Back to GetFilings.com
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2000
[ ] 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 (I.R.S. Employer
incorporation or organization) Identification No.)
1730 Westchester Drive
High Point, NC 27262
(Address of principal executive offices)
Registrant's Telephone Number (336) 889-5000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock ($.10 par value)
(Title of class)
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 X . No .
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of voting stock held by nonaffiliates of the
registrant as of March 12, 2001, was $12,807,047.
As of March 15, 2001, the registrant had 8,312,840 outstanding shares of Common
Stock ($.10 par value).
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company's Proxy Statement for the 2001 Annual Meeting of
Stockholders are incorporated by reference into Part III.
PART I
ITEM 1. BUSINESS
General
Old Dominion Freight Line, Inc. ("Old Dominion", the "Company" or the
"Registrant", as appropriate for this report) is an inter-regional and
multi-regional motor carrier transporting primarily less-than-truckload ("LTL")
shipments of general commodities, including consumer goods, textiles and capital
goods to a diversified customer base. LTL shipments are defined as shipments
weighing less than 10,000 pounds. In 2000, 97.4% of the Company's shipments and
89.4% of the Company's operating revenue were generated from LTL shipments. The
Company serves regional markets in the Southeast, South Central, Northeast,
Midwest and West regions of the country. Old Dominion connects these geographic
regions with high quality inter-regional service. The Company has also developed
strategic partnerships with foreign-based motor carriers, particularly in Canada
and Mexico, to provide its customers with service to destinations outside the
United States.
Old Dominion transports shipping containers between several port cities and
inland points, primarily in its core southeastern service area. For the year
ended December 31, 2000, container services accounted for 2.4% of the Company's
operating revenue. Old Dominion also provides assembly and distribution services
primarily to its retail customers.
Old Dominion's operating strategy is to provide high quality and timely service,
including time definite and expedited delivery services, at competitive prices,
while maintaining low operating costs. Along key inter-regional lanes, Old
Dominion maintains published service standards that generally provide for
delivery time schedules that are faster than those of its principal national
competitors, in part, because of its more efficient service center network and
use of team drivers. The Company's service standards generally provide for
delivery times of between two and three days along key inter-regional lanes
between 500 and 1,500 miles. The Company also provides for one or two-day
delivery along regional lanes of less than 500 miles, which Old Dominion
believes is highly competitive.
The Company seeks to reduce unit operating costs and improve service by building
freight volume, or density, in its markets. Increasing density reduces unloading
and reloading at breakbulk facilities, resulting in faster transit times,
reduced cargo claims and more efficient equipment utilization. Old Dominion also
lowers its cost structure and reduces cargo claims by using twin 28-foot
trailers exclusively in its linehaul operations. Use of twin 28-foot trailers
permits the Company to transport freight directly from its point of origin to
destination with minimal unloading and reloading, and permits more freight to be
hauled behind a tractor than could be hauled if the Company used one larger
trailer. Approximately 56% of the Company's LTL tonnage moves directly from the
origination service center to its destination without being reloaded to another
trailer at a breakbulk facility, with a substantial majority of the remaining
tonnage experiencing no more than one breakbulk handling per shipment. Further,
management believes that it gains an operating advantage by maintaining a
flexible work force, which permits service center employees to perform several
functions that result in reliable deliveries and a higher level of customer
satisfaction.
The LTL Industry
LTL companies are generally categorized as regional, inter-regional or national
motor carriers based upon length of haul. Carriers with average lengths of haul
less than 500 miles are referred to as regional carriers. Carriers with average
lengths of haul between 500 and 1,000 miles are referred to as inter-regional
carriers. National carriers generally have average lengths of haul that exceed
1,000 miles. For the year ended December 31, 2000, Old Dominion had an average
length of haul of 869 miles.
In the motor carrier industry, revenue is primarily a function of weight, length
of haul and commodity class, and is frequently described in terms of revenue per
hundredweight. The Company tracks revenue per hundredweight as a measure of
pricing, commodity mix and rate trends.
2
LTL carriers can improve profitability by increasing lane and service center
density. Increased lane density lowers unit operating costs and improves
service. Increased service center density, by increasing the amount of freight
handled at a given service center location, improves utilization of assets and
other fixed costs.
In recent years, many shippers have attempted to simplify their transportation
requirements by reducing the number of carriers they use by establishing
service-based, long-term relationships with a small group of preferred or "core
carriers" or by the use of third party logistics providers. This trend toward
the use of "core carriers" and third party logistics offers significant growth
opportunities for carriers that possess financial stability and can provide both
regional and inter-regional, high quality service with low costs. The Company
believes that this trend has created an opportunity for it to increase lane and
service center density along key inter-regional lanes in which a relatively
small number of carriers offer high quality service. Old Dominion's strategy is
to continue to capitalize on its ability to build its market share in key
inter-regional and regional lanes. From time to time, certain national carriers
have sought to compete in selected inter-regional markets and along selected
inter-regional lanes and may seek to do so in the future as national markets
mature, but the Company believes that it holds a key competitive advantage over
its principal national competitors due to its more efficient service center
network.
Revenue Equipment and Maintenance
At December 31, 2000, the Company operated 2,387 tractors. The Company generally
uses new tractors in linehaul operations for approximately three to five years
and then transfers those tractors to pickup and delivery operations for the
remainder of their useful lives. In a number of Company service centers,
tractors perform pickup and delivery functions during the day and linehaul
functions at night to maximize tractor utilization.
At December 31, 2000, the Company operated a fleet of 9,596 trailers. As the
Company has expanded and its needs for equipment have increased, the Company has
purchased new trailers as well as trailers meeting its specifications from other
trucking companies that have ceased operations. These purchases of pre-owned
equipment, though providing an excellent value, have the effect of increasing
the trailer fleet's average age; however, the Company believes the age of its
trailer fleet compares favorably with its competitors.
The Company develops certain specifications for revenue equipment, the
production and purchase of which are negotiated with several manufacturers.
These purchases are planned well in advance of anticipated delivery dates in
order to accommodate manufacturers' production schedules. The Company believes
that there is sufficient capacity among suppliers to ensure an uninterrupted
flow of equipment.
The table below reflects, as of December 31, 2000, the average age of Old
Dominion's revenue equipment:
Type of Equipment Number
(Categorized by Primary Use) of Units Average Age
- ---------------------------- -------- -----------
Linehaul tractors 1,731 2.8 years
Pickup and delivery tractors 656 7.6 years
Pickup and delivery trucks 26 5.4 years
Linehaul trailers 7,756 7.3 years
Pickup and delivery trailers 1,840 11.9 years
The Company currently has major maintenance operations at its service centers in
Atlanta, Georgia; Dallas, Texas; Chicago and Des Plaines, Illinois; Harrisburg,
Pennsylvania; Jersey City, New Jersey; Morristown and Memphis, Tennessee; Los
Angeles and Rialto, California; Columbus, Ohio; Greensboro, North Carolina; and
Greenville, South Carolina. In addition, four other service center locations are
equipped to perform routine and preventive maintenance checks and repairs on the
Company's equipment.
3
The Company has an established scheduled maintenance policy and procedure that
is administered by the Vice President - Equipment and Maintenance. Linehaul
tractors are routed to appropriate maintenance facilities at designated mileage
intervals ranging from 12,500 to 25,000 miles, depending upon how the equipment
was utilized. Pickup and delivery tractors and trailers are scheduled for
maintenance every 90 days.
The table below sets forth the Company's capital expenditures for certain
revenue equipment during 2000, 1999 and 1998:
Year Service Centers Tractors Trailers Total
- ---- --------------- -------- -------- -----
2000 $ 21,189,000 $ 21,546,000 $ 9,291,000 $ 52,026,000
1999 $ 17,015,000 $7,886,000 $4,360,000 $ 29,261,000
1998 $ 12,115,000 $21,400,000 $15,165,000 $ 48,680,000
Service Center Operations
At December 31, 2000, Old Dominion conducted operations through 105 service
center locations, of which it owns 38 and leases 67. The Company operates major
breakbulk facilities in Atlanta, Georgia; Greensboro, North Carolina;
Harrisburg, Pennsylvania; Indianapolis, Indiana; Morristown, Tennessee; and
Rialto, California, while using some smaller service centers for limited
breakbulk activity. Old Dominion's service centers are strategically located to
permit the Company to provide the highest quality service and minimize freight
rehandling costs.
Each service center is responsible for the pickup and delivery of freight for
its own service area. All inbound freight received by the service center in the
evening or during the night is scheduled for local delivery the next business
day, unless a customer requests a different delivery schedule. Each service
center loads the freight by destination the day it is picked up. Management
reviews the productivity and service performance of each service center on a
daily basis in order to ensure quality service.
The Company also has established primary responsibility for customer service at
the local level. Service center employees trace freight movements using the
Company's automated tracing system, which provides for immediate response to
customer requests for delivery information. Customers may also trace shipments,
obtain copies of documents and initiate other inquires on the Company's website.
