odfl-10q_20200930.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________ .

Commission File Number: 0-19582

OLD DOMINION FREIGHT LINE, INC.

(Exact name of registrant as specified in its charter)



Virginia		56-0751714
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)



500 Old Dominion Way Thomasville, North Carolina		27360
(Address of principal executive offices)		(Zip Code)

(336) 889-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock ($0.10 par value)

ODFL

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 4, 2020 there were 117,331,447 shares of the registrant’s Common Stock ($0.10 par value) outstanding.

INDEX


Part I – FINANCIAL INFORMATION

Item 1	Financial Statements	1
	Condensed Balance Sheets – September 30, 2020 and December 31, 2019	1
	Condensed Statements of Operations – For the three and nine months ended September 30, 2020 and 2019	3
	Condensed Statements of Changes in Shareholders’ Equity - For the three and nine months ended September 30, 2020 and 2019	4
	Condensed Statements of Cash Flows – For the nine months ended September 30, 2020 and 2019	5
	Notes to the Condensed Financial Statements	6
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3	Quantitative and Qualitative Disclosures about Market Risk	20
Item 4	Controls and Procedures	21

Part II – OTHER INFORMATION

Item 1	Legal Proceedings	22
Item 1A	Risk Factors	22
Item 6	Exhibits	22

Exhibit Index		23
Signatures		24

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

OLD DOMINION FREIGHT LINE, INC.

CONDENSED BALANCE SHEETS

	September 30,
	2020			December 31,
(In thousands, except share and per share data)	(Unaudited)			2019
ASSETS
Current assets:
Cash and cash equivalents	$	420,396		$	403,571
Short-term investments		205,294			—
Customer receivables, less allowances of $10,286 and $8,866, respectively		453,346			397,579
Other receivables		9,578			10,586
Prepaid expenses and other current assets		49,882			55,098
Total current assets		1,138,496			866,834

Property and equipment:
Revenue equipment		1,892,005			1,898,999
Land and structures		2,167,557			2,039,937
Other fixed assets		495,268			482,425
Leasehold improvements		12,043			11,709
Total property and equipment		4,566,873			4,433,070
Accumulated depreciation		(1,631,398	)		(1,464,235	)
Net property and equipment		2,935,475			2,968,835

Goodwill		19,463			19,463
Other assets		180,254			140,436
Total assets	$	4,273,688		$	3,995,568

Note: The Condensed Balance Sheet at December 31, 2019 has been derived from the audited financial statements at that date, but does not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements.

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

OLD DOMINION FREIGHT LINE, INC.

CONDENSED BALANCE SHEETS

(CONTINUED)

	September 30,
	2020		December 31,
(In thousands, except share and per share data)	(Unaudited)		2019
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	59,229	$	70,254
Compensation and benefits		217,154		192,524
Claims and insurance accruals		54,493		54,330
Other accrued liabilities		60,141		46,130
Income taxes payable		13,271		2,847
Current maturities of long-term debt		45,000		—
Total current liabilities		449,288		366,085

Long-term liabilities:
Long-term debt		99,927		45,000
Other non-current liabilities		316,831		241,802
Deferred income taxes		236,809		261,964
Total long-term liabilities		653,567		548,766
Total liabilities		1,102,855		914,851

Commitments and contingent liabilities

Shareholders’ equity:
Common stock - $0.10 par value, 280,000,000 shares authorized, 117,331,447 shares outstanding at September 30, 2020 and 140,000,000 shares authorized, 119,532,534 shares outstanding at December 31, 2019		11,733		11,953
Capital in excess of par value		185,991		218,462
Retained earnings		2,973,109		2,850,302
Total shareholders’ equity		3,170,833		3,080,717
Total liabilities and shareholders’ equity	$	4,273,688	$	3,995,568

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

OLD DOMINION FREIGHT LINE, INC.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In thousands, except share and per share data)	2020			2019			2020			2019
Revenue from operations	$	1,058,166		$	1,048,457		$	2,941,740		$	3,099,905

