. Governmental Regulation We are regulated by the DOT and by various state and federal agencies.
Service Center Operations At December 31, 2023, we operated 257 service center locations, of which we owned 233 and leased 24. Our service centers are responsible for the pickup and delivery ("P&D") of freight within their local service area. Each night, our service centers load outbound freight for transport to our other service centers for delivery.
Service Center Operations At December 31, 2024, we operated 261 service center locations, of which we owned 239 and leased 22. Our service centers are responsible for the P&D of freight within their local service area. Each night, our service centers load outbound freight for transport to our other service centers for delivery.
The table below reflects, as of December 31, 2023, the average age of our tractors and trailers: Type of Equipment Number of Units Average Age (In years) Tractors 10,791 4.5 Linehaul trailers 31,233 7.0 P&D trailers 15,181 7.2 We develop certain specifications for tractors and trailers and then negotiate the production and purchase of this equipment with several manufacturers.
The table below reflects, as of December 31, 2024, the average age of our tractors and trailers: Type of Equipment Number of Units Average Age (In years) Tractors 11,284 4.3 Linehaul trailers 31,451 7.3 P&D trailers 15,263 7.0 We develop certain specifications for tractors and trailers and then negotiate the production and purchase of this equipment with several manufacturers.
Employee Development and Safety As of December 31, 2023, we employed 5,911 linehaul drivers and 5,453 P&D drivers on a full-time basis. We select our drivers based upon many factors, including driving records and experience. Among other requirements, our drivers must pass a drug test, have a current U.S.
Employee Development and Safety As of December 31, 2024, we employed 5,645 linehaul drivers and 5,296 P&D drivers on a full-time basis. We select our drivers based upon certain qualifications and a comprehensive background check, including driving records and experience. Among other requirements, our drivers must pass a drug test, have a current U.S.
Our safety bonuses paid to drivers totaled $5.5 million, $5.3 million and $4.9 million in 2023, 2022 and 2021, respectively. We also maintain a “Management Trainee Program,” "Sales Trainee Program," and “Supervisor Development Program” that offer opportunities for our employees to be considered and prepared for sales and management opportunities.
Our safety bonuses paid to drivers totaled $5.8 million, $5.5 million and $5.3 million in 2024, 2023 and 2022, respectively. We also maintain various talent development programs, including our “Management Trainee Program,” “Sales Trainee Program,” and “Supervisor Development Program,” that offer opportunities for our employees to be considered and prepared for sales and management opportunities.
Year Ended December 31, In thousands 2023 2022 Tractors $ 203,417 $ 148,719 Trailers 181,534 216,697 Total $ 384,951 $ 365,416 At December 31, 2023, we operated 46 fleet maintenance centers at strategic service center locations throughout our network. These fleet maintenance centers are equipped to perform routine and preventive maintenance and repairs on our equipment.
Year Ended December 31, In thousands 2024 2023 Tractors $ 218,682 $ 203,417 Trailers 103,919 181,534 Total $ 322,601 $ 384,951 At December 31, 2024, we operated 47 fleet maintenance centers at strategic service center locations throughout our network. These fleet maintenance centers are equipped to perform routine and preventive maintenance and repairs on our equipment.
Customers Revenue is generated primarily from customers throughout the United States and North America. In 2023, our largest customer accounted for approximately 5.2% of our revenue and our largest 5, 10 and 20 customers accounted for 15.0%, 21.6% and 30.6% of our revenue, respectively.
Customers Revenue is generated primarily from customers throughout the United States and North America. In 2024, our largest customer accounted for approximately 5.3% of our revenue and our largest 5, 10 and 20 customers accounted for 14.7%, 21.5% and 31.1% of our revenue, respectively.
Our full-time employees work in the following roles: Full-Time Employees Number of Employees Drivers 11,364 Platform 4,227 Fleet technicians 673 Sales, administrative and other 6,638 Total 22,902 Employee Engagement and Benefits Our Old Dominion Family of employees are a key factor in the success of our business.
Our full-time employees work in the following roles: Full-Time Employees Number of Employees Drivers 10,941 Platform 3,773 Fleet technicians 684 Sales, administrative and other 6,497 Total 21,895 Employee Engagement and Benefits Our Old Dominion Family of employees are a key factor in the success of our business.
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Drivers, like all of our employees, are required to take pre-employment drug and alcohol tests and are randomly selected for periodic additional testing, per the requirements of the Department of Transportation.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFailure to keep pace with developments in technology, any disruption to our technology infrastructure, or failures of essential services upon which our technology platforms rely could cause us to incur costs or result in a loss of business, which may have a material adverse effect on our results of operations and financial condition. We rely heavily on information technology systems.
Biggest changeIn addition, the timing of when we have to adopt new technologies may be affected by changes in the political or regulatory environment, which could further increase our investment costs, operating complexity , and our ability to offer such technologies to our customers in the jurisdictions in which we operate. 13 Failure to keep pace with developments in technology, any disruption to our technology infrastructure, or failures of essential services upon which our technology platforms rely could cause us to incur costs or result in a loss of business, which may have a material adverse effect on our results of operations and financial condition.
These provisions: • limit who may call a special meeting of shareholders; • require shareholder action by written consent to be unanimous; • establish advance notice and other substantive and procedural requirements for nominations for election to our Board or for proposing matters that can be acted upon at shareholder meetings; • may make it difficult to merge with or otherwise absorb a Virginia corporation acquired in a tender offer for the three years after the acquisition; and • may make an unsolicited attempt to gain control of us more difficult by restricting the right of specified shareholders to vote newly acquired large blocks of stock. 17
These provisions: • limit who may call a special meeting of shareholders; 17 • require shareholder action by written consent to be unanimous; • establish advance notice and other substantive and procedural requirements for nominations for election to our Board or for proposing matters that can be acted upon at shareholder meetings; • may make it difficult to merge with or otherwise absorb a Virginia corporation acquired in a tender offer for the three years after the acquisition; and • may make an unsolicited attempt to gain control of us more difficult by restricting the right of specified shareholders to vote newly acquired large blocks of stock.
Adverse macroeconomic conditions, both in the U.S. and internationally, such as recent high inflation, continued high interest rates and slower economic growth has, and may continue to, negatively affect our customers’ business levels, the amount of transportation services they need, their ability to pay for our services and overall freight levels, any of which might impair our asset utilization.
Adverse macroeconomic conditions, both in the U.S. and internationally, such as high inflation, continued high interest rates and slower economic growth has, and may continue to, negatively affect our customers’ business levels, the amount of transportation services they need, their ability to pay for our services and overall freight levels, any of which might impair our asset utilization.
We intend to pay a quarterly cash dividend to holders of our common stock for the foreseeable future; however, dividend payments are subject to approval by our Board of Directors (the "Board"), and are restricted by applicable state law limitations on distributions to shareholders as well as certain covenants under our revolving credit facility and our note purchase and private shelf agreement.
We intend to pay a quarterly cash dividend to holders of our common stock for the foreseeable future; however, dividend payments are subject to approval by our Board of Directors (the “Board”), and are restricted by applicable state law limitations on distributions to shareholders as well as certain covenants under our revolving credit facility and our note purchase and private shelf agreement.
We may also use cash for investing in strategic assets or dividend payments, instead of share repurchases. 16 The market value of our common stock has been and may in the future be volatile, and could be substantially affected by various factors. The price of our common stock on the Nasdaq Global Select Market changes constantly.
We may also use cash for investing in strategic assets or dividend payments, instead of share repurchases. The market value of our common stock has been and may in the future be volatile, and could be substantially affected by various factors. The price of our common stock on the Nasdaq Global Select Market changes constantly.
Nevertheless, if we receive unacceptable CSA scores, and this data is made available to the public, our relationships with our customers could be damaged, which could result in a loss of business. The requirements of the CSA could also shrink the industry’s pool of drivers, as those with unfavorable scores could leave the industry.
Nevertheless, if we receive unacceptable CSA scores, and this data is made available to the public, our relationships with our customers could be damaged, which could result in a loss of business. 14 The requirements of the CSA could also shrink the industry’s pool of drivers, as those with unfavorable scores could leave the industry.
As a result, future dividend payments are not guaranteed and will depend upon various factors such as our overall financial condition, available liquidity, anticipated cash needs, future prospects for earnings and cash flows, as well as other factors considered relevant by our Board.