While the Company maintains primary accountability for customer service at the
local service center, the Company has established a customer service function at
the corporate offices to offer additional customer support.
The Company plans to expand capacity at existing service centers as well as
expand the number of service centers geographically as opportunities arise that
provide for profitable growth and fit the needs of its customers.
Linehaul Transportation
The Company's Linehaul Transportation Department is responsible for directing
the movement of freight among the Company's service centers. Linehaul
dispatchers control the movement of freight among service centers through
real-time, integrated freight movement systems. The Company also utilizes
load-planning software to optimize efficiencies in its linehaul operations.
Senior management continuously monitors freight movements, transit times, load
factors and other productivity measurements to ensure the Company maintains its
highest levels of service and efficiency
The Company uses scheduled dispatches, and schedules additional dispatches as
necessary, to meet its published service standards. The Company uses twin
trailers exclusively in its linehaul operations to reduce breakbulk handling and
to increase linehaul productivity.
Marketing and Customers
4
At December 31, 2000, the Company had a sales staff of 272 employees. The
Company compensates its sales force, in part, based upon revenue generated,
Company and service center profitability and on-time service performance, which
the Company believes helps to motivate those employees.
The Company utilizes a computerized freight costing model to determine the price
level at which a particular shipment of freight will be profitable. Elements of
this freight costing model may be modified, as necessary, to simulate the actual
conditions under which the freight will be moved. From time to time, the Company
also competes for business by participating in bid solicitations. Customers
generally solicit bids for relatively large numbers of shipments for a period of
from one to two years and typically choose to enter into a contractual
arrangement with a limited number of motor carriers based upon price and
service.
For the year ended December 31, 2000, Old Dominion's largest 20, 10, and 5
customers accounted for approximately 13.5%, 9.4% and 6.3%, respectively, of the
Company's operating revenue. The Company's largest customer for 2000 accounted
for approximately 2.8% of operating revenue. While the Company is not dependent
upon one customer, a reduction or termination of services provided by the
Company to a large group of customers could have an adverse effect on the
Company's business and operating results.
Competition
The transportation industry is highly competitive on the basis of both price and
service. Old Dominion competes with regional, inter-regional and national LTL
and truckload carriers and, to a lesser extent, with air freight carriers and
railroads, a number of which have greater financial resources, operate more
equipment and have larger freight capacity than the Company. The Company
believes that it is able to compete effectively in its markets by providing high
quality and timely service at competitive prices.
Seasonality
The Company's operations are subject to seasonal trends common in the motor
carrier industry. Operating results in the first and fourth quarters are
normally lower due to reduced shipments during the winter months. Harsh weather
conditions can also adversely impact the Company's performance by reducing
demand and increasing operating expenses.
Safety and Insurance
The Company's Vice President - Safety and Personnel and Vice President - Field
Services implement and monitor its safety and loss prevention programs with the
assistance of 15 field supervisors. The Company's accident frequency, as defined
by the National Safety Council (including minor and unavoidable accidents), was
7.4, 7.3 and 7.5 accidents per million miles for the years ended December 31,
2000, 1999 and 1998, respectively.
The Company is self-insured for bodily injury and property damage claims up to
$250,000 per occurrence. Cargo claims are self-insured up to $100,000; however,
after the first two losses exceed $100,000, the retention under the Company's
excess insurance policy is reduced to $50,000 per occurrence. The Company also
is self-insured for workers' compensation in certain states and has first dollar
or high deductible plans in the other states. The Company believes that its
policy of self-insuring up to set limits, together with its safety and loss
prevention programs, is an effective means of managing insurance costs.
Old Dominion believes that its current insurance coverage is adequate to cover
its liability risks.
Fuel Availability and Cost
The motor carrier industry is dependent upon the availability of diesel fuel.
Increases in fuel prices and fuel taxes, to the extent not offset by rate
increases or fuel surcharges to customers, shortages of fuel or rationing of
petroleum products could have a material adverse effect on the operations and
profitability of the Company. The Company has not experienced difficulties in
maintaining a consistent
5
and ample supply of fuel. In periods of extreme price increases, the Company has
implemented a fuel surcharge to offset the additional cost of fuel, which is
consistent with other competitors. Management believes that the Company's
operations and financial condition are susceptible to the same fuel price
increases or fuel shortages as those of its competitors. Fuel costs normally
fluctuate between three and five percent of revenue; however, fuel expense
exceeded those levels and averaged 5.6% of revenue for the year 2000. In
response to the dramatic increases in all petroleum products, the Company
implemented a fuel surcharge in August 1999, which has remained in effect since
that time.
Employees
At December 31, 2000, the Company employed 5,909 individuals in the following
categories:
Number of
Category Employees
- -------- ---------
Drivers 2,903
Platform 1,066
Mechanics 180
Sales 272
Salaried, clerical and other 1,488
At December 31, 2000, the Company employed 1,260 linehaul drivers and 1,643 city
drivers. All drivers hired by the Company are selected based upon driving
records and experience. Drivers are required to pass drug tests at employment
and are later required to take such tests periodically, by random selection.
Competition for drivers is intense within the trucking industry, and the Company
periodically experiences difficulties in attracting and retaining qualified
drivers. There can be no assurance that the Company's operations will not be
affected by a shortage of qualified drivers in the future which could result in
temporary under-utilization of revenue equipment, difficulty in meeting shipper
demands and increased compensation levels for drivers. Difficulty in attracting
or retaining qualified drivers could require the Company to limit growth and
have a material adverse effect on the Company's operations.
To help fulfill driver needs, the Company offers employees and their families
the opportunity to become drivers through the "Old Dominion Driver Training
Program". Since its inception in 1988, 957 individuals have graduated from that
program, from which the Company has experienced an annual turnover rate of
approximately 11%. In management's opinion, driver qualification programs, which
are required to be taken by all drivers, have been important factors in
improving the Company's safety record. Drivers with safe driving records are
rewarded with bonuses of up to $1,000 annually. Driver safety bonuses paid for
2000 were approximately $557,000.
Management believes that relations with employees are excellent and there are no
employees represented under a collective bargaining agreement. However, there
can be no assurance that a substantial number of the Company's employees will
not unionize in the future, which could increase the Company's operating costs
and force it to alter its operating methods. Any significant unionization of the
Company's workforce could have a materially adverse effect on the Company's
operating results.
Regulation
The Surface Transportation Board, an independent entity within the United States
Department of Transportation ("DOT"), regulates and monitors certain activities
within the motor carrier industry. The Company is also regulated by various
state agencies. These regulatory authorities have broad powers, generally
governing matters such as authority to engage in motor carrier operations,
rates, certain mergers, consolidations and acquisitions, and periodic financial
reporting. The motor carrier industry is subject to regulatory and legislative
changes that can affect the economics of the industry by requiring changes in
operating practices or influencing the demand and costs of providing services to
shippers.
6
Interstate motor carrier operations are subject to safety requirements
prescribed by the DOT. Such matters as weight and dimensions of equipment are
also subject to federal and state regulation. The Company is subject to federal,
state and local environmental laws and regulations, particularly relating to
underground fuel storage tanks ("USTs"). The Company believes it is in
compliance with applicable environmental laws and regulations, including those
relating to USTs, and does not believe that the cost of future compliance will
have a material adverse effect on the Company's operations or financial
condition.
Executive Officers of the Company
The following table sets forth information regarding the executive officers of
the Company:
Name and Age Positions and Offices with the Company
- ------------ --------------------------------------
Earl E. Congdon (70) Chairman of the Board of Directors and Chief
Executive Officer
John R. Congdon (68) Vice Chairman of the Board of Directors
David S. Congdon (44) President, Chief Operating Officer
John B. Yowell (49) Executive Vice President
J. Wes Frye (53) Sr. Vice President - Finance, Treasurer, Chief
Financial Officer and Assistant Secretary
Joel B. McCarty, Jr. (63) Sr. Vice President, General Counsel and
Secretary
Earl E. Congdon has been employed by the Company since 1950 and has served as
Chairman of the Board and Chief Executive Officer since 1985 and as a director
since 1952. He is a son of E. E. Congdon, one of the founders of Old Dominion.
John R. Congdon joined the Company in 1953, was appointed a director in 1955 and
has served as Vice Chairman of the Board since 1985. He is also the Chairman of
Old Dominion Truck Leasing, Inc., a North Carolina corporation that is engaged
in the full service leasing of tractors, trailers and other equipment, to which
he devotes more than half of his time. He is a son of E. E. Congdon, one of the
founders of Old Dominion, and the brother of Earl E. Congdon.
David S. Congdon has been employed by the Company since 1978 and, since May
1997, has served as President and Chief Operating Officer. He has held various
positions in the Company including Vice President - Quality and Field Services,
Vice President - Quality, Vice President - Transportation, President - Dominion
Furniture Xpress (a former division of Old Dominion that specialized in
furniture transportation) and has held other positions in operations and
engineering. He is the son of Earl E. Congdon.