Operating expenses:
Salaries, wages and benefits		524,658			533,451			1,510,047			1,588,378
Operating supplies and expenses		90,269			117,343			273,374			361,110
General supplies and expenses		27,383			33,633			86,872			97,584
Operating taxes and licenses		29,923			29,117			86,280			87,572
Insurance and claims		11,821			11,280			32,581			34,039
Communications and utilities		7,622			8,098			23,075			22,071
Depreciation and amortization		64,983			63,493			196,153			189,137
Purchased transportation		25,405			23,063			65,188			68,218
Miscellaneous expenses, net		5,858			11,452			15,590			21,354
Total operating expenses		787,922			830,930			2,289,160			2,469,463

Operating income		270,244			217,527			652,580			630,442

Non-operating expense (income):
Interest expense		1,071			3			1,936			285
Interest income		(123	)		(1,714	)		(1,602	)		(4,966	)
Other expense, net		961			844			4,205			768
Total non-operating expense (income)		1,909			(867	)		4,539			(3,913	)

Income before income taxes		268,335			218,394			648,041			634,355

Provision for income taxes		66,467			54,295			165,191			162,861

Net income	$	201,868		$	164,099		$	482,850		$	471,494

Earnings per share:
Basic	$	1.72		$	1.37		$	4.09		$	3.91
Diluted	$	1.71		$	1.37		$	4.07		$	3.90

Weighted average shares outstanding:
Basic		117,188,398			119,820,422			117,946,805			120,711,513
Diluted		117,933,440			119,984,153			118,696,836			120,882,836

Dividends declared per share	$	0.15		$	0.11		$	0.45		$	0.34

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

OLD DOMINION FREIGHT LINE, INC.

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(UNAUDITED)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In thousands)	2020			2019			2020			2019
Common stock:
Beginning balance	$	11,734		$	12,020		$	11,953		$	12,185
Share repurchases		—			(38	)		(223	)		(211	)
Share-based compensation and restricted share issuances, net of forfeitures		(1	)		—			6			10
Taxes paid in exchange for shares withheld		—			—			(2	)		(2	)
Cash paid for fractional shares		—			—			(1	)		—
Ending balance		11,733			11,982			11,733			11,982

Capital in excess of par value:
Beginning balance		181,895			140,970			218,462			138,210
Share-based compensation and restricted share issuances, net of forfeitures		4,096			1,147			8,371			5,353
Taxes paid in exchange for shares withheld		—			—			(2,731	)		(1,446	)
Forward contract for accelerated share repurchases		—			—			(37,500	)		—
Cash paid for fractional shares		—			—			(611	)		—
Ending balance		185,991			142,117			185,991			142,117

Retained earnings:
Beginning balance		2,788,839			2,645,495			2,850,302			2,530,088
Share repurchases		—			(40,576	)		(306,568	)		(205,135	)
Cash dividends declared		(17,598	)		(13,589	)		(53,475	)		(41,018	)
Net income		201,868			164,099			482,850			471,494
Ending balance		2,973,109			2,755,429			2,973,109			2,755,429

Total shareholders' equity	$	3,170,833		$	2,909,528		$	3,170,833		$	2,909,528

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

OLD DOMINION FREIGHT LINE, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine Months Ended
	September 30,
(In thousands)	2020			2019
Cash flows from operating activities:
Net income	$	482,850		$	471,494
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		196,157			189,137
Loss on disposal of property and equipment		255			5,624
Share-based compensation		8,377			5,363
Provision for deferred income taxes		(25,155	)		—
Other operating activities, net		23,974			75,897
Net cash provided by operating activities		686,458			747,515

Cash flows from investing activities:
Purchase of property and equipment		(166,459	)		(370,310	)
Proceeds from sale of property and equipment		3,411			2,598
Purchase of short-term investments		(205,301	)		—
Other investing, net		(100	)		—
Net cash used in investing activities		(368,449	)		(367,712	)

Cash flows from financing activities:
Proceeds from issuance of long-term debt		99,923			—
Payments for share repurchases		(306,791	)		(205,346	)
Forward contract for accelerated share repurchases		(37,500	)		—
Dividends paid		(53,471	)		(41,005	)
Other financing activities, net		(3,345	)		(1,448	)
Net cash used in financing activities		(301,184	)		(247,799	)