As a result, future dividend payments are not guaranteed and will depend upon various factors such as our overall financial 16 condition, available liquidity, anticipated cash needs, future prospects for earnings and cash flows, as well as other factors considered relevant by our Board.
In 2023, we experienced lower freight volumes due to continued softness in the domestic economy. Decreased demand for LTL freight services can negatively impact shipment volume and lower weight per shipment, which in turn can negatively impact freight density in our network.
In 2023 and 2024, we experienced lower freight volumes due to continued softness in the domestic economy. Decreased demand for LTL freight services can negatively impact shipment volume and lower weight per shipment, which in turn can negatively impact freight density in our network.
Furthermore, any failure to comply with data privacy, security or other laws and regulations, such as the California Consumer Privacy Act and other similar laws that have been or are expected to be enacted in the United States, at both the federal and state level, could result in claims, legal or regulatory proceedings, inquiries or investigations.
Additionally, any failure to comply with data privacy, security or other laws and regulations, such as the California Consumer Privacy Act and other similar laws that have been or are expected to be enacted in the United States, at both the federal and state level, could result in claims, legal or regulatory proceedings, inquiries or investigations.
Our competitors may implement new technology, including artificial intelligence applications, that could improve their service, price, available capacity or business relationships and increase their market share. If we do not appropriately adapt our operations to these new technologies, our business, financial condition, and results of operations may suffer.
Our competitors may implement new technology, including AI applications, that could improve their service, price, available capacity or business relationships and increase their market share. If we do not appropriately adapt our operations to these new technologies, our business, financial condition, and results of operations may suffer.
The FMCSA’s Compliance, Safety, Accountability initiative (“CSA”) is an enforcement and compliance program designed to monitor and improve commercial motor vehicle safety by measuring the safety record of both the motor carrier and the driver. These measurements are scored and used by the FMCSA to identify potential safety risks and to direct enforcement action.
The FMCSA’s CSA is an enforcement and compliance program designed to monitor and improve commercial motor vehicle safety by measuring the safety record of both the motor carrier and the driver. These measurements are scored and used by the FMCSA to identify potential safety risks and to direct enforcement action.
Responding to these ESG considerations and implementation of these goals and initiatives involves risks and uncertainties, requires investments, and depends in part on third-party performance or data that is outside our control. 15 Healthcare and other mandated benefits-related coverage may increase our costs for employee benefits and reduce our future profitability.
Responding to these ESG considerations and implementation of these goals and initiatives involves risks and uncertainties, may require investment, and depends in part on third-party performance, expectations, or data that is outside our control. Healthcare and other mandated benefits-related coverage may increase our costs for employee benefits and reduce our future profitability.
While we and our third-party service providers have experienced cyber-attacks and attempted breaches of our and their information technology systems and networks or similar events from time to time, no such incidents have been, individually or in the aggregate, material to us.
While we have experienced attempted cyber-attacks and attempted breaches of our information technology systems and networks or similar events from time to time, no such incidents have been, individually or in the aggregate, material to us.
Disruptions due to transitional challenges in upgrading or enhancing our technology systems; failures in the services upon which our information technology platforms rely, including those that may arise from adverse weather conditions or natural calamities, including but not limited to storms, floods, hurricanes, earthquakes or tornadoes; illegal acts, including terrorist attacks; human error or systems modernization initiatives; and/or other disruptions, may adversely affect our business, which could increase our costs or result in a loss of customers that could have a material adverse effect on our results of operations and financial condition. 13 Any disruption in the operational and technical services provided to us by third parties could adversely affect our business and subject us to liability.
Disruptions due to transitional challenges in upgrading or enhancing our technology systems; failures in the services upon which our information technology platforms rely, including those that may arise from adverse weather conditions or natural calamities, including but not limited to storms, floods, hurricanes, earthquakes or tornadoes; illegal acts, including terrorist attacks; human error or systems modernization initiatives; and/or other disruptions, may adversely affect our business, which could increase our costs or result in a loss of customers that could have a material adverse effect on our results of operations and financial condition.
Our information technology systems are complex and require ongoing investments and enhancements to meet both internal requirements and the requirements of our customers.
We rely heavily on information technology systems. Our information technology systems are complex and require ongoing investments and enhancements to meet both internal requirements and the requirements of our customers.
If we do not adapt to new technologies implemented by our competitors in the LTL and transportation industry, our business could suffer. The LTL and transportation industry may be impacted by rapid changes in technologies.
If we do not adapt to new technologies implemented by our competitors in the LTL and transportation industry, our business could suffer.
Risks Related to Legal and Regulatory Matters The FMCSA’s CSA initiative could adversely impact our ability to hire qualified drivers, meet our growth projections and maintain our customer relationships, each of which could adversely impact our results of operations.
Risks Related to Legal and Regulatory Matters The FMCSA’s C o mpliance, Safety, Accountability initiative (“CSA”) could adversely impact our ability to hire qualified drivers, meet our growth projections and maintain our customer relationships, each of which could adversely impact our results of operations.
Our ability to monitor such third parties’ security measures is limited. Any security incident involving such third parties could compromise the confidentiality, integrity, or availability of, or result in the theft of, our, our customers’, our employees’, or our vendors’ data and could negatively impact our operations.
Any security incident involving such third parties could compromise the confidentiality, integrity, or availability of, or result in the theft of, our, our customers’, our employees’, or our vendors’ data and could negatively impact our operations.
The rapid evolution and increased adoption of artificial intelligence technologies may also intensify our cybersecurity risks. We utilize third-party service providers who have access to our systems and certain sensitive data, which exposes us to additional security risks, particularly given the complex and evolving laws and regulations regarding privacy and data protection.
We utilize third-party service providers who have access to our systems and certain sensitive data, which exposes us to additional security risks, particularly given the complex and evolving laws and regulations regarding privacy and data protection.
Regulatory requirements and changes in regulatory requirements or guidance, together with the growing compliance risks presented by increased differences between applicable federal and state regulations, may affect our business or the economics of the industry by requiring changes in operating practices that could influence the demand for and increase the costs of providing transportation services. 14 We are subject to various environmental laws and regulations, and costs of compliance with, liabilities under, or violations of, existing or future environmental laws or regulations could adversely affect our business.
Department of Homeland Security. Regulatory requirements and changes in regulatory requirements or guidance, together with the growing compliance risks presented by increased differences between applicable federal and state regulations, may affect our business or the economics of the industry by requiring changes in operating practices that could influence the demand for and increase the costs of providing transportation services.
We rely on third parties to provide us with operational and technical services, such as hosting of our cloud computing and storage needs.
Any disruption in the operational and technical services provided to us by third parties could adversely affect our business and subject us to liability. We rely on third parties to provide us with operational and technical services, such as hosting of our cloud computing and storage needs.
If any of such services were to become inoperable for an extended period, we might be unable to fulfill our contractual commitments. Furthermore, these third parties may have access to information we maintain about our company, operations, customers, employees, vendors, or technology that are critical to or can significantly impact our business operations.
Furthermore, these third parties may have access to information we maintain about our company, operations, customers, employees, vendors, or technology that are critical to or can significantly impact our business operations. Our ability to monitor such third parties’ security measures is limited.
In addition, we may make statements about our goals and initiatives through our various non-financial reports, information provided on our website, press statements and other communications.
Many governments, regulators, investors, employees, customers and other stakeholders are increasingly focused on evolving ESG considerations relating to businesses, including climate change and greenhouse gas emissions, and human capital matters. In addition, we may make statements about our goals and initiatives through our various non-financial reports, information provided on our website, press statements and other communications.
Future strengthening of EPA, CARB or other federal or state regulatory requirements regarding fuel-efficiency or engine emissions of tractors could also result in increases in the cost of capital equipment and maintenance. The CARB’s Advanced Clean Fleets (“ACF”) rule requires fleets to adopt an increasing percentage of zero emission trucks, complementing CARB’s Advanced Clean Trucks (“ACT”) rule.
Future strengthening of EPA, CARB or other federal or state regulatory requirements regarding fuel-efficiency or engine emissions of tractors could also result in increases in the cost of capital equipment and maintenance. 15 Expectations relating to evolving ESG considerations and related reporting obligations expose us to potential liabilities, increased costs, reputational harm, and other adverse effects on our business.