John B. Yowell joined the Company in February 1983 and has served as Executive
Vice President since May 1997. He has held the positions of Vice President -
Corporate Services, Vice President - Central Region, Assistant to the President
and Vice President - Management Information Systems. He is a son-in-law of Earl
E. Congdon.
J. Wes Frye has served as Sr. Vice President - Finance since May 1997. He has
also served as Chief Financial Officer and Treasurer since joining the Company
in February 1985 and has held the position of Assistant Secretary since December
1987. Mr. Frye was formerly employed as the Vice President of Finance of
Builders Transport, Inc., from 1982 to 1985, and held various positions,
including Vice President - Controller, with Johnson Motor Lines from 1975 to
1980. Mr. Frye is a Certified Public Accountant.
7
Joel B. McCarty, Jr., was appointed Sr. Vice President in May 1997 and has
served as General Counsel and Secretary since joining the Company in June 1987.
Before joining Old Dominion, he was Assistant General Counsel of McLean Trucking
Company and was in private law practice prior to 1985.
ITEM 2. PROPERTIES
The Company owns its general offices located in High Point, North Carolina,
consisting of a four-story office building of approximately 56,500 square feet
on 10.3 acres and an office building of approximately 15,000 square feet located
near the general office. The Company also owns service center facilities in
Birmingham, Dothan and Huntsville, Alabama; Los Angeles and Rialto, California;
South Windsor, Connecticut; Atlanta, Georgia; Jacksonville, Miami, Orlando and
Tampa, Florida; Des Plaines, Illinois; Kansas City, Kansas; Baltimore, Maryland;
Minneapolis, Minnesota; Tupelo, Mississippi; Syracuse, New York; Asheville,
Charlotte, Fayetteville, Hickory, Wilmington and Wilson, North Carolina;
Columbus, Ohio; Pittsburg, Pennsylvania; Columbia and Greenville, South
Carolina; Chattanooga, Memphis, Morristown and Nashville, Tennessee; Dallas and
Houston, Texas; Richmond, Manassas, Martinsville and Norfolk, Virginia; and
Milwaukee, Wisconsin.
The Company also owns non-operating properties in Jacksonville, Florida; St.
Louis, Missouri; Cincinnati, Ohio; Fayetteville and Hickory, North Carolina;
Memphis, Morristown and Nashville, Tennessee; and Houston, Texas, all of which
are held for lease. Currently, the Jacksonville property is leased until
December 2001; the St. Louis property is leased until February 2004; the
Fayetteville property is leased until January 2002; the Hickory property is
under a month-to-month lease; the Nashville property is leased through October
2001; the Houston property is leased until December 2003; and the Cincinnati,
Memphis and Morristown properties are not under lease.
At December 31, 2000, Old Dominion leased 67 of its 105 service centers. These
leased facilities are dispersed over the 35 states in which the Company operates
in the Southeast, Northeast, Midwest, South Central and West regions of the
country. The length of these leases ranges from month-to-month to a lease that
expires in January 2008. The Company believes that as current leases expire, it
will be able either to renew them or find comparable facilities without
incurring any material negative impact on service to customers or its operating
results.
The Company believes that all of its properties are in good repair and are
capable of providing the level of service required by current business levels
and customer demands.
ITEM 3. LEGAL PROCEEDINGS
There are no pending legal proceedings, other than ordinary routine litigation
incidental to the business, to which the Company is a party or of which any of
its property is the subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Common Stock and Dividend Information
The common stock of Old Dominion Freight Line, Inc. is traded on the Nasdaq
National Market under the symbol ODFL. At February 27, 2001, there were
approximately 752 holders of the common stock, including 127 stockholders of
record. No dividends have been paid on the common stock. The
8
information concerning restrictions on dividend payments required by Item 5 of
Form 10-K appears in Note 2 of the Notes to Consolidated Financial Statements
appearing in Item 8 of this report.
Market Prices of Common Stock:
2000
---------------------------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
- --------------------------------------------------------------------------------------------------------------------
High $ 13.000 $ 12.500 $ 11.000 $ 10.500
Low $ 10.750 $ 8.875 $ 8.750 $ 8.500
1999
---------------------------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
- --------------------------------------------------------------------------------------------------------------------
High $ 12.000 $ 12.875 $ 15.000 $ 14.750
Low $ 10.375 $ 8.125 $ 11.625 $ 9.750
Market Makers:
Spear, Leeds & Kellogg; ING Barings Furman Selz, LLC; Edgar M. Norris & Co.,
Inc.; The Brass Utility, L.L.C.; Sherwood Securities Corp.
9
ITEM 6. SELECTED FINANCIAL DATA
SELECTED FINANCIAL DATA
For the Year Ended December 31,
-------------------------------------------------------------
(In thousands, except per share amounts
and operating statistics) 2000 1999 1998 1997 1996
- -------------------------------------------------------------------------------------------------------------
Operating Data:
Revenue from operations $475,803 $426,385 $383,078 $328,844 $293,006
Operating expenses:
Salaries, wages and benefits 283,121 258,900 229,188 193,523 163,490
Purchased transportation 19,547 14,504 15,696 15,494 21,435
Operating supplies and expenses 50,074 36,749 31,485 30,311 30,288
Depreciation and amortization 27,037 25,295 21,887 17,173 16,091
Building and office equipment rents 7,196 7,330 7,285 6,921 6,874
Operating taxes and licenses 18,789 17,699 16,791 13,968 12,867
Insurance and claims 12,465 10,200 12,277 10,033 10,118
Communications and utilities 8,488 7,532 7,011 6,152 5,687
General supplies and expenses 18,527 15,852 15,000 11,976 10,444
Miscellaneous expenses 3,806 4,268 3,881 3,282 2,762
-------------------------------------------------------------
Total operating expenses 449,050 398,329 360,501 308,833 280,056
-------------------------------------------------------------
Operating income 26,753 28,056 22,577 20,011 12,950
Interest expense, net 4,397 4,077 4,331 3,547 2,903
Other expense, net (97) 522 311 273 137
-------------------------------------------------------------
Income before income taxes 22,453 23,457 17,935 16,191 9,910
Provision for income taxes 8,757 9,056 6,815 6,153 3,766
-------------------------------------------------------------
Net income $ 13,696 $ 14,401 $ 11,120 $ 10,038 $ 6,144
-------------------------------------------------------------
Earnings Per Share:
Basic $ 1.65 $ 1.73 $ 1.34 $ 1.21 $ 0.74
Diluted $ 1.65 $ 1.73 $ 1.34 $ 1.21 $ 0.74
Weighted Average Shares Outstanding:
Basic 8,313 8,312 8,312 8,312 8,346
Diluted 8,314 8,316 8,323 8,322 8,347
Operating Statistics:
Operating ratio 94.4% 93.4% 94.1% 93.9% 95.6%
LTL revenue per hundredweight $ 12.83 $ 11.82 $ 11.28 $ 11.37 $ 11.00
Revenue per intercity mile $ 3.43 $ 3.26 $ 3.09 $ 2.99 $ 2.92
Intercity miles (in thousands) 138,848 130,648 123,816 110,120 100,447
LTL tonnage (in thousands) 1,697 1,644 1,527 1,334 1,221
Shipments (in thousands) 3,278 3,140 2,980 2,607 2,388
Average length of haul (miles) 869 844 853 869 -
Balance Sheet Data: As of December 31,
-------------------------------------------------------------
2000 1999 1998 1997 1996
-------------------------------------------------------------
Current assets $ 80,196 $ 76,254 $ 69,789 $ 59,860 $ 56,264
Current liabilities 63,410 71,582 54,481 39,084 35,865
Total assets 296,591 257,579 241,799 191,061 170,726
Long-term debt (including current maturities) 83,542 64,870 70,589 47,301 43,141
Stockholders' equity 124,734 111,038 96,637 85,501 74,928
10
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following table sets forth, for the years indicated, expenses and other
items as a percentage of revenue from operations:
2000 1999 1998
- ------------------------------------------------------------------------------------------------------------------
Revenue from operations 100.0% 100.0% 100.0%
---------- ---------- ----------
Salaries, wages and benefits 59.5 60.7 59.8
Purchased transportation 4.1 3.4 4.1
Operating supplies and expenses 10.5 8.6 8.2
Depreciation and amortization 5.7 5.9 5.7
Building and office equipment rents 1.5 1.7 1.9
Operating taxes and licenses 4.0 4.2 4.4
Insurance and claims 2.6 2.4 3.2
Communication and utilities 1.8 1.8 1.8
General supplies and expenses 3.9 3.7 3.9
Miscellaneous expenses .8 1.0 1.1
---------- ---------- ----------
Total operating expenses 94.4 93.4 94.1
---------- ---------- ----------
Operating income 5.6 6.6 5.9
Interest expense, net .9 1.0 1.1
Other expense, net - .1 .1
---------- ---------- ----------
Income before income taxes 4.7 5.5 4.7
Provision for income taxes 1.8 2.1 1.8
---------- ---------- ----------
Net income 2.9% 3.4% 2.9%
========== ========== ==========
Results of Operations
2000 Compared to 1999
Revenue for 2000 was $475,803,000, an increase of 11.6 % over 1999 revenue of
$426,385,000. The Company met its targeted revenue growth of between 10% to 15%
by expanding its market share in its existing markets, through selected
geographic expansion, by increasing its service product offerings and by
implementing a fuel surcharge on its base tariffs and contract pricing.
