Significant Accounting Policies
|6 Months Ended|
Jun. 30, 2013
|Accounting Policies [Abstract]|
|Significant Accounting Policies||
Note 1. Significant Accounting Policies
Basis of Presentation
The accompanying unaudited, interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and, in management’s opinion, contain all adjustments (consisting of normal recurring items) necessary for a fair presentation, in all material respects, of the financial position and results of operations for the periods presented. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements.
The preparation of condensed financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions. Such estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Our operating results are subject to seasonal trends; therefore, the results of operations for the interim period ended June 30, 2013 are not necessarily indicative of the results that may be expected for subsequent quarterly periods or the year ending December 31, 2013.
The condensed financial statements should be read in conjunction with the financial statements and related notes, which appear in our Annual Report on Form 10-K for the year ended December 31, 2012.
There have been no significant changes in the accounting principles and policies, long-term contracts or estimates inherent in the preparation of the condensed financial statements of Old Dominion Freight Line, Inc. as previously described in our Annual Report on Form 10-K for the year ended December 31, 2012.
Unless the context requires otherwise, references in these Notes to “Old Dominion,” the “Company,” “we,” “us” and “our” refer to Old Dominion Freight Line, Inc.
Prior Period Adjustments
During the second quarter of 2013, we determined that the costs of purchased transportation for certain truckload brokerage and freight forwarding services, which were previously netted against revenue, met the criteria to be presented separately in operating expenses in accordance with Accounting Standards Codification ("ASC") Topic 605, Revenue Recognition. The amount of these costs that are now included in “Purchased transportation” on our Condensed Statements of Operations totaled $6.8 million and $5.9 million for the second quarter of 2013 and 2012, respectively, and $12.7 million and $11.6 million for the six months ended June 30, 2013 and 2012, respectively. The accompanying Condensed Statements of Operations for the three and six months ended June 30, 2012 were corrected to reflect the immaterial increases to both revenue and purchased transportation expense. There was no effect on retained earnings, operating income, net income or earnings per share for any period presented.
The Company will also record correcting adjustments to increase both revenue and purchased transportation for the third and fourth quarters of 2012 of $6.0 million and $6.5 million, respectively.
Common Stock Split
On August 13, 2012, we announced a three-for-two common stock split for shareholders of record as of the close of business on the record date, August 24, 2012. On September 7, 2012 those shareholders received one additional share of common stock for every two shares owned. In lieu of fractional shares, shareholders received a cash payment based on the average of the high and low sales prices of our common stock on the record date.
All references in this report to shares outstanding, weighted average shares outstanding and earnings per share amounts have been restated retroactively for this stock split.
Fair Values of Financial Instruments
The carrying values of financial instruments included in current assets and liabilities, such as cash and cash equivalents, customer and other receivables, trade payables and current maturities of long-term debt, approximate their fair value due to the short maturities of these instruments. The carrying value of our total long-term debt, including current maturities, was $228.8 million and $240.4 million at June 30, 2013 and December 31, 2012, respectively. The estimated fair value of our total long-term debt was $237.4 million and $247.9 million at June 30, 2013 and December 31, 2012, respectively. The balance of our long-term debt primarily consists of our senior notes for which fair value is estimated using market interest rates for similar issuances of private debt. Since this methodology is based upon indicative market interest rates, the measurement is categorized as Level 2 under the three-level fair value hierarchy as established by the Financial Accounting Standards Board (the “FASB”).
Earnings Per Share
Earnings per share is computed using the weighted average number of common shares outstanding during the period.
The entire disclosure for all significant accounting policies of the reporting entity.
Reference 1: http://www.xbrl.org/2003/role/presentationRef