Removed
The ACF rule applies to high-priority fleets of 50 or more trucks, aiming to accelerate the transition to zero emission vehicles (“ZEVs”). The ACF rule offers the ZEV Milestones Option or the Model Year Schedule.
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Our third-party service providers have also experienced similar attempted cyber-attacks and attempted breaches, which have thus far been mitigated by us through preventative, detective and responsive measures.
Removed
We have elected the ZEV Milestones Option, which allows fleets to phase in ZEVs between 2025 and 2042, depending on the type of vehicle and its usage. Fleet owners choosing this option must continuously meet or exceed certain scheduled ZEV Fleet Milestone percentage requirements. The ZEV Milestones Option ultimately requires 100% ZEVs by 2035.
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The rapid ongoing evolution and increased adoption of emerging technologies such as artificial intelligence (“AI”) and machine learning may make it more difficult to anticipate and implement protective measures to recognize, detect, and prevent the occurrence of any of these events.
Removed
While CARB’s ACF and ACT regulations may permit companies to seek exemptions or relief, there are no assurances that relief from either regulation will be obtained. At this point, there are virtually no ZEVs widely available that are suitable replacements for current technology used in LTL operations.
Added
Furthermore, we are subject to an increasing number of cybersecurity reporting obligations in different jurisdictions that vary in their scope and application, creating conflicting reporting requirements. These factors and the time spent to comply may inhibit our ability to quickly provide complete and reliable information about the cybersecurity incident to customers, counterparties, and regulators, as well as the public.
Removed
In addition, there does not appear to be sufficient infrastructure in place to support an electric vehicle fleet operation throughout our current terminal network. If ZEVs are not available or not commercially viable for the LTL market, we may be required to modify or curtail our operations in California.
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In recent years, our industry has been characterized by rapid changes in technology, leading to innovative transportation and logistics concepts that have impacted, or have the potential to significantly impact, our business model, competitive landscape , and the industries of our customers and suppliers.
Removed
During any transition to zero-emission trucks, due to the mandates on manufacturers limiting diesel engine sales, we may be forced to continue using older model diesel trucks that may require higher maintenance costs or be less reliable. The transition to utilizing ZEVs could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows.
Added
AI and other emerging technologies have the potential to alter the delivery of services and business operations across our industry. We currently incorporate AI solutions into our business, and these applications may become more important over time.
Removed
Expectations relating to ESG considerations and related reporting obligations expose us to potential liabilities, increased costs, reputational harm, and other adverse effects on our business. Many governments, regulators, investors, employees, customers and other stakeholders are increasingly focused on ESG considerations relating to businesses, including climate change and greenhouse gas emissions, human and civil rights, and diversity, equity and inclusion.
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If the content, analyses, or recommendations that AI applications assist in producing are or are alleged to be deficient, inaccurate or biased or to violate intellectual property rights of third parties, our financial condition, results of operations, liquidity and cash flows may be adversely affected.
Added
AI also presents emerging ethical issues and if our use of AI becomes controversial, we may experience brand or reputational harm, competitive harm, or legal liability. The rapid evolution of AI, including potential government regulation of AI, will require significant resources to develop, test, implement and maintain our AI solutions to minimize unintended harmful impacts.
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Advances in technology may require us to increase investments in order to remain competitive, and our customers may not be willing to accept higher prices to cover the cost of these investments.
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If any of such services were to become inoperable for an extended period, or suffer disruptions to their systems, labor groups, or supply chains that could adversely affect their services, we might be unable to fulfill our contractual commitments.
Added
We are subject to various environmental laws and regulations, and costs of compliance with, liabilities under, or violations of, existing or future environmental laws or regulations could adversely affect our business.
Added
Moreover, even without such regulation, increased awareness and any adverse publicity in the global marketplace about the greenhouse gases emitted by companies in the transportation industry could harm our reputation and reduce customer demand for our services.
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Although CARB recently withdrew its request for a waiver and authorization from the EPA for its Advanced Clean Fleets rule, a proposal that would have required trucking companies to gradually add zero emission vehicles (“ZEVs”) to their fleets, CARB may seek to enforce certain portions of the rule or curtail emissions through other programs.
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Furthermore, CARB’s Advanced Clean Trucks rule, a proposal that would require manufacturers to only sell ZEVs in California beginning in the 2036 model year, is still in effect.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Risk Committee of our Board is apprised by management of the results of the third-party analysis, any related action plans, and progress against those plans. Management, together with members of our OD Technology Department, brief the Board directly, or through their communications with the Risk Committee, on information security matters on at least a quarterly basis.
Biggest changeManagement, together with members of our OD Technology Department, brief the Board directly, or through their communications with the Risk Committee, on information security matters on at least a quarterly basis. After gathering and assessing information about our risk exposure, the Risk Committee reports the results of its review to the Board on a regular basis.
Please refer to “Risks Related to Cybersecurity and Technology Matters” under Item 1A, “Risk Factors” above for a discussion of the risks from cybersecurity threats and the potential impact to our strategy, results of operations and financial condition. 18 Governance The Board and the Risk Committee each receive regular presentations and reports on cybersecurity risks, which address a wide range of topics including recent developments, evolving standards, vulnerability assessments, third-party and independent reviews, the threat environment, technological trends and information security considerations.
Governance The Board and the Risk Committee each receive regular presentations and reports on cybersecurity risks, which address a wide range of topics including recent developments, evolving standards, vulnerability assessments, third-party and independent reviews, the threat environment, technological trends and information security considerations.
We also use third parties to periodically benchmark and assess our cybersecurity readiness and to assess how any known vulnerabilities might impact our Company as well as the sufficiency of our response. The results generated from these activities are reported to management and are used to develop action plans to address any identified opportunities for risk mitigation and overall improvement.
We also use third parties to periodically benchmark and assess our cybersecurity readiness and to assess how any known vulnerabilities might impact our Company as well as the sufficiency of our response.
The Board and the Risk Committee also receive prompt and timely information regarding any cybersecurity incident that meets established reporting thresholds, as well as ongoing updates regarding any such incident. Our Director of Information Security has served in various roles in information technology and information security for over 30 years, and is a Certified Information Systems Security Professional (CISSP).
The Board and the Risk Committee also receive prompt and timely information regarding any cybersecurity incident that meets established reporting thresholds, as well as ongoing updates regarding any such incident.
Removed
After gathering and assessing information about our risk exposure, the Risk Committee reports the results of its review to the Board on a regular basis.
Added
The results generated from these activities are reported to management and are used to develop action plans to address any identified opportunities for risk mitigation and overall 18 improvement. The Risk Committee of our Board is apprised by management of the results of the third-party analysis, any related action plans, and progress against those plans.
Added
Please refer to “Risks Related to Cybersecurity and Technology Matters” under Item 1A, “Risk Factors” above for a discussion of the risks from cybersecurity threats and the potential impact to our strategy, results of operations and financial condition.
Added
Our Director of Information Security, the management position responsible for assessing and managing material risks from cybersecurity threats, has served in various roles in information technology and information security for over 30 years, and is a Certified Information Systems Security Professional (CISSP).

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. P ROPERTIES We own our principal executive office located in Thomasville, North Carolina, and 233 of the 257 service centers we operated as of December 31, 2023. Our facilities are strategically dispersed over the states in which we operate.
Biggest changeITEM 2. P ROPERTIES We own our principal executive office located in Thomasville, North Carolina, and 239 of the 261 service centers we operated as of December 31, 2024. Our facilities are strategically dispersed over the states in which we operate.
Our owned service centers include most of our larger facilities and account for approximately 95% of the total door capacity in our network. At December 31, 2023, the terms of our leased properties ranged from month-to-month to a lease that expires in 2035.
Our owned service centers include most of our larger facilities and account for approximately 96% of the total door capacity in our network. At December 31, 2024, the terms of our leased properties ranged from month-to-month to a lease that expires in 2035.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeConsistent with SEC Regulation S-K Item 103, we have elected to disclose those environmental legal proceedings with a governmental authority if management reasonably believes that the proceedings may involve potential monetary sanctions of $1.0 million or more. Applying this threshold, there are no such unresolved proceedings to disclose as of December 31, 2023.
Biggest changeConsistent with SEC Regulation S-K Item 103, we have elected to disclose those environmental legal proceedings with a governmental authority if management reasonably believes that the proceedings may involve potential monetary sanctions of $1.0 million or more. Applying this threshold, there are no such unresolved proceedings to disclose as of December 31, 2024.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOn 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 our prior repurchase program in January 2022.