In January 2000, the Company intensified its strategy to increase market share
within existing areas of operations by implementing full state coverage in 16
states east of the Mississippi River. By the end of the second quarter, the
Company implemented full state coverage in 5 additional states, bringing the
total to 21 states. In addition, the Company opened 6 new service centers in
2000, including openings in West Virginia and Oklahoma. These openings increased
the number of states in which the Company has service center facilities to 35.
The Company also introduced its new guaranteed and expedited service product,
Speed Service, in early 2000. Speed Service is anticipated to grow significantly
as more customers demand service sensitive and customized delivery services.
In response to the rising costs of petroleum products, particularly diesel fuel,
the Company implemented a fuel surcharge on its tariffs in August 1999.
Generally, this surcharge is designed to offset the cost of fuel above a base
price and increases as fuel prices escalate over the base. The fuel surcharge
accounted for approximately 3.4% of revenue for 2000 while accounting for
approximately .4% of revenue for 1999.
LTL revenue per shipment in 2000 increased 7.3% to $136.36 from $127.13 for 1999
while LTL shipments increased 4.5%. The increase in revenue per shipment was a
result of an 8.5% increase in
11
LTL revenue per LTL hundredweight to $12.83 from $11.82 and a 1.2% decrease in
LTL weight per shipment to 1,063 lbs. from 1,076 lbs. In addition, the Company's
average length of haul increased 3.0% to 869 miles from 844 miles, which
generally increases both LTL revenue per hundredweight and LTL revenue per
shipment.
The operating ratio (operating expenses as a percentage of revenue) increased to
94.4% in 2000 from 93.4% in 1999. Increases in operating supplies, purchased
transportation, insurance and claims liabilities, and general supplies and
expenses contributed to the increased operating ratio, the 4.6% decline in
operating income and the 4.9% decline in net income in 2000 compared to 1999.
Diesel fuel, which is expensed in operating supplies, increased in 2000 to 5.6%
of revenue from 3.7% in 1999. While this cost element reflected the most
significant and dramatic increase over the prior year, the Company was able to
offset its impact with the implementation of fuel surcharges.
Purchased transportation increased to 4.1% of revenue from 3.4%, due to an
increase in cartage expense. Cartage expense, or outsourced pickup and delivery
services, increased to 1.8% of revenue from 1.3% as a result of two factors.
First, the implementation of full-state coverage in 21 states required the
Company to service certain remote locations that were more economically served
by third party agent partners who had more operating density in those areas. As
market share builds, Company personnel and equipment will replace these agents.
Second, growth in certain markets exceeded the Company's operating capacity
resulting in the use of more expensive outside pickup and delivery services to
maintain quality service standards during peak shipping periods. The Company is
addressing these situations by either constructing or leasing larger facilities
to accommodate this growth.
The Company self-insures a portion of its bodily injury, property damage and
cargo claims liabilities. In 2000, the cost of self-insurance increased to 2.4%
of revenue compared to 2.1% for 1999 due to a slight increase in the number and
severity of claims.
General supplies and expenses increased to 3.9% of revenue from 3.7% in 2000,
due in part to the Company's change in its capitalization policy to require a
minimum expenditure of $1,000 before recognizing a depreciable asset, compared
to a minimum expenditure of $500 in 1999. In 2000, the Company continued to
upgrade its desktop equipment and software, much of which fell below the new
capitalization level of $1,000 and was therefore expensed.
The Company's strategy to grow existing markets has resulted in improvements in
asset utilization. These improvements were reflected as decreases in certain
fixed costs as a percent of revenue when compared to the prior year.
Depreciation and amortization decreased to 5.7% of revenue from 5.9%, building
and office equipment rents decreased to 1.5% from 1.7%, and operating taxes and
licenses decreased to 4.0% from 4.2%.
Net interest expense decreased slightly to .9% of revenue from 1.0%. While
outstanding debt at year-end 2000 increased $18,672,000 from year-end 1999 and
interest rates generally increased on the Company's variable rate debt
instrument, $1,031,000 in interest charges were capitalized as part of the
construction of service centers in 2000 as compared to $230,000 in 1999.
Net income for 2000 was $13,696,000, a 4.9% decrease from $14,401,000 in 1999.
The effective tax rate was 39.0% for 2000 compared to 38.6% for 1999.
1999 Compared to 1998
Revenue from operations for 1999 was $426,385,000, an increase of 11.3%,
compared to $383,078,000 for 1998. This growth was generated by increases in
both volume and pricing, and was achieved through the Company's strategy to
increase market share in its existing geographic areas of operations and service
center network. The Company opened seven new service centers in 1999 and
benefited from a full year of operation of its acquisition of selected assets of
Goggin Truck Line Company, Inc. in August 1998. In addition, in January 1999,
the Company acquired certain assets of Skyline Transportation, Inc. These
acquisitions were LTL motor carriers operating primarily in the southeastern
United States.
12
LTL tonnage increased 7.7% in 1999 due to a 5.5% increase in LTL shipments and a
2.1% increase in LTL weight per shipment. Average revenue per LTL shipment
increased 7.0% to $127.13 from $118.81 for 1998. This increase was due to a 4.8%
increase in LTL revenue per hundredweight to $11.82 from $11.28 and the increase
in LTL weight per shipment. The increase in LTL revenue per shipment was
achieved although the Company's average length of haul decreased 1.1% to 844
miles from 853, a trend that generally lowers revenue per shipment. The
reduction in average length of haul was due to the growth of the Company's
regional markets, which generally are characterized by shorter distances between
origin and destination points when compared to inter-regional markets.
The operating ratio for 1999 improved to 93.4% compared to 94.1% for 1998. The
Company experienced significant reductions in both insurance expense and
purchased transportation in 1999. Insurance and claims expense decreased to 2.4%
of revenue from 3.2% due to reductions in cargo, bodily injury and property
damage claims. The Company provides a continuous training process for its
dockworkers and monitors freight movements to prevent cargo loss and damage
claims. In addition, Company drivers undergo continuous safety training to
prevent and reduce the frequency and severity of vehicle accidents. The Company
self-insures a portion of these claims and maintains excess insurance coverage
over the self-insured retention. Due to favorable claims experience, the rates
on excess insurance were reduced by 33.4% in 1999 over the prior year.
Purchased transportation decreased to 3.4% of revenue from 4.1% in 1998 as the
Company continued to replace outside purchased transportation with direct
service by Company personnel and equipment. The focus on increasing market share
in existing areas of operation allowed the Company to improve transit times to
more delivery points in its existing network. As a result, salaries, wages and
benefits increased to 60.7% of revenue from 59.8%. A portion of that increase
was due to an increase in group health expenses to 3.3% of revenue from 2.7%,
consistent with the national trend in increased group health costs per employee
in 1999. Depreciation and amortization expense increased to 5.9% of revenue from
5.7%, primarily due to increases in the Company's equipment fleet, Company owned
service centers and investments in information systems.
Operating supplies and expenses increased to 8.6% of revenue from 8.2%. During
the latter half of 1999, the Company experienced sharp increases in diesel fuel
and other petroleum based products. Fuel costs increased to 3.7% of revenue from
3.3% for 1998. In August 1999, the Company implemented a fuel surcharge, which
was recorded in operating revenue, to partially offset the rising cost of fuel.
The Company benefited from reductions in general supplies and expenses, building
and office equipment rents, operating taxes and licenses, and miscellaneous
expenses, which as a group were 10.6% of revenue in 1999 as compared to 11.3% in
1998. These reductions reflect the strategy of leveraging the Company's assets
to provide for more efficient and profitable operations.
Net interest expense decreased to 1.0% of revenue for 1999 from 1.1% due to a
lower average amount of debt outstanding during the year.
Net income was $14,401,000 for 1999 compared to $11,120,000 for 1998. The
effective tax rate for 1999 was 38.6% compared to 38.0% for 1998.
Liquidity and Capital Resources
Expansion in both the size and number of service center facilities, the planned
tractor and trailer replacement cycle and revenue growth have required continued
investment in property and equipment. In order to support these requirements,
the Company incurred net capital expenditures of $61,030,000 during 2000. Cash
flows generated internally funded 69.1% of the required capital expenditures for
the year while the remainder was funded through additional borrowings. At
December 31, 2000, long-term debt including current maturities increased to
$83,542,000 from $64,870,000 at December 31, 1999.