Increase in cash and cash equivalents		16,825			132,004
Cash and cash equivalents at beginning of period		403,571			190,282
Cash and cash equivalents at end of period	$	420,396		$	322,286

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

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. Significant Accounting Policies

Business

We are a leading, less-than-truckload (“LTL”), union-free motor carrier providing regional, inter-regional and national LTL services through a single integrated organization. Our service offerings, which include expedited transportation, are provided through an expansive network of service centers located throughout the continental United States. Through strategic alliances, we also provide LTL services throughout North America. In addition to our core LTL services, we offer a range of value-added services including container drayage, truckload brokerage and supply chain consulting. We have one operating segment and the composition of our revenue is summarized below:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands)	2020		2019		2020		2019
LTL services	$	1,044,640	$	1,035,093	$	2,903,140	$	3,058,864
Other services		13,526		13,364		38,600		41,041
Total revenue from operations	$	1,058,166	$	1,048,457	$	2,941,740	$	3,099,905

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 September 30, 2020 are not necessarily indicative of the results that may be expected for the subsequent quarterly periods or the year ending December 31, 2020.

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, 2019. 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, 2019, other than those disclosed in this Form 10-Q.

Certain amounts in prior years have been reclassified to conform prior years’ financial statements to the current presentation.

Unless the context requires otherwise, references in these Notes to “Old Dominion,” the “Company,” “we,” “us” and “our” refer to Old Dominion Freight Line, Inc.

Common Stock Split

On February 21, 2020, we announced that our Board of Directors approved a three-for-two split of our common stock for shareholders of record as of the close of business on the record date of March 10, 2020. On March 24, 2020, 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, earnings per share, and dividends per share amounts have been restated retroactively to reflect this stock split. Split-adjusted quarterly per-share metrics may not recalculate precisely due to rounding.

Short-term Investments

The Company’s investments in certificates of deposit, U.S. government securities, and commercial paper with an original maturity of greater than three months have been classified and accounted for as trading securities, and are reported in “Short-term investments” on our Condensed Balance Sheet. These investments are measured at fair value each reporting period, with gains or losses recorded in “Non-operating expense (income)” on our Condensed Statement of Operations.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The levels of inputs used to measure fair value are:

•Level 1 — Quoted prices for identical instruments in active markets;

•Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets; and

•Level 3 — Valuations based on inputs that are unobservable, generally utilizing pricing models or other valuation techniques that reflect management’s judgment and estimates.

Our short-term investments and our long-term debt, including current maturities, are measured at fair value on a recurring basis, and are further described in Note 6. Our other financial securities in current assets and current liabilities approximate their fair value due to the short maturities of these instruments.

Stock Repurchase Program

On May 1, 2020, we announced that our Board of Directors had approved a new two-year stock repurchase program authorizing us to repurchase up to an aggregate of $700.0 million of our outstanding common stock (the “2020 Repurchase Program”). The 2020 Repurchase Program became effective upon the termination of our $350.0 million repurchase program on May 29, 2020, as of which date $21.5 million remained authorized under the prior program. Under the 2020 Repurchase Program, we may repurchase shares from time to time in open market purchases or through privately negotiated transactions. Shares of our common stock repurchased under our repurchase programs are canceled at the time of repurchase and are classified as authorized but unissued shares of our common stock.

On May 29, 2020, we entered into an accelerated share repurchase agreement (the “ASR Agreement”) with a third-party financial institution as part of our 2020 Repurchase Program. Under the ASR Agreement, we paid the third-party financial institution $125.0 million and received an initial delivery of 511,427 shares of our common stock for $87.5 million, representing approximately 70% of the total value of shares to be received under the ASR Agreement. The remaining expected shares are scheduled to settle during the fourth quarter of 2020. At final settlement, we may receive additional shares of our common stock, or, under certain circumstances, we may be required to provide the third-party financial institution additional shares or may elect to make a cash payment to the third-party financial institution. The total shares repurchased will be based on the daily volume-weighted average share price of our common stock during the term of the ASR Agreement, less a negotiated discount.