Biggest changeThe 2021 Repurchase Program began after the completion of our prior repurchase program in January 2022 and was completed in May 2024. 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 “2023 Repurchase Program”).
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STO CKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Information Our common stock is traded on the Nasdaq Global Select Market (“Nasdaq”) under the symbol ODFL. At February 16, 2024, there were 423,775 holders of our common stock, including 73 shareholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STO CKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Information Our common stock is traded on the Nasdaq Global Select Market (“Nasdaq”) under the symbol ODFL. At February 12, 2025, there were 600,325 holders of our common stock, including 68 shareholders of record.
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. 20 Performance Graph The following graph compares the total shareholder cumulative returns, assuming the reinvestment of all dividends, of $100 invested on December 31, 2018, in (i) our common stock, (ii) the S&P 500 Total Return Index, and (iii) the Dow Jones Transportation Average, for the five-year period ended December 31, 2023.
At December 31, 2024, we had $2.26 billion remaining authorized under the 2023 Repurchase Program. 20 Performance Graph The following graph compares the total shareholder cumulative returns, assuming the reinvestment of all dividends, of $100 invested on December 31, 2019, in (i) our common stock, (ii) the S&P 500 Total Return Index, and (iii) the Dow Jones Transportation Average, for the five-year period ended December 31, 2024.
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.
See discussion of the ASR Agreement within this section. 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 following table provides information regarding our repurchases of our common stock during the fourth quarter of 2023: ISSUER PURCHASES OF EQUITY SECURITIES Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs October 1-31, 2023 58,925 $ 400.08 58,296 $ 287,637,586 November 1-30, 2023 55,005 $ 392.18 54,376 $ 266,302,847 December 1-31, 2023 105,434 $ 389.92 104,805 $ 225,437,013 Total 219,364 217,477 (1) Total number of shares purchased during the quarter includes 1,887 shares of our common stock surrendered by a participant to satisfy tax withholding obligations in connection with the vesting of equity awards issued under our 2016 Stock Incentive Plan.
The following table provides information regarding our repurchases of our common stock during the fourth quarter of 2024: ISSUER PURCHASES OF EQUITY SECURITIES Total Number of Shares Purchased (1) Average Price Paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs October 1-31, 2024 299,516 $ 196.51 296,284 $ 2,382,449,575 November 1-30, 2024 (3) 276,693 $ 256.25 274,292 $ 2,312,029,428 December 1-31, 2024 258,329 $ 193.98 255,928 $ 2,262,459,237 Total 834,538 826,504 (1) Total number of shares purchased during the quarter includes 8,034 shares of our common stock surrendered by a participant to satisfy tax withholding obligations in connection with the vesting of equity awards issued under our 2016 Stock Incentive Plan.
At December 31, 2023, our 2021 Repurchase Program had $225.4 million remaining authorized. Under our repurchase programs, we may repurchase shares from time to time in open market purchases or through privately negotiated transactions.
The 2023 Repurchase Program, which does not have an expiration date, began after the completion of the 2021 Repurchase Program in May 2024. Under our repurchase programs, we may repurchase shares from time to time in open market purchases or through privately negotiated transactions.
Cumulative Total Return 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 Old Dominion Freight Line, Inc. $ 100 $ 154 $ 239 $ 440 $ 350 $ 502 S&P 500 Total Return Index $ 100 $ 131 $ 156 $ 200 $ 164 $ 207 Dow Jones Transportation Average $ 100 $ 121 $ 141 $ 188 $ 155 $ 186
Cumulative Total Return 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Old Dominion Freight Line, Inc. $ 100 $ 155 $ 285 $ 227 $ 325 $ 285 S&P 500 Total Return Index $ 100 $ 118 $ 152 $ 125 $ 158 $ 197 Dow Jones Transportation Average $ 100 $ 117 $ 155 $ 128 $ 154 $ 157
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(2) Average price paid per share excludes a 1% excise tax imposed by the Inflation Reduction Act of 2022. (3) The total number of shares purchased includes the final settlement of 133,012 shares of our common stock under an accelerated share repurchase agreement entered into with a third-party financial institution on May 28, 2024 (the “ASR Agreement”).
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Shares of our common stock repurchased under our repurchase programs are canceled at the time of repurchase and are classified as authorized but unissued shares of our common stock. On May 28, 2024, we entered into the ASR Agreement with a third-party financial institution.
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The ASR Agreement was accounted for as a settled treasury stock purchase and a forward stock purchase contract. The par value of the initial shares received was recorded as a reduction to common stock, with the excess purchase price recorded as a reduction to retained earnings.
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The forward stock purchase contract was accounted for as a contract indexed to our own stock and is classified within capital in excess of par value on our Balance Sheets.
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The ASR Agreement was 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.
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Under the ASR Agreement, we paid the third-party financial institution $200.0 million and received an initial delivery of 923,201 shares of our common stock for $160.0 million, representing approximately 80% of the total value of shares to be received by us under the ASR Agreement, and the remaining balance of $40.0 million was settled in November 2024.
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In total, we repurchased 1,056,213 shares for $200.0 million under the ASR Agreement.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations The following table sets forth, for the years indicated, expenses and other items as a percentage of revenue from operations: 2023 2022 Revenue from operations 100.0 % 100.0 % Operating expenses: Salaries, wages and benefits 44.8 43.4 Operating supplies and expenses 12.2 13.6 General supplies and expenses 2.8 2.6 Operating taxes and licenses 2.5 2.3 Insurance and claims 1.3 0.9 Communication and utilities 0.7 0.6 Depreciation and amortization 5.5 4.5 Purchased transportation 2.1 2.5 Miscellaneous expenses, net 0.1 0.2 Total operating expenses 72.0 70.6 Operating income 28.0 29.4 Interest (income) expense, net (0.2 ) (0.1 ) Other expense, net 0.1 0.1 Income before income taxes 28.1 29.4 Provision for income taxes 7.0 7.4 Net income 21.1 % 22.0 % 23 Key financial and operating metrics for 2023 and 2022 are presented below: 2023 2022 Change % Change Work days 252 253 (1 ) (0.4 ) Revenue (in thousands) $ 5,866,152 $ 6,260,077 $ (393,925 ) (6.3 ) Operating ratio 72.0 % 70.6 % Net income (in thousands) $ 1,239,502 $ 1,377,159 $ (137,657 ) (10.0 ) Diluted earnings per share $ 11.26 $ 12.18 $ (0.92 ) (7.6 ) LTL tons (in thousands) 9,260 10,211 (951 ) (9.3 ) LTL tonnage per day 36,745 40,359 (3,614 ) (9.0 ) LTL shipments (in thousands) 12,176 12,989 (813 ) (6.3 ) LTL shipments per day 48,317 51,341 (3,024 ) (5.9 ) LTL weight per shipment (lbs.) 1,521 1,572 (51 ) (3.2 ) LTL revenue per hundredweight $ 31.31 $ 30.24 $ 1.07 3.5 LTL revenue per shipment $ 476.25 $ 475.45 $ 0.80 0.2 LTL revenue per intercity mile $ 8.38 $ 8.28 $ 0.10 1.2 LTL intercity miles (in thousands) 691,632 746,028 (54,396 ) (7.3 ) Average length of haul (miles) 925 934 (9 ) (1.0 ) Our financial results for 2023 reflect continued softness in the domestic economy that contributed to the decline in our revenue.