The Company estimates net capital expenditures to be approximately $60,000,000
to $65,000,000 for the year ending December 31, 2001. Of that, approximately
$35,000,000 is planned to be used for purchases of larger replacement service
centers or expansion of existing service centers, $20,000,000 is planned to be
used to purchase revenue equipment, $8,000,000 is planned to be used for
13
investments in technology and the balance is planned to be used to purchase
other assets. The Company plans to fund these expenditures through cash flows
from operations supplemented by additional borrowings.
On May 31, 2000 the Company entered into a $62,500,000 uncollateralized
committed credit facility that consists of a $50,000,000 line of credit and a
$12,500,000 line to support standby letters of credit. The new facility has a
term of three years that expires on May 31, 2003. Interest on the line of credit
is charged at rates that vary based upon a certain financial performance ratio.
The applicable interest rate for 2000 under this agreement was based upon LIBOR
plus .70%. A fee of .20% was charged on the unused portion of the line of credit
and fees ranging between .60% to .75% were charged on outstanding standby
letters of credit. At December 31, 2000, there was $6,040,000 outstanding on the
standby letter of credit facility, which was required for self-insured retention
reserves for bodily injury, property damage and workers' compensation claims. On
February 1, 2001 this credit agreement was amended to increase the line of
credit facility to $55,000,000 through April 30, 2001, and thereafter decrease
to $50,000,000 for the remainder of the term.
The Company's exposure to changes in interest rates is limited to the
outstanding balance of its line of credit facility, which represents 47.0% of
total long-term debt at year-end 2000. The Company does not currently use
interest rate derivative instruments to manage exposure to interest rate
changes. Also, the Company is not using any fuel hedging instruments as its
tariff provisions generally allow for fuel surcharges to be implemented in the
event that fuel prices exceed stipulated levels.
Inflation
Most of the Company's expenses are affected by inflation, which generally result
in increased costs. During 2000, the effect of inflation on the Company's
results of operations was minimal.
Environmental
The Company is subject to federal, state and local environmental laws and
regulations, particularly relative to underground storage tanks. The Company
believes it is in compliance with applicable environmental laws and regulations,
including those relating to underground storage tanks, and does not believe that
the cost of future compliance will have a material adverse effect on the
Company's operations or financial condition.
Forward-Looking Information
Forward-looking statements in this report, including, without limitation,
statements relating to future events or the future financial performance of the
Company appear in the preceding Management's Discussion and Analysis of
Financial Condition and Results of Operations and in other written and oral
statements made by or on behalf of the Company, including, without limitation,
statements relating to the Company's goals, strategies, expectations,
competitive environment, regulation and availability of resources. Such
forward-looking statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Investors are cautioned
that such forward-looking statements involve risks and uncertainties that could
cause actual events and results to be materially different from those expressed
or implied herein, including, but not limited to, the following: (1) changes in
the Company's goals, strategies and expectations, which are subject to change at
any time at the discretion of the Company; (2) the Company's ability to maintain
a nonunion, qualified work force; (3) the competitive environment with respect
to industry capacity and pricing; (4) the availability and cost of fuel,
additional revenue equipment and other significant resources; (5) the ability to
impose and maintain fuel surcharges to offset increases in fuel prices; (6) the
impact of regulatory bodies; (7) various economic factors such as insurance
costs, liability claims, interest rate fluctuations, the availability of
qualified drivers or owner-operators, fluctuations in the resale value of
revenue equipment, increases in fuel or energy taxes, economic recessions and
downturns in customers' business cycles and shipping requirements; (8) the
Company's ability to raise capital or borrow funds on satisfactory terms, which
could limit growth and require the Company to operate its revenue equipment for
longer periods of time; (9) the Company's ability to purchase, build or lease
facilities suitable for its operations; and (10) other risks and uncertainties
indicated from time to time in the Company's filings with the Securities and
Exchange Commission.
14
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by Item 7A of Form 10-K appears in Item 7 of this
report under the heading "Liquidity and Capital Resources".
15
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED BALANCE SHEETS
December 31,
-------------------------------------
(In thousands, except share data) 2000 1999
- ----------------------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 585 $ 781
Customer receivables, less allowances of $6,068
and $6,495, respectively 54,273 55,077
Other receivables 4,450 1,067
Tires on equipment 6,912 6,428
Prepaid expenses 12,499 10,631
Deferred income taxes 1,477 2,270
--------------- ----------------
Total current assets 80,196 76,254
Property and equipment:
Revenue equipment 198,131 178,301
Land and structures 90,469 68,972
Other equipment 38,430 31,557
Leasehold improvements 4,338 4,381
--------------- ----------------
Total property and equipment 331,368 283,211
Less accumulated depreciation (130,018) (116,249)
--------------- ----------------
Net property and equipment 201,350 166,962
Other assets 15,045 14,363
--------------- ----------------
Total assets $ 296,591 $ 257,579
=============== ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 26,515 $ 22,944
Compensation and benefits 11,298 11,352
Claims and insurance accruals 14,128 12,548
Other accrued liabilities 2,434 2,927
Income taxes payable - -
Current maturities of long-term debt 9,035 21,811
--------------- ----------------
Total current liabilities 63,410 71,582
Long-term debt 74,507 43,059
Other non-current liabilities 12,295 11,102
Deferred income taxes 21,645 20,798
--------------- ----------------
Total long-term liabilities 108,447 74,959
Stockholders' equity:
Common stock - $.10 par value, 25,000,000 shares
authorized, 8,312,840 shares outstanding at
December 31, 2000 and December 31, 1999 831 831
Capital in excess of par value 23,907 23,907
Retained earnings 99,996 86,300
--------------- ----------------
Total stockholders' equity 124,734 111,038
Commitments and contingencies - -
--------------- ----------------
Total liabilities and stockholders' equity $ 296,591 $ 257,579
=============== ================
The accompanying notes are an integral part of these financial statements.
16
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Year ended December 31,
-------------------------------------------------
(In thousands, except share and per share data) 2000 1999 1998
- ------------------------------------------------------------ -------------- --------------- --------------
Revenue from operations $475,803 $426,385 $383,078
Operating expenses:
Salaries, wages and benefits 283,121 258,900 229,188
Purchased transportation 19,547 14,504 15,696
Operating supplies and expenses 50,074 36,749 31,485
Depreciation and amortization 27,037 25,295 21,887
Building and office equipment rents 7,196 7,330 7,285
Operating taxes and licenses 18,789 17,699 16,791
Insurance and claims 12,465 10,200 12,277
Communications and utilities 8,488 7,532 7,011
General supplies and expenses 18,527 15,852 15,000
Miscellaneous expenses 3,806 4,268 3,881
-------------- --------------- --------------
Total operating expenses 449,050 398,329 360,501
-------------- --------------- --------------
Operating income 26,753 28,056 22,577
Other deductions:
Interest expense, net 4,397 4,077 4,331
Other expense, net (97) 522 311
-------------- --------------- --------------
Total other deductions 4,300 4,599 4,642
-------------- --------------- --------------
Income before income taxes 22,453 23,457 17,935
Provision for income taxes 8,757 9,056 6,815
-------------- --------------- --------------
Net income $ 13,696 $ 14,401 $ 11,120
============== =============== ==============
Basic and diluted earnings per share $ 1.65 $ 1.73 $ 1.34
============== =============== ==============
Weighted average shares outstanding:
Basic 8,312,840 8,312,457 8,311,774
Diluted 8,313,866 8,316,329 8,323,240
The accompanying notes are an integral part of these financial statements.
17
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Capital in
Common excess of Retained
(In thousands) stock par value earnings Total
- -------------------------------------------------------------------------------------------------------------------
Balance as of December 31, 1997 $ 831 $ 23,891 $ 60,779 $ 85,501
Net income - - 11,120 11,120
Exercise of stock options - 16 - 16
----------------------------------------------------
Balance as of December 31, 1998 831 23,907 71,899 96,637
Net income - - 14,401 14,401
----------------------------------------------------
Balance as of December 31, 1999 831 23,907 86,300 111,038
Net income - - 13,696 13,696
----------------------------------------------------
Balance as of December 31, 2000 $ 831 $ 23,907 $ 99,996 $124,734
====================================================
The accompanying notes are an integral part of these financial statements.