The ASR Agreement was accounted for as a settled treasury stock purchase and a forward stock purchase contract. The par value of the initial share delivery was recorded as a reduction to common stock, with the excess purchase price recorded as a reduction to retained earnings. The forward stock purchase contract is accounted for as a contract indexed to our own stock and is classified within capital in excess of par value on our Condensed Statements of Changes in Shareholders’ Equity.

During the three months ended September 30, 2020, we did not repurchase any shares of our common stock. During the nine months ended September 30, 2020, we repurchased 2,237,320 shares of our common stock for $306.8 million under our repurchase programs, including shares repurchased under the ASR Agreement. As of September 30, 2020, we had $612.5 million remaining authorized under the 2020 Repurchase Program.

Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Statements” (Topic 326). This ASU modified the loss methodology for establishing a provision against financial assets, including customer receivables, to include an expected

future performance component. We adopted ASU 2016-13 on January 1, 2020. The adoption did not have a material impact to our financial position, results of operations, or cash flow.

We maintain an allowance for uncollectible accounts for estimated losses resulting from the inability of our customers to make required payments. We estimate this allowance by analyzing the aging of our customer receivables, our historical loss experience and other trends and factors affecting the credit risk of our customers, including anticipated changes to future performance. Write-offs occur when we determine an account to be uncollectible and could differ from our allowance estimate as a result of factors such as changes in the overall economic environment or risks surrounding our customers. Additional allowances may be required if the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments. We periodically review the underlying assumptions in our estimate of the allowance for uncollectible accounts to ensure that the allowance reflects the most recent trends and factors.

Our allowance for uncollectible accounts was $4.9 million at September 30, 2020. There were no material write-offs to our allowance for uncollectible accounts during the third quarter of 2020.

Note 2. Earnings Per Share

Basic earnings per share is computed by dividing net income by the daily weighted average number of shares of our common stock outstanding for the period, excluding unvested restricted stock. Unvested restricted stock is included in common shares outstanding on our Condensed Balance Sheets.

Diluted earnings per share is computed using the treasury stock method. The denominator used in calculating diluted earnings per share includes the impact of unvested restricted stock and other dilutive, non-participating securities under our equity award agreements. The denominator excludes contingently-issuable shares under performance-based award agreements when the performance target has not yet been deemed achieved.

The following table provides a reconciliation of the number of shares of common stock used in computing basic and diluted earnings per share:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Weighted average shares outstanding - basic		117,188,398		119,820,422		117,946,805		120,711,513
Dilutive effect of share-based awards		745,042		163,731		750,031		171,323
Weighted average shares outstanding - diluted		117,933,440		119,984,153		118,696,836		120,882,836

Note 3. Long-Term Debt

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

(In thousands)	September 30, 2020			December 31, 2019
Senior notes	$	144,927		$	45,000
Revolving credit facility		—			—
Total long-term debt		144,927			45,000
Less: Current maturities		(45,000	)		—
Total maturities due after one year	$	99,927		$	45,000

Senior Note Agreements

We had an unsecured senior note agreement with a principal amount outstanding of $45.0 million at each of September 30, 2020 and December 31, 2019 (the “Senior Note”). The agreement for the Senior Note calls for a scheduled principal payment of $45.0 million, with an interest rate of 4.79%, on January 3, 2021.

On May 4, 2020, we entered into a Note Purchase and Private Shelf Agreement with PGIM, Inc. (“Prudential”) and certain affiliates and managed accounts of Prudential (the “Note Agreement”). The Note Agreement, which is uncommitted and subject to Prudential’s sole discretion, provides for the issuance of senior promissory notes with an aggregate principal amount of up to $350.0 million through May 4, 2023. Pursuant to the Note Agreement, we issued $100.0 million aggregate principal amount of senior promissory notes (the “Series B Notes”), the proceeds of which are available for capital expenditures, share repurchases, dividends,

acquisitions, or general corporate purposes. Borrowing availability under the Note Agreement is reduced by the outstanding amount of the existing Senior Note, the Series B Notes, and all other senior promissory notes issued pursuant to the Note Agreement.