Biggest changeResults of Operations The following table sets forth, for the years indicated, expenses and other items as a percentage of revenue from operations: 2024 2023 Revenue from operations 100.0 % 100.0 % Operating expenses: Salaries, wages and benefits 46.2 44.8 Operating supplies and expenses 10.9 12.2 General supplies and expenses 3.0 2.8 Operating taxes and licenses 2.6 2.5 Insurance and claims 1.6 1.3 Communication and utilities 0.7 0.7 Depreciation and amortization 5.9 5.5 Purchased transportation 2.1 2.1 Miscellaneous expenses, net 0.4 0.1 Total operating expenses 73.4 72.0 Operating income 26.6 28.0 Interest income, net (0.3 ) (0.2 ) Other expense, net 0.1 0.1 Income before income taxes 26.8 28.1 Provision for income taxes 6.4 7.0 Net income 20.4 % 21.1 % 23 Key financial and operating metrics for 2024 and 2023 are presented below: 2024 2023 Change % Change Work days 254 252 2 0.8 Revenue (in thousands) $ 5,814,810 $ 5,866,152 $ (51,342 ) (0.9 ) Operating ratio 73.4 % 72.0 % Net income (in thousands) $ 1,186,073 $ 1,239,502 $ (53,429 ) (4.3 ) Diluted earnings per share $ 5.48 $ 5.63 $ (0.15 ) (2.7 ) LTL tons (in thousands) 9,000 9,260 (260 ) (2.8 ) LTL tonnage per day 35,433 36,745 (1,312 ) (3.6 ) LTL shipments (in thousands) 12,011 12,176 (165 ) (1.4 ) LTL shipments per day 47,288 48,317 (1,029 ) (2.1 ) LTL weight per shipment (lbs.) 1,499 1,521 (22 ) (1.4 ) LTL revenue per hundredweight $ 32.05 $ 31.31 $ 0.74 2.4 LTL revenue per shipment $ 480.29 $ 476.25 $ 4.04 0.8 Average length of haul (miles) 919 925 (6 ) (0.6 ) All references in this report to shares outstanding, weighted average shares outstanding, earnings per share, and dividends per share amounts have been restated retroactively to reflect the two-for-one stock split effected in March 2024.
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%.
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%.
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.
With respect to services not completed at the end of a reporting period, we use a percentage of completion method to allocate 28 the appropriate revenue to each separate reporting period.
Our return of capital to shareholders is more fully described below under “Stock Repurchase Program” and “Dividends to Shareholders.” Our long-term debt agreement is more fully described below under "Financing Arrangements." 25 We have four primary sources of available liquidity: cash flows from operations, our existing cash and cash equivalents, available borrowings under our third amended and restated credit agreement with Wells Fargo Bank, National Association serving as administrative agent for the lenders, dated March 22, 2023 (the “Credit Agreement”), and our Note Purchase and Private Shelf Agreement with PGIM, Inc.
Our return of capital to shareholders is more fully described below under “Stock Repurchase Program” and “Dividends to Shareholders.” Our long-term debt agreement is more fully described below under “Financing Arrangements.” We have four primary sources of available liquidity: cash flows from operations, our existing cash and cash equivalents, available borrowings under our third amended and restated credit agreement with Wells Fargo Bank, National Association serving as administrative agent for the lenders, dated March 22, 2023 (as subsequently amended, the “Credit Agreement”), and our Note Purchase and Private Shelf Agreement with PGIM, Inc.
Discussions of our 2021 results and year-to-year comparisons between 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the Securities and Exchange Commission on February 22, 2023.
Discussions of our 2023 results and year-to-year comparisons between 2023 and 2022 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the Securities and Exchange Commission on February 26, 2024.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Management’s Discussion and Analysis of Financial Condition and Results of Operations generally discusses our 2023 and 2022 results and year-to-year comparisons between 2023 and 2022.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Management’s Discussion and Analysis of Financial Condition and Results of Operations generally discusses our 2024 and 2023 results and year-to-year comparisons between 2024 and 2023.
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 Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers ("ASC Topic 606").
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 Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”).
Increases in density allow us to maximize our asset utilization and labor productivity, which we measure over many different functional areas of our operations including linehaul load factor, P&D stops per hour, P&D shipments per hour, platform pounds handled per hour and platform shipments per hour.
Increases in density allow us to maximize our asset utilization and labor productivity, which we measure over many different functional areas of our operations including linehaul load factor, pickup and delivery (“P&D”) stops per hour, P&D shipments per hour, platform pounds handled per hour and platform shipments per hour.
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.
Credit Agreement The Credit Agreement, which matures in May 2028, 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.
We were in compliance with all covenants in our outstanding debt instruments for the period ended December 31, 2023.
We were in compliance with all covenants in our outstanding debt instruments for the period ended December 31, 2024.
Our accrued liability for insurance, BIPD claims, and workers’ compensation claims totaled $127.0 million and $129.6 million at December 31, 2023 and 2022, respectively. Claims and insurance accruals are discussed further in Note 1 of the Notes to the Financial Statements included in Item 8 of this report.
Our accrued liability for BIPD and workers’ compensation claims totaled $137.3 million and $127.0 million at December 31, 2024 and 2023, respectively. Claims and insurance accruals are discussed further in Note 1 of the Notes to the Financial Statements included in Item 8 of this report.
Approximately $350 million is allocated for the purchase of service center facilities, construction of new service center facilities or expansion of existing service center facilities, subject to the availability of suitable real estate and the timing of construction projects; approximately $325 million is allocated for the purchase of tractors and trailers; and approximately $75 million is allocated for investments in technology and other assets.
Approximately $300 million is allocated for the purchase of service center facilities, construction of new service center facilities or expansion of existing service center facilities, subject to the availability of suitable real estate and the timing of construction projects; approximately $225 million is allocated for the purchase of tractors and trailers; and approximately $50 million is allocated for investments in technology and other assets.
The cost of diesel fuel, excluding fuel taxes, represents the largest component of operating supplies and expenses, and can vary based on both the average price per gallon and consumption. Our average cost per gallon of diesel fuel decreased 19.8% in 2023 as compared to 2022.
The cost of diesel fuel, excluding fuel taxes, represents the largest component of operating supplies and expenses, and can vary based on both the average price per gallon and consumption. Our average cost per gallon of diesel fuel decreased 14.6% in 2024 as compared to 2023.
In addition to our focus on density and operating efficiencies, it is critical for us to obtain an appropriate yield, which is measured as revenue per hundredweight, on the shipments we handle to offset our cost inflation and support our ongoing investments in capacity and technology.
In addition to our focus on density and operating efficiencies, it is critical for us to obtain an appropriate yield, which is measured as revenue per hundredweight, on the shipments we handle.
Light, bulky freight typically has a higher class and is priced at higher revenue per hundredweight than dense, heavy freight. Fuel surcharges, accessorial charges, revenue adjustments and revenue for undelivered freight are included in this measurement.
Light, bulky freight typically has a higher class and is priced at higher revenue per hundredweight than dense, heavy freight. Fuel surcharges, accessorial charges, revenue adjustments and revenue for undelivered freight are included in this measurement, and we regularly monitor the components that impact our pricing.
Depreciation and amortization increased $48.4 million, or 17.5%, in 2023 as compared to 2022. The increases in depreciation and amortization costs were due primarily to the assets acquired as part of our 2022 and 2023 capital expenditure programs. We believe depreciation costs will continue to increase in future periods based on our 2024 capital expenditure plan.
The increases in depreciation and amortization costs were due primarily to the assets acquired as part of our 2023 and 2024 capital expenditure programs. We believe depreciation costs will continue to increase in future periods based on our 2025 capital expenditure plan.
The 2021 Repurchase Program, which does not have an expiration date, began after completion of our prior repurchase program in January 2022. 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 2021 Repurchase Program began after completion of our prior repurchase program in January 2022 and was completed in May 2024. On July 26, 2023, we announced that our Board of Directors had approved a stock repurchase program authorizing us to repurchase up to an aggregate of $3.0 billion of our outstanding common stock (the “2023 Repurchase Program”).
LTL tons per day decreased 5.0%, due primarily to a 2.3% decrease in LTL shipments per day and a 2.8% decrease in LTL weight per shipment. LTL revenue per hundredweight increased 2.7% as compared to the same month last year. LTL revenue per hundredweight, excluding fuel surcharges, increased 6.7% as compared to the same month last year.
January 2025 Update Revenue per day decreased 4.2% in January 2025 compared to the same month last year. LTL tons per day decreased 7.1%, due primarily to a 5.4% decrease in LTL shipments per day and a 1.7% decrease in LTL weight per shipment. LTL revenue per hundredweight increased 3.1% as compared to the same month last year.
We regularly monitor the components of our pricing, including base freight rates, accessorial charges and fuel surcharges. The fuel surcharge is generally designed to offset fluctuations in the cost of our petroleum-based products and is indexed to diesel fuel prices published by the U.S. Department of Energy, which reset each week.
The fuel surcharge is generally designed to offset fluctuations in the cost of our petroleum-based products and is indexed to diesel fuel prices published by the U.S. Department of Energy, which reset each week.
Our effective tax rate generally exceeds the federal statutory rate due to the impact of state taxes and, to a lesser extent, certain other non-deductible items.