18
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended December 31,
---------------------------------------------
(In thousands) 2000 1999 1998
- --------------------------------------------------------------------- -------------- --------------- --------------
Cash flows from operating activities:
Net income 13,696 $ 14,401 $ 11,120
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 27,037 25,295 21,887
Deferred income taxes 1,640 1,192 2,689
Loss (gain) on sale of property and equipment 27 243 (71)
Changes in assets and liabilities:
Customer and other receivables, net (2,579) (4,965) (1,094)
Tires on equipment (484) (103) (1,273)
Prepaid expenses and other assets (2,972) (1,923) (1,428)
Accounts payable 3,571 1,594 7,189
Compensation, benefits and other accrued liabilities (547) 2,701 335
Claims and insurance accruals 2,620 1,458 4,048
Income taxes payable - (499) 499
Other liabilities 153 595 370
-------------- --------------- --------------
Net cash provided by operating activities 42,162 39,989 44,271
-------------- --------------- --------------
Cash flows from investing activities:
Acquisition of business assets, net - (1,100) (16,790)
Purchase of property and equipment (63,083) (35,992) (45,079)
Proceeds from sale of property and equipment 2,053 2,943 2,180
-------------- --------------- --------------
Net cash used in investing activities (61,030) (34,149) (59,689)
-------------- --------------- --------------
Cash flows from financing activities:
Proceeds from issuance of long-term debt 1,626 553 20,991
Principal payments under long-term debt agreements (10,629) (9,537) (7,184)
Net proceeds from revolving line of credit 27,675 3,265 1,580
Proceeds from conversion of stock options - - 16
-------------- --------------- --------------
Net cash provided by (used in) financing activities 18,672 (5,719) 15,403
-------------- --------------- --------------
(Decrease) increase in cash and cash equivalents (196) 122 (15)
Cash and cash equivalents at beginning of period 781 659 674
-------------- --------------- --------------
Cash and cash equivalents at end of period $ 585 $ 781 $ 659
============== =============== ==============
Cash paid for interest was approximately $5,553,000, $4,802,000 and $4,099,000
for the years ended December 31, 2000, 1999 and 1998, respectively. Interest of
$1,031,000 and $230,000 was capitalized during 2000 and 1999, respectively.
The accompanying notes are an integral part of these financial statements.
19
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies
Business
The Company is an inter-regional and multi-regional motor carrier transporting
primarily less-than-truckload shipments of general commodities, such as consumer
goods, textiles and capital goods, to a diversified customer base. The Company
serves regional markets in the Southeast, Northeast, Midwest, South Central, and
West regions of the country. Old Dominion also serves inter-regional routes
connecting these geographic regions and major metropolitan markets throughout
most of the continental United States.
Basis of Consolidation
The consolidated financial statements include the accounts of the Company and
its subsidiary. All significant intercompany balances and transactions are
eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from these estimates.
Revenue and Expense Recognition
Operating revenue is recognized on a percentage of completion method based on
average transit time. Expenses associated with operating revenue are recognized
when incurred.
Segments
The Company operates one business segment, within the continental United States,
and has no customer that exceeds 10% of its operating revenue.
Credit Risk
Financial instruments that potentially subject the Company to concentrations of
credit risk consist principally of customer receivables. Credit risk is
generally diversified due to the large number of entities comprising the
Company's customer base and their dispersion across many different industries
and geographic regions. As noted on the consolidated balance sheets, the Company
maintains an allowance for doubtful accounts to cover estimated credit losses.
Cash and Cash Equivalents
The Company considers cash on hand and deposits in banks along with certificates
of deposit and short-term marketable securities with original maturities of
three months or less as cash and cash equivalents for the purpose of the
statements of cash flows.
Tires on Equipment
The cost of tires on equipment is amortized over the estimated tire life of 18
to 24 months.
Property and Equipment
Property and equipment is stated at cost. Major additions and improvements are
capitalized, while maintenance and repairs that do not improve or extend the
lives of the respective assets are charged to expense as incurred.
20
Depreciation is provided by the straight-line method over the following
estimated useful lives:
Structures 5 to 25 years
Revenue equipment 2 to 12 years
Other equipment 2 to 10 years
Leasehold improvements Lesser of 10 years or life of lease
Depreciation expense was $26,615,000, $24,842,000 and $21,740,000 for 2000, 1999
and 1998, respectively.
Intangible Assets
The excess cost over net assets acquired in connection with acquisitions is
recorded in "Other Assets". These intangible assets are amortized using a
straight-line method over their estimated useful lives of 3 to 25 years.
Long-Lived Assets
The Company periodically assesses the realizable value of its long-lived assets
and evaluates such assets for impairment whenever events or changes in
circumstances indicate the carrying amount of an asset may not be recoverable.
Claims and Insurance Accruals
Claims and insurance accruals reflect the estimated ultimate cost of claims,
including amounts for claims incurred but not reported, for cargo loss and
damage, bodily injury and property damage, workers' compensation, long-term
disability and group health not covered by insurance. These costs are charged to
insurance and claims expense except for workers' compensation, long-term
disability and group health, which are charged to employee benefits expense.
Advertising
The costs of advertising the Company's products are generally expensed as
incurred. Advertising costs charged to expense amounted to $1,364,000,
$1,153,000 and $1,251,000 for 2000, 1999 and 1998, respectively.
Earnings Per Share
Net income per common share is computed using the weighted average number of
common shares outstanding during the period. The effect of dilutive employee
stock options in Note 7 is immaterial to the calculation of diluted earnings per
share for the years ended December 31, 2000, 1999 and 1998.
Fair Values of Financial Instruments
At December 31, 2000 and 1999, the carrying value of financial instruments such
as cash and cash equivalents, customer and other receivables, trade payables and
long-term debt approximated their fair values. Fair value is determined based on
expected future cash flows, discounted at market interest rates, and other
appropriate valuation methodologies.
Stock Based Compensation
Stock based compensation expense for the Company's employee stock option plan is
recognized under the provisions of Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees ("APB 25"), and related
interpretations. Consistent with APB 25, the exercise price of the Company's
employee stock options equals the market price of the underlying stock on the
date of grant; therefore, no compensation expense is recognized. Pro forma
information regarding net income and earnings per share required by Statement of
Financial Accounting Standards ("SFAS") No. 123, Accounting for Stock-Based
Compensation, is not significant.
Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS
No. 138, which is required to be adopted in fiscal years beginning after June
15, 2000. Under the statement, all derivatives will be required to be recognized
on the balance sheet at fair value. Derivatives that are not hedges must be
21
adjusted to fair value through income. If the derivative is a hedge, depending
on the nature of the hedge, changes in the fair value of derivatives will either
be offset against the change in fair value of the hedged assets, liabilities, or
firm commitments through earnings or recognized in other comprehensive income
until the hedged item is recognized in earnings. Under the statement, any
ineffective portion of a derivative's change in fair value must be immediately
recognized in earnings. The Company did not utilize any derivative instruments
or hedging activities for the peroids reported in the financial statements. The
adoption of the statements on January 1, 2001, by the Company had no impact on
the earnings and financial position of the Company.
Reclassifications
Certain amounts in prior years have been reclassified to conform with the
current period presentation.
Note 2. Long-Term Debt
Long-term debt consisted of the following:
December 31,
---------------------------------
(In thousands) 2000 1999
- -----------------------------------------------------------------------------------------------------------
Senior Notes $ 41,143 $ 47,500
Revolving credit facility 39,250 11,575
Equipment obligations, principal payable in monthly installments
plus interest ranging from 6.26% to 6.90% 1,669 5,427
Capitalized lease obligations 1,480 368
---------------------------------
83,542 64,870
Less current maturities 9,035 21,811
---------------------------------
$ 74,507 $ 43,059
=================================
Senior Notes consist of four individual debt agreements with interest rates
ranging from 6.35% to 7.59%. The notes call for periodic principal payments with
maturities ranging from 2002 to 2008.
On May 31, 2000 the Company entered into a $62,500,000 uncollateralized
committed credit agreement that consisted of a $50,000,000 line of credit
facility and a $12,500,000 standby letter of credit facility expiring on May 31,
2003. On February 1, 2001 this credit agreement was amended to increase the line
of credit facility to $55,000,000 through April 30, 2001, and thereafter
decrease to $50,000,000 for the remainder of the term. Interest on the line of
credit is charged at rates that vary based upon a certain financial performance
ratio. The applicable interest rate for 2000 under this agreement was based upon
LIBOR plus .70%. A fee of .20% was charged on the unused portion of the line of
credit and fees ranging between .60% to .75% were charged on outstanding standby
letters of credit. At December 31, 2000, there was $6,040,000 outstanding on the
standby letter of credit facility, which was required for self-insured retention
reserves for bodily injury, property damage and workers' compensation claims.
Both the Company's Senior Notes and credit agreement limit the amount of
dividends that may be paid to stockholders pursuant to certain financial ratios,
necessary corporate action and all applicable laws. At December 31, 2000, the
Company's debt instruments limited the amount of dividends that could be paid to
stockholders to $18,680,000. The Company did not declare or pay a dividend on
its common stock in 2000 and has no plans to declare or pay a dividend in 2001.
Equipment and capitalized lease obligations are collateralized by property and
equipment with a net book value book value of $8,587,000 at December 31, 2000.