The Series B Notes bear interest at 3.10% per annum and mature on May 4, 2027, unless prepaid. Principal payments are required annually beginning on May 4, 2023 in equal installments of $20.0 million through May 4, 2027. The Series B Notes are senior unsecured obligations and rank pari passu with our other senior unsecured indebtedness.

Credit Agreement

On November 21, 2019, we entered into a second amended and restated credit agreement with Wells Fargo Bank, National Association serving as administrative agent for the lenders (the “Credit Agreement”). The Credit Agreement provides for a five-year, $250.0 million senior unsecured revolving line of credit and a $150.0 million accordion feature, which if fully exercised and approved, would expand the total borrowing capacity up to an aggregate of $400.0 million. Of the $250.0 million line of credit commitments under the Credit Agreement, up to $100.0 million may be used for letters of credit.

At our option, borrowings under the Credit Agreement bear interest at either: (i) LIBOR (including applicable successor provisions) plus an applicable margin (based on our ratio of net debt-to-total capitalization) that ranges from 1.000% to 1.375%; or (ii) a Base Rate plus an applicable margin (based on our ratio of net debt-to-total capitalization) that ranges from 0.000% to 0.375%. Letter of credit fees equal to the applicable margin for LIBOR loans are charged quarterly in arrears on the daily average aggregate stated amount of all letters of credit outstanding during the quarter. Commitment fees ranging from 0.100% to 0.175% (based upon the ratio of net debt-to-total capitalization) are charged quarterly in arrears on the aggregate unutilized portion of the Credit Agreement.

For periods covered under the Credit Agreement, the applicable margin on LIBOR loans and letter of credit fees were 1.000% and commitment fees were 0.100%.

The Credit Agreement replaced our previous five-year, $300.0 million senior unsecured revolving credit agreement dated as of December 15, 2015, as amended on September 9, 2016 (the “Prior Credit Agreement”). For periods in 2019 covered under the Prior Credit Agreement, the applicable margin on LIBOR loans and letter of credit fees were 1.000% and commitment fees were 0.125%.

There were $42.1 million and $48.9 million of outstanding letters of credit at September 30, 2020 and December 31, 2019, respectively.

General Debt Provisions

The Senior Note, Credit Agreement, and Note Agreement contain customary covenants, including financial covenants that require us to observe a maximum ratio of debt to total capital and a minimum fixed charge coverage ratio. The Credit Agreement and Note Agreement also include a provision limiting our ability to make restricted payments, including dividends and payments for share repurchases, unless, among other conditions, no defaults or events of default are ongoing (or would be caused by such restricted payment).

Note 4. Commitments and Contingencies

We are involved in or addressing various legal proceedings and claims, governmental inquiries, notices and investigations that have arisen in the ordinary course of our business and have not been fully adjudicated, some of which may be covered in whole or in part by insurance. Certain of these matters include collective and/or class-action allegations. We do not believe that the resolution of any of these matters will have a material adverse effect upon our financial position, results of operations or cash flows.

Note 5. Leases

Our right-of-use assets totaled $100.2 million and $65.3 million as of September 30, 2020 and December 31, 2019, respectively, and are presented within “Other assets,” which is classified as long-term, on our Condensed Balance Sheets. Our corresponding lease liabilities consist of a current and a non-current portion. The current lease liability was $12.3 million and $10.4 million as of September 30, 2020 and December 31, 2019, respectively, and is presented within “Other accrued liabilities” on our Condensed Balance Sheets. The non-current lease liability was $89.5 million and $56.1 million as of September 30, 2020 and December 31, 2019, respectively, and is presented within “Other non-current liabilities” on our Condensed Balance Sheets. During the three-months ended September 30, 2020, we added $41.0 million in new right-of-use assets in exchange for corresponding lease liabilities, which includes leases that were executed prior to December 31, 2019 and commenced in the quarter ended September 30, 2020.

Note 6. Fair Value Measurements

Short-term investments

A summary of the fair value of our short-term investments as of September 30, 2020 is shown in the table below.

	September 30, 2020		Level 1		Level 2		Level 3
Certificates of deposit	$	55,000	$	—	$	55,000	$	—
U.S. government securities		75,367		75,367