Our effective tax rate generally exceeds the federal statutory rate due to the impact of state taxes and, to a lesser extent, certain other non-deductible items. In 2024, our effective tax rate was favorably impacted by the purchase of federal tax credits and other discrete tax adjustments.
These decreases were partially offset by the annual wage increase provided to our employees at the beginning of both September 2022 and 2023. Our productive labor costs, which include wages for drivers, platform employees, and fleet technicians, increased as a percent of revenue to 23.6% in 2023 from to 22.9% in 2022.
The increase in salaries and wages was due primarily to the annual wage increase provided to our employees at the beginning of both September 2023 and 2024. Our productive labor costs, which include wages for drivers, platform employees, and fleet technicians, increased as a percent of revenue to 24.1% in 2024 from 23.6% in 2023.
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.
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. 29 Audit Committee Approval The Audit Committee of our Board of Directors reviews and approves all related person transactions in accordance with our Related Person Transactions Policy.
Changes in our capital expenditures are more fully described below in “Capital Expenditures.” The change in our cash flows used in financing activities during 2023 as compared to 2022 was primarily due to the $823.6 million decrease in funds used for repurchases of our common stock.
Changes in our capital expenditures are more fully described below in “Capital Expenditures.” The change in our cash flows used in financing activities during 2024 as compared to 2023 was primarily due to higher repurchases of our common stock, as well as an increase in dividend payments to our shareholders during 2024.
The amounts outstanding and available borrowing capacity under the Credit Agreement are presented below: December 31, (In thousands) 2023 2022 Facility limit $ 250,000 $ 250,000 Line of credit borrowings — — Outstanding letters of credit (39,966 ) (38,653 ) Available borrowing capacity $ 210,034 $ 211,347 27 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.
For periods in 2023 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%. 27 The amounts outstanding and available borrowing capacity under the Credit Agreement are presented below: December 31, (In thousands) 2024 2023 Facility limit $ 250,000 $ 250,000 Line of credit borrowings — — Outstanding letters of credit (37,702 ) (39,966 ) Available borrowing capacity $ 212,298 $ 210,034 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 new repurchase program, which does not have an expiration date, will be effective upon the completion of our 2021 Repurchase Program. At December 31, 2023, our 2021 Repurchase Program had $225.4 million remaining authorized. Under our repurchase programs, we may repurchase shares from time to time in open market purchases or through privately negotiated transactions.
The 2023 Repurchase Program, which does not have an expiration date, began after the completion of the 2021 Repurchase Program in May 2024. Under our repurchase programs, we may repurchase shares from time to time in open market purchases or through privately negotiated transactions.
Expenditures for land and structures can be dependent upon the availability of land in the geographic areas where we are looking to expand. We historically spend 10% to 15% of our revenue on capital expenditures each year. We expect to continue to maintain a high level of capital expenditures in order to support our long-term plan for market share growth.
We historically spend 10% to 15% of our revenue on capital expenditures each year, and we generally expect to continue to maintain a level of capital expenditures in order to support our long-term plan for market share growth.
Liquidity and Capital Resources A summary of our cash flows is presented below: (In thousands) 2023 2022 Cash and cash equivalents at beginning of year $ 186,312 $ 462,564 Cash flows provided by (used in): Operating activities 1,569,135 1,691,582 Investing activities (659,820 ) (547,472 ) Financing activities (661,828 ) (1,420,362 ) Increase (decrease) in cash and cash equivalents 247,487 (276,252 ) Cash and cash equivalents at end of year $ 433,799 $ 186,312 The change in our cash flows provided by operating activities during 2023 as compared to 2022 was due to the $137.7 million decrease in net income as well as the $33.2 million decrease in certain other working capital accounts.
Liquidity and Capital Resources A summary of our cash flows is presented below: (In thousands) 2024 2023 Cash and cash equivalents at beginning of year $ 433,799 $ 186,312 Cash flows provided by (used in): Operating activities 1,659,283 1,569,135 Investing activities (751,194 ) (659,820 ) Financing activities (1,233,212 ) (661,828 ) (Decrease) increase in cash and cash equivalents (325,123 ) 247,487 Cash and cash equivalents at end of year $ 108,676 $ 433,799 The change in our cash flows provided by operating activities during 2024 as compared to 2023 was due primarily to the $139.5 million increase in certain other working capital accounts partially offset by the $53.4 million decrease in net income.
The use of different assumptions, estimates or significant changes in the resale market for our equipment could result in material changes in the carrying value and related depreciation of our assets. Depreciation expense in 2023 totaled $324.0 million.
The use of different assumptions, estimates or significant changes in the resale market for our equipment could result in material changes in the carrying value and related depreciation of our assets. Depreciation expense in 2024 totaled $344.5 million. There have been no material effects to estimates related to depreciation expense for the year ended December 31, 2024.
In addition, our gallons consumed decreased 8.5% in 2023 as compared to 2022 due to a decrease in our miles driven. We do not use diesel fuel hedging instruments; therefore, our costs are subject to market price fluctuations. Our other operating supplies and expenses as a percent of revenue were generally consistent in 2023 as compared to 2022.
We do not use diesel fuel hedging instruments; therefore, our costs are subject to market price fluctuations. Our gallons consumed also decreased 3.5% in 2024 as compared to 2023 due primarily to a decrease in our miles driven.
While our investments in real estate, equipment, and technology can increase our short-term costs, we believe these investments are necessary to support our continued long-term growth and strategic initiatives. Purchased transportation expense decreased $36.6 million, or 23.1%, in 2023 as compared to 2022.
While our investments in real estate, equipment, and technology can increase our short-term costs, we believe these investments are necessary to support our continued long-term growth and strategic initiatives. Our effective tax rate in 2024 was 23.9% as compared to 24.8% in 2023.
As a result, we periodically evaluate our self-insured retention and deductible levels to determine the most cost-efficient balance between our exposure and excess coverage.
Insurers providing excess coverage above a company’s self-insured retention or deductible levels typically adjust their premiums to cover insured losses and for other market factors. As a result, we periodically evaluate our self-insured retention and deductible levels to determine the most cost-efficient balance between our exposure and excess coverage.
Our 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 first two principal payments of $20.0 million each were paid on May 4, 2023 and 2024, respectively. The remaining $60.0 million will be paid in three equal annual installments of $20.0 million through May 4, 2027.
This decrease resulted from a 9.0% decrease in LTL tonnage per day, which was primarily due to decreases in LTL shipments per day and LTL weight per shipment. This decrease in revenue was partially offset by a 3.5% increase in our LTL revenue per hundredweight.
Revenue Revenue decreased $51.3 million, or 0.9%, in 2024 compared to 2023 due to a decrease in volumes that was partially offset by an increase in LTL revenue per hundredweight. LTL tonnage per day decreased 3.6% primarily due to decreases in LTL shipments per day and LTL weight per shipment.
Our LTL revenue per hundredweight includes the impact of lower fuel surcharges resulting from a decline in the average price of diesel fuel for the comparable periods. Excluding fuel surcharges, LTL revenue per hundredweight increased 8.3% in 2023 as compared to 2022.
This decrease in our volumes was partially offset by a 2.4% increase in our LTL revenue per hundredweight. Our LTL revenue per hundredweight includes the impact of lower fuel surcharges resulting from a decline in the average price of diesel fuel from the comparable period. Excluding fuel surcharges, LTL revenue per hundredweight increased 5.0% in 2024 as compared to 2023.
A hypothetical change of 10% in our percentage of completion estimate would not have a material effect on our recorded revenue. 28 Property and Equipment Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated economic lives. We use historical experience, certain assumptions and estimates in determining the economic life of each asset.
Changes in economic conditions, customer creditworthiness, pricing arrangements and other factors may significantly impact revenue recognition estimates. Property and Equipment Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated economic lives. We use historical experience, certain assumptions and estimates in determining the economic life of each asset.
Capital Expenditures The table below sets forth our net capital expenditures for property and equipment, including those obtained through noncash transactions, for the years ended December 31, 2023 and 2022: Year Ended December 31, (In thousands) 2023 2022 Land and structures $ 291,070 $ 299,529 Tractors 203,417 148,719 Trailers 181,534 216,697 Technology 44,358 33,783 Other equipment and assets 36,930 68,920 Less: Proceeds from sales (48,637 ) (22,096 ) Total $ 708,672 $ 745,552 Our capital expenditures vary based upon the projected increase in the number and size of our service center facilities necessary to support our plan for long-term growth, our planned tractor and trailer replacement cycle, and forecasted tonnage and shipment growth.