22
As of December 31, 2000, aggregate maturities of long-term debt are as follows:
(In thousands)
- ----------------------------------------------------------------------------
2001 $ 9,035
2002 8,181
2003 6,255
2004 7,107
2005 13,714
Thereafter -
------------
44,292
Borrowings outstanding under the revolving credit agreement 39,250
------------
$83,542
============
Note 3. Leases
The Company leases certain revenue equipment and information systems under
capital leases. These assets are included in property and equipment as follows:
December 31,
--------------------------------
(In thousands) 2000 1999
- ----------------------------------------------------------------------------
Revenue equipment $ 599 $ 605
Information systems 1,760 -
----------------------------------
2,359 605
Less accumulated amortization (614) (136)
----------------------------------
$ 1,745 $ 469
==================================
Future minimum annual lease payments as of December 31, 2000, are as follows:
Capital Operating
(In thousands) leases leases Total
- -------------------------------------------------------------------------------------------------------
2001 $ 751 $ 8,170 $ 8,921
2002 699 5,348 6,047
2003 149 2,070 2,219
2004 - 1,163 1,163
2005 - 715 715
Thereafter - 1,075 1,075
--------------------------------------------------
Total minimum lease payments 1,599 $ 18,541 $ 20,140
==================================
Less amount representing interest (119)
-------------
Present value of capitalized lease obligations $ 1,480
=============
Aggregate expense under operating leases approximated $12,061,000, $11,891,000
and $10,358,000 for 2000, 1999 and 1998, respectively.
23
Note 4. Income Taxes
The components of the provision for income taxes are as follows:
Year ended December 31,
-----------------------------------
(In thousands) 2000 1999 1998
- --------------------------------------------------------------------------
Current:
Federal $6,691 $7,382 $3,899
State 426 482 227
-----------------------------------
7,117 7,864 4,126
Deferred:
Federal 1,381 1,005 2,264
State 259 187 425
-----------------------------------
1,640 1,192 2,689
-----------------------------------
Total provision for income taxes $8,757 $9,056 $6,815
===================================
Net cash paid for income taxes during 2000, 1999, and 1998 aggregated
$10,666,000, $8,586,000, and $2,856,000, respectively.
A reconciliation of the statutory federal income tax rates with the Company's
effective income tax rates for 2000, 1999, and 1998 is as follows:
Year ended December 31,
------------------------------------
(In thousands) 2000 1999 1998
- ---------------------------------------------------------------------------------------------------------------------
Tax provision at statutory rate on income before income taxes $7,859 $8,210 $6,277
State income taxes, net of federal benefit 450 435 424
Meals and entertainment disallowance 326 319 291
Other, net 122 92 (177)
------------------------------------
Total provision for income taxes $8,757 $9,056 $6,815
====================================
Deferred tax assets and liabilities consist of the following:
December 31,
------------------------
(In thousands) 2000 1999
- --------------------------------------------------------------------------
Deferred tax assets:
Claims and insurance reserves $ 9,447 $ 8,425
Allowance for doubtful accounts 2,367 2,533
Accrued vacation 1,742 1,530
Other 1,004 1,013
------------------------
14,560 13,501
Deferred tax liabilities:
Depreciation 26,431 25,122
Tires on equipment 3,020 2,723
Employee benefits 2,861 2,083
Other 2,416 2,101
------------------------
34,728 32,029
------------------------
Net deferred tax liability $ 20,168 $ 18,528
========================
24
Note 5. Related Party Transactions
The Company leases revenue equipment and a service center facility from certain
stockholders, employees and other affiliates under short-term operating leases.
Lease payments to these affiliates of the Company were $778,000, $773,000 and
$739,000 in 2000, 1999 and 1998, respectively.
The Company purchased fuel, equipment repairs and other services from an
affiliate for which it paid $248,000, $197,000 and $310,000 in 2000, 1999 and
1998, respectively. Charges to the affiliate for rent, equipment repairs, fuel
and other services provided by the Company were $27,000, $32,000 and $207,000
during 2000, 1999 and 1998, respectively.
Note 6. Employee Retirement Plan Contribution Expense
Substantially all employees meeting certain service requirements are eligible to
participate in the Company's 401(k) employee retirement plan. Employee
contributions are limited to a percentage of their compensation, as defined in
the plan. The Company makes contributions based upon the greater of a percentage
of employee contributions or ten percent of net income. Company contributions
for 2000, 1999 and 1998 were $1,370,000, $1,440,000 and $1,112,000,
respectively.
Note 7. Stock Options
In 1991, the Board of Directors and stockholders adopted the 1991 Employee Stock
Option Plan ("Plan") under which 250,000 shares of common stock are reserved for
stock option grants to certain officers and employees. Options granted under the
Plan may be incentive stock options or nonqualified stock options. The Plan
provides that options may be granted at prices not less than the fair market
value on the date the option is granted, which means the closing price of a
share of common stock as reported on the Nasdaq National Market on such day or
the preceding day if the shares are not traded in the Nasdaq system on the grant
day. On the date the option is granted, the Stock Option Plan Committee of the
Board of Directors determines the period during which the option may be
exercised; however, under the terms of the Plan, the option period cannot extend
more than ten years from the date on which the option is granted. Options may
not be granted under the Plan after August 31, 2001. A summary of the changes in
the number of common shares under option during the years ended December 31,
2000, 1999 and 1998 follows:
Number of Per share Weighted average
options option price exercise price
- -----------------------------------------------------------------------------------------------------
Balance as of December 31, 1997 179,100 $10.00 - $19.25 $16.34
Granted - - -
Exercised (1,600) $10.00 $10.00
Canceled - - -
---------------------------------------------------------
Balance as of December 31, 1998 177,500 $10.00 - $19.25 $16.40
Granted - - -
Exercised (2,000) $10.00 $10.00
Canceled - - -
---------------------------------------------------------
Balance as of December 31, 1999 175,500 $10.00 - $19.25 $16.47
Granted - - -
Exercised - - -
Canceled (9,000) $10.00 - $19.25 $17.11
---------------------------------------------------------
Balance as of December 31, 2000 166,500 $10.00 - $19.25 $16.44
===============
At December 31, 2000 there were 64,500 options reserved for future grant and
166,500 options exercisable. The weighted average remaining contractual life of
outstanding options is 2.4 years.
Note 8. Acquisitions of Business Assets
25
On January 26, 2001 the Company entered into an agreement to purchase selected
assets, consisting primarily of revenue equipment and real estate, from Carter &
Sons Freightway, Inc. of Carrollton, Texas. While the purchase price is
preliminary and has not been fully allocated, the Company anticipates cash
outlays and the present value of assumed equipment leases to approximate
$9,200,000.
On January 12, 1999, Old Dominion acquired selected assets of Skyline
Transportation, Inc.'s LTL operations for $1,100,000. In addition, the Company
acquired selected assets of two LTL trucking companies in 1998, Fredrickson
Motor Express Corporation and Goggin Truck Line Company, Inc. The 1998
acquisitions consisted of the purchase of assets with an estimated fair value of
$18,247,000 and the assumption of liabilities of $8,942,000.
These acquisitions have been accounted for as purchase transactions and the
results of operations have been included in the Company's financial statements
beginning on the date the acquisitions were consummated. The aggregate pro forma
impact on the Company's revenue from operations, operating income and earnings
per share is not material to the consolidated results of operations.
Note 9. Commitments and Contingencies
The Company is involved in various legal proceedings and claims that have arisen
in the ordinary course of its business that have not been fully adjudicated.
Many of these are covered in whole or in part by insurance. These actions, when
finally concluded and determined, will not, in the opinion of management, have
an adverse effect upon the financial position or results of operations of the
Company.
Note 10. Quarterly Financial Information (Unaudited)
Quarter
-------------------------------------------------------------
(In thousands, except per share data) First Second Third Fourth Total
- -----------------------------------------------------------------------------------------------------------------------
2000
- ----
Revenue $112,799 $120,144 $122,385 $120,475 $475,803
Operating income 4,723 8,615 8,260 5,155 26,753
Net income 2,327 4,576 4,293 2,500 13,696
Net income per share:
Basic and diluted 0.28 0.55 0.52 0.30 1.65
1999
- ----
Revenue $99,346 $106,195 $108,527 $112,317 $426,385
Operating income 5,488 7,703 7,857 7,008 28,056
Net income 2,469 4,264 4,219 3,449 14,401
Net income per share:
Basic and diluted 0.30 0.51 0.51 0.41 1.73
26
Report of Independent Auditors
The Board of Directors and Stockholders
Old Dominion Freight Line, Inc.
We have audited the accompanying consolidated balance sheets of Old Dominion
Freight Line, Inc. and subsidiary as of December 31, 2000 and 1999, and the
related consolidated statements of operations, changes in stockholders' equity,
and cash flows for each of the three years in the period ended December 31,
2000. Our audits also included the financial statement schedule of Old Dominion
Freight Line, Inc. and subsidiary listed in Item 14(a). These financial
statements and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Old Dominion
Freight Line, Inc. and subsidiary as of December 31, 2000 and 1999, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States. Also, in our opinion, the
financial statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
Ernst & Young LLP
Winston-Salem, North Carolina
January 24, 2001, except for the information
presented in Note 2 and Note 8, for which the
date is February 1, 2001
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information concerning the Company's directors required by Item 10 of Form
10-K is incorporated by reference to the Company's proxy statement for the 2001
Annual Meeting of its Stockholders under the caption's "Election of Directors"
and "Principal Stockholders - Section 16 Beneficial Ownership Reporting
Compliance", reference to which is hereby made, and the information there is
incorporated herein by reference.