The Credit Agreement and the Note Agreement are described in more detail below under “Financing Arrangements.” We believe we also have sufficient access to debt and equity markets to provide other sources of liquidity, if needed. 25 Capital Expenditures The table below sets forth our net capital expenditures for property and equipment for the years ended December 31, 2024 and 2023: Year Ended December 31, (In thousands) 2024 2023 Land and structures $ 373,416 $ 291,070 Tractors 218,682 203,417 Trailers 103,919 181,534 Technology 28,037 44,358 Other equipment and assets 47,264 36,930 Less: Proceeds from sales (20,124 ) (48,637 ) Total $ 751,194 $ 708,672 Our capital expenditures vary based upon the projected increase in the number and size of our service center facilities necessary to support our plan for long-term growth, our planned tractor and trailer replacement cycle, and forecasted tonnage and shipment growth.
Dividends to Shareholders Our Board of Directors declared a cash dividend of $0.40 per share for each quarter of 2023 and declared a cash dividend of $0.30 per share for each quarter of 2022. 26 On January 31, 2024, we announced that our Board of Directors had declared a cash dividend of $0.52 per share of our common stock.
Our Board of Directors declared a cash dividend of $0.26 per share for each quarter of 2024, declared a cash dividend of $0.20 per share for each quarter of 2023 and declared a cash dividend of $0.15 per share for each quarter of 2022.
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.
Shares of our common stock repurchased under our repurchase programs are canceled at the time of repurchase and are classified as authorized but unissued shares of our common stock. On May 28, 2024, we entered into an accelerated share repurchase agreement (the “ASR Agreement”) with a third-party financial institution.
This increase in employee benefit costs as a percent of salaries and wages was partially offset by lower retirement benefit plan costs directly linked to our net income. Operating supplies and expenses decreased $134.6 million, or 15.8%, in 2023 as compared to 2022, due primarily to decreases in our costs for diesel fuel used in our vehicles.
This increase in employee benefit costs was partially offset by lower retirement benefit plan costs directly linked to our net income. Our employee benefit costs as a percent of salaries and wages remained relatively consistent at 37.3% in 2024 compared to 37.5% in 2023.
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.
At December 31, 2024, we had $2.26 billion remaining authorized under the 2023 Repurchase Program. 26 Dividends to Shareholders 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 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%.
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”).
Contractual Obligations The following table summarizes our significant contractual obligations as of December 31, 2023: Payments due by period Contractual Obligations (1) Less than More than (In thousands) Total 1 year 1-3 years 3-5 years 5 years Series B Notes $ 84,564 $ 22,072 $ 42,281 $ 20,211 $ — Operating lease obligations (2) 151,273 21,598 37,261 34,670 57,744 Purchase obligations and Other 38,056 25,266 12,790 — — Total $ 273,893 $ 68,936 $ 92,332 $ 54,881 $ 57,744 (1) Contractual obligations include principal and interest on our Series B Notes; leases consisting primarily of real estate and automotive leases; and purchase obligations relating to non-cancellable purchase orders for (i) equipment scheduled for delivery in 2024, and (ii) information technology agreements.
Contractual Obligations The following table summarizes our significant contractual obligations as of December 31, 2024: Payments due by period Contractual Obligations (1) Less than More than (In thousands) Total 1 year 1-3 years 3-5 years 5 years Series B Notes $ 62,492 $ 21,451 $ 41,041 $ — $ — Operating lease obligations (2) 128,104 20,548 39,245 33,577 34,734 Purchase obligations and Other 285,546 238,195 28,655 13,195 5,501 Total $ 476,142 $ 280,194 $ 108,941 $ 46,772 $ 40,235 (1) Contractual obligations include principal and interest on our Series B Notes; leases consisting primarily of real estate and automotive leases; and purchase obligations relating to (i) non-cancellable purchase orders for equipment scheduled for delivery in 2025, (ii) non-cancellable purchase orders for information technology agreements, and (iii) federal tax credits.
Operating Costs and Other Expenses Salaries, wages, and benefits decreased $87.2 million, or 3.2%, in 2023 as compared to 2022, due to an $83.1 million decrease in the costs attributable to salaries and wages and a $4.1 million decrease in employee benefit costs.
LTL revenue per hundredweight, excluding fuel surcharges, increased 4.5% as compared to the same month last year. Operating Costs and Other Expenses Salaries, wages, and benefits increased $59.6 million, or 2.3%, in 2024 as compared to 2023, due to a $46.1 million increase in salaries and wages and a $13.5 million increase in employee benefit costs.
These decreases were partially offset by a $48.4 million increase in depreciation and amortization expense. The change in our cash flows used in investing activities during 2023 as compared to 2022 was primarily due to the timing of purchases and maturities of short-term investments, which was partially offset by a net reduction in capital expenditures.
The change in our cash flows used in investing activities during 2024 as compared to 2023 was primarily due to the timing of purchases and maturities of short-term investments and an increase in expenditures under our 2024 capital expenditure program. Additionally, we had lower proceeds from the sale of property and equipment in 2024 as compared to 2023.
Our other salaries and wages as a percent of revenue remained consistent between the comparable periods. 24 The cost attributable to employee benefits decreased $4.1 million, or 0.6%, in 2023 compared to 2022. Our employee benefit costs increased as a percent of salaries and wages to 37.5% in 2023 from 36.2% in 2022.
Our other salaries and wages as a percent of revenue also increased to 9.5% in 2024 as compared to 9.0% in 2023. 24 The cost attributable to employee benefits increased $13.5 million, or 1.9%, in 2024 compared to 2023 due primarily to the annual wage increase as well as an increase in costs associated with our group health and dental plans.
We believe our yield management process appropriately focuses on individual account profitability, and ongoing improvements in operating efficiencies, as key components of our ability to produce profitable growth.
We believe the continued execution of this yield-management philosophy, continued increases in density, and ongoing improvements in operating efficiencies are the key components of our ability to further improve our operating ratio and long-term profitable growth.
A hypothetical change of 1% in the estimated useful lives of all depreciable assets would not have a material impact on our financial results. Claims and Insurance Accruals Claims and insurance accruals reflect the estimated cost of various claims, including those related to bodily injury/property damage (“BIPD”) and workers’ compensation.
Claims and Insurance Accruals Claims and insurance accruals reflect the estimated cost of various claims, including those related to bodily injury/property damage (“BIPD”) and workers’ compensation. All related costs associated with BIPD claims are charged to insurance and claims expense, and all related costs associated with workers’ compensation claims are charged to employee benefits expense.
We believe the increase in our LTL revenue-per-hundredweight metrics was driven by the ongoing execution of our yield management strategy, which is focused on obtaining price increases necessary to offset our cost inflation and support our continued investments in capacity and technology. January 2024 Update Revenue per day decreased 2.7% in January 2024 compared to the same month last year.
We believe the increase in our LTL revenue-per-hundredweight metrics was driven by the ongoing execution of our yield management strategy. Our consistent, cost-based approach to pricing focuses on offsetting our cost inflation while also supporting additional investments into our business to expand capacity and enhance our technology.
Despite the decrease in our LTL tons, we maintained a commitment to providing superior customer service to support the continued improvement in our yield. We continued to focus on controlling our costs in the low volume environment, but we continued to invest in new capacity in anticipation of long-term growth in our market share.
Despite the decrease in our LTL tons, we maintained a commitment to providing superior customer service to support the continued improvement in our yield as we provided our customers with 99% on-time service and a cargo claims ratio of 0.1% during the year.
As a result, our depreciation costs increased as a percent of revenue and contributed to the slight increase in our operating ratio to 72.0% for 2023. In addition, our net income and diluted earnings per share decreased by 10.0% and 7.6%, respectively, as compared to 2022. Revenue Revenue decreased $393.9 million, or 6.3%, in 2023 compared to 2022.
We maintained our focus on operating efficiently and controlling discretionary spending during the year, but the increase in costs and the deleveraging effect from the decrease in revenue led to an increase in our operating ratio. As a result, our net income and diluted earnings per share decreased by 4.3% and 2.7%, respectively, as compared to 2023.
While our platform and P&D shipments per hour and P&D stops per hour improved during 2023 as compared to 2022, our linehaul laden load average declined due to the decreased operating density associated with the decrease in our LTL tons.
We continued to operate efficiently in 2024, despite the decrease in network density that generally results from the decline in volumes. Our P&D shipments and stops per hour both improved in 2024 as compared to 2023, which helped offset the reduction in our linehaul laden load factor.
The dividend is payable on March 20, 2024 to shareholders of record at the close of business on March 6, 2024.
On February 5, 2025, we announced that our Board of Directors had declared a cash dividend of $0.28 per share of our common stock. The dividend is payable on March 19, 2025 to shareholders of record at the close of business on March 5, 2025.
Removed
The decrease in salaries and wages was due primarily to decreases in the average number of active full-time employees during the year, as we balanced our workforce to align with our customers' shipping trends. Salaries and wages also decreased as a result of lower performance-based and discretionary bonus compensation.
Added
We focus on the profitability of each customer account and generally seek to obtain an appropriate yield to offset our cost inflation and support our ongoing investments in capacity and technology.
Removed
The increase in employee benefit costs as a percent of salaries and wages was primarily due to an increase in our employee group health benefit costs that resulted from higher costs per claim.
Added
Our financial results for 2024 reflect continued softness in the domestic economy that contributed to the decline in our revenue.
Removed
We primarily utilize purchased transportation services to support our LTL services to and from Canada as well as our truckload brokerage operations. We also periodically utilize purchased transportation for our domestic LTL service when we need to supplement the capacity of our workforce or fleet, which most frequently occurs during periods with significant growth.
Added
Operating supplies and expenses decreased $83.0 million, or 11.6%, in 2024 as compared to 2023, due primarily to decreases in our costs for diesel fuel used in our vehicles and lower maintenance and repair costs.
Removed
We used third-party transportation providers in our domestic linehaul network during the first half of 2022, but our utilization was normalized during the second half of 2022 when the capacity of our team was closely balanced with our volumes. Our effective tax rate in 2023 was 24.8% as compared to 25.2% in 2022.
Added
Our other operating supplies and expenses as a percent of revenue decreased in 2024 as compared to 2023 due primarily to lower maintenance and repair costs, as we improved the average age of our fleet by consistently executing on our capital expenditure programs. Depreciation and amortization increased $20.1 million, or 6.2%, in 2024 as compared to 2023.
Removed
This decrease in cash was partially offset by higher dividend payments to our shareholders and a scheduled principal payment under our long-term debt agreement.
Added
(“Prudential”) and certain affiliates and managed accounts of Prudential (as subsequently amended, the “Note Agreement”).
Removed
(“Prudential”) and certain affiliates and managed accounts of Prudential, as amended by the First Amendment dated March 22, 2023 (as amended, the “Note Agreement”). The Credit Agreement and the Note Agreement are described in more detail below under “Financing Arrangements.” We believe we also have sufficient access to debt and equity markets to provide other sources of liquidity, if needed.
Added
Expenditures for land and structures can be dependent upon the availability of land in the geographic areas where we are looking to expand.
Removed
We currently estimate capital expenditures will be approximately $750 million for the year ending December 31, 2024.
Added
There could be years, however, where our annual capital expenditures plan is above or below this range as we balance the size of our service center network and operating fleet with anticipated growth. We currently estimate capital expenditures will be approximately $575 million for the year ending December 31, 2025.
Removed
All related costs associated with BIPD claims are charged to insurance and claims expense, and all related costs associated with workers’ compensation claims are charged to employee benefits expense. Insurers providing excess coverage above a company’s self-insured retention or deductible levels typically adjust their premiums to cover insured losses and for other market factors.
Added
The ASR Agreement was accounted for as a settled treasury stock purchase and a forward stock purchase contract. The par value of the initial shares received was recorded as a reduction to common stock, with the excess purchase price recorded as a reduction to retained earnings.
Removed
Audit Committee Approval The Audit Committee of our Board of Directors reviews and approves all related person transactions in accordance with our Related Person Transactions Policy. 29
Added
The forward stock purchase contract was accounted for as a contract indexed to our own stock and is classified within capital in excess of par value on our Balance Sheets.
Added
The ASR Agreement was 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.
Added
Under the ASR Agreement, we paid the third-party financial institution $200.0 million and received an initial delivery of 923,201 shares of our common stock for $160.0 million, representing approximately 80% of the total value of shares to be received by us under the ASR Agreement, and the remaining balance of $40.0 million was settled in November 2024.
Added
We repurchased a total of 1,056,213 shares for $200.0 million under the ASR Agreement.
Added
On March 27, 2024, those shareholders received one additional share of common stock for every share owned. All references in this report to dividend amounts have been restated retroactively to reflect this stock split. Split-adjusted per-share metrics may not recalculate precisely due to rounding.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+0 added−0 removed2 unchanged
Biggest changeA hypothetical 100 basis point change in market interest rates would have had an immaterial impact on the fair value of these investments at December 31, 2022 and no impact at December 31, 2023. We are exposed to market risk for investments relating to certain assets held within the Company-owned life insurance contracts on certain current and former employees.
Biggest changeWe are exposed to market risk for investments relating to certain assets held within the Company-owned life insurance contracts on certain current and former employees. The cash surrender value in life insurance contracts included on our Balance Sheets at December 31, 2024 and 2023 was $86.5 million and $74.4 million, respectively.
To provide a meaningful assessment of the market risk for investments relating to Company-owned life insurance contracts, we performed a sensitivity analysis using a 10% change in market value in those investments as of December 31, 2023 and 2022.
To provide a meaningful assessment of the market risk for investments relating to Company-owned life insurance contracts, we performed a sensitivity analysis using a 10% change in market value in those investments as of December 31, 2024 and 2023.
A 10% change in market value would have caused a $5.6 million and a $4.6 million impact on our pre-tax income in 2023 and 2022, respectively. We are also exposed to commodity price risk related to diesel fuel prices, and we manage our exposure to that risk primarily through the application of fuel surcharges to our customers.
A 10% change in market value would have caused a $6.8 million and a $5.6 million impact on our pre-tax income in 2024 and 2023, respectively. We are also exposed to commodity price risk related to diesel fuel prices, and we manage our exposure to that risk primarily through the application of fuel surcharges to our customers.
We are exposed to interest rate risk directly related to loans, if any, under our Credit Agreement, which have variable interest rates. A 100 basis point increase in the average interest rate on this agreement would have no material effect on our operating results at December 31, 2023 and 2022.
We are exposed to interest rate risk directly related to loans, if any, under our Credit Agreement, which have variable interest rates. A 100 basis point increase in the average interest rate on this agreement would have no effect on our operating results as we had no outstanding borrowings under our Credit Agreement at December 31, 2024 or 2023.
Although the fair values of these instruments can fluctuate, we believe that the short-term, highly liquid nature of these debt securities, and our ability to hold these instruments to maturity, reduces our risk for potential material losses.
Although the fair values of these instruments can fluctuate, we believe that the short-term, highly liquid nature of these debt securities, and our ability to hold these instruments to maturity, reduces our risk for potential material losses. We held no short-term investments as of December 31, 2024 or 2023.
We held no short-term investments as of December 31, 2023. These fixed rate securities are subject to interest rate risk, as sharp increases in market interest rates could have an adverse impact on their fair value.
These fixed rate securities are subject to interest rate risk, as sharp increases in market interest rates could have an adverse impact on their fair value.
We have established policies and procedures to manage exposure to market risks and use major institutions that we believe are creditworthy to minimize credit risk. From time to time, we are exposed to interest rate risk on certain short-term investments. We maintained a short-term investment portfolio, principally composed of commercial paper, totaling $49.4 million at December 31, 2022.
We have established policies and procedures to manage exposure to market risks and use major institutions that we believe are creditworthy to minimize credit risk. From time to time, we are exposed to interest rate risk on certain short-term investments as a result of investing in commercial paper and certificates of deposits.
The cash surrender value in life insurance contracts included on our Balance Sheets at December 31, 2023 and 2022 was $74.4 million and $63.5 million, respectively. The portion of underlying investments with exposure to market fluctuations was $56.2 million and $45.9 million at December 31, 2023 and 2022, respectively.
The portion of underlying investments with exposure to market fluctuations was $67.9 million and $56.2 million at December 31, 2024 and 2023, respectively.

Other ODFL 10-K year-over-year comparisons