The information concerning the Company's executive officers required by Item 10
of Form 10-K appears in Item 1 of this report under the heading "Executive
Officers of the Company".
ITEM 11. EXECUTIVE COMPENSATION
27
The information required by Item 11 of Form 10-K appears in the Company's proxy
statement for the 2001 Annual Meeting of its Stockholders under the caption
"Executive Compensation", reference to which is hereby made, and the information
there is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by Item 12 of Form 10-K appears in the Company's proxy
statement for the 2001 Annual Meeting of its Stockholders under the captions
"Election of Directors" and "Principal Stockholders", reference to which is
hereby made, and the information there is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by Item 13 of Form 10-K appears in the Company's proxy
statement for the 2001 Annual Meeting of its Stockholders under the caption
"Executive Compensation - Compensation Committee Interlocks and Insider
Participation", reference to which is hereby made, and the information there is
incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) Financial Statements.
The following consolidated financial statements of Old Dominion Freight
Line, Inc. are included in Item 8:
Consolidated Balance Sheets - December 31, 2000, and December 31, 1999
Consolidated Statements of Operations - Years ended December 31, 2000,
December 31, 1999, and December 31, 1998
Consolidated Statements of Changes in Stockholders' Equity - Years
ended December 31, 2000, December 31, 1999, and December 31, 1998
Consolidated Statements of Cash Flows - Years ended December 31, 2000,
December 31, 1999, and December 31, 1998
Notes to the Consolidated Financial Statements
(a)(2) Financial Statement Schedules.
The following financial statement schedule of Old Dominion Freight
Line, Inc., is included in response to Item 14(d):
Schedule II - Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the instructions or are inapplicable and, therefore,
have been omitted.
The documents listed below are filed under subsection (d) of Item 14:
(a)(3) Exhibits Filed. The exhibits listed in the accompanying Exhibit Index
are filed as a part of this report.
28
(b) Reports on Form 8-K. None filed during the last quarter of the period
covered by this report.
(c) Exhibits. See Exhibit Index.
(d) Financial Statement Schedules.
SCHEDULE II
OLD DOMINION FREIGHT LINE, INC.
VALUATION AND QUALIFYING ACCOUNTS
Allowance for Doubtful Accounts
----------------------------------------------------------
Additions Amounts
Beginning Charged Written Ending
Description Balance To Expense Off Balance
- -------------------------------------------------------------------------------
Year ended
December 31, 1998 $ 4,963,000 $3,035,000 $ 2,296,000 $ 5,702,000
Year ended
December 31, 1999 $ 5,702,000 $ 2,840,000 $ 2,047,000 $ 6,495,000
Year ended
December 31, 2000 $ 6,495,000 $ 3,167,000 $ 3,594,000 $ 6,068,000
29
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
OLD DOMINION FREIGHT LINE, INC.
Dated: March 15, 2001 By: EARL E. CONGDON
---------------
Earl E. Congdon
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
Name and Signature Position Date
EARL E. CONGDON Chairman of the Board and March 15, 2001
- ------------------
Earl E. Congdon Chief Executive Officer
JOHN R. CONGDON Vice Chairman of the Board March 15, 2001
- ------------------
John R. Congdon and Director
JOHN A. EBELING Director March 15, 2001
- ------------------
John A. Ebeling
JOHN R. CONGDON, JR. Director March 15, 2001
- --------------------
John R. Congdon, Jr.
HAROLD G. HOAK Director March 15, 2001
- ------------------
Harold G. Hoak
FRANZ F. HOLSCHER Director March 15, 2001
- ------------------
Franz F. Holscher
DAVID S. CONGDON President and Chief March 15, 2001
- ------------------
David S. Congdon Operating Officer
J. WES FRYE Senior Vice President - Finance March 15, 2001
- ------------------
J. Wes Frye (Principal Financial Officer)
JOHN P. BOOKER III Vice President - Controller March 15, 2001
- ------------------
John P. Booker III (Principal Accounting Officer)
30
EXHIBIT INDEX
TO ANNUAL REPORT ON FORM 10-K
OLD DOMINION FREIGHT LINE, INC.
FOR YEAR ENDED DECEMBER 31, 2000
Exhibit No. Description
- ----------- --------------------------------------------------------------
3.1.1(a) Articles of Incorporation (as amended and restated September
18, 1991)
3.2(a) Bylaws of Old Dominion Freight Line, Inc.
4.1(a) Specimen certificate of Common Stock
4.4(b) Credit Agreement between First Union National Bank of North
Carolina and Old Dominion Freight Line, Inc., dated June 14,
1995
4.4.1(b) Form of note issued by Company pursuant to the Credit
Agreement between First Union National Bank of North Carolina
and Old Dominion Freight Line, Inc., dated June 14, 1995
4.4.2(c) First Amendment to Credit Agreement between First Union
National Bank of North Carolina and Old Dominion Freight Line,
Inc., dated February 2, 1996
4.4.3(d) Second Amendment to the Credit Agreement between Old Dominion
Freight Line, Inc. and First Union National Bank of North
Carolina, dated April 29, 1996
4.4.4(d) Third Amendment to the Credit Agreement between Old Dominion
Freight Line, Inc. and First Union National Bank of North
Carolina, dated June 15, 1996
4.4.5(f) Fourth Amendment to the Credit Agreement between Old Dominion
Freight Line, Inc. and First Union National Bank of North
Carolina, dated April 22, 1997
4.4.6(i) Fifth Amendment to the Credit Agreement between Old Dominion
Freight Line, Inc. and First Union National Bank of North
Carolina, dated January 14, 2000
4.5(d) Note Purchase Agreement between Nationwide Life Insurance
Company, New York Life Insurance Company and Old Dominion
Freight Line, Inc., dated June 15, 1996
4.5.1(d) Forms of notes issued by Company pursuant to Note Purchase
Agreement between Nationwide Life Insurance Company, New York
Life Insurance Company and Old Dominion Freight Line, Inc.,
dated June 15, 1996
4.6(g) Note Purchase Agreement between Nationwide Life Insurance
Company, New York Life Insurance Company and Old Dominion
Freight Line, Inc., dated February 25, 1998
4.6.1(g) Forms of notes issued by Company pursuant to Note Purchase
Agreement between Nationwide Life Insurance Company, New York
Life Insurance Company and Old Dominion Freight Line, Inc.,
dated February 25, 1998
4.7.1(j) Credit Agreement between First Union National Bank and Old
Dominion Freight Line, Inc., dated May 31, 2000
4.7.2 First Amendment to the Credit Agreement between First Union
National Bank and Old Dominion Freight Line, Inc., dated
February 1, 2001
10.4(a) 1991 Employee Stock Option Plan of Old Dominion Freight Line,
Inc.
10.5(a) Stock Option Agreement pursuant to the 1991 Employee Stock
Option Plan of Old Dominion Freight Line, Inc. (included in
Exhibit 10.4)
10.9(a) E & J Enterprises Trailer Lease Agreement, effective August 1,
1991
31
Exhibit No. Description
- ----------- --------------------------------------------------------------
10.9.1(e) Extension of E & J Trailer Lease Agreement, effective August
1, 1996
10.9.2(h) Extension of E & J Trailer Lease Agreement, effective August
1, 1999
10.15(c) Lease Agreement between Robert A. Cox, Jr., Trustee, and Old
Dominion Freight Line, Inc., dated as of October 31, 1995
23.1 Consent of Ernst & Young LLP
- --------------------------------------------------
(a) Incorporated by reference to the exhibit of the same number contained
in the Company's registration statement on Form S-1 filed under the
Securities Act of 1933 (SEC File: 33- 42631)
(b) Incorporated by reference to the exhibit contained in the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1995
(c) Incorporated by reference to the exhibit of the same number contained
in the Company's Annual Report on Form 10-K for the year ended December
31, 1995
(d) Incorporated by reference to the exhibit of the same number contained
in the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996
(e) Incorporated by reference to the exhibit of the same number contained
in the Company's Annual Report on Form 10-K for the year ended December
31, 1996
(f) Incorporated by reference to the exhibit of the same number contained
in the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997
(g) Incorporated by reference to the exhibit of the same number contained
in the Company's Annual Report on Form 10-K for the year ended December
31, 1997
(h) Incorporated by reference to the exhibit of the same number contained
in the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999
(i) Incorporated by reference to the exhibit of the same number contained
in the Company's Annual Report on Form 10-K for the year ended December
31, 1999
(j) Incorporated by reference to the exhibit of the same number contained
in the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2